Tag Archives: Asset Strategy Management

By Jason Apps, ARMS Reliability CEO

When it comes to asset management, many organizations continue to be hampered by high costs, a high volume of unplanned failures and, ultimately, an unacceptable level of risk. The reason? There’s a piece missing in their asset management puzzle.

That piece is called Asset Strategy Management (ASM). It’s a simple – but vital – component of any asset management or reliability improvement initiative.

There are three questions you can ask of your organization to see if ASM would be of benefit:

  • Do you know if you are currently executing all the strategies in your EAM system and at the set interval? (And, if not, do you know what level of risk you’re exposed to?)
  • Do the strategies in your EAM system align to your agreed strategies or best-in-class strategies – on all assets? (And, if not, do you know what level of risk you’re exposed to?)
  • Does your maintenance plan cover all the basic equipment care fundamentals and statutory or regulatory requirements – on all assets?

Answering ‘no’ to one or more of these questions sends a clear signal that you would gain immediate value from implementing ASM.

Delivering high reliability

Once an asset has been selected and installed, its ongoing reliability is determined by two things: how it is operated and how it is maintained.

ASMPutting operations aside for moment, how you maintain an asset will directly impact its performance. And to decide how and when that maintenance is conducted, you need a strategy. Hence, an asset’s performance all starts with a maintenance strategy. At the most basic level, there aren’t many options for setting a strategy. You can either decide to execute a task at a regular interval to prevent or predict a failure; or you can monitor the asset for specific failure mechanisms, with an alarm or alert triggered if remedial action is needed.

It sounds easy enough. Yet many organizations will set a strategy in the first instance – upon installation of the asset – and leave it at that. There’s no ongoing management of that strategy. The implication of this is that, over time, the strategy may no longer be appropriate for how the asset’s being used. Or, someone may change the strategy without proper review or justification. Think about it. If someone goes into the EAM system and changes an interval of one of your maintenance plans without any review – and it turns out to be an inappropriate change – imagine the risk to your business.

Since strategy is the single biggest driver of asset performance, it must be managed effectively to ensure it remains optimal for the life of the asset.

ASM is the process you need to realize reliability

Enter ASM, a process that integrates with work management, but with a very different objective. Whereas work management is all about the efficient execution of work, ASM is all about making sure you are executing the right work – all the time.

asm cog- englishMany organizations have unsuccessfully tried to tackle ASM within their work management process. The reason this approach doesn’t deliver results is that ASM and work management have very different objectives and therefore require entirely different triggers, resources, data and technical solutions to be effective.

Beyond delivering optimal performance and management of risk on an ongoing basis, ASM also delivers benefits that are out-of-reach for many organizations:

  • A consolidated, standard, component-based maintenance strategy – driving consistency of strategy but allowing for local operating context
  • A consistent Master Data build for all plans and materials supporting execution
  • Identification of undesirable risk
  • Automatic detection of where to focus improvement initiatives
  • Rapid deployment of relevant strategy changes across the entire asset base

Organizations typically see an immediate uplift in performance and reduction in costs on implementing ASM. The clarity generated from an ASM program can also improve work management, because the objective of the work management process become singular and clear, allowing the organization to do work more efficiently.

How does Asset Performance Management (APM) fit in?

Some organizations may be familiar with APM, which is focused on maintaining asset health and condition. APM manages the ongoing performance of assets by monitoring current conditions or current performance data; and alerting the organization when an intervention is required to prevent an impending failure.

Types of monitoring range from a periodic assessment by a technician through to multi-parameter continuous monitoring devices. Essentially however, the intent is the same: understand the condition, determine if that condition is deteriorating and identify any impending failure so that rectification can be scheduled into the workflow. And, in doing so, avoid that failure.

Recently, the cost of technologies that support the online monitoring of asset operating parameters has fallen, leading to wider-scale adoption of online monitoring tools. APM, as a result, is getting cheaper and easier to perform. It’s good news for organizations – but it’s important to remember that these monitoring tools don’t take care of strategy.

