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Asset Management
Application Guide
for ISO 55001
International Copper Association (ICA)
Latin America
Av. Vitacura 2909, Oficina 303
Las Condes, Santiago
Chile
www.coppera...
NOTE OF CLARIFICATION
The document was originally created in Brazil, written in
Portuguese and translated into English.
Al...
Original Text in Portuguese Prepared by:
Marisa Zampolli
Revised and Supervised by:
Glycon Garcia Jr.
Contributors (author...
Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...
Step 3: Risk management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...
Executive Summary
10
Asset management is a cultural change in companies’
strategic planning that adds to the traditional v...
11
Introduction
This document is not intended to prescribe approaches, methods or mandatory tools, but seeks to clarify
wh...
Let’s talk a little about Standards:
The series of of international standards is the result of work carried out under the ...
The series of standards provides the definitions of what shall be done, but does not tell “how to do.” This is why the
sea...
PLAN THE COMPANY ASSET MANAGEMENT
STEP 1
In the first step, the whole planning for implementation of the asset management system will be addressed, including
the r...
A. The Context of the Organization {4}
a. Understanding the organization and its context {4.1}
Before start-up, the compan...
b. Understanding the needs and expectations of stakeholders {4.2}
c. Determining the scope of the asset management system ...
Leadership {5}
Leadership and organizational culture are key factors in obtaining value.
The top management has the natura...
a. Policy {5.2}
• Clearly express the principles to be applied,
such as the organization’s approach to the
health and safe...
c. Criteria and definition of the asset portfolio to the management system - Determination of the scope {4.3}
When definin...
At first glance, the critical assets to maintain power generation would be the generators
and turbines, but these are not ...
EXECUTE THE ASSET MANAGEMENT OBJECTIVES
STEP 2
In a company, the asset management shall be driven by objectives aligned to the strategic planning and considered
in the p...
The company shall establish, document and maintain a management plan (or several ones) to achieve the strategy,
or asset m...
The SAMP shall address for the assets portfolio:
• The required service level (reliability, safety, regulatory requirement...
Figure 9 – Structure of the asset management plan(s)
The Plan
Scope and
Directives
Financial
forecasts
Life cycle
strategi...
b. Competence {7.2}
c. Awareness {7.3}
The personnel appointed to perform asset management related to roles, authorities, ...
e. Information Requirements {7.5}
f. Documented Information {7.6}
Information that must be identified and addressed is tho...
Practice shows that adopting only the initial cost as a purchase criterion, in most cases, is not the best alternative,
be...
• EAP’s (Project Analytical Structure) creation according to the acquired asset that served as the basis
for existing and ...
Practical example: Introduction of new technologies in the oil and gas industry [B]
(Author: Alexandre Félix do Nascimento...
RISK MANAGEMENT
STEP 3
33
Risk management is an important factor in a proactive asset management. The overall objective is to understand the
caus...
For every potential risk, the probability
of failure must be analyzed and its
respective consequence (type, extension
and ...
35
Check if there is any strategy or
maintenance task to prevent failure
or reduce risk to degree III. Otherwise,
it shall...
Actions to address risks and opportunities for the
asset management system {6.1}
Management of Change {8.2}
B
C
The object...
Outsourcing {8.3}
D
Outsourcing is a common method for an organization that prefers to perform certain asset management ac...
MONITORING THE OPERATION
STEP 4
After acquisition, the commissioning stage starts after the manager or contractor have completed the implementation
or acq...
The system shall be assessed through the evolution of indicators in time in relation to:
Examples used in utility companie...
• Exposure Degree / number of failures
• Probability of failure / maintenance costs
• Investment in training / costs of ac...
ANALYZE THE ASSET MANAGEMENT SYSTEM
STEP 5
Managing the lifecycle of critical assets is an essential component in asset management and requires the application
of te...
Adequate monitoring of the asset operation enables the management team to estimate the remaining life depending
on the sev...
With the information of material failures detailed by component, the reliability analysis can be made [11]:
The following ...
The definition of the chosen scenario is based on the better performance at lower cost and longer life expectancy.
Cheaper...
Figure 17: Steps for the LCC (Life Cycle Cost) or cost analysis during the life cycle
Identification of the alternatives o...
2 3 4
Situation 2 (change):
Acquisition in January, availability
provided by the manufacturer
of 98% and loss reduction in...
Then, we consider the following historical company data:
• Ratio of American Dollar / Real.
• Annual inflation rate.
• Env...
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
R$ 20.518,73
R$ 20.410,36
R$ 20.190,50
R$ 20.170,88
R$ 20.243,03
R$ 20....
The analysis of the economic life calculation of an asset and LCC analysis allow to obtain multiple benefits for the
opera...
DECISIONS MAKING AND SEARCH FOR
CONTINUOUS IMPROVEMENT
STEP 6
In general, the best asset management practices take place when the company chooses to keep its assets in use
for as long ...
At this initial stage, a mapping of the ball mills’ function within the process was
performed by raising the installation ...
Figure 19: Continuous improvement cycle for asset management
Establish goals,
objectives, methods
and standards
Improve an...
CONCLUSIONS
Asset management marks the beginning of a new era in business administration, something to be practiced by
those seeking b...
Bibliography
[0] ISO 5500x
[1] Zampolli, Marisa, “Guia básico para implantação da gestão de ativos em empresas de energia”...
[12] Pinto, Luis Henrique Terbeck, “Análise de Falhas – Tópicos de Engenharia de Confiabilidade”
(Failure Analysis - Relia...
ANNEXES
61
Case study AES Tietê – Preparing the SAMP
1 Author: Rafael Schmitz Venturini de Barros, CMRP, CRP – AES Tietê
In 2009, ...
62
Among the four strategic drivers, it was identified that AES Tietê asset management system would contribute to
the thir...
Cobre - Gestión de Activos – Guía para la aplicación de la norma 55001
Cobre - Gestión de Activos – Guía para la aplicación de la norma 55001
Cobre - Gestión de Activos – Guía para la aplicación de la norma 55001
Cobre - Gestión de Activos – Guía para la aplicación de la norma 55001
Cobre - Gestión de Activos – Guía para la aplicación de la norma 55001
Cobre - Gestión de Activos – Guía para la aplicación de la norma 55001
Cobre - Gestión de Activos – Guía para la aplicación de la norma 55001
Cobre - Gestión de Activos – Guía para la aplicación de la norma 55001
Cobre - Gestión de Activos – Guía para la aplicación de la norma 55001
Cobre - Gestión de Activos – Guía para la aplicación de la norma 55001
Cobre - Gestión de Activos – Guía para la aplicación de la norma 55001
Cobre - Gestión de Activos – Guía para la aplicación de la norma 55001
Cobre - Gestión de Activos – Guía para la aplicación de la norma 55001
Cobre - Gestión de Activos – Guía para la aplicación de la norma 55001
Cobre - Gestión de Activos – Guía para la aplicación de la norma 55001
Cobre - Gestión de Activos – Guía para la aplicación de la norma 55001
Cobre - Gestión de Activos – Guía para la aplicación de la norma 55001
Cobre - Gestión de Activos – Guía para la aplicación de la norma 55001
Cobre - Gestión de Activos – Guía para la aplicación de la norma 55001
Cobre - Gestión de Activos – Guía para la aplicación de la norma 55001
Cobre - Gestión de Activos – Guía para la aplicación de la norma 55001
Cobre - Gestión de Activos – Guía para la aplicación de la norma 55001
Cobre - Gestión de Activos – Guía para la aplicación de la norma 55001
Cobre - Gestión de Activos – Guía para la aplicación de la norma 55001
Cobre - Gestión de Activos – Guía para la aplicación de la norma 55001
Cobre - Gestión de Activos – Guía para la aplicación de la norma 55001
Cobre - Gestión de Activos – Guía para la aplicación de la norma 55001
Cobre - Gestión de Activos – Guía para la aplicación de la norma 55001
Cobre - Gestión de Activos – Guía para la aplicación de la norma 55001
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Cobre - Gestión de Activos – Guía para la aplicación de la norma 55001

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La gestión de activos representa un cambio cultural en el planeamiento estratégico de las empresas que agrega a la visión tradicional sobre productos y clientes la visión de los activos y del valor que estos son capaces de generar al negocio. Autor: International Copper Association Latin America

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Cobre - Gestión de Activos – Guía para la aplicación de la norma 55001

  1. 1. Asset Management Application Guide for ISO 55001
  2. 2. International Copper Association (ICA) Latin America Av. Vitacura 2909, Oficina 303 Las Condes, Santiago Chile www.copperalliance.org COPYRIGHT © 2015 International Copper Association
  3. 3. NOTE OF CLARIFICATION The document was originally created in Brazil, written in Portuguese and translated into English. Although this document has been prepared with due care, the ICA and any other participating institution are not responsible for the information and analysis herein presented, which shall be credited directly to their authors. This study does not restrain and nor does it exempts consultation and full reading of the standard ISO 55000/1/2 of the ISO - International Organization for Standardization and the British specification PAS-55 (Publicly Available Specification number 55) of the British Standards Institution [1]. Citations and references to the ISO 55000/1/2 and case studies were authorized by their respective organizations and their representatives in Brazil were the original texts were written.
