The document discusses the evolution of asset management practices, emphasizing the transition from traditional methods to a fourth generation focused on performance, risk, and comprehensive management strategies. It highlights the importance of strategies in achieving corporate visions, detailing various maintenance approaches and the need for modern technologies and data-driven decision-making. The need for improved performance and reduced costs is underscored, alongside the critical role of reliable information and proactive management in achieving organizational goals.

1. The 4th Generation of Asset ManagementAn overview of leading practices in modern asset management

2. What is strategy?Vision or goalsHow we are going to make that vision or goal a realityWhat resources, tools, capacities, skills and other requirements are they to carry this outStrategy is means of taking converting a vision into reality.

3. What is strategy?Strategy is means of taking converting a vision into reality.For example:

4. In the context of RCM a strategy is the management plan for a specific failure mode. (E.g. A detective maintenance task on Oil-filled circuit breakers)

5. The corporate vision will revolve around either reduced cost, improved performance or reduced risk

6. The strategy is what we are going to do to achieve that vision (Task type and frequency)

7. And the tactics are how we are going to achieve that vision:

8. What task, with what resources, having which skills, with which spares, with which tools, using what procedure etcetera, etcetera…What is strategy?Strategy is means of taking converting a vision into reality.For example:

9. In the context of strategic asset planning it could mean something like “We will implement comprehensive risk profiling for each critical asset group”

10. The corporate vision or requirement could be regarding a response to the passage of C-45, or potentially for capital planning purposes…

11. The strategy is the decision of what we are going to do (What end goal and initiative possibly)

12. The tactics here are then the skills, people, timeframe allowed, meeting times and rooms, the initiative that has been chosen, and other relevant resources required to make this vision a reality.ProductionDemandForecastingProductionPlanningProduction BasedProductionOrdersPurchasingSalesShopFloorRawMaterialsInboundLogisticsSalesOrdersPurchaseOrdersOutboundLogisticsWare-houseWare-houseAsset IntensiveMaintenanceMaterialsPersonnelAvailabilitySkills &TrainingInboundLogisticsPurchaseOrdersWork-shopPurchasingHuman ResourcesWorkOrdersMaintenanceScheduleMaintenancePlanMaintenanceAsset Intensive versus Scheduled ManufactureImprovement focussed on…JIT

13. MRP

14. Supply chain and logisticsGen LedgerAccountsReceivableAccountsPayableAccountsPayablePayrollCostingImprovement focussed on…Just in case

15. Asset resource Planning

16. JIC supply chain techniquesThe changing world of asset management…Over the past 15 years the managerial discipline of asset management has undergone a dramatic transformation; this has been due to three fundamental reasons…An institutional shift in the expectations of asset managementAdvancement in understandingA quantum leap in the technology available (Session 2)

17. The early 21st century has witnessed an institutional shift in the way that asset managers manage their physical asset base…Expectations…2006 – Letter MD212 - OFWAT recognise common framework in UK waterStandardisation…2005 - United States of the Energy Policy Act - USA, makes compliance by electric utilities and other companies with reliability standard mandatory and enforceable under federal lawPre 2000…20012005200020022003200420062004 – Formal launch of PAS551999SAE JA1011The RCM Standard2005 – OFGEM recommends voluntary comparison against PAS552006 - Office of the PPP Arbiter (OPPPA) using PAS55 as key input for AM Framework (UK)Increased demands by regulators for high confidence decisions

18. Need for defensible budgeting within institutions and public sector

19. Growing need for benchmarking tools2004 - 2006 Unsuccessful trial of executives, contractors and engineersregarding Potters Bar rail crash in the UKThe early 21st century has witnessed an institutional shift in the way that asset managers manage their physical asset base…Expectations…2006 – Sweeping changes recommended to American Petroleum Institute after Chemical Safety Board Investigation into BP Houston accident. Safety…2004 - Bill C-45 becomes applicable law in Canada. Up to CND$100,000 and 25 years imprisonment.Pre 2000…20012005200020022003200420062006 – Buncefield disaster in the UK, investigation ongoing…In the future questions will continue to be asked, but they will increasingly be asked of individuals rather than companies…

20. Increasing performance from each $ spent on asset maintenance…Direct maintenance costsImpacts of traditional methods of cost reduction…driving unit costs of maintenance downEasy benefits have been removed from asset management during the 1980’s and the 1990’s…Expectations…Profitability…

