Emerging International Standards for Asset Management

Day One

ISO 72:2001  

• Six common elements of a MSS:– policy– planning– implementation and operation– performance assessment– improvement– management review

Guidelines for the justification and development of Management System Standards (MSS)

PAS 99 – Illustration of Integration

Figure 1 of BSI PAS 99:2006

Table of Contents for ISO 55000• Foreword; Introduction; Scope

• 2 Overview• 2.1 What is asset management and why do we need it?• 2.2 What characterises asset management?• 2.3 What is an asset and to what types of assets are we referring? • 2.4 What processes do we need for managing the life cycle of assets?2.5

What is an Asset Management System and why is it important?• 2.6 What characterises an Asset Management System?• 2.7 What are the key asset management challenges?• 2.8 The ISO5500x family of asset management standards• 2.9 The relationship of ISO5500x standards with other management

system approaches and other standards

• 3.0 Terms and Definitions• 3.1 Concept diagram covering all terms• 3.2 Terms relating to ‘context’• 3.3 Terms related to ‘asset’• 3.4 Terms related to ‘asset management’• 3.5 Terms related to ‘Asset Management System’ •

PAS 55 Management System Structure

Figure 6 of BSI PAS 55-1:2008

Management of Physical Assets

Strategy ‐ Develop a robust program within strategic framework.

Business Review ‐ Implement with respect to critical business needs and without impact to scheduled operations.

Technology Review ‐ Implement technology that can support processes at the business unit level but that can also be supported at the enterprise level.

Implementation Planning ‐ Identify an implementation schedule based on the program and corresponding costs.

Asset Management Strategy

Asset Management Strategy ContentBackground and Objectives

• Interaction with other goals, procedures and plans

• Planning period adopted

• Stakeholder interest

• Accountability and responsibilities for asset management

• Details of asset management systems and processes

Asset Management Strategy Content

Assets covered• Description of asset configuration

• Identification of assets by category

• Justification for assets

• Age and condition of assets

Asset Management Strategy Content

Proposed levels of service• Customer oriented performance targets

• Other asset performance targets

• Justification for target levels of service

Asset Management Strategy Content

Development and life cycle plans• Description of planning criteria and assumptions• Total cost of ownership• Details of demand forecast

Total Cost o

f Owne

rship

Asset Management Plan

Asset Operations Plan

Operating ParametersPlanned Utilization

Staffing RequirementsRaw/WIP Materials RequirementsMaterials Handling Requirements

Energy/Utilities RequirementsContinuous Operating Hours

Production Schedule VariationIncoming Materials SpecificationsFinished Products Specifications

Production Minimum Lot SizePlanned Capital Life

Performance Variables (KPIs)Performance Tracking Process

Business Risk Assessment

Maintenance ParametersAsset Hierarchy

Criticality Ranking IndexFailure Modes and Effects

Maximum Continuous OperationMean-time-between-repair

Mean-time-between-maintenanceMean-time-to –repairMean-time-to-rebuild

PM/PdM RequirementsOverhaul/Rebuild Requirements

Skills/Staffing RequirementsAnticipated Useful Life

Performance Variables (KPIs)Reliability Risk Assessment

Standard Work

Asset Maintenance Plan

AssetRisk Plan

Risk ParametersRisk strategy, tolerance

Risk definition and categorizationLoss data collection

Risk indicator data collection Control self-assessment

Risk assessment and analysisExpected/Unexpected Loss Control Scores

Real exposuresControls quality

Cost benefit analysisRisk mitigation and transfer

strategy

The Asset Operation Plan

• Standard operating procedures

• Start‐up / Shut–down procedures

• Materials procedures

• Operator care procedures

The Risk Plan

• Risk identification

• Risk analysis

• Risk mitigation

• Communication plan

• Risk management table

The Asset Maintenance PlanThe Infrastructure:• Database development• Asset definitions• Required attributes• Functional/Reliability block diagrams• Hierarchy development• Criticality analysis• Failure mode and effect analysis

The Asset Maintenance PlanTask Module Creation• Mapping failure modes to failure detection methods

• Rebuild / Refurbishment criteria• Assigning crafts and trades• Determining frequency• Establishing durations• Level loading tasks