ASM sits alongside APM to make sure that routine maintenance strategies and whole of life asset strategies are best-in-class and aligned to the performance requirements of the plant. It uses a consolidated base of Reliability Master Data that is deployed and connected across the entire asset base. Any updates to strategy follow a process to ensure that the change is effective (data-driven where applicable); and work-flowed to ensure review, approval and implementation. This may result, where applicable, in a single site-based change, driving the update of the corporate Reliability Master Data, and the resulting change being deployed automatically across an entire asset base.

ASM can also help to identify where it is cost-effective and practical to implement monitoring or APM. Hence, along with work management, you have a closed loop for reliability maintenance.

So, where do you start?

Most organizations will already have a work management process in place. Ideally, this process has been refined to ensure that assets are maintained and repaired quickly to minimize downtime.

But if you’re serious about asset maintenance then your next step is to implement an ASM plan. It’s the most effective way to deliver improvements, reduce costs and improve your existing work management processes.

Why? Because any reliability process must start with a strategy aligned to your performance goals. This strategy must be best-in-class and continually managed – it can’t be changed ad-hoc, without review and approval. By the same token, if effective local strategy changes are made, it is a waste not to electronically distribute that change to all relevant instances of that asset.

Implementing an ASM process puts the organization back in control of asset management; and will continually drive the execution of best-in-class strategies across the entire asset base.

Where does your organization sit on the Asset Strategy Management maturity scale? Find out how you compare to best-in-class Reliability programs on this and other key measures with our short 12-question Asset Strategy Management Assessment and receive a custom report with our recommended path forward.

Author: Amir Datoo

Microsoft Excel is an amazing tool. Yet it has its limitations and flaws for engineers who aren’t trained in computer programming.

The main problem with Excel for managing maintenance programs is a simple one, yet it’s largely unavoidable. It’s called human error. No matter how fastidious you are when creating a spreadsheet, a single line of data that is entered incorrectly—or, worse, an inaccurate user-defined formula—can have huge implications down the track.  bigstock--124618859

In fact, a study by Raymond Panko has found that 88% of spreadsheets contain errors. He warns:

These error rates are completely consistent with error rates found in other human activities. With such high cell error rates, most large spreadsheets will have multiple errors, and even relatively small “scratchpad” spreadsheets will have a significant probability of error.

When it comes to maintenance, these small errors can quickly add up.

Think of a multi-million-dollar maintenance project. A maintenance manager unwittingly enters a few incorrect cost estimates. Decisions are made based on the calculations resulting from this incorrect data, and machinery is not maintained when it should be.

Or, the equation for failure probability is not quite right. According to the spreadsheet, a major piece of equipment isn’t likely to fail anytime soon, so you delay maintenance. Whoops. The equipment fails and the whole plant needs to be shut down. The downtime costs tens of thousands a day.

Yes, Excel can be used to create links between different sheets, develop hierarchical relations and create simple pivots. It can even run complex Monte Carlo simulations for determining probabilistic likelihoods of asset failure. It’s flexible and easily adaptable. But can your organization afford the risk of compounding errors due to incorrectly entered data or a flawed formula?

Making sense of work management

As any maintenance engineer or manager will know, work management is a critical piece of the maintenance puzzle. It’s all about evaluating your equipment, deciding what you need to do with it, scheduling the work in, completing the work and finally reviewing your actions.

You’d be hard-pressed to find an organization that doesn’t have a good work management process in place. And a raft of enterprise software systems exist to help manage the activity (think SAP PM or Maximo).

Yet these enterprise systems fall down in one crucial area: Asset Strategy Management. Reliability analysis is not built into the tools, and so organizations fall back on spreadsheets to manage things like predictive failure analysis, failure mode effects analysis and reliability simulations.

The good news? Implementing an Asset Strategy Management (ASM) solution removes the inconsistent outcomes from asset strategies and drives continuous reliability improvement. Asset Strategy Management helps to answer the ‘what’ and ‘when’ of maintenance, and is proving to save money, dodge downtime and improve overall business performance.

Key benefits of Asset Strategy Management

The use of an enterprise ASM solution over spreadsheets offers huge value to any organization.

First, as a structured solution, you know that it has gone through rigorous rounds of testing by experienced programs. Formula errors simply don’t exist.