21. Resulting in…Improved performance…

22. Lower direct costs / greater value for money…

23. Baseline maintenance regimes…

24. Expert judgement in place of quantified analysis..

25. Data rich and information poor…

26. High resource requirement to sustain the effort…Moubrays’ 3rd generation of maintenance…ProactiveRCM

27. Expert judgement

28. Predictive maintenance

29. Online condition monitoring

30. Enterprise systems

31. Modern technologiesPreventiveRegular maintenance routines

32. Time based maintenance

33. Mainframe computers

34. Beginning of automationReactiveFix it when it breaks1800’s1930’s1970’sAdvancement in understanding

35. 4th generation asset managementRisk BasedMoubrays’ 3rd generation of maintenance…Probabilistic modelling

36. Collaborative systems

37. Knowledge capture and use

38. Remote working solutions

39. On-premise and on-line technologyProactiveRCM

40. Expert judgement

41. Predictive maintenance

42. Online condition monitoring

43. Enterprise systems

44. Embracing modern technologiesPreventiveRegular maintenance routines

45. Time based maintenance

46. Mainframe computersReactiveFix it when it breaks1800’s1930’s1970’s2000Advancement in understanding

47. Time based maintenance

48. Manufacturers recommendations

49. Low confidence decisions

50. High NPC

51. Condition based maintenance

52. Tied to performance and risk

53. Processes and procedures for capture of data

54. Higher confidence

55. Lower NPC

56. Risk based maintenance

57. Maximum confidence in decision making

58. Lowest NPCDeterministicProactiveStochasticRisk BasedProactivePreventive20001930’s1970’sThe path to high confidence decision making

59. The problem with data…Most attempts at historic analysis fail due to one fundamental fact….The vast majority of reliability analyses are completed with approximately 70% Knowledge and 30% data…

60. What is whole of life costing?WoL asset management is also referred to as Life-cycle costing or LCC. The Hydraulic Institute’s LCC guidebook, defines the equation is as followsLCC = Cic + Cin + Ce + Co + Cm + Cs + Cenv + Cdic = initial cost or purchase price (e.g., of the pump, system, pipe, auxiliary equipment)in = installation and commissioninge = energy costso= operating costs (the labor costs for normal system supervision)m = maintenance costs (e.g., parts, worker-hours)s = downtime (loss of production)env = environmental costsd = decommissioning

61. ic = initial cost or purchase price in = installation and commissioningStart-of-LifePreventiveNet Present Valuee = energy costso= operating costs (the labor costs for normal system supervision)m = maintenance costs (e.g., parts, worker-hours)s = downtime (loss of production)env = environmental costsConfidenceIn-Service-LifeNet Present CostYR1YR2YR3YR4YR5DeterministicEnd-of-Lifed = decommissioningThe journey to 4th generation asset managementWhat’s wrong with this???LCC = Cic + Cin + Ce + Co + Cm + Cs + Cenv + Cd

62. PreventiveNet Present ValueConfidenceNet Present CostYR1YR2YR3YR4YR5DeterministicThe journey to 4th generation asset managementWhat’s wrong with this???LCC = Cic + Cin + Ce + Co + Cm + Cs + Cenv + CdIt’s focused on low costs, not low unit costs. There is no mention of the performance required!!

63. The journey to 4th generation asset managementStart-of-LifePreventiveNet Present ValueConfidenceNet Present CostYR1YR2YR3YR4YR5DeterministicNot Lifecycle costs (LCC) …Net Present Unit Costs (NPUC)CSOLSummarizedIn-Service-LifeCISLNet Present Unit Cost (NPUC)End-of-LifeCSoL + (∑ (y1+y2+y3…)) + CEoLCEOL(∑ (p1+p2+p3…)

64. The journey to 4th generation asset managementStart-of-LifePreventiveNet Present ValueConfidenceNet Present CostYR1YR2YR3YR4YR5DeterministicYet there are still problems with this…CSOLIn-Service-LifeCISLNet Present Unit Cost (NPUC)End-of-LifeCSoL + (∑ (y1+y2+y3…)) + CEoLCEOL(∑ (p1+p2+p3…)

65. The journey to 4th generation asset managementPreventiveNet Present ValueConfidenceNet Present CostYR1YR2YR3YR4YR5DeterministicYet there are still problems with this…Strategies have sketchy origins, not tied to performance and risk

66. CAPEX Maintenance is generic or ad-hoc

67. Corrective Maintenance forecasts are a guess. (At best!) Net Present Unit Cost (NPUC)CSoL + (∑ (y1+y2+y3…)) + CEoL(∑ (p1+p2+p3…)

68. The journey to 4th generation asset managementTying in to performance and risk (Through application of RCM principles)Inclusion of corrective expectations (Through application of all maintenance tasks)ProactiveNet Present ValueConfidenceNet Present CostYR1YR2YR3YR4YR5Proactive

