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Early Equipment
Management (EEM)
Dennis McCarthy, of DAK Consulting, explains how EEM can
deliver capital projects faster, cheaper and better.

ost managers and engineers have had first hand

experience of capital projects that failed to live
up to expectation when introduced and needed
significant attention during routine operation. The
excess capital costs of these troublesome assets can be huge.
Opportunity costs are high too. One organisation we
Dennis McCarthy supported estimated that improvements in capital project
delivery was enough to recoup the original capital investment
during the first year.

What goes wrong?

Research into the causes of project failures indicate a number
of common failings at the early projects steps including:
insufficient time allowed for clarifying and aligning project
goals so that:

project accountabilities and roles are ill defined;

avoidable risks and preventable problems are not
identified and dealt with until too late in the process.
resources released late or not released at all.
insufficient training and support for project stakeholders.
The impact of these weaknesses on the later steps includes:
inconsistent perspectives of what is needed;
poor use of in house knowledge to challenge and optimise
design choices;
issues overlooked so that critical decisions were delayed or
not taken;
information/knowledge flow between project stakeholders
interrupted or lost.
As can be seem from the above, the root causes of problem

projects are not generally technical issues but relate to

people and how they work together.

Early Equipment Management

Early Equipment Management (EEM) was developed to
support the collaboration of project stakeholders across the
end-to-end capital project process through:
the use of systematic analysis around key decision
milestones to avoid the transfer of problems to later steps;
the use of systematic decision tools within each step to
surface problems and enhance project value;
the organisation of collaborative project roles and
accountabilities to align cross functional commercial,
operational and technical project roles at each step.
The EEM route map consists of 6 steps (see Figure 1) which
systematically deliver flawless operation from day 1 through
the achievement 3 goals.
steps 1 and 2 contain activities to define the correct
scope of the project and involve the right expertise;
steps 3 and 4 contain activities to tease out latent
design weaknesses and enhance project value to
achieve a robust design;
steps 5 and 6 contain activities to refine the
operational design and develop internal competence.

Avoiding Common Pitfalls

Below is an overview of common capital project pitfalls
and how EEM principles and techniques help to avoid them.

Define the goal of steps 1 and 2

The root causes of later problems can be due to weaknesses

in the way investment priorities are set and project scopes
defined. For example a company at the start of its EEM
journey decided to invest in upgrading equipment to bring in
house a product which currently was packed by an outside
company. A cost hike from the outside packer had recently
focussed attention on the need to curtail this increased cost.
As part of step 1, the EEM team identified that this
was not the best use of the investment and that if the funds
allocated were spent elsewhere it would produce greater
benefits. Normally, the
original investment
5. Op.mum
request would have
LiAle non standard work
been carried out without
Foolproof/failsafe opera.on
Moving parts guarded, few projec.ons
question but following
High level of resource recycling
Meets SHE and re regula.ons
Uses sustainable resources
this review a much larger
Easy escape routes and good ergonomics
Low failure rate
project with a faster
Low idling and minor stops
Stable machine cycle .me
payback was identified.
Low quality defect rate
Easy to measure
Based on this
Flexible to technology risks
Flexible to material variability
experience, investment
Good sta.c and dynamic precision
Simple set up and adjustment
project briefs were then
One touch opera.on for height,
posi.on, number colour etc
set out in terms of the
Quick replace tools
Flexible to volume risk
Simple process control
desired outcome and
Flexible to labour skill levels
Auto load and feeder to fed processing
prioritised targets. The
Easily overhauled
Easy failure/detec.on/repair
EEM team role was to:
Self correc.ng/auto adjust
O the shelf/common spares used
- translate targets into
Inbuilt problem diagnos.c
Long MTBF, Short MTTR
Predictable component life
Easy to inspect and repair
Fit and forget components
define problems to
Easy order cycle comple.on
Capacity for future demand
overcome to deliver
Maximum control of basic and
Robust supply chain
performance product features
Simple logis.cs//forecas.ng needs
those targets;
Flexible to product range needs
Flexible to poten.al market shiZs
set out scenarios to
Clarity of current capital and
opera.onal cost drivers and process
Flexible to nancial risks (e.g.
added value features
- evaluate those
Poten.al for value engineering gain
Easily scalable to 400% or to 25%
scenarios and develop
Resource economy
Access to high added value markets
a preferred approach.

EEM Design Benchmarks


Safety and

Func.on is intrinsically safe, low risk, fail

safe opera.on able to easily meet future
statutory and environmental limits


Func.on is immune to deteriora.on

requiring liAle no interven.on to secure
consistent quality


Process is easy to start up, change over

and sustain normal condi.ons. Rapid
close down, cleaning and rou.ne asset
care task comple.on.


Deteriora.on is easily measured and

corrected, Rou.ne maintenance tasks are
easy to perform and carried out by
internal personnel.