What about human error? An ASM solution helps you avoid user input errors through data validation and verification. You set up business rules and logic that immediately flags if an error has been made. For example, there’s a common field called a ‘system condition’. You can set the field as mandatory—a user must enter a number to progress to the next field. You can even stipulate what number/s it can be. Competitive Advantage in a Business Competition Environment 3D I

ASM delivers huge efficiency gains.  We have seen it take almost three years to develop a reliability management strategy using Excel spreadsheets. Using an enterprise ASM software tool, complex reliability strategies were up and running in six months.

Efficiency is also found in the reduction of the number of files being used. If you’re using spreadsheets to manage maintenance schedules, it’s common to have a different spreadsheet at each site. A change that needs to be deployed globally requires huge effort and carries risk of error. When data is consolidated into one ASM system, changes can be made singularly and globally. Reliability studies seamlessly interact with the CMMS without version issues and/or loss of data. Perhaps the most significant benefit of an ASM solution is its ability to facilitate risk-based decision making. Spreadsheets do no provide real-time analytics to guide informed decisions. With the right Asset Strategy Management system in place, all the key metrics you need to make those business-critical decisions that could make or break your business are at your fingertips.

To learn more about Asset Strategy Management watch this webinar on-demand “Harnessing Technology, Innovation, and Big Data to Reshape Asset Strategy Management and Unlock Unrealized Value.”

Author: Jason Apps

Use the content and equipment expertise you already have to drive performance improvement

Do you get the sense that your organization is unable to deploy the best maintenance strategies to all assets, at all times? Do you suspect that money is being wasted through ineffective strategies? An Asset Strategy Management process could be just what your organization needs.

In short, Asset Strategy Management means that:

  1. The best strategies, developed by your best subject matter experts, are in place; and
  2. They are deployed to all your assets all the time; and
  3. They continually evolve based on real data and an effective review process

It unlocks value currently being left on the table through ineffective strategies and the inability to deploy the best tactics to all assets in moments.

What is Asset Strategy Management?

Most organizations have attempted, at least in part, to standardize Master Data and even strategies for common equipment. It makes logical sense to consolidate and deploy common data wherever relevant.

Yet there are two common problems holding organizations back:

  1. Creating and deploying generic content cannot be done effectively within a CMMS or ERP system. These systems are designed to support the execution of work; not the management of strategy decisions. By their very nature, they cannot truly utilize generic content in a continuously deployable and connected way.
  2. While there may be a sound, defined work management process in place to drive consistent execution of work, there is limited or no process in place to manage the review and evolution of strategies and content. Quite simply, parameters associated with the strategy can be changed on a whim with no requirement for subject matter involvement or approval.

Essentially, most organizations have not separated work management and strategy management – yet they are entirely different processes with completely different objectives.

Work Management = managing execution of work

Strategy Management = managing the strategy that will be executed

So what does strategy management cover? ASM Cog

  • Tactical:  The maintenance tactics that will be executed. Including the tasks to be performed, when they are done, how they are done, who does them, materials required.
  • Asset/Fleet: The decisions made at an asset level such as major component or asset replacement ages, major shutdown or system outage schedules.
  • Portfolio: Optimization of budget allocation for a portfolio to maximize value given the financial and resource constraints.

In many cases, there is an iteration whereby constraints at a portfolio level drive the need to change tactical level strategy to deliver the required performance with the available funds.

ASM ComponentsThe ideal situation

This environment – where strategy management is separated from both work management and performance management, where it is implemented – allows for management of generic content, rapid deployment, and intelligent strategies that continually learn from your best decisions no matter where they are made.

Your subject matter experts can develop a strategy for an equipment type, and then rapidly deploy the strategy to all relevant assets. When a change is made to one instance of that particular equipment type, you can see exactly where else it is implemented – so that maintenance plans can be updated in the CMMS, across the whole asset base if needed.  Caution

It is critical to note that Asset Strategy Management is not:

  1. Just an FMEA library
  2. Just a maintenance tactic library
  3. Just a project to review or develop maintenance tactics

Rather, it is a process that continually manages asset strategies over time. It delivers the required performance and allows you to effectively manage and deploy generic maintenance plans at a speed that matches the decision making.

Of course, for the process to work, Asset Strategy Management allows for local variations of content to account for different operating contexts or duties, environments, local workforces or regulations – while maintaining the link to generic content for rapid deployment of the latest thinking in the future.