  4. 4. Original Text in Portuguese Prepared by: Marisa Zampolli Revised and Supervised by: Glycon Garcia Jr. Contributors (authors of practical examples and annexes) in the order they appear in the document: Alexandre Felix do Nascimento Ítalo Claudio Caiani Spanó – Reliasoft Brasil Rafael Schmitz Venturini de Barros – AES Tietê Gilberto Martins Junior – Elektro Eletricidade e Serviços S.A. Henrique Eduardo Pinto Diniz – CEMIG Valéria Simões de Marco – Eletrobrás Eletronuclear S.A. Paulo Marcio Nepomuceno de Sousa – CEMIG Pedro Monteiro de Castro Souza – CEMIG Henderson Saldonas da Silva João Esmeraldo da Silva, Dr. - Fundação Gorceix - Departamento de Pesquisa e Educação Continuada Jefferson Januário Mendes, Msc. - Instituto Federal Minas Gerais – Departamento de Engenharia de Produção Ruben Antonio Llobell Solé, Dr. - Fundação Gorceix - Departamento de Pesquisa e Educação Continuada DATASHEET
  5. 5. Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Let’s talk a little about Standards: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Step 1: Plan the company asset management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 A. The Context of the Organization {4} . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 a. Understanding the organization and its context {4.1}. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 b. Understanding the needs and expectations of stakeholders {4.2}. . . . . . . . . . . . . . . . . . . . . . . . 17 c. Determining the scope of the asset management system {4.3}. . . . . . . . . . . . . . . . . . . . . . . . . . 17 d. Determining the Asset Management System {4.4}. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 B. Leadership {5} . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 a. Policy {5.2}. .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 b. Organizational roles, responsibilities and authorities {5.3} . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 c. Criteria and definition of the asset portfolio to the management system - Determination of the scope {4.3}. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 • Critical Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 • Criteria for defining critical assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 d. Asset management system {4.4}. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Step 2: Execute the asset management objectives. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 A. SAMP – Strategic Asset Management Plan {6.2.2}. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 a. The Asset Management Plans {6.2.2}. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 B. Support {7}. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 a. Resources {7.1}. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 b. Competence {7.2}. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 c. Awareness {7.3}. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 d. Communication {7.4} . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 e. Information Requirements {7.5}. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 f. Documented Information {7.6}. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 g. Control of documented information {7.6.3}. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 C. Operation: Project and Acquisition of Critical Assets {8} . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Practical example: Asset’s Acquisition by a Logistics Company [A]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 a. Analysis for introduction of new technologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Practical example: Introduction of new technologies in the oil and gas industry [B]. . . . . . . . . . . . . . . . . . 31 CONTENTS
  6. 6. Step 3: Risk management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 A. Methodologies applied to risk management. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 B. Actions to address risks and opportunities for the asset management system {6.1}. . . . . . . . . . . . . . . 36 C. Management of Change {8.2} . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 D. Outsourcing {8.3}. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Step 4 Monitoring the operation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 A. Performance evaluation {9}. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 B. Definition of indicators {9.1}. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 a. Performance indicators or KPI´s. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 b. Cost Indicators. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 c. Risk indicators or KRI´s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 C. Internal audit {9.2}. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 Step 5: Analyze the asset management system. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 A. Economic & Life Cycle Assessment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 B. Calculation of the economic life of an asset and LCC analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 Practical example: High Performance Compressor [C]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 Step 6: Decisions making and seek of continuous improvement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 A. Analysis for technological modernization based on power efficiency. . . . . . . . .. . . . . . . . . . . . . . . . . . . . 53 Practical example: Electric Motors [D]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 Conclusions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 Bibliography. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 Annexes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 1 – Case study AES Tietê – Preparing the SAMP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 2 – Case Study: Elektro - Asset Management Plan for the purchase of transformers . . . . . . . . . . . . . . . . . 65 3 – Case study: CEMIG – Application of Asset Management in Risk Assessment of Connection Failures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 4 – Case Study: Eletronuclear Management Plans for Critical Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 5 – Case Study: CEMIG - Application of Asset Management in Call Center. . . . . . . . . . . . . . . . . . . . . . . . . . 72 6 – Case Study: Strategic Asset Acquisition Based on Risk Management. . . . . . . . . . .. . . . . . . . . . . . . . . . . . 79 7 – Case Study: Economic-financial results of asset management applications reliability engineering in the implementation of capital projects. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 8 – Case Study: Implementation of the SAMP in a Mining Enterprise. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82 Acknowledgement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
  7. 7. Executive Summary 10 Asset management is a cultural change in companies’ strategic planning that adds to the traditional vision on products and clients the vision of assets and of the value they are able to generate to the business. For companies that are willing to seek international performance standards within competitive markets, asset management brings, from the context of the organization, a new proposal to realize the strategic objectives. This is accomplished by integrating all areas of the organization, so that each one recognizes its role and responsibilities in achieving value through the organization assets. The asset management practice implies an initial reflection on the company’s positioning in the market, on its long-term objectives, and on the expectations and needs of stakeholders and how all these interact with the company’s business. We use to say that asset management marks the beginning of a new era in business administration, something to be practiced by those seeking business excellence. Asset management is not limited to the management of assets, but transcends the barrier of operational limits to influence the business strategies. Practicing asset management according to the rules implies in following an international standard to obtain value through the use of assets in order to obtain the balance of performance, cost and risks. The ISO 5500X standards, issued in 2014, bring to organizations the challenge of quantifying their efficiency in terms of risk. The balance between cost, performance and risks can only be achieved through asset management practices. The ISO 5500X standards go beyond the universe of the PAS-55 BSI published by the British Standards Institution, which until then was the only reference to physical asset’s management practices. Themanagementsystemapproachtoassetmanagement in the context of the ISO 55001 provides the necessary requirements for the company’s management to favor the asset management results, not only for the physical assets, but all those that add value to the organization. In asset-intensive companies, whose business is based on the operation of large physical assets, the standards bring an innovation to the life of assets, no longer limited to the period between acquisition and disposal, but understood from the asset specification to the liabilities remaining after decommissioning. The management of physical assets results in a clear policy of renewing assets that must be replaced not only when they are irreparably damaged, but also when: a) Operating and/or maintenance costs over the remaining life of the asset exceeds the replacement cost; b) There is an imminent risk failure of the asset; c) The impact of a likely failure exceeds the replacement cost;; d) A probable failure may compromise the reliability and security of the system and of people; e) The assets have become obsolete and inefficient to operate and maintain the business; f) Gains by replacing imply improvement of indicators of people safety, of the environment and of the company performance. Decision making for anticipated replacement of assets should be based on accurate information on their conditions, ensuring through analysis and diagnosis the best return on invested capital, improved operating performance, and lower risks to the organization. To achieve the strategic objectives, the plans for assets maintenance, reform and renewal shall be part of the annual budget so that the necessary resources are appropriate in operating and investment budgets, ensuring that the long-term planning is modeled to contribute to business strengthening. The adoption of these practices by companies brings results in short, medium and long-term. These results are seen in improvement of technical, economic and financial performance; reduction of risks and liabilities; provision of transparency, security and traceability of investments; besides favoring investment funding and distribution over time. The International Copper Association, through this publication, contributes to companies, especially in the power sector, to visualize how the successful practice of asset management can leverage businesses efficiently and sustainably over time.
  8. 8. 11 Introduction This document is not intended to prescribe approaches, methods or mandatory tools, but seeks to clarify what is proposed in the current standards by giving examples, adopted practices and tools used by companies, not only the energy sector but also other of industries and other service sectors. The proposal is to draw a path or a trail that enables the basic vision for a company to deploy an asset management system through stages or the described “steps” based on the PDCA (Plan, Do, Check, & Act) cycle that is the foundation of the management system. Thus, the six steps proposed enable the structuring of the management system for asset management of any asset-intensive company. The proposed steps are in line with the standards and stages of the PDCA cycle. Figure 1: PDCA Cycle and Asset Management
  9. 9. Let’s talk a little about Standards: The series of of international standards is the result of work carried out under the ISO TC 251 international committee. The series of standards consists of 3 separate standards: ISO 55000, ISO 55001 & ISO 55002. The standard ISO 55001 gives the requirements of a management system for asset management, which from now on will be referred to only as asset management system. This standard is related to the ISO 55000 standard, which introduces terminology and with the ISO 55002 standard that provides guidance on how to interpret the ISO 55001 standard within a specific environment or for certain types of assets. 55000 Overview, principles and terminology • Leadership • Policy • Planning • Resources • Operation • Evaluation • Monitoring • Critical Analysis • Continuous Improvement 55001 Requirements of management systems 55002 Guidelines for application of the 55001 12 Figure 2: Standards and content
  10. 10. The series of standards provides the definitions of what shall be done, but does not tell “how to do.” This is why the search for practical examples is a constant among companies intending the adoption of the standards and further certification. In this document we will use the symbols “{}” to reference the number of the corresponding item in the ISO 55000/1/2 standards. The standards are also structured according to the PDCA cycle (plan, develop or execute, verify and take action to improve). In this document, we will also follow the structure of the standards, through structured steps according to the PDCA. The steps described in following are a basic proposal for a company of any size to adapt itself to what is required by the Standards and to get value through asset management. Step 1 refers to system planning corresponding to the P phase of the PDCA cycle. The steps 2 and 3 relate to the system development as the D phase of the PDCA cycle. Steps 4 and 5 represent the verification stage of the PDCA cycle and step 6 refers to Actions to improve the system as the stage of the PDCA cycle. Figure 3: Proposed steps 13 Step 1 Planning Step 2 Execution Step 4 Monitoring Step 5 Analyze Step 6 Make a decision and seek improvement Step 3 Manage Risks
  11. 11. PLAN THE COMPANY ASSET MANAGEMENT STEP 1