MATERIALS MANAGEMENT

PREVENTIVE / PREDICTIVE 

MAINTENANCE

SCHEDULING & COORDINATION

WORK CONTROL

PROCESSES

FACILITIES & EQUIPMENT

WORK MEASUREMENT

WORK PLANNINGTRAININGORGANIZATIONAL 

STRUCTURESUPERVISIONCMMS/EAM

OPTIMIZATION

MANAGEMENT REPORTING

BUDGETING & COST CONTROL

CONFIGURATION MANAGEMENT

EQUIPMENT HISTORYAUDITSRELIABILITY 

ENGINEERING

SUSTAINABILITY

OPERATOR CARE PROCUREMENTEQUIPMENT & PROCESS 

DESIGN

MANAGEMENT COMMITMENTFACILITY PARTNERSHIPS

PRINCIPLES

ORGANIZATIONAL BEHAVIORMASTER PLANOBJECTIVES & GOALSGOVERNING 

PRINCIPLESSTATUS 

ASSESSMENT

CULTUREPERFORMANCE MANAGEMENT

LOSS ELIMINATION

Excellence Model

EDUCATION AND CHANGEPhase 1

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Recommended Approach

Strategic Planning

Define Business

Opportunities

Tactical Improvements

Short-term Profits

Implement Change

Develop Processes

Sustainable Performance

Implementing Optimized Asset Management

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Phase One:• Education• Change Management

Phase Two:  • Assessment• Master Planning• Business Case

Phase Three: • Executive Sponsorship• Leadership Team• Focus Teams • Project Execution• Timeline• Resources• Toolbox

Phase Four:• Benefits Tracking• Return on Investment• Reassessment

3 Wave Implementation Process

L;

Education and Change Management

Assessment

Master Planning and Business Case Development

Implementation 

Measurement & Follow‐up

Wave 1

Wave 2

Wave 3

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+27%Improved BottomLine Performance

Lack of System Support

+75%Significantly Improved

Bottom Line Performance

Processes and SystemAlignment

BaselineInformal Manual Planning 

Processes

Below AverageBusiness Performance

‐7%Systems are not

Complemented by Effective Work Processes

Significant Inefficiencies

Work Processes and 

Cultu

re M

aturit y

High

LowLow Technology Maturity High

Source: Brynjolfsson (MIT)

Processes and Technology

Executive Preparation

Manager Education

Employee Awareness Coaching

Change Management ApproachUse: Business Transformation, Management System Implementation,  Technology 

Upgrades, Process Redesign, Restructuring, Acquisition,  Merger and Job Redesign.

Tools:  Communication Plan, Risk Plan, Training, Coaching and Resistance  Management.  

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ASSESS AND PLANPhase 2

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Reactive Emerging Proactive Excellence

0 - 399 400 ‐ 549 550 ‐ 749 750 ‐ 1000

RegressiveState

ReactiveState

PlannedState

ProactiveState

LeanState

Maintenance Driven

Operations Led

Per

form

ance

Lev

els

Staged Decay

Fix it After It Breaks

Fix it Before It Breaks

Loss EliminationAsset  Availability

Operations Ownership

Lean ManufacturingThe 8 Wastes

Vision Leadership 

Long Term Commitment

The Journey

The Assessment Process

Includes all functions, processes, procedures, practices and infrastructure that comprise the plant or facility.  It is designed to identify and quantify all financial, performance and infrastructure factors that limit performance. Reliability Excellence is a holistic evaluation and encompasses all stakeholders.  

Scope

Financial and Performance

The assessment include a comprehensive analysis of the company’s financial and performance history.  This analysis is designed to quantity the company’s ability to compete in the world market, as well as identify opportunities for tangible, sustainable improvements.

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Financial EvaluationFinancial evaluation is focused on Cost of Goods Sold (COGS), Return on Net Assets (RoNA), Operating Profit and standard accounting measures of plant, company or corporate performance  

It also compares current and historical cost distribution and amounts to similar best‐in‐class plants.  This benchmark comparison is based either on Replacement Asset Value (RAV) or annual Revenue, as well as industrial classification to assure a valid benchmark . 

Special attention is given to current cost in the following categories:• Engineering• Production• Supply chain costs and inventories• Finished goods inventories• Maintenance

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Performance Evaluation Includes:

Asset Utilization is the measure asset use based on theoretical optimum or full‐time operations.  Asset utilization or AU is the best measure of how well a plant or company manages its capital assets and capital procurement processes. 

Operational Effectiveness, like asset utilization, OE is a measure of actual use of installed capacity and is the primary indicator of actual plant performance. It is a true measure of how well the installed capacity is managed. 

