This document discusses how asset lifecycle management (ALM) strategies can help organizations achieve sustainability goals. It defines sustainability from environmental, business, and holistic perspectives. A sustainable manufacturing operation has the right assets, practices, and programs to optimize performance across the asset lifecycle. ALM excellence in design, operation, and maintenance leads to optimal overall performance. The document recommends considering ALM as the foundation for sustainability programs and learning more about effective ALM strategies through ARC Advisory Group's research.

1. Sustainable Operations Through Better
Asset Lifecycle Management
Sid Snitkin
Vice-President & GM
Enterprise Advisory Services
ARC Advisory Group
srsnitkin@arcweb.com

2. Agenda
What is Sustainability?
What Makes a Sustainable Mfg Operation?
How Does This Relate to Asset Lifecycle
Management (ALM)?
How Can You Use this to Develop a Strategy for
Sustainable Operations?
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3. What is Sustainability?
Many Perspectives, Many Challenges
Focus on the Environment – Planet’s Survival
• Use of Natural Resources – Renewable Rational Use etc
Renewable, Use, etc.
• Product Footprint - Recyclable, Decomposable, etc
• Process Footprint – CO2, Water, Other effluents
p , ,
Focus on the Business - Corporate Survival
• Satisfying Customer – Features, Cost, Delivery, Service, etc.
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• Satisfying Shareholders – Profit, RONA, etc.
• Satisfying Regulators – Product Safety, OSHA, etc.
Focus on Everything – “Green to Gold”
• Aligning Corporate and Human Survival Goals
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4. What Does Sustainability Mean to Mfgrs?
Operations That Meet all Sustainability Goals
A Sustainable Manufacturing Operation Has:
• The Right Set of Assets for the Job
• Fast, bumpless response to changing requirements
• Minimum use of energy, labor and materials
• Th Ri ht Practices to Optimize Use of All Assets
The Right P ti t O ti i U f A t
• Strategically - to satisfy the most important demand
• Tactically - in the most efficient manner
• Balanced to maximize returns x lifetime
• The Right Programs to Ensure High Availability
• Assets that are reliable and ready when needed
y
• Assets that maintain peak performance over the long run
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5. Sustainability = Excellent ALM Performance
ALM Provides a Good Basis for Sustainability Efforts
Design Operate Maintain Win!
The Right Optimal High Optimum
Capability X Utilization X Availability = Performance
ARC’s DOM Model for Asset Performance
DOM Excellence is the outcome of a proper
E ll i h f
Asset Lifecycle Management (ALM) Strategy …
» Establishing a Good ALM Strategy will satisfy many
of your Sustainability Goals
» Investments in ALM can be justified on the basis of
more S t i bl Operations
Sustainable O ti
» Making the Right Investments requires a solid
understanding of ALM!
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6. ALM begins with a proper view of the Asset
Productive Assets are More Than Equipment
Primary Project-Centric
Facilities
F iliti Project M
P j t Mgmt t
Equipment Engr/Design
Remote Procurement
Construction
Physical Human
Support Asset-Centric
IT HW/SW Operations
Mobile Process Engr
MRO Material Maintenance
Reliability
Virtual
Reference Data
R f D t Activity R
A ti it Records
d
Functional Commercial
Design Status
Procedural History
The Three Asset Classes are Equally Important to
Plant Success !
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7. Add a proper definition of an Asset Lifecycle
Stages in the Life of a Real Physical Asset
Ramp Time
Lif Cycles of Brownfie Project for the Asset
Up
Func Oper
A
Asset Rdy
Assm Peak
Asset Perf
eld ts
Spec Mods
Proj
P j
o
Liab
Plan
Des
fe
Cash
Basis
Idea
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8. And, the processes that must be managed
ALM is the Management of Several Key Processes
Ramp Time
Lif Cycles of Brownfie Project for the Asset
Up
Func Oper
A
Asset Rdy
Operate &
Assm
Asset Optimize
p Peak
Perf
eld ts
Spec Mods
Design & Maintain &
Build
Proj
P j Improve
o
Liab
Plan
Des
fe
Cash
Basis
Idea
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9. And, the Many Parties Involved in ALM
ALM Requires Extensive Collaboration
Owner/Operator
Engr & Project
Mgmt Services
(EPC/AEC)
Fabricators & O&M Service
Constructors Operate Providers
&
Optimize
Design Maintain
& &
MRO Build Improve IT Services
Material Providers
Suppliers
Virtual
Shareholders Regulators
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10. Results in Some Level of Asset Performance
ALM Performance = Project & Plant Performance
j
• Financial
• Design Accuracy • Const Planning
• Cost, Cash Flow
• Release Mgmt • Material Mgmt
• Functional
• C/N Mgmt • Site Mgmt
• Work Quality
• Equip Selection • Labor Efficiency
y
• Design Compliance
• Material Specs • EH&S
• Personal EH&S
• Schedule
Design Build
Timely, Right
e y, g Optimal Project
j
Information X Execution Performance
ALM
Operate Maintain Performance
The Right Optimal Maximum Asset
A t
Capability X Utilization X Availability Performance
• Product Range • Product Mix • Maint Strategy Mgmt • Financial
• Throughput
oug pu • Prod Planning
od a g • Maint Planning
a a g • Profit, Ratios (ROA)
o , a o ( O )
• Quality • Prime % • Maint Efficiency • Functional
• Product Unit Cost • Material Cost • MRO Material Mgmt • Process EH&S
• EH&S Capability • Labor Cost • Labor Cost • Personal EH&S
• EH&S • EH&S • Product/Service
• Cost, Quality, Delivery
Optimal Performance Occurs When all DOM Processes Are
“Jointly” Optimized Across All Lifecycle Stages!