  12. 12. In the first step, the whole planning for implementation of the asset management system will be addressed, including the required knowledge and needed tools. For the planning to be successful, it will be necessary to deepen some basic definitions mentioned in the ISO 55000 standards: • Assets {3.2.1} According to the standards, an asset is an item, something or an entity that has actual or potential value for an organization. This value can be tangible or intangible, financial or non-financial, and includes consideration of risk and liabilities. It can be positive or negative, at different stages of the asset life. Physical assets usually refer to equipment, inventory and properties owned by the organization. Physical assets are the opposite of intangible assets that are non-physical assets, and are such as contracts, brands, digital assets, use rights, licenses, intellectual property rights, reputation or agreements. A grouping of assets referred to as an assets system may also be considered as an asset. • Asset Management {3.3.1} According to the standard, asset management is the coordinated activity of an organization to realize value from assets, what involves a balancing of costs, risks and performance. • Asset management system {3.4.3} The function of a management system for asset management is to establish the asset management policy and the asset management objectives. The asset management system is a subset of asset management. The four principles of Asset Management described in the standard are: Assets that are within the scope of the asset management system Set of interrelated or interacting elements to establish asset management, policy, asset management, objectives and processes to achieve those obectives Coordinated activity of an organization to realize value from assets Figure 4: Relations between key terms in asset management Asset Portfolio Asset Management System Asset Management Managing the Organization Assets exist to provide value to the organization and to stakeholders; Asset Management transforms the strategic intent into tasks, decisions, technical and financial activities; The leadership and the workplace culture are determinants to the perceived value; Asset management provides assurance that the assets will meet and perform their function. 1 2 3 4 15
  13. 13. A. The Context of the Organization {4} a. Understanding the organization and its context {4.1} Before start-up, the company normally establishes the scope of the asset management system and its breadth within the organization. A team is designated to execute the process in the organization performing specific roles. In the classic management form, there is a leader (with full autonomy to conduct the process and communicate with the top management) and a team that is usually divided into three distinct roles: the asset owners (who define the corporate objectives through financial, technical and risk criteria), the asset managers (who apply the defined specifications of a project or asset planning) and the service providers (who execute the project and provide the results or information). The initial preparation requires from the leader and from the team a deepening into the company’s business. The standards consider that the asset management system must address six aspects of an organization: the internal and external environment, their planning processes, support processes, operational processes, the performance evaluation processes and ultimately the continuous improvement processes. At this stage, some questions need to be answered: What creates value for the company? What is the focus of its business? What is expected as a result? All external and internal issues that affect both the realization of organizational objectives and the asset management system shall be identified. In the ISO 55002 is listed types of issues to be evaluated. At this stage, it is needed to determine if the asset management system is aligned and consistent with the organizational and strategic objectives, knowing in detail the organization’s strategic plan in the short, medium and long term. A Figure 5: Overview and interrelations of the asset management system Organization Management System Organizational objectives Requirements of stakeholders Asset Management System Asset management scope and strategy Organizational plan 16
  14. 14. b. Understanding the needs and expectations of stakeholders {4.2} c. Determining the scope of the asset management system {4.3} d. Determining the Asset Management System {4.4} Firstofall,itisrecommendedtoidentifystakeholders,includinginternalandexternalstakeholdersoftheorganization. After identification of the parties, their expectations and intrinsic requirements are related to the asset management system. It is important to consider how they interact with the system, and their goals. The requirements of stakeholders are also considered for registration and documentation of financial and non- financial information relevant to asset management. At this time, the criteria for decision-making are determined, as well as the roles and responsibilities of each member of the asset management team. Within the scope of the asset management system are the limits and reach of the system, which shall be documented. Some sort of list of assets shall exist, which will be handled by the asset management system, and these assets will form the considered portfolio. The unlisted assets will remain out of the scope and will not be treated by the system. The application requires full involvement, comprising the resources and interactions of the whole organization related with asset management in its broadest sense. In addition to covering internal processes and functions, including interfacing with external suppliers, outsourced services, regulators and national and international considerations, the scope includes geographical locations and organizational involvement periods. Probably, the scope of the asset management system will be a written document with various relevant subsections and will certainly be the object of definition by internal and external audits of the asset management system. A system is a set of processes. Every process used in asset management must be defined and specified. Thus, a description of how the asset management system is established, applied, maintained and improved is required. At this stage, a critical analysis of existing processes against the requirements of the standards is carried out. This analysis will determine which areas need to be developed to support the asset management system. Every process used in asset management must be defined and specified. An alternative is to draw a flow graph of each process, with all of its interactions, considering in practice procedures on how to do correctly each phase and step of each process. Figure 6: Processes of an asset management system Asset Management System Stakeholders needs and expectation Organizational plan and objectives Strategic Assets Management Plan (SAMP) Asset Management Plan Asset Management Policy 17
  15. 15. Leadership {5} Leadership and organizational culture are key factors in obtaining value. The top management has the natural leaders of asset management of an organization, who are responsible for quality and safety, and who will be responsible for asset management. The top management sets the business vision and strategy, aligns the organization and provides the necessary resources for the objectives’ achievement. The top management places people in leadership roles, guiding and supporting them. The leadership influences how the organization performs its role and creates the organizational culture. In this respect, the influence occurs by example and attitudes. B Figure 7: Leadership process in asset management Definition of the executive sponsor Identification of the leading team Forming work groups for deployment Scope definition Preparation of the strategic plan Preparation of management plans Allocation of resources 18
  16. 16. a. Policy {5.2} • Clearly express the principles to be applied, such as the organization’s approach to the health and safety of its employees, the environment and sustainable development; • Include a commitment to continual improvement of asset management and the asset management performance; • Be documented, put into practice and maintained; • Be communicated to all stakeholders, including contracted service providers. There is a requirement that these shall be informed of their obligations related to the organization’s asset management policy; • Be reviewed periodically to ensure that it remains relevant and consistent with the organization and with the strategic plan. The asset management policy is a short statement that sets out the principles by which the organization intends to apply asset management to achieve its organizational objectives. The standard recommends that the asset management policy is a formal statement of support from top management, which thus demonstrates its commitment to asset management. The process of elaboration of the asset management policy is complex it must involve the company vision and mission, as well as a strategic analysis of its situation in the market. In general, there are some rules that the policy must meet: • It shall be derived from and compatible with the organizational strategic plan, i.e., define the high strategic value of assets and how they fit into the mission and goals of the organization; • Be adequate to the nature and scale of the organization assets and operations; • Be coherent with other organizational policies; • Be consistent with the overall risk management of the organization, i.e., guide how decisions should be taken; • Provide a framework that allows the strategy, objectives and asset management plans to be produced and implemented; • Be commited to comply with the law, regulations and standards applicable to the organization; 19 The policy may not be presented in an exclusive document; it may be contained within other organizational policies, or the organization management documents.
  17. 17. c. Criteria and definition of the asset portfolio to the management system - Determination of the scope {4.3} When defining the scope of the asset management system, the portfolio or group of assets that are within the scope shall also be defined. These assets are typically classified by the risks and costs associated with them as critical and non-critical assets: Starting from the premise that asset is what creates value for the organization we can consider critical the ones that generate the greater value within the established scope. We can also say that for an asset can be considered critical or not depends on the importance of this element and by the consequences of its absence or failure. In some situations the same type of asset can be critical and in others not, depending on the application and the backup conditions in case of a failure. The conclusion that an asset is critical, or non-critical, seems pretty simple and easy to understand when you know the context of the organization and its scope. In short, it can be said that the characteristic of an asset being critical or not is directly proportional to the role this plays in the company’s business. Therefore, we can have assets that in certain companies are considered critical and in others are non-critical. Classifying the assets as critical and non-critical is an important task for asset management, as critical assets will necessarily be monitored in more detail. Assets grouped into critical and non-critical shall, in a general manner, be reviewed, monitored, and have their performance evaluated, individually and in groups. Each asset in the system has a specific function and often can be considered non-redundant. Example: In the particular case of power companies, critical assets for each segment would be: CRITICAL ASSETS 20 Figure 8 Assignments and expected results of the asset management team Assignments of the Asset Management Team Define strategies (lines of action) Define operational policy Prioritize investments Manage internal and external suppliers Set up services Know the assets and their life cycle Expected Results Optimization of performance and cost involved in the assets’ life cycle Maximizing returns on investments with assets Satisfaction of customers and shareholders Greater value for the company and for stakeholders b. Organizational roles, responsibilities and authorities {5.3} A team is assigned to lead the process within the organization by performing specific roles. Each role and responsibilities should be agreed and disclosed with everyone involved, ensuring the transparency of the process and the authority of each one.
  18. 18. At first glance, the critical assets to maintain power generation would be the generators and turbines, but these are not the only responsible for creating value to the core business of a power generation company: there are also transformers, conductor cables, protective equipment, control and supervision and the source of generation, as water sources for hydroelectric generation. If in a generating unit, there is an incident involving lightning and the simple lightning rod does not function properly or the grounding system does not protect the equipment; the loss for the company will be large, as if there is no water available in dams and springs; the company’s business will be fully committed. Power transmission through lines and towers has as critical assets not only the conductors, but also the substations, the protection system, the control and supervision plus the towers, switchgear systems and transformers. Similarly to what happens with generation companies, if a disconnect switch does not operate at the right time; the failure can disable a line and the consequences for the company can be many. GENERATION TRANSMISSION The criteria for defining critical assets depend on the company’s business and organizational strategic plan. In general, some are used by all companies: One of the requirements of the ISO 55001 standard is that the company shall establish, implement, maintain and continuously improve the asset management system, including all the processes required to support the system and its interactions. In this way, the whole planning will be structured within a document called SAMP - Strategic Asset Management Plan. Further details on the SAMP preparation will be provided in Step 2 - Execution Value generated by the asset in the business Risks involved in losing the asset Non-earned profits by the failure or absence Maintenance and replacement costs A C B D CRITERIA FOR DEFINING CRITICAL ASSETS d. Asset management system {4.4} Distributors are responsible for making the generated and transmitted power reach the end users. The main assets of the distribution business are: transformers, cables, protection systems, control and supervision, meters and maneuvering systems. In this case, the failure of a power transformer in the substation can be as disastrous as a failure of a circuit breaker or an insulator; this will depend on the role of each component in the power distribution activity, and on the load being fed. DISTRIBUTION 21
