First Bus blends Infor asset management with SAP core ERP
When First Bus decided to upgrade its asset management and maintenance systems, it avoided senior management’s first choice, SAP, which provides its main business systems, and plumped for Infor
Two suppliers dominate the market for enterprise applications. With revenue of about $11.6bn between them, SAP and Oracle try to convince organisations that their range of integrated applications, powered by mouth-watering R&D, make one or the other a simple choice for a one-stop shop. But not all customers are convinced.
When UK bus company First Bus, part of global transport company FirstGroup, decided to upgrade its asset management and maintenance systems, it avoided senior management’s first choice of adopting SAP, which provides its main business systems.
“It was a really hard sell to say ‘no’,” says Ian Warr, UK engineering director at First Bus.
Instead of going with its enterprise resource planning (ERP) supplier, First Bus opted for technology from Infor, in a move that commentators say signals the ease at which businesses can take a pick-and-mix approach to enterprise application strategy.
“We were just embarking on an SAP Hana upgrade of our enterprise platform,” says Warr. “So obviously, it seemed reasonable and natural – and also was the chief executive’s view – that we should integrate maintenance within that platform.”
First Bus owns about 5,500 vehicles in the UK and operates one-fifth of all local bus services outside London. It runs diesel, electric, hybrid, hydrogen and gas buses, as well as ancillary vehicles. In May 2019, the company announced that it would, through a sale or other form of divestment, separate First Bus from FirstGroup. In planning this move, Warr was tasked with modernising the UK bus business’s maintenance systems.
Its legacy maintenance systems include an application from Atos, SAP R/3, and other disparate systems. But the idea that maintenance management could be rolled into the enterprise upgrade to SAP Hana hit some barriers.
Despite the logic of using a single platform for ERP and asset management, analysis from Warr’s team showed it would cost more to develop a user interface for SAP Hana that worked in the First Bus business than adopt a specialist asset management system from Infor and integrate it with SAP.
“When you look at it from an end-user perspective, you have to compare how you would bring it into the business – what resources you would have to deploy to get the best from the system,” says Warr. “It would have cost us more in labour resources to capture data [in SAP], while Infor was tailored and more bespoke towards our kind of operation.”
“We are trying to find that sweet spot in the middle, which we call optimised or reliability-centred maintenance”
Ian Warr, First Bus
But picking Infor left First Bus with the task of integrating it with its main SAP system. “Everything we do, of course, we need to integrate into SAP because that is our primary finance system,” says Warr. “We’ve got enough technical capability in our software and data teams to make sure that interface works well, and Infor is designed to be a fully integrated system. So we are just making sure that all the rules that we set up are aligned.”
As part of its application overhaul, First Bus also wanted to create a new approach to maintaining its bus fleet. The philosophy is to switch from a reactive maintenance approach – to maintain vehicles to a schedule or when they break down – to a method that focuses on reliability.
Supporting the transition will be data collected from the buses themselves. The company will launch the new system with live data describing bus location, fuel consumption and ticketing, but it plans to take advantage of more internet of things (IoT) sensor data as it comes on stream.
“Frontline technicians will have real-time information at their fingertips, so we need to be able to capture and optimise maintenance rules internally by adopting the big data approach,” says Warr. “Infor’s ability to do that is, in my view, superior to many other platforms out in the marketplace.”
Set to go live next year, the Infor system will also track warranties and service intervals. It is designed to track maintenance jobs and despatch engineers with the right competencies to the right type of problem.
Get the maintenance balance right
The challenge is to get the balance right between reactive and scheduled maintenance, which is wasteful, and predictive maintenance, which can be costly, says Warr.
“We are not trying to create the polar opposite of reactive maintenance, because it is very costly changing components out in a preventative way,” he says. “We are trying to find that sweet spot in the middle, which we call optimised or reliability-centred maintenance, which means using data to constantly evaluate the optimum interval to carry out maintenance activities on an asset, knowing what materials, what resources and what labour need to be applied to each job.
“We get to fully utilise our staff, reduce our inventory holdings, monitor and evaluate the longevity of all the components. There are significant benefits compared with our legacy environments, where we don’t capture or measure any of that.”
Using the existing systems, drivers would have filled in a piece of paper every day and defects would then be input by a data clerk the following day. The new Infor system should provide automated, intelligent data that engineers can react to in real time, says Warr.
First Bus will also exploit anonymised data from other Infor clients working in a similar environment. The big picture will help to determine the optimal interval for carrying out maintenance and replacing components.
The Infor enterprise asset management system is set to go live in two phases. Phase one will include the build-and-design stage, testing and, eventually, the training stages. Inventory and maintenance transactional activities are also set to complete in phase one, before April next year. Phase two will see First Bus introduce iPads on the shop floor, interfacing technicians into the system towards the end of next year.
The business benefit that First Bus aims to accrue from the implementation includes the ability to standardise specifications in looked-after assets. “It’s not about maintenance in isolation,” says Warr. “It’s the way we buy assets, the information we get on total cost of ownership, which influences our capital purchasing. It’s about monitoring and being able to track inventory. It’s about improved analysis of fuel usage, and so that we get some immediate benefit – fuel is our second-biggest cost.”
It also hopes to make better use of warranty terms and improve the uptime of all assets.
First Bus expects a minimum of a 10% return on investment on a maintenance budget of about £100m, and a potential 1.5% fuel efficiency saving on a budget of about £160m.
Warr’s team plans use the Infor system to exploit more IoT data as devices are built into the vehicles it buys. But the integration of data presents a challenge. Although APIs can feed data directly into the maintenance system, IoT data on vehicles has yet to be standardised.
“We’ve got to find a way of harnessing all that data streaming off the vehicle and interfacing it into Infor,” says Warr. “That is work to be done in the second phase of the project, but we aspire to get a benefit from harvesting that data.”
Although it once created integration headaches, mixing enterprise applications from different suppliers is becoming more common and less risky, says Alison Clark, a digital expert at PA Consulting.
“It was once difficult, and you faced fragmented resources in support of these applications, but an API economy is opening up the ability to integrate much more easily,” she says.
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This approach is changing the relationship with suppliers and application strategy, she adds. “You used to be tied in – if you bought propriety niche technology, they had you. But now, aggregation through an integration layer allows you to pick and choose.”
Clark says asset-heavy engineering and transport companies are increasingly interested in investing in IoT as they become driven by customers. “They are becoming more aware of customer expectations, which are being driven by private sector consumer goods companies and retailers,” she says. “On a bus, for example, customers expect access to Wi-Fi and to able to tell what time they might arrive.
“Technology is dictating what end-customers want from a service and the only way that engineering and asset-heavy companies are going to keep people using them – and there is a choice – is to deliver at the base level and beyond.”
Brian Whitmore, principal solution architect at Capgemini, agree it is becoming easier to integrate applications from different suppliers, but businesses overhauling their approach to maintenance might face a bigger challenge – change management. “You’ve got to get people trained up and into the new structure,” he says. “It might involve transfer or loss of staff. There is a lot of sensitivity around automation.”
First Bus’s priority is to save on fuel and achieve efficiency. By choosing a maintenance application best suited to its end-user environment, it has opted to carry out integration with its main ERP supplier – a choice that is becoming easier in the API economy, say consultants.
But although it is set to make significant savings, it must wait and see whether the investment is enough to help the transport company keep pace with customer expectations.