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11. Developing an ALM Strategy
Performance Depends Upon Several Factors
ALM Requires Strategies for Design, Operate & Maintain!
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12. ALM Performance is Challenging
ALM Needs Interoperability Across ALM Processes
Strategy Shared Goals
Operate
Consistent
People | Processes Processes
Optimum Technology
Compatible Tools
Performance
Information Complementary
Data Models
Design Maintain Design Operate Maintain
Maximizing Performance requires Teamwork …
AIM helps Teamwork “Work” !
Work
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13. Developing an ALM Strategy
ALM is a Collection of Interdependent Strategies
Asset Lifecycle Management
A Collection of Interdependent Business Strategies
Capital Projects Management Capital Assets Management
(Design & Build) (Maintenance & Reliability)
Physical Human Physical Human
Virtual Virtual
Asset Information Management
Ramp Time
et
Life Cycles of Brownfield Projects for the Asse
Up
Func Oper
Asset Rdy
Assm Peak
Asset Perf
Functional Design Procedures Commercial Status History
• Process • Process • Project Mgmt • Financial Analysis • Project & Site • Source & Spec Mods
Specs Design • Install/Test • CAPEX • Procurement Build History
• Process • P&ID • Descriptions • Depreciation • Operational • Operating
Models • Equip Layout, of Operation • OPEX Status History
• Process Calcs Design, • Operating • Purchasing • MRO • Maint History
• Flow Diags BOMs • Insp & Maint Records Inventory • Inspection
• Equip Calcs y
• System • Certification • Warranty & • Training Records
• Equip Specs Detail Design Reqs Repair Records • Incident
• Func Designs • MRO BOMs • Lockout & • O&M Service Reports Proj Liab
Safety Reqs Agreements • People Plan
Certifications
Reference Data Activity Records Des Cash
Basis
Idea
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14. Where Can ALM Help with Sustainability
Many Opportunities, Many Victories
Focus on the Environment – Planet’s Survival
• Use of Natural Resources – Renewable Rational Use etc
Renewable, Use, etc.
• Product Footprint - Recyclable, Decomposable, etc
• Process Footprint – CO2, Water, Other effluents
p , ,
Focus on the Business - Corporate Survival
• Satisfying Customer – Features, Cost, Delivery, Service, etc.
y g , , y, ,
• Satisfying Shareholders – Profit, RONA, etc.
• Satisfying Regulators – Product Safety, OSHA, etc.
Focus on Everything – “Green to Gold”
?
• Aligning Corporate and Human Survival Goals
14
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15. Conclusions & Recommendations
Asset Lifecycle Management (ALM) programs
address many of the issues that are now being
identified as Sustainability Goals
» Consider ALM as the foundation for your own Sustainability
Program
Effective ALM strategies are based upon a
p p
proper understanding of assets, asset lifecycles,
g , y ,
ALM processes and ALM Stakeholders
» ARC’s ALM research addresses these issues and may be
helpful in your efforts to achieve various Sustainability goals
» Learn more about ALM through ARC’s ALM newsletter,
research reports, workshops and events.
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16. Thank You
For a free copy of a full ARC report on this topic please
contact the author at srsnitkin@arcweb com
srsnitkin@arcweb.com
For more information about Asset Lifecycle Management
p
please visit our web site at www.arcweb.com and look
under “Domains/Asset Lifecycle Management”
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