  19. 19. EXECUTE THE ASSET MANAGEMENT OBJECTIVES STEP 2
  20. 20. In a company, the asset management shall be driven by objectives aligned to the strategic planning and considered in the planning stage. The asset management objectives must be clear and consistent, as indicated by the letters of the word “SMART”: The asset management objectives are specified and derived as a part of the SAMP (Strategic Asset Management Plan) to be deployed in the management plans of assets, which by their turn are aligned to, and derived from the scope. Typical issues, amongst others, that are addressed by objectives include the following: “Specific” “Achievable” “Realistic” “Time-based” “Measurable” — total cost of ownership; — net present value; — return on capital employed; — performance vs. planning; — certification of the asset management system, or assessment of the asset management maturity (by benchmarking); — customer satisfaction scores; — survey results for society or for reputation; — environmental impact, e.g. carbon costs; — level of service; IN ASSET MANAGEMENT: S A M R T A 23 — return on investment (or return on invested capital, or return on asset); FOR GROUPS OF ASSETS:B — asset system availability; — asset system performance (e.g.: uptime, efficiency); — unit cost of product or service; FOR ASSET SYSTEMS:C — reliability (mean time/distance between failures); — asset condition, performance, or health score; — life cycle costs; — life expectancy; — assets’ power performance. FOR ASSETS:D
  21. 21. The company shall establish, document and maintain a management plan (or several ones) to achieve the strategy, or asset management line of action, according to the established scope, to achieve the goals through the following activities throughout the assets’ life cycle: • Creation, acquisition or improvement includes conception, specification, project, modification, procurement, construction and commissioning. •Maintenance also includes inspection, condition monitoring, functional testing, repair, renovation and/or extension of assets useful life. Replacement of individual assets can also be regarded as maintenance of the asset systems. •Theassetmanagementplancanbedevelopedforindividual assets, for groups of assets, for isolated systems or for the global management system. However, it is essential that the plansarelinkedandcoherentwiththemanagementstrategy and aimed to reach the preset objectives (directives). The development of the asset management plan and the life cycle activities should include an analysis of the actions’ impact on each stage of the life cycle and the needs before the next stages of the life cycle. Notes: a) Acquisition, creation or renewal; b) Usage; c) Maintenance; d) Discard / or alienation. The SAMP should present in a documental form the relationship between the organizational objectives and the asset management objectives, and should define what is required to achieve such objectives. It is important that this alignment be communicated to stakeholders to ensure that all levels understand why asset activities and asset management activities are implemented. Some key questions before drawing up a SAMP are: • What is the current situation of the company? • Where it is intended to be in the considered time period? • What are the objectives and associated risks? • How to achieve them ? • How long is the time to get there? • What are the targets? • How are they measures? SAMP – Strategic Asset Management Plan {6.2.2}A 24
  22. 22. The SAMP shall address for the assets portfolio: • The required service level (reliability, safety, regulatory requirements, environmental acceptance, etc.) • Strategic plan horizon/schedule • Financial information / expected return of investments • Roles and responsibilities • Risk management • Integration with other management systems • Specification/Project • Purchasing • Operation • Maintenance • Renewal/Replacement • Expansion • Introduction of New Technologies • Disposal STRATEGY LIFE CYCLE A B 25 • Description • Measurement Range • Targets INDICATORSC The asset management plan(s) shall be the SAMP unfolding for each asset or each group of assets within the asset management system portfolio. The development of the asset management plan shall include an analysis of the actions’ impact on each stage of the life cycle and the needs before the next stages of the life cycle. A special plan for emergencies or contingencies shall be developed for critical assets, in order to foresee solutions for catastrophic or large impact events. The contingency plan shall provide planned answers to possible failures in critical assets resulting from independent or coincidental events, as well as being capable of fast asset replacement by a backup in case of a failure, or the system operation blocking, as the case may be. For transmission lines, as an example, the plan must provide for such failures not affecting the whole system, by carrying out operational risk’s prediction and analysis, taking into account that undesirable events can have consequential effects due to a variety of causes: • The environment: lightning, winds, birds, trees; • Human actions: accidents, vandalism; • Malfunction of other equipment: explosions, protection failures. a. Asset Management Plans {6.2.2}
  23. 23. Figure 9 – Structure of the asset management plan(s) The Plan Scope and Directives Financial forecasts Life cycle strategies Continual Improvement Actions Description data of considered assets Activities, tasks, responsible persons and priorities Evaluation Practices Support {7}B a. Resources {7.1} For the asset management system to function properly, its inputs must be provided. These comprise processes, infrastructure, funding, knowledge, skills, information management, services and the cultural environment for the system and assets reach the performance required by the organization. All resources needed to ensure the SAMP and the asset management plans shall be identified. This requirement of the ISO 55001 standard aims to support the asset life cycle and lead the organization to recognize that commitments are needed from all organization’s areas, throughout the asset life cycle, in order to ensure the asset performance wanted by the organization. It is necessary to identify and direct all resources either financial, human, security, tools, equipment and mainly investment for assets’ replacement, renovation, or acquisition. When performing asset management plans, a RGA - Resourcing Gap Analysis - can be simultaneously performed to identify the resource gaps that exist between the actual capacity of the organization and the resources needed to accomplish the management plans. Where restrictions are found, the organization should prioritize actions and resources. The emergency or contingency plan shall ensure that all critical assets can be replaced safely, with small impact to the system and in the shortest time possible, so that power supply is promptly reinstated. The emergency plan shall provide for actions in a crisis, and for major accidents, storms, disasters, operations’ center failure, evacuation plans, including communications continuity planning and foreseeing other emergencies. For some special assets, it will need to develop an individual contingency plan. In case of the practical implementation of the plan, this shall be reported and evaluated so that the emergency plan is improved and increasingly comprehensive. 26
  24. 24. b. Competence {7.2} c. Awareness {7.3} The personnel appointed to perform asset management related to roles, authorities, functions and services should be competent to perform their functions. This shall include external suppliers, service providers and hired labor. It is necessary that the organization verify if these persons have values, attitudes, knowledge, talent and experience consistent as expected for asset management. Proof of competency is a requirement. For example, a skilled person in the business area shall be able to demonstrate clear competence in specific asset management tasks (such as asset conditions evaluation) and comprehend the relationship between what they do and the activities performed by other persons in asset management (for example, how its asset conditions evaluation activity affects the determination of the remaining useful life of the asset). More than having knowledge and being aware, awareness means to have the exact view of the impacts and opportunities that the asset management system brings to the organization. It could be said that it is to take the perspective of the “business owner” and know the risks, opportunities and services’ quality expected from the organization. To assess the level of people awareness, one can make interviews on aspects that cover the comprehension of the asset management policy, such as to effectively contribute to the asset management success, and how the interviewed see their contribution to the achievement of the organization’s asset management goals, or what else can be done to achieve a positive differential. In addition to the asset management policy, the ISO 55002 standards recommend that awareness rate the following aspects: 27 A why asset management is important to the organization; B the implications of changes in the organization operation (e.g. if the organization makes changes to its operational processes or performance objectives the persons accountable for the asset management system should be aware of any resulting impacts); C your contribution to the effectiveness of the asset management system, including the benefits of the improved performance of the asset management system; D the consequences of asset management related risk (actual or potential) with its work activities, their behavior, and the asset management benefits of improved personal performance; E your roles and responsibilities, as well as the importance of their contribution in meeting the requirements of the asset management policy and of the asset management system; F the form that the organization is meeting its objectives. d. Communication {7.4} It is necessary to have a strategy with plans and communications media to convey the right information to the right people, inside and outside of the organization, at the right time. All communication requirements related to relevant assets, asset management and the asset management system should be identified and addressed, including the transfer and exchange of knowledge and intelligence for planning, execution, improvement and monitoring of the resulting performance.
  25. 25. e. Information Requirements {7.5} f. Documented Information {7.6} Information that must be identified and addressed is those referring to relevant assets, asset management and the asset management system. The type of information to be saved and for how long depends on its purpose. The ISO 55002 standard lists common information and requirements to asset management and to the asset-management system. The form of information collecting, retention, management, terminology consistency and traceability must be reported, ensuring the quality of information flow. Main information to be documented: Some information needs to be documented and maintained in accordance with the Standard requirements. In general, this is the information requiring control, basically comprising all means, all asset management system processes and all records evidencing the requirements’ fulfillment. Policy Asset Management Plan(s) Objectives g. Control of documented information {7.6.3} The documents selected for use in the organization are considered controlled documents and become a part of its document management system. They need to be identified, approved, made available when needed, stored and preserved, have their changes controlled, be filed using archiving practices and have their disposal specified. SAMP Auditing Critical Analysis by top management Operation: Project and Acquisition of Critical Assets {8}C The steps preceding the acquisition of an asset are extremely important because they affect directly the assets’ life cycle. It is used to say that the specification precedes the life start, but totally influences performance over the life cycle. Therefore, the specification for assets’ acquisition shall be reviewed periodically based on assets’ operational performance information and on the need of a technological upgrade, seeking assets that have the lowest TCO (Total Cost of Ownership), even if their initial purchase value is higher, and taking into account new indicators such as the power efficiency level. The specification shall consider the company norms and standards, which also should be revised to include new technology’s guidelines and adequacy of assets whose performance no longer meets the company’s strategies. The routine of norms, standards and specifications reviewing must be aligned between the asset management and engineering areas, both integrated with strategic planning. The specification for equipment procurement should be led by the asset management pillars: Performance, Cost and Risk. 28