Customer Value

Process is able to meet current and likely

future customer QCD features and
demand variability. Provides a plaYorm
for incremental product improvement

Life Cycle Cost

Process has clearly dened cost and

value drivers to support Life cycle cost
reduc.on, enhance project value and
maximise return on capital invested

LCC Influence

EEM Step

Des ign

Des ign

Proces s

I ns tall

is s ion
T est

S tabilis e

Optimis e

Figure 1. EEM Steps and goals

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Continued on page 10


At this stage of a project there is often little qualitative

data to support the evaluation of scenarios. There is a need to
codify tacit knowledge to make and objective choice between
EEM supports this by the use of six qualitative design
targets (see Figure 2) - each of which has a significant impact
on life cycle costs but can be difficult to measure even with
hands on experience.
These 6 target areas are set out in the right hand
graphic. This also shows the 1 to 5 scale used to calibrate



2. High

Demand Planning

3. Detailed


Inventory Building

5. Install

6. Commission



Renew Supply Chain

Ramp Up

Base Case LCC Model LCC Function Review LCC Operating Review




Provisional Best

Scope Modules

Sign Off


Refine Best

Cross Shift

Develop Knowledge


Figure 2. EEM design targets

assessments 1 being low, 3 being acceptable and 5 being

Where necessary, following this qualitative
assessment, further analysis can be carried out to confirm the
evaluation basis, refine the preferred concept and support the
submission of the application for capital project funding.

Design the goal of steps 3 and 4

Following funding approval of the preferred option
and selection of a vendor, the priorities for EEM steps 3 and
4 are to tease out latent design weaknesses and enhance
project value.
Common mistakes here are trying to pass off risk to
the vendor without a clear understanding of what the risks
are or whether the vendor is able to manage them.
Experience shows that there is more to gain from
collaborating with vendors to develop better designs. Even
where the options to modify technical design are limited, the
understanding gained about changes to operations, workflow
and skills needed, etc, make this an important activity on the
road to flawless operation.
Our analysis shows that the difference between
an average and simplified design can be worth a 30%
reduction in capital costs. The same analysis shows that
complex designs can increase capital costs by more than
double when compared to the average design. That alone
is enough reason to take care at the design review stage.
However, capital costs are normally a small percentage of the
total life cycle costs and achieving flawless operation from
day one can be worth as much again.
EEM design collaboration involves a two-part review
meeting 1 involves assessment of an outline design
against EEM standards to confirm strengths and priorities.
Use day-in-the-life-of approach and layouts to make
clear operational realities and outline ways of working;
meeting 2 involves the vendor explaining in detail how the
more detailed design meets those standards.
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That way the vendor can show that they really do know what
is needed to achieve flawless operation from day one.

Refine the goal of steps 5 and 6

After completion of the detailed design process, human error
is the biggest risk to the capital project. A common mistake
here is relying on vendor training alone to develop in house
competence; this is only achieved over time and needs
reinforcement. In addition, when introducing new equipment,
this is the ideal time to engage representatives across shifts
to agree a common approach.
Within an EEM project, the evolution of ways of
working is managed as a core part of the specification process
at each step. That is the only way to be sure that MORSE
principles (Maintainability, Operability, Reliability, Safety and
Environment) are hard wired into the design.
To further refine ways of working, problem prevention
techniques are applied to provisional ways of working so
that it is easy to do right, difficult to do wrong, and simple
to learn. This incorporates the PDCA (Plan, Do, Check,
Act) approach by testing ways of working as part of the
commissioning process.

Implementing EEM
Like EEM itself, successful implementation programmes adopt
a stepwise approach:
1. Define: review current capital project processes and
identify strengths and priorities for action;
2. Design: use a pilot project(s) to improve the current
processes, define EEM standards and deal with gaps in
related business processes.
3. Refine: train managers, design engineers project managers
and CI facilitators in lessons learned from the pilot
4. Improve: capture lessons learned from each project and
use to update design standards. Reinforce EEM policy by
training of each new project delivery teams including key
As many capital projects originate due to the introduction
of new products or services, the biggest gains from EEM are
achieved when the principles are applied at the product design
stage. The approach is then known as Early Management.
EEM can also be applied to projects relating to
equipment optimisation, low cost automation or business
systems implementation.
Why not attend the day introductory EEM workshop
being organised by DAK Consulting in conjunction with
Conference Communication on 10 April 2014 at the NEC,
alongside the Plant & Asset Management exhibition the
UKs premier forum for engineers, managers and directors
responsible for operating and maintaining industrial plant
and equipment.
Full details can be found at maintenanceonline.co.uk,
from where bookings can be made. At the same time, why
not visit maintenanceuk-expo.com to register for Plant &
Asset Management 2014.

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