Overall Equipment Effectivenessmeasures the performance of individual production areas, lines or assets and includes runtime, rate and quality in its calculation.  It is a true measure of how well individual business units are managing their installed capacity.

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Example Assessment Report • Executive Summary

– 1 – 2 page report summary

• Performance Evaluation– Detailed evaluation of the plant’s operating 

performance compared to best‐in‐class

• Financial Evaluation– Detailed evaluation of the plant’s financial 

performance compared to best‐in‐class

• Excellence Model Assessment– Detailed assessment of the facilities' performance 

based on the  29‐elements

• Recommendations– Specific  tactical  recommendations that will yield 

short‐term, measurable benefits and fund the strategic, sustaining benefits of Rx

– Specific strategic recommendations the will  resolve the limiting factors identified by the excellence  model assessment and  performance analyses

• Next Steps– Detailed recommendations for implementing change 

and improving facility performance

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Reliability

Waste

Energy Losses

ProductionScheduling

Master Plan

Innovations

Planning

Asset Utilization

Performance Management

Empowerment

Change Management

Reliability Engineering

Master Planning

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•Master Plan• Development

•1 Week

Master PlanA detailed master plan is the 

roadmap to success• Includes:

– Tasks– Resources– Schedule– Deliverables

• Implementation Cost– Internal, incremental cost– External resources and support

• Benefits Tracking– Key measurements and methods– Comparative scales

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OPPORTUNITY BUSINESS IMPACT

Financial Value

• This savings number includes a reduction in maintenance costs and savings from other business areas. Business benefits may include: lower capital requirement lower energy cost capacity availability increased yield

Strategic Fit

• Long-term benefit To be a partner of choice• Cultural change:

process-honoring organization effective process governance engaged employees effective talent management

Customer Focus

Competitive Advantage

Connectivity • Connects Asset Management leading practices across like segments and regions• Connect to resources in larger operations that can support smaller organizations • Talent transfer

- improved customer experience

Improved asset health - better quality- more and consistent fill rates

improved customer service less changeover times increased equipment utilization less overtime

higher customer satisfaction improved safety Improved food safety less unplanned downtime

- options to grow revenue- decrease production and capital

costs- more customer-focused solutions

- increased product quality- improved yields- lower working capital- increased available capacity

Improved asset health

Business Case

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IMPLEMENTATIONPhase 3

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ReliabilityMaterial 

Management

Supply Chain Management

MRO Materials Management

Infrastructure Preparation

Tactical Improvements

Risk Management

Work Management

Production Work Management

Maintenance Work Management

Leadership Team

Executive Sponsor(s)

Facilitator

Planning & Scheduling

Business Planning

Production Planning 

Maintenance Planning 

Typical Implementation Team

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Executive Sponsor

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Prosci © 2010

Prosci © 2010

Union Leader(s)

Production Manager

Engineering Manager

Finance & Accounting

Procurement Manager

MPS Coach / Coordinator

Material Manager

Maintenance Manager

Facilitator

Program ChampionExecutive Sponsor

Leadership Team Model

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Focus Team Activities• Kick‐off – Teams attend Focus Team and Best Practices overview 

training. They then develop a team charter and present it to the Leadership Team for approval.

• Brown Paper – Teams process map the current state of business per the team’s scope. This process includes interviewing peers for process validation and to foster employee participation

• White Paper – Teams process map the target business process along with defining the associated Roles and Responsibilities.

• Pilot Planning – Upon target process approval, teams develop/acquire and implement the supporting target process resources (technical/non‐technical).

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Focus Team Activities• Training – Teams develop training plans including materials, equipment, 

dates, time and audiences. Once defined, training is provided to pilot area employees.

• Pilot Implementation – Teams provide technical and tactical support to the pilot area personnel. Data and feedback is collected from pilot area personnel and process systems to assist in the pilot area analysis phase.  

• Optimization – Teams review information collected during the pilot area implementation phase and begin the continuous improvement/sustainability process. 