  26. 26. Practice shows that adopting only the initial cost as a purchase criterion, in most cases, is not the best alternative, because other aspects need to be considered ever since the specification phase, these are: These are only a few examples, as many other aspects should be considered, depending on the business of the company. a) The equipment normal operation conditions b) Life cycle costs c) Risks associated with the equipment failure d) Power efficiency e) Overload capability in adverse situations COST RISK PERFORMANCE 29 Practical example: Asset’s Acquisition by a Logistics Company [A] (Author: Alexandre Félix do Nascimento Ítalo) A Brazilian company of the logistics sector, expert in road transport, had a management system being deployed. This system helped everyday tasks’ performance, but was restricted to maintenance areas. As the company was substituting and expanding its fleet (consisting of cars and light urban transport vehicles), this significantly penalized the initial stages of the life cycle that depended on joint efforts from various sectors to be successful. The main problems faced were: • Significant vendor delays in the planned schedule of order’s delivery • Quality failures in delivered products and early death, with assets definitely immobilized with less than 10% of expected life • Technical specification problems that compromised operation • Lack of materials to perform maintenance • Dissatisfaction and lack of involvement of some areas. These and other failures caused external customers dissatisfaction and difficulties to expand its transport capacity. A process of assets (fleet vehicles) acquisition was devised and implemented with steps, deadlines and well-defined responsibilities, where maintenance was no longer the work center, but one participant of a multidisciplinary group built with representatives of Strategic Planning, Commercial, Suppliers, Purchasing, Engineering, MCP, Maintenance Execution and external customers. The main gains obtained were:
  27. 27. • EAP’s (Project Analytical Structure) creation according to the acquired asset that served as the basis for existing and future projects. • Alignment of acquisition’s schedule to customer needs. • Analysis of suppliers’ process capabilities and creation of technical evaluations. • Development of a trust relationship with the Purchasing sector and a partnership in suppliers’ evaluation, with direct impact on the future procurement processes. • Training of operation and maintenance teams, delivery of critical materials, and management of new assets’ configuration and commissioning before their final delivery to the unit responsible for their routine management. • Technical specifications in line with the client’s needs and with the best feasible technology for the business. Bringing the operational areas closer is one of the most difficult points to overcome and requires constant action: They tend not to meet medium-term activities and to worry only after the final delivery of the product, with failure complaints caused by their own lack of involvement. To achieve the correct performance of this and of other areas, it was essential do develop stakeholders’ management and implement a communication plan. Results appeared when asset management became everyone’s responsibility. [20] Introduction of new technologies shall also be analyzed from the asset management point of view.New technologies impact on the system could jeopardize the expected outcome of the asset management system, so an impact analysis should be held for short, medium and long term before acquisition and usage. a. Analysis for introduction of new technologies Training needs New Tools Changes in processes New Accessories Users Resistance Higher productivity? Better quality? Safer? Fewer failures? More competitive? Figure 10 – New Technologies Evaluation New Equipment New Technology New Process 30
  28. 28. Practical example: Introduction of new technologies in the oil and gas industry [B] (Author: Alexandre Félix do Nascimento Ítalo) Company “B” with operations in the oil and gas sector began to renew its fleet of ships built by a department and operated by another department of the same company. There were many unscheduled stoppages for maintenance, including stops of the newest ships, which generated heavy fines and risk of operating contracts’ cancellation. It was decided to develop an asset management model to reduce the occurrence of unscheduled downtime, met the legal requirements, the clients’ internal HSE (Health, Safety and Environment) programs and optimized vessels’ life cycle. A RGA - Resourcing Gap Analysis was carried out in the company. The main deviations found were linked to the lack of a structured process of assets’ acquisition and installation in Operations, which received the ships designed, manufacturedanddeliveredbytheConstructionDivision.Thecurrentprocessallowedthenewassettostartoperation, but with a high failure rate, no maintenance planning, no spares in stock, and without technical documentation. An asset management system based on the ISO 55000 was developed, aligned with the TPM (Total Productive Management) pillars and the best practices of Project Management, where the disciplines Time Management, Communication Management and Risk Management were fundamental to achieve the expected result. An “EAP” (Project Analytic Structure) model was prepared and a schedule was drawn for each vessel, divided into 3 phases. 31 The results were, in the first year of operation: • Savings over R$ 2 million in spare parts, comparing the manufacturer indications with the one prepared by the technical group; • Improved assessment of the company in the Maintenance category under the company main client risk and safety program; • Preparation of all maintenance plans for critical assets; • Increased adherence to maintenance planning; • Structuring of the Engineering and Maintenance Planning area and definition of the roles and responsibilities of all involved areas; • Creation of a multiannual asset management program for the implementation of the remaining tasks required for managing the entire life cycle of the company assets. Mapping of the hierarchical structure of the ship and organization of the technical collection. Definition of maintenance plans, drawing up lists of spare parts using reliability tools for the first trip and for the first 2 years of operation. Configuration management, preparation of strategic contracts for materials and services and inventory planning. Crew training, quality audits, control of Maintenance Indicators and warehouse and on board stocks’ management. PHASE 1 PHASE 2 PHASE 3 For the asset management to be effective, an ongoing risk assessment is needed, eliminating the ones that can be eliminated and controlling others to ensure the desired performance at a reasonable cost. [20]
  29. 29. RISK MANAGEMENT STEP 3
  30. 30. 33 Risk management is an important factor in a proactive asset management. The overall objective is to understand the cause, the effect and the occurrence likelihood of adverse events, to manage such risks optimally, by reducing them to an acceptable and controlled level. Risks may be defined as “future uncertainty”. It has two basic components: the frequency and its severity or consequences. For example, each transformer has an end-of-life, so that the gravity of the event is known. The risk is not to know when this will occur - or the frequency of failures. Some companies often use the event frequency and severity product in the analysis process. Despite the frequency and severity information being subjective, qualitative or quantitative, risk analysis is always an important tool to develop a decision framework. Risk management is an integral part of every asset management process. Therefore, there is a specific need to have processes to identify and monitor risks, not only in view of the current law, but also as a practice that makes it possible to optimize and prioritize actions based on cost, risk and performance. There are several ways to manage risks [1] and their adoption depends on each organization. The following are some of these forms: Classify critical assets and list the risks of each one Define the scope and limits of individual risk assessments Create a spreadsheet of potential events and their causes  Include the associated risks, the probable failures and their consequences Identify existing controls Create controls for each risk, activity and planned asset Estimate the probability and consequence of each event or potential risk assuming that the control measures were taken Consider the effectiveness of the measures and the probability of each one failure Determine whether the control measures are sufficient to keep risks under control within the tolerance required by the organization and by legislation Indicate as severe the risks that do not have control measures or exceed the tolerance limits Techniques: SR (risk series), SE (series of events), etc. Techniques: SWOT, HAZOP, PESTLE, etc. Techniques: RCM, RBI, IPF. Analysis using: • FMEA • FMECA • RCA • FTA Methodologies applied to risk managementA Figure 11 – Risk management methodology Classification of assets Identification of risks Control Measures Risk Levels Tolerance Levels
  31. 31. For every potential risk, the probability of failure must be analyzed and its respective consequence (type, extension and severity). For example, one may have two risks with a high failure probability, the first with a low severity result (low repair cost without injury to persons and without damage to the environment, and the second risk with critical severity consequences (severe damage with the unit stoppage, probability of injury to persons and damage to the environment)). This particular risk, may need further testing and stricter control measures culminating in proactive maintenance, early renewal or replacement of the assets before its end of life. Risk indicators should be established and applied to assets for a “risk matrix” to be created, easing analysis and decision- making. There are several risk matrix models, but all result in a graduation of risks allowing to take the necessary mitigating measures for their elimination or reduction. It is suggested below, as an example, the use of a model [6] with 5 rows and 4 columns, resulting in five different levels of risk: A risk matrix can be divided into three colors (green, yellow and red) indicating low, medium and high-risk and can also be divided into four regions or quadrants as in the SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis, indicating the outer quadrant as the most critical risk (more severe and more often) and the other two quadrants that need mitigating actions because of high frequency or high severity, both cells are proposed for deciding on actuation forms for frequency and severity of risks. By the proposed analysis [6], it is noticed that in the risk management matrix, the horizontal axis (severity or seriousness) that only the figure represented by “Y” is considered because at this point there is no need to differentiate, if the effect of a failure mode occurs on people’s safety, on the assets, or on the environment, but only to assess the severity of the involved risk. It is enough to considered Y = 1 when the probability of damage to the environment, health or safety, is non-existent or insignificant, and greater than 1 when there is a significant probability. After analysis and tabulation of the risks of each asset, these risks are mapped in the matrix. The next table summarizes the results that may be obtained in the matrix with condition and recommended actions [6]. It is observed that the deadlines are given as examples and can be changed according to the guidelines of each company. Figure 12: Risk matrix [6] 34 Another manner is to use the risk matrix:
  32. 32. 35 Check if there is any strategy or maintenance task to prevent failure or reduce risk to degree III. Otherwise, it shall be mitigated with projects/ actions within 6 months. Check if there is any strategy or maintenance task to prevent failure or reduce risk to degree III Otherwise, it shall be mitigated with projects/ actions within 12 months. Checkforstrategyormaintenancetask to avoid failure. Otherwise, procedures or controls should be created. Some of the necessary measures are signs and warnings. Check if any strategy or maintenance task to prevent failure is economically feasible. No mitigation is required Table 1: Risk Classification, conditions and recommended actions RISK DEGREE CATEGORY CRITICAL Not acceptable Undesirable Acceptable with controls Acceptable with warnings Acceptable SERIOUS MODERATE SMALLER NEGLIGIBLE CONDITION ACTIONS If the risk degree is I, II or III, it is considered that the failure mode analyzed has implications on the environment, health and safety and should be subjected to further questionings, such as reliability-centered maintenance. In this case, maintenance strategies or proactive actions that meet the predefined criteria must be defined, or changes in the design specification shall be made. Knowing the variables Y (severity degree), F (frequency) and (R) risk degree, one can list the recommended actions for each case. Risk management should be an ongoing process searching for defects, failures or near misses, in order to prevent them and control the effects. For risk without control measures existent or proposals, the failure probability study should be conducted more thoroughly. Here the analysis shall include technical, economic and strategic aspects. In the event of a failure stemmed from a high-risk potential, direct and indirect costs will be involved, including some intangible aspects that are not always considered. Another important consideration in asset and risk management is compliance with legal requirements and regulations for the company operation, that under no circumstances may be unattended due to exposure to risks. The costs of repairs or corrective maintenance can reach more than 35% of the costs of a company, which further motivates the risk management and minimizing failures actions [2].