69. Defining the maintenance tasks

70. The journey to 4th generation asset managementTying in to performance and risk (Through application of RCM principles)Inclusion of corrective expectations (Through application of all maintenance tasks)PTIVE – Predictive Maintenance regimes (Routine)PTED – Action to correct a failing component (Corrective)ProactiveNet Present ValueConfidenceNet Present CostYR1YR2YR3YR4YR5Proactive

71. Defining the maintenance tasks

72. The journey to 4th generation asset managementTying in to performance and risk (Through application of RCM principles)Inclusion of corrective expectations (Through application of all maintenance tasks)PTIVE – Predictive Maintenance regimes (Routine)PTED– Action to correct a failing component (Corrective)PRES – Preventive Restoration (Routine)PREP – Preventive Replacement (Routine)ProactiveNet Present ValueConfidenceNet Present CostYR1YR2YR3YR4YR5Proactive

73. Defining the maintenance tasks

74. The journey to 4th generation asset managementTying in to performance and risk (Through application of RCM principles)Inclusion of corrective expectations (Through application of all maintenance tasks)PTIVE – Predictive Maintenance regimes (Routine)PTED– Action to correct a failing component (Corrective)PREST – Preventive Restoration (Routine)PREP – Preventive Replacement (Routine)DTIVE – Detective Maintenance regimes (Routine)DTED – Action to correct a failed component (Corrective)ProactiveNet Present ValueConfidenceNet Present CostYR1YR2YR3YR4YR5Proactive

75. Defining the maintenance tasks

76. The journey to 4th generation asset managementTying in to performance and risk (Through application of RCM principles)Inclusion of corrective expectations (Through application of all maintenance tasks)PTIVE – Predictive Maintenance regimes (Routine)PTED– Action to correct a failing component (Corrective)PRES – Preventive Restoration (Routine)PREP – Preventive Replacement (Routine)DTIVE – Detective Maintenance regimes (Routine)DTED– Action to correct a failed component (Corrective)RTF – Decision to allow a component to run to failure due to consequences of failure and suitability of tasks (Corrective)ProactiveNet Present ValueConfidenceNet Present CostYR1YR2YR3YR4YR5Proactive

77. The journey to 4th generation asset managementTying in to performance and risk (Through application of RCM principles)Inclusion of corrective expectations (Through application of all maintenance tasks)PTIVE – Predictive Maintenance regimes (Routine)PTED– Action to correct a failing component (Corrective)PREST – Preventive Restoration (Routine)PREP – Preventive Replacement (Routine)DTIVE – Detective Maintenance regimes (Routine)DTED– Action to correct a failed component (Corrective)RTF – Decision to allow a component to run to failure due to consequences of failure and suitability of tasks (Corrective)Sets up the processes, procedures and techniques to move to stochastic WoL management.ProactiveNet Present ValueConfidenceNet Present CostYR1YR2YR3YR4YR5Proactive

78. How the progression comes about…PreventiveNet Present ValueProactiveConfidenceNet Present ValueNet Present CostConfidenceYR1YR2YR3YR4YR5Net Present CostDeterministicYR1YR2YR3YR4YR5ProactiveDefining the functions of the assets, tying in to performance and risk

79. Raising the level of understanding within the workforce

80. Higher confidence capital maintenance planning

81. Online and on demand condition monitoring

82. Tracking calendar and operational information

83. Implementation into business processes…Resulting in…Improved performance…

84. Lower direct costs / greater value for money…

85. Baseline maintenance regimes…

86. Expert judgement in place of quantified analysis..

87. Data rich and information poor…

88. High resource requirement to sustain the effort…ProactiveNet Present ValueConfidenceNet Present CostYR1YR2YR3YR4YR5ProactiveWhy is it important to move forward…

89. How to move this forward…StochasticProactiveNet Present ValueNet Present ValueConfidenceConfidenceNet Present CostNet Present CostYR1YR2YR3YR4YR5YR1YR2YR3YR4YR5Stochastic ProactiveEnsure maximum efficiency in execution through capacity resource scheduling, tying into inventory management and supply chain algorithms, lean thinking, and uses of technology…

90. Semi-automation of reliability analytical information

91. Sophisticated performance management systems and programs

92. Correct the data capture, failure and work coding and work flows surrounding physical data capture (Using new technologies)

93. Determine the correct operational, asset condition and ongoing condition data based on reliability analyses

94. Collaborative techniques and systems

95. Away from the planner / supervisor models…Maximum value asset managementDefine what you want the assets to do…Put the routines in to do it!Move from time based to condition basedImplement and use modern EAM / ERP systemsBasic planning and schedulingOperational information where requiredBasic inventory management strategiesRationalise the failure coding that is usedRationalise the work management systems ion placeImplement full capacity schedulingTie inventory management to probability of failure (Not historic only)Define the minimum asset condition information requirements for modellingUsing outsourcing and contract management to maximise value