What’s required for Asset Strategy Management?

Like all effective workflows, Asset Strategy Management needs the right infrastructure in place. You need:

  • A clearly defined process, with roles and accountabilities outlined
  • The right technology to identify underperforming assets and implement appropriate solutions using data-driven insights
  • A strategy for educating all people involved in every step of the process
  • Support mechanisms
  • Effective triggers
  • An Asset Strategy Management solution

But get it right and the results speak for themselves. With Asset Strategy Management, you will realise significant cost savings by deploying your best strategies to your entire asset base, all the time.

Every year, millions of dollars needlessly go down the drain in large organisations. It’s money that can easily be saved, if you know why it’s disappearing and how to save it.

To illustrate, let’s look at a real-life example. Links

We are regularly asked to lead projects to review maintenance strategies sites and assets that are not meeting their availability targets, are suffering frequent unplanned failures, or high costs.

We typically set to work collecting the asset hierarchy, work order history and current maintenance plans. Using all this data, we apply sophisticated methodologies to build an optimised maintenance strategy. In a particular project the resulting revised strategies were forecast to reduce maintenance costs by -18% per annum, and improve availability by +3%.

It was a great outcome. But – and herein lies the problem – the site failed to effectively implement and execute the strategy, and so continued to suffer from unplanned failures and poor availability. There’s the money down the drain.

To truly realise the value good strategy needs to be implemented and then updated over time. In essence the strategy needs to be managed. This includes workflows, review and approval by appropriate subject matter experts, use of generic content wherever possible and data driven decision making.

Learning from past failures

Ten years ago, when Reliability Centred Maintenance (RCM) was really hitting its strides, more and more organisations started investing in the task of developing maintenance strategies. But according to research a massive 60 per cent of these strategies were never implemented. Think of the money wasted.

Or, if a strategy was implemented, it is likely that it may get changed over time with little or no oversight, typically the good strategy work is undone for it only to be put back to how it was.

Realistically any change to a strategy such as the interval, durations, specific tasks, and instruction content should be managed with a dedicated workflow which would include justification and the opportunity to utilise any great improvements across your entire asset base.

The power of combining Work Management with Strategy Management

To fix these endemic problems, the focus of an organisation needs to evolve to strategy management as well as work management.

 Think about it. Work management is all about executing tasks. Strategy management is all about deciding what tasks should be executed. You can have the best work execution process, but if you’re not working on the right strategies then it won’t deliver results. Asset Managers need to make sure that teams are effectively executing the right strategy.

ASM Graphic

Furthermore, reliability and maintenance teams need the agility to adapt if a positive change is made to a strategy at one site in a multi-site organisation, or a common asset used multiple times on a single site. How do you quickly deploy this cost-saving change across other sites in the organisation?

For example, think of a water utility that operates 400 pump stations across the country, with each one operating the same equipment. Say there’s a pump failure at one site, and a technician does some good root cause analysis work which leads to a recommended strategy around a task that needs to be done. If their decision could come back to a central area for review and approval, and then get deployed efficiently and electronically to all the other pump stations, the utility could potentially save thousands on future fixes, reduce risk and improve performance.

Wherever you find pockets of excellence you need to deploy them everywhere, effectively.

Adopt a best practice approach and create a culture of excellence

 The secret of successful strategy management lies in looking beyond the SAPs and Maximos of the world. You can try to standardise these systems for a “generate once, use many times” approach, but it won’t work. A CMMS is designed to manage work tasks, not manage strategy.

Instead, you need a separate approach and solution for strategy management, which directly integrates with your work management system. This way, if your reliability team and subject matter experts devise a new asset strategy that is going to save your organisation millions of dollars, then you can be assured that it will successfully be applied to all the relevant assets across all sites. Likewise, you will gain visibility into single site strategy excellence and be able to quickly and easily deploy it enterprise wide. With an Asset Strategy Management program, your asset strategies will be dynamic, constantly evolving and will instill a culture towards achieving excellence in reliability.

This makes reliability a reality.

Find out how you can adopt a best practice approach to Asset Strategy Management  and unlock unrealised value, enterprise wide.