  33. 33. Actions to address risks and opportunities for the asset management system {6.1} Management of Change {8.2} B C The objectives of using risk management in asset management are: - Give assurance that the asset management system can achieve its Intended outcomes; - Prevent, or reduce, undesirable events and effects - Determine new opportunities - Achieve continual improvement. It shall be taken into account that risks and opportunities change over time, so it is important that this assessment be made periodically and promote the necessary changes to achieve the objectives. Internal or external changes affecting assets can impact on the organization capacity to achieve its asset management objectives. It is important that these changes are assessed, and mitigating actions are taken before the change occurs. A critical analysis must be made of the consequences of both the planned changes, as well as the unplanned. The main changes that require this analysis are: 36
  34. 34. Outsourcing {8.3} D Outsourcing is a common method for an organization that prefers to perform certain asset management activities not by itself, but by an external or internal service provider. When these activities influence the achievement of the asset management objectives, it is advised that these should be part of the asset management system, and should be documented. The organization should formalize (with a contract) the level and quality of outsourced services. An important care to be taken is to not to lose control over the objectives of outsourced services and the results to be achieved. For the asset management system to be adequately controlled, it needs a monitoring able to early identification of any deviation that can impact performance and the expected results. • changes in organizational structures, roles or responsibilities; • asset management policy, objectives or plans; • process(es) or procedure(s) for asset management activities; • new assets, asset systems or technology (including obsolescence); • factors external to the organization (including new legal and regulatory requirements); • supply chain constraints; • demands for products and services, contractors or suppliers; • demand on resources, including competing demands. 37
  35. 35. MONITORING THE OPERATION STEP 4
  36. 36. After acquisition, the commissioning stage starts after the manager or contractor have completed the implementation or acquisition of the project, and the asset or system is ready for use. From this moment onward, monitoring of the asset performance must be conducted and recorded, enabling the future analysis of the life-cycle. Commissioning marks the beginning of the operation, which can occur in various ways. In a power substation, the final test of the installation should be performed and documented through an as-build of the plant. At the same time, the operation and maintenance personnel must be trained on the operational requirements of the new plant. The initial phase ends when the new asset is put into commercial operation, and preventive and corrective maintenance guidelines are established and known by the station teams. Monitoring should take place throughout the asset lifetime to enable decision-making. The monitoring comprises the following steps: The expected results by asset management will only be achieved if there are a systematic measurement, monitoring, analysis and evaluation of assets. The methods for monitoring, measurement, analysis and assessments depend on each organization and should review the necessary items for decision-making on assets. Usually, indicators are adopted for evaluation. These indicators should be established in the asset management plans. Performance and risks indicators are determined with the following assumptions: Aligned with the strategic objectives of the company Balanced and measurable Deployed to all levels of the organization Monitoring steps: • Checking and comparison with standards • Observation of deviation from objectives • Identification of problems • Review of partial results • Communication for targets’ change Performance evaluation {9} A Figure 13 Premises for indicator’s definition INDICATORS 39
  37. 37. The system shall be assessed through the evolution of indicators in time in relation to: Examples used in utility companies: • Regulated Indicators (DEC, FEC, DIC, FIC etc.) • MTBF – Mean time between failures • Availability (hours without interruption) • Failure rate / critical equipment • Fault severity • Mean time between repairs • Maintainability • Frequency of failures or repairs • Technical losses / MWh installed or Total loss / km network • Reliability • Hours dedicated to asset management / team hours available Definition of indicators {9.1}B Figure 14: Indicator´s classification according to asset management fundamentals. a. Performance indicators or KPI´s PERFORMANCE COST RISK Examples of cost indicators used in utility companies: • Total cost of maintenance/ total asset value • Actual cost (sum of amortized repair costs (average acquisition cost - average depreciation X (1- average age of asset) ) • Operating Cost / MWh sold • Maintenance Costs** / Estimated costs of assets’ replacement • Maintenance Cost / Operating Cost • Cost of operation / Asset’s base value • Capex value provided / Performed capex value **Maintenance cost includes labor, contractors, support, overhead, training, spare parts, materials and systems, excludes depreciation costs and downtime because of maintenance. b. Cost Indicators 40
  38. 38. • Exposure Degree / number of failures • Probability of failure / maintenance costs • Investment in training / costs of accidents and incidents • Estimated costs of the company exposure / investments in maintenance and operation • Rate of return per maintenance project • Number of warnings from the regulator / MWh sold • Cost fines / investments in maintenance Measurement is always necessary There are no ready-made formulas, it is needed to be aligned to the strategic objectives of the company The evolution expresses the result Caution: the most important thing is not the value, but the interpretation Internal audits are effective tools to ensure that the asset management system conforms to its own requirements. Usually, such audits take place at planned intervals, are able to early point out deviations, and identify opportunities for improvement. Internal audits should be seen as a self-evaluation process that encourages participants to seek opportunities for improvement. The active participation, understanding and support of the organization’s members are important for the top management to make a critical analysis of the entire asset management system. Internal audit {9.2} C c. Risk indicators or KRI´s 41
  39. 39. ANALYZE THE ASSET MANAGEMENT SYSTEM STEP 5
  40. 40. Managing the lifecycle of critical assets is an essential component in asset management and requires the application of technical and economic criteria for decision-making. All equipment has a life cycle that consists of stages ranging from conception to disposal, or recycling: Life cycle analysis besides providing a deeper knowledge of the assets behavior helps companies to define the right time for disposal and how this disposal should be made in order to minimize the associated environmental impacts. The life cycle is understood as the time of the asset existence within the company from design and specification to disposal for recycling or scrap. Economic & Life Cycle Assessment A Figure 15 Economic analysis and the life cycle 43 During the life cycle events caused by incidents, accidents or failures accelerate the asset useful life end, reducing its life expectancy, or the asset remaining operational life under the required conditions.
  41. 41. Adequate monitoring of the asset operation enables the management team to estimate the remaining life depending on the severity of the events throughout the life cycle and determine the exact point for the asset replacement before an irreversible failure could happen. For the company to get the best yield and the best performance of an asset, it is necessary to make its life cycle management. The management of an asset life cycle shall comprise: • A continual monitoring system; • The evaluation and registration of incidents, accidents and failures; • Specific maintenance strategies; • Analysis of the life cycle cost; • Management of risks, reliability and its failure probability. As an example, considering a transformer with dummy data, and assuming a supervisory and monitoring system installed in the feeder, we will have over the years the record of events and operating information. The evaluation of failures occurred with this type of asset and its causes showed the following results (fictitious): Figure 16: Example of failures assessment 49% material 34 % assembly 11% internal residue 6% need further examination 44
  42. 42. With the information of material failures detailed by component, the reliability analysis can be made [11]: The following can be calculated: • Average availability • Total operating time • Time spent with maintenance • Expected number of failures over the lifetime • Average time till the first system failure • Reliability • Maintainability • Life expectancy The analysis of these parameters should feedback maintenance strategies, renewal and replacement of the transformer. At this point, the economic analysis and the risk analysis should be aggregated to the life cycle analysis to prepare data for decision-making [14]. The various decision scenarios can be tabulated with the following information (fictitious data): Failure Distribution: Weibull, b= 1.4, h = 1000 Repair Distribution: Weibull, b= 1.4, h = 100 Failure Distribution: Weibull, b= 2.0, h = 5000 Repair Distribution: Exponential, MTTR = 12 Failure Distribution: Exponential, MTTR = 10,000 Repair Distribution: Normal, m=8, s= 0.00001 A B C COMPONENT A COMPONENT B COMPONENT C 45
  43. 43. The definition of the chosen scenario is based on the better performance at lower cost and longer life expectancy. Cheaper solutions may not be the most durable and give the best performance, therefore, the need to overview different scenarios. Most companies do not take into account in their decisions the hidden costs that can be defined as costs that are not normally apparent, but that are important for the asset operation. Some of these costs are exemplified below and are established according to each company particularities: • Transport costs for maintenance and repair of assets; • Cost of emergency workers to meet the occurrence and put the asset into operation; • Cost of the management team to analyze the failure and propose a solution; • Non-quality cost; • Probable cost of an accident involving persons; • Probable cost of damage to the environment; • Rework costs in the event of a repeated failure; • Cost of customer dissatisfaction with the power supply interruption; • Fines, fees and penalties for an asset failure; • Cost of using an equipment of low power efficient (which increases losses and brings non-measurable losses by the company). For example: induction motors, distribution transformers, etc. The initial investment is only part of the total costs involved in an asset and its long-term use. The investment that seem high at the time of purchase can be paid in the long run through lower operating and maintenance costs. Where: SI = Without intervention RP= Partial reform RE= Renewal (complete reform) SU= Replacing with a new one The analysis of Life Cycle Costs (LCC) considers all operating and maintenance costs, beyond the initial investment for acquisition of an asset. Other major costs are the hidden costs, taxes and administration costs in return for subsidies received, added values and residual values. 46 Scenery Cost of action Current estimate of remaining life Cost of a new fault Equivalent Annual Cost Operating hidden costs Until replacement Expected life After taking-action Risk profile SI R$ 0 10 10 25 25 30 5 2,5 2,5 1,5 15 15 15 R$ 500 R$ 500 R$ 450 R$ 450 R$ 1.000 R$ 1.000 R$ 105,50 R$ 600 R$ 400 R$ 300 R$ 100 R$ 80,50 R$ 80,50 R$ 80,50R$ 1.500 RP RE SU Table 2: Example of scenario analysis