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•Learning to See

Process Flow DiagramValue Stream MappingRelationship Models

Equipment CriticalityFailure AnalysisRisk AnalysisRisk Ranking

Standard WorkOperating Procedures

PreventivePredictive

Condition MonitoringRemote Monitoring

Operator CareCritical Spares

OEETCO

Asset UtilizationMTBFMTTR

Implementation ModelOPERATIONAL STABILITY

MeasureControlAnalyzeClassify

© 2011 Life Cycle Engineering

Continuous Improvement

Plan Do Check Act

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Taxonomy(1)

BusinessCategory

(2)Installation/Business Unit

(3)Cost Center/ Op Unit

(4)Function

(5)System

(8)Part/ BOM

Use/ L

ocation Da

taEquipm

ent S

ubdivision

Taxonomy per ISO 14224:2006

(7)Component/Maintainable Item

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Structuring Fixed Assets

SAP AG 2010

Managing Information of Assets

SAP AG 2010

Functional Block Diagram

In Feed Assembly Out feed AssemblyFill Table

Shaker

VFD

Drive Unit

PLC

Asset / Sub Assembly / Technical Object

Objects / Components

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Building Master Data

CodeComponent

Description In feed

Fill Table

Out Feed

Shaker

Drive Unit

VFD PLC

1001 Rail Misalignment X X1002 Failed Bearing X X1003 Worn Gear X X X X1004 Air Leak X

1005Failed Electrical Circuit X X X

1006 Failed Belt X X1007 Programming Error1008 Failed Belt X1009 Failed Chain X1010 Failed eye X X

Cause Code Catalog

CodeComponent

Description In feed

Fill Table

Out Feed

Shaker

Drive Unit

VFD PLC

2001 Process Stopped X X X X X X2002 Process Slow X X X X X X2003 Process Fast X X2004 Over fill X X X X X2005 Under fill X X

Damage  Code Catalog

Rotary Filler Cause Code Group

Rotary Filler Task Code Group

Rotary Filler Damage Code Group

Maintenance Plan

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Criticality AnalysisEH&S Impact

• Risk of injury or death• Risk of environmental pollutants

Production Impact

• Risk of lost production capacity• Risk of defects

Financial Impact

• Risk of exceeding acceptable Total Life Cycle Cost

Reliability, Availability, Maintainability Impact

• Risk of failure repeating (R)• Risk of lost availability to Operations (A)• Risk of extended maintenance downtime (M)

STEP 1 Identify scope of process – definition, process owner, start & end points

STEP 2 Recruit Focus Team - people involved in the process

Construct the Process

STEP 4 Validate and obtain comments - from others involved in the process

STEP 5 Identify opportunities - determine where areas for improvement exist

STEP 6 Present back to management and other key people for their input

STEP 3

Developing a Process Map

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Develop the RASI

RASI Chart for: Configuration Management

Con

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Cor

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VP

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Saf

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Step Number Step DescriptionCM-1

Step by Step tasks from CM Business Process

I I I A S R S S S S S S SCM-2 I I I A S R S S S S S S SCM-3 I I I A S R S S S S S S SCM-4 I I I A S R S S S S S S SCM-5 I I I A S R S S S S S S SCM-6 I I I A S R S S S S S S SCM-7 I I I A S R S S S S S S SCM-8 I I I A S R S S S S S S SCM-9 I I I A S R S S S S S S S

CM-10 I I I A S R S S S S S S SCM-11 I I I A S R S S S S S S SCM-12 I I I A S R S S S S S S SCM-13 I I I A S R S S S S S S SCM-14 I I I A S R S S S S S S SCM-15 I I I A S R S S S S S S S

R = Responsible "The Buck Stops Here" A = Accountable "The Doer"S = Support "Provides Support"I = Inform "Keep in the Loop"

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REALIZING THE BENEFITPhase 4

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Key Performance Indicators

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Reassessment

A 400 point increase in assessment score potentially yields a 16% reduction in material costs and a 26% reduction in labor costs.

Labor Cost Reduction (26%)Material Cost

Reduction (16%)

Reactive Proactive ExcellenceEmerging

% Im

prov

emen

t Pot

entia

l Assessment Score:Initial Final

0

10

20

30

40

50

60

0 100 200 300 400 500 600 700 800 900 1000

LaborMaterial

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Return on Investment• Reduced Planned and Unplanned Outages• Increased/reliable capacity salesIncreased Availability

• OT reduction• Contractor reductionReduced Labor Costs

• Reduced usage• Reduced InventoryReduced Material Costs

• Planned & scheduled work• Fewer emergenciesReduced Injuries

• Safety and EnvironmentalImproved Regulatory 

Compliance

• Extended Life Cycle• Less replacementsCapital Project Avoidance

• InvolvementEngaged Work Force

• Operations owned reliability• InstitutionalizedSustainable Culture Change

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