  44. 44. Figure 17: Steps for the LCC (Life Cycle Cost) or cost analysis during the life cycle Identification of the alternatives of the analysis Preparation of cost unfoldment tree Data and information collection Development of cost profiles per period Cost analysis, their reasons and impacts Selection of the best alternative Development of Pareto charts for the alternative levelingfor the the first stage 1 FEEDBACK 2 3 4 5 6 7 The complete analysis can be better understood through the example of an asset of a mining sector company: the press filter [14]. The press filter is an equipment used in the mining process to perform the separation of the processed ore, and the water added to the process to carry it through pipes. In this case, we will consider four options for analysis (Maintenance of current condition, Change or replacement, Re-powering and Overhaul) of the life cycle with a 10-year horizon. The Pareto graphs were performed for each of the alternatives [14]: a) Maintenance of the current condition (no interventions) Costs Costs up to 10 years % up to 10 years Accumulated Purchasing 6.403.920,20 26.721.669,80 ... ... ... 0,0 0% 0% 23,97% 23,97%Component A Component B Total 47 The analysis of the LCC (Life Cycle Costs) [14] can be made by the following steps:
  45. 45. 2 3 4 Situation 2 (change): Acquisition in January, availability provided by the manufacturer of 98% and loss reduction in maintenance by 95%. Situation 3 (repowering): Acquisition in January, availability provided by the manufacturer of 96% and loss reduction in maintenance by 92%. Situation 4 (overhaul): Acquisition in January, availability provided by the manufacturer of 97% and loss reduction in maintenance by 90%. b) Change or replacement with new equipment c) Re-powering of existing equipment d) Equipment overhaul Costs Costs Costs Costs up to 10 years Costs up to 10 years Costs up to 10 years % up to 10 years % up to 10 years % up to 10 years Accumulated Accumulated Accumulated Purchasing Purchasing Purchasing 3.842.352,10 5.891.606,60 5.763.528,20 23.977.763,90 23.417.480,40 27.624.645,80 ... ... ... ... ... ... ... ... ... 7.944.762,00 2.383.428,60 3.575.142,90 33,13% 9,02% 12,94% 12,94% 33,13% 9,02% 16,02% 22,30% 20,86% 49,16% 31,33% 33,81% Component A Component A Component A Component B Component B Component B Total Total Total 48
  46. 46. Then, we consider the following historical company data: • Ratio of American Dollar / Real. • Annual inflation rate. • Environmental costs and production loss costs = the same values were adopted for the 4 options, so as to cause the analysis to focus exclusive on maintenance costs. • Analysis limit = 10 years. • Hours per year = 8080 hours. • Maintenance intervals, parts list and needed man-hours. The maintenance plan adopted by the company is based on the manufacturer’s manual. For each option the NPV (net present value) is calculated and the IRR (internal rate of return), and the best result in this example was obtained with alternative 3. The analysis of costs over the life of assets depends on the data collected during all phases of the cycle by continuously monitoring of the asset. Consider a compressor that has been operating for 10 months in severe conditions (dust, temperature and humidity well above average), and so had numerous fails. To solve this problem we suggest an analysis by reliability engineering methods, in particular using the statistics curves of Weibull. From the compressor basic information, the hierarchy of components can be defined, enabling the creation of a functional tree. This makes it possible to define the appropriate maintenance activities for each component, as well as the cost analysis by failure event. Through a FTA simulation, maintenance costs are obtained over the life cycle of the compressor, whose service life is estimated at 20 years. Calculation of the economic life of an asset and LCC analysis B Practical example: High Performance Compressor [C] Author: Claudio Caiani Spanó ? From this scenario, how to determine the optimal compressor replacement time based on the best cost-performance relation? 49
  47. 47. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 R$ 20.518,73 R$ 20.410,36 R$ 20.190,50 R$ 20.170,88 R$ 20.243,03 R$ 20.351,15 R$ 20.104,74 R$ 20.422,32 R$ 20.189,48 R$ 20.271,16 R$ 20.383,32 R$ 20.296,65 R$ 20.284,15 R$ 20.377,45 R$ 20.194,76 R$ 20.303,46 R$ 20.223,03 R$ 20.271,57 R$ 20.117,37 R$ 20.317,17 Table 3: Example of maintenance cost over time OPERATING TIME (YEARS) MAINTENANCE COST System Overview - Compressor Average Availability (all events) 97% Expected number of failures 2.570,57 Standard deviation (number of failures) 63,21 Available time (hr) 1 70.100,50 Total downtime (hr) 5.099,50 Number of failures 2.571 Total cost R$ 405.751,05 Equivalent operating cost of maintenance, considering the expected duration of the asset = 20 years The simulation results provide data on the maintenance cost for any time, i.e. each analyzed year (LCC analysis base). From the simulation, the related performance and cost indicators are obtained throughout the planned life cycle for the compressor, featuring parameters to calculate the economic life of the asset. 50
  48. 48. The analysis of the economic life calculation of an asset and LCC analysis allow to obtain multiple benefits for the operation and maintenance activities, such as: • Organize and direct the activities through hierarchy • Determine and classify the components • Understand and quantify the performance of the most critical components • Understand the financial context and of the compressor • Apply knowledge acquired in other optimizations: • Determine ideal stock of spare parts • Determine optimized preventive maintenance and inspections Calculations and costs analysis over the life cycle, as well as performance evaluation, are essential tools to support decision-making. Figure 18: Example of LCC cost analysis Time (years) Equivalent Capital Cost/year Equivalent Property Cost /year Equivalent cost O&M 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 R$ 22.500,00 R$ 19.687,50 R$ 17.343,75 R$ 15.380,86 R$ 13.728,52 R$ 12.330,32 R$ 11.140,92 R$ 10.123,73 R$ 9.249,15 R$ 8.493,18 R$ 7.836,26 R$ 7.262,43 R$ 6.758,60 R$ 6.314,03 R$ 5.919,82 R$ 5.568,62 R$ 5.254,32 R$ 4.971,81 R$ 4.716,81 R$ 4.485,73 R$ 31.558,73 R$ 32.584,38 R$ 33.522,97 R$ 34.589,31 R$ 35.706,85 R$ 36.923,80 R$ 38.141,06 R$ 39.484,93 R$ 40.840,45 R$ 42.275,22 R$ 43.794,37 R$ 45.365,40 R$ 47.005,92 R$ 48.736,83 R$ 50.516,24 R$ 52.397,12 R$ 54.351,98 R$ 56.406,72 R$ 58.532,43 R$ 60.793,20 R$ 54.058,73 R$ 52.271,88 R$ 50.866,72 R$ 49.970,17 R$ 49.435,36 R$ 49.254,13 R$ 49.281,98 R$ 49.608,66 R$ 50.089,61 R$ 50.768,40 R$ 51.630,63 R$ 52.627,83 R$ 53.764,52 R$ 55.050,85 R$ 56.436,06 R$ 57.965,75 R$ 59.606,31 R$ 61.378,53 R$ 63.249,24 R$ 65.278,93 51 Therefore, it was possible to identify the optimal time to replace the compressor, based on the minimum cost of the asset ownership. The ideal time would be the sixth year, rather than wait for the full course of 20 years, representing a reduction of cost of 32.53% in the lifecycle. MINIMUN COST Asset equivalent cost Property cost O&M cost
  49. 49. DECISIONS MAKING AND SEARCH FOR CONTINUOUS IMPROVEMENT STEP 6
  50. 50. In general, the best asset management practices take place when the company chooses to keep its assets in use for as long as they remain in a safe condition, technically efficient and economically viable. Management and maintenance policies should support this goal, actively intervening to ensure continuous performance improvement. The company needs a clear policy of assets’ renewing that must be replaced not only when they are irreparably damaged, but also when: a) The operating and/or maintenance costs over the remaining life of the asset exceeded the replacement cost; b) There is an imminent risk of the asset failure; c) The impact of a likely failure exceeds the replacement cost; d) A probable failure may compromise the reliability and security of the system and people; e) The assets have become obsolete and inefficient to operate and to maintain; f) Replacement gains imply improvement of indicators related with people safety, the environment and the company performance. For decision-making to take place in the best possible way, it is necessary that the management team has accurate information on the assets’ conditions. The basic information is: • Monitoring the assets’ condition (operating conditions, inspection data, testing, maintenance, incident recording and occurrences); • Development of a diagnosis to interpret the condition monitoring data; • Determination of failure modes, reliability and statistical analysis; • Calculation of failure rates, remaining life and probability of failure; • Economic analysis of capital investments and costs of assets; • Risk analysis of critical assets. In the asset management system, the quality of data entry has a significant impact on the output accuracy, so it is important to have the staff commitment in keeping records up to date and organized. Maintenance plans, revamp and renewal of assets should be part of the annual planning with asset management having its own budget. This will allow designing the asset management, and modeling its long-term planning. Asset managers are also responsible for determining which items should be kept as a strategic stock, mainly due to the time that the supplier need for replacement and the importance of the component to the company system. The timing of new technology’s introduction should also be decided by the asset management team based on historical and market trends. Often the asset management team is who points out the need of technological update or change in specifications, as in the following example: 53 Analysis for technological modernization based on energy efficiency A Practical example: Electric Motors [D] In 2010, a major porcelain industry, with 60 years of experience in the market, found among its critical assets the existence of equipment that was acquired at different times since its founding with old technologies and without concern for energy efficiency [16]. The factory mills, essential for the business, used standard electric motors with low efficiency and high power consumption. When evaluating its manufacturing process and mapping the critical assets’ condition and seeking solutions on the market, the company found that it was necessary to change the specification of the motors and replaced them with high-efficiency ones. This change took place in three distinct stages:
  51. 51. At this initial stage, a mapping of the ball mills’ function within the process was performed by raising the installation data, the motors’ data and detailed consumption and efficiency measurements for various operating cycles. The analysis of measurements and operating curves made it possible to conclude that it was necessary to replace the conventional electric drive motors of the mills by permanent magnet motors and a power inverter with braking device and IP65 degree of protection. These combined features allows saving energy by using an extra-high-efficiency motor, and also fit the motor operating environment and provide operational flexibility with variable speed. After replacement of the motors and their driver (inverter) measurements were made to evidence savings from replacing the standard type rotary motors by extra high efficiency motors (permanent magnets and frequency inverter). The results for one substituted motor are shown in the following tables: IDENTIFICATION OR DIAGNOSIS: ANALYSIS OF THE CURRENT STATE AND SPECIFICATION CHANGE EVALUATION OF RESULTS AFTER EXECUTION 1 2 3 Standard CA Direct Starting 40 1175 380 200L 243 26,9 17,7200L 2393800 a 180060 60 60 Wmagnet - Permanent Magnets Frequency Inverter CONSUMPTION REDUCTION: ANNUAL GAINS: Motor Driver Power (kW) Rotation (rpm) Voltage (V) Freq. (Hz) Torque (Nm) Casing Consump- tion (kW) 54 26,9 278 12 69.724,80 17,43 15.674,14 9.024,2810,0412 40.143,6027717,7 Consumption (kW) No hours opertion/ cycle No cycles/ month No months/ year Total kWh/years R$/ year (electricity) Ton of CO2 /year The annual energy savings with one of the new engines is R$ 6,649.85. As investment for the high performance motor implementation was R$ 15,977.21, the return on investment takes 2 years and 4 months [16]. With this solution, the company stopped issuing 7.38 tCO2 per year, equivalent to the absorbing capacity of 37 native trees. These gains only occurred because the asset management team of the company decided to evaluate its critical assets before their end of life, reviewing the specifications of the original design of the manufacturing plant and researching new technologies in the market that could provide increased reliability and better competitiveness. Risk analysis should support asset management decisions, facilitating the prioritization of investments and alignment of management plans. Management plans should always be reviewed and re-evaluated (planned vs. actual) for defining setting actions within an improvement program. All asset management actions should focus on continuous improvement of the management process to obtain the following results:
  52. 52. Figure 19: Continuous improvement cycle for asset management Establish goals, objectives, methods and standards Improve and perfect the process Put methods and standards into practice Measure the obtained results CORRECT CHECK PLAN EXECUTE 55 Change of maintenance culture into the asset management culture Creation of permanent values Excellence in assets’ performance A B C Periodically, the asset management system should be reviewed and audited in order to identify improvement opportunities. Early on, before the implementation of the asset management system, it is recommended to carry out a diagnosis and a gap analysis to know exactly the current state, and to know where it is possible to act immediately. Following the of PDCA (Plan, Do, Check and Act) methodology for the continuous improvement process to reach the best results you must follow the steps below: Figure 20: Main phases of the continuous improvement process
  53. 53. CONCLUSIONS
  54. 54. Asset management marks the beginning of a new era in business administration, something to be practiced by those seeking business excellence. Asset management is not limited to the management of asset, but transcends the barrier of operational limits to influence the business strategies. The ISO 5500X standards, issued in 2014, brings to organizations the challenge of quantifying their efficiency in terms of risk. The balance between cost, performance and risks can only be achieved through asset management practices. For companies that are willing to seek international performance standards within competitive markets, asset management brings, from the context of the organization, a new proposal to realize the strategic objectives. This is accomplished by integrating all areas of the organization, so that each one recognizes its role and responsibility in achieving value through organization assets. In the case of asset-intensive companies, whose business is based on the operation of physical assets, the rules bring an innovation to the life of assets, no longer limited to the period between acquisition and disposal, but understood from the asset specification to the liabilities remaining after decommissioning. The adoption of these practices by companies brings results in short, medium and long term. These results are seen in improvement of technical, economic and financial performance; reduction of risks and liabilities; provision of transparency, security and traceability of investments; besides favoring investment funding and distribution over time. Several benefits were conquered by companies already practicing asset management and adopting the international standards of the ISO 55000 series, mainly for asset-intensive companies such as electric utilities. Among the main achieved benefits, we shall mention the following: • A better Strategic Vision of the business; • Improved technical and financial performance; • Change in culture; • Improved competitiveness. 57
  55. 55. Bibliography [0] ISO 5500x [1] Zampolli, Marisa, “Guia básico para implantação da gestão de ativos em empresas de energia” (Basic guide for the implementation of asset management in power companies), 2012 [2] Zampolli, Marisa et al, “Gerenciamento de Ativos no setor elétrico da América Latina Resultados da Pesquisa: Melhores Práticas e Tendências” (Asset management in the Latin America power sector - Research Results: Best Practices and Trends), October 2011 [3] Pereira, Felipe Ernesto Lamm, “Determinação do intervalo de manutenção programada da proteção de linhas de transmissão considerando-se penalidades associadas à indisponibilidade” (Determining the scheduled maintenance interval of transmission line protection considering penalties associated with unavailability) Doctoral thesis – PUC Rio – October 2008 Bartlett, S., “Asset Management in a Deregulated Environment” on behalf of the CIGRE Joint Task Force 23.18 and Australian Working Groups, CIGRE Biannual Meeting, Paris, 2002 [4] Cheberle, Luciano A.D.; Carvalho, Cláudio E., “Controle patrimonial georeferenciado com padrões regulatórios de codificação e descrição das características técnicas dos ativos em serviço no Brasil” (Georeferenced asset control with regulatory coding standards and description of the technical characteristics of the assets in service in Brazil) submitted in the CIDEL, Argentina 2010 [5] Burle, Hélio, “Da manutenção para a gestão de ativos” (On maintenance for asset management), submitted in the SIC- Simpósio Internacional de Confiabilidade, 17/05/2012 [6] Raposo, José Luis Oliveira, “Manutenção centrada em confiabilidade aplicada a sistemas elétricos: uma proposta para uso de análise de risco no diagrama de decisão” (Maintenance focused on reliability applied to electrical systems: a proposal for risk analysis used in decision tree), Master’s dissertation - Universidade Federal da Bahia, 2005 [7] Pintelon, L., Gelders, L. and Puyvelde van, F., “Maintenance Management, Acco Leuven, Amersfoort”, 1997 Davidson, Innocent E., “Utility Asset Management in Electrical Power Distribution Sector, School of Electrical, Electronic and Computer Engineering, University of KwaZulu-Natal, 2005 [8] Marcorin, Wilson R., Lima, Carlos A.C., “Análise dos Custos de Manutenção e de Não- manutenção de equipamentos produtivos” (Analysis of Maintenance Costs and Non-maintenance of production equipment), 2004 [9] Bartley, William H. et al, “Life Cycle Management of Utility Transformer Assets” presented at Breakthrough Asset Management for Restructured Power Industry, Salt Lake City, 2002 [10] Picanço, Alessandra, Martinez, Manuel L. B., “Desempenho de transformadores de distribuição” (Performance of distribution transformers), Universidade Federal de Itajubá, 2008 [11] Seixas, Eduardo, “Manutenção Focada na Gestão de Ativos” (Maintenance Focused on Asset Management), Reliasoft, submitted in the 2nd Amazonian Seminar on Maintenance, May 2012 58
  56. 56. [12] Pinto, Luis Henrique Terbeck, “Análise de Falhas – Tópicos de Engenharia de Confiabilidade” (Failure Analysis - Reliability Engineering Topics) Engenharia de Manutenção Central, November 2004 [13] SAKURADA, Eduardo Yuji, “As técnicas de Análise do Modos de Falhas e seus Efeitos e Análise da Árvore de Falhas no desenvolvimento e na avaliação de produtos” (Failure Mode Analysis Techniques and its Effects & Analysis and Fault Tree in the development and in products’ assessment) Florianópolis: Eng. Mecânica/UFSC, (Masters dissertation), 2001 [14] Herculano, Adriano Souto, “Mensuração e avaliação dos custos no setor de manutenção industrial de uma mineração: impacto gerencial no ciclo de vida” (Measurement and assessment of costs in the industrial maintenance sector of a mining: managerial impact in the life cycle), Masters dissertation, UFPB, 2009 [15] Van Duc, Nguyen, “Managing T&D Assets to enhace business performance” presentation on 6th Harmonisation Forum, Thailand, June,2012 [16] WEG catalog /Procobre, 2011 [17] Belardo, Carlos A. , Lopes, J.C.R, Souza, P.D. “Manutenção Centrada em Confiabilidade aplicada na gestão de linhas de transmissão subterrâneas” (Reliability Centered Maintenance applied in the management of underground transmission lines), 2009 [18] Martins, Maria A. G., “Gestão da vida útil dos transformadores” (Lifecycle management of transformers), EDP, 2009 [19] Nascimento, Sebastião Vieira do. “Engenharia econômica: técnica de avaliação e seleção de projetos de investimentos” (Economic engineering: technical evaluation and selection of investment projects) Rio de Janeiro: Editora Ciência Moderna Ltda., 2010. Nascimento, Sebastião V., “A importância da substituição de equipamentos” (The importance of equipment replacement) article found at http://www.logisticadescomplicada.com/ a-importancia-da-substituicao-de-equipamentos/ [20] Practical examples: [A] Practical example: Assets’ Acquisition in a Logistics Company Author: Alexandre Félix do Nascimento Ítalo [B] Practical example: Introduction of a new technology in an Oil and Gas Company Author: Alexandre Félix do Nascimento Ítalo [C] Practical example: High Performance Compressor – Reliasoft Author: Claudio Caiani Spanó [D] Practical example: Motores Elétricos Eficientes – WEG Authors: WEG and PROCOBRE Brasil [21] PAS 55 - BSI (British Standards Institution) 59
  57. 57. ANNEXES
  58. 58. 61 Case study AES Tietê – Preparing the SAMP 1 Author: Rafael Schmitz Venturini de Barros, CMRP, CRP – AES Tietê In 2009, the AES Tietê started to working with the asset management concept. Lately, since 2012 the company has been keeping an asset management system based on the PAS 55 and more recently in the ISO 55001. The asset management system is structured in the form of a PDCA where the starting point, the “P” is the strategic asset management plan, or SAMP (Strategic Asset Management Plan). In item 4.1 of the ISO 55001 it is explained that the objectives of the asset management, which are stated in the SAMP, must be aligned to and consistent with the organizational objectives. Thus, in the construction of AES Tiete SAMP, the first step was to evaluate how the asset management system would contribute to the AES strategy in Brazil. The AES Brazil current strategy is called SPARK 15 and is structured in the form of a temple, as shown in Figure 1. The temple has four pillars that are the strategic drivers with four statements, which are like guiding lines that will help us to achieve the proposed objectives and the organization five values. “To be a leader in the Brazilian energy sector by providing sustainable, safe, reliable, affordable power” Figure 1 - Organizational Strategy of AES Brazil
  59. 59. 62 Among the four strategic drivers, it was identified that AES Tietê asset management system would contribute to the third strategic driver: “Efficient use of resources and disciplined execution”, which is found in the objective “Managing assets with efficiency - Additions in the regulatory asset base and the PAS 55 and ISO 55001”. From this point, the asset management strategy of AES Tiete was designed. It was structured using the Balanced Scorecard methodology. The asset management strategy can be seen in Figure 2. F1. Manage assets efficiently F2. Optimize operating costs CS1. Optimize the availability of energy production assets CS2. Operate in a responsible and sustainable way F3. Maximize the MRE proceeds F4. Reduce MRA exposure Figure 2 - Asset Management Strategy Strategic Objectives – O&M 2015 to 2019 INCREASE PRODUCTIVITY ENSURE REVENUES Operating Cost (15%) PI1. Optimize the assets life cycle costs PI2. Promote process improvement People (10%) P&C1. Manage by skills and abilities P&C2. Promote achievement at work Culture (10%) P&C5. Integrated vision of the business P&C6. Keep alignment with the AES values P&C7. Continuous APEX improvement P&C8. Safe behavior P&C9. Innovation Technologies (10%) P&C3. Maintaining the data base reliable to support decision-making P&C4. Intelligent operation Producibility (10%) PI10. Maximize power generation meeting the SIN requirements PI11. Search Adjacencies Sustainability (5%) PI18 Sustainability of the assets life cycle Regulatory matters (5%) PI15. Meet 100% of the standards and regulations required in the country PI16. Meet the requirements of operating licenses PI17. Search to maintain the current physical guarantee of reservoirs Safety (10%) PI12. Improve safety culture in the company employees and contractors PI13. Spread the integrated PAE/SOSem contingency plan to the entire company *PI14 Reduce safety risks of assets Maintainability / Supportability (10%) PI3. Optimize times and improve the Administrative, logistics, execution of maintenance and operation processes PI4. Reduce the average intervention time of assets, in a cost- effective way. Reliability (15%) PI5. Monitor assets, diagnose faults and act proactively to avoid them P16. Fulfill the maintenance plan efficiently and promote continuous improvement PI7. Increase the mean time between maintenance of assets, in a cost- effective way PI8. Identify root causes and the probability of failure of assets to prevent recurrences PI9. Quantify and act on human reliability PEOPLEANDCULTUREINTERNALPROCESSES CLIENTS ANDSOCIETY FINANCIAL

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