Meridium

You need to move 10,000 Humpback whales over 20 miles today...Where are your potential bottlenecks?

Wednesday, January 25, 2012 by Stephen Rucker

If you work in the process industry, you have lots of moving parts working to turn your starting materials into finished products. Starting materials can be anything from crude oil to ore infested rock. These materials often bear little resemblance to their finished products. In order to extract or create these valuable products, there are various steps which must be taken. Each of these steps involves specialized equipment. If any of these pieces of equipment breaks down, that equipment's step is affected and production stops. In order to keep their equipment running, many companies mitigate the risk of asset failures through Asset Performance Management.

The Kennecott Utah Copper Corporation, a division of the Rio Tinto Group shows in the video below how they extract copper out of the 500,000 tons that they harvest every day. As the video explains, 500,000 tons of is the equivalent weight of 10,000 humpback whales. Every day, the Kennecott Utah Copper Corporation transports these "10,000 humpback whales" worth of ore over 20 miles through shovels, haulers, conveyors, grinders, mills, filters, dryers, and furnaces as they refine the copper to a purity of 99.99%.

Copper's necessity in the production of so many different products keeps it in constant demand. Copper companies must supply that demand and many of these companies do so while improve their asset performance through analytical tools like APM Software. These tools are so important to predictable production because companies can't get the ore to the conveyors if the haulers don't work. The ore won't be small enough to go into the furnaces if the grinders are broken down. Unexpected asset failures disrupt production and raise costs. Analyses can help companies predict and prevent failures to ensure that there are no bottlenecks in their processes. 10,000 humpback whales' worth of ore is a lot of weight...don't let it pile up because your equipment broke down.

Asset Performance Management: The Future of Asset Management and Risk Mitigation

Friday, January 20, 2012 by Stephen Rucker

Preventing crime through analysis in "Minority Report"

In the 2002 movie "Minority Report," moviegoers were exposed to an interesting view of crime prevention in the future. The plot of the movie revolves around a futuristic police force called "Pre-Crime" that uses psychics (the "pre-cogs") to predict crimes before they happen. In the movie, Tom Cruise's character quickly sorts through data related to the future crime and determines where the crime will occur, when it will occur, and how it will occur. Through his analysis, the Pre-Crime police know exactly where to go to prevent the crime. As a result, the Pre-Crime police arrive on scene and arrest the suspect for the homicide that they were just about to commit. In the movie, the Pre-Crime program saved many lives.

Whether such a crime prevention program would work in reality remains to be seen but catastrophe prevention is certainly important in the world today. This is especially true in the world of maintenance and reliability. How many times in the past 10 years have CEO's watching the news seen reports of disasters their companies created and thought "if only we would have known?" How much pain and devastation could have been avoided, if only they would have known to replace that piece of pipe (replace that seal, test their safety intrumented system, fix that motor earlier, etc.)?

Hindsight is always 20/20. Foresight is priceless. If companies want to see which of their assets are likely to fail next and when that is likely to happen, the future is here. Analytical tools like APM software give reliability engineers the ability the prevent those same failures that if they happen could land their company in the news to the chagrin of its CEO and stockholders. Jim Weller of Xcel Energy uses Meridium APM software to predict future failures in boiler tubes. In this video, he shows how much money Xcel Energy saved because they had the foresight to make informed decisions:

For more information on APM software, please click here.

Plant Safety: Protecting Your Greatest Assets

Thursday, January 19, 2012 by Stephen Rucker

Work can be a dangerous place. Whether a company is refining oil, generating power, or mixing chemicals, a slight malfunction in a plant's equipment can cause an incident that kills or maims employees. The loss of mechanical integrity in a gas pipeline, for example, can lead to an explosion. This explosion can destroy the pipeline and connected vessel and start fires that spread to other parts of the plant. Employees who try to contain the fires may ultimately lose their lives if the fire ignites other process chemicals. The company loses millions of dollars in equipment, pays millions of dollars in lawsuits, faces millions of dollars in fines, and loses their good reputation for decades.

Risk is a real thing. While financial analysts may consider risk calculations as "soft numbers," unmitigated risks certainly create "hard realities." Equipment failures threaten the lives of employees and the survival of the business. While the equipment itself may be replacable (albeit expensive), the company's reputation and employees' lives are not. In order to protect employees' lives, organizations like OSHA put regulations in place. These regulations affect how companies act and help to create a safety-minded culture. Employees adjust their personal performance of daily tasks in order to mitigate risks. Managers provide tools like hard hats, gloves, harnesses, and install handrails and eye wash stations to facilitate safe practices.

But what about asset performance? How can a company ensure that they mitigate the risks associated with how the equipment behaves? These questions puzzle some managers and elude others, with some managers accepting equipment failures as "par for the course." This attitude easily fosters a reactive culture in which employees wait for failures to happen, never knowing how serious the consequences will be. For those concerned with employee safety, this is the wrong attitude to have.

Asset Performance Management best practices and APM software facilitate safety risk mitigation. Using such analytical software allows engineers to perform hazards analysis to better understand risks. Those concerned with mechanical integrity use these tools to monitor the thicknesses of fixed equipment and set up appropriate risk based inspection tasks to mitigate loss of containment. As the old adage states, "an ounce of prevention is worth a pound of cure." Taking the time to understand what all your asset data is really telling you can help you predict which failures are going to happen next. Knowing where the next problem will arise provides managers with the information that they need to prevent high criticality assets from failing. Such preventive measures help to keep employees safe.

For more information on APM Work Processes and APM Software, come to Meridium Conference this April!

Would you rather do it RIGHT or have to do it TWICE?

Thursday, January 12, 2012 by Stephen Rucker

Let's face it, we all have too much to do. Emails pile up in our inboxes, meetings fill our calendars, and new projects seem to appear before old projects are finished. As our available time shrinks further and further, the need to free ourselves and cross things off of our "To Do" lists becomes an even greater prerogative. When something is done, we want to make sure it is DONE. We don't want to have to keep doing the same things over and over (can you imagine having to deal with trick birthday candles on a stressful day when you just want to hurry up and get things over with?).

Are your work orders starting to repeat themselves like a broken record?

In the world of maintenance and asset management, this is a common problem. Many people want so badly to progress and improve their programs...but they keep having to repeat the same steps. Engineers may have spent hours doing a root cause analysis for an asset failure 18 months ago...but no one captured the process or the results and so the engineers get to spend those same hours doing the analysis again (and sadly, another team will likely have to do the same analysis is a few months because this analysis won't be recorded either).

Other companies struggle with their EAM/CMMS systems. When the company decided to purchase an EAM/CMMS, they may have bought the top-of-the-line software for recording asset information but they neglected to make sure that their asset taxonomy/hierarchy and failure coding was suited for their needs. Since no one took the time to ensure that the EAM/CMMS was set up properly, companies now find that they can't effectively capture failure data or tie it to the assets or locations that are breaking down most often. They continue to collect data but they fail to get the value from it.

For this reason, there is Asset Performance Management (APM). With APM as the end in mind, failure coding and asset taxonomy gets set up right the first time. As a result, companies are better able to find meaningful data, which they can then turn into actionable intelligence. Tools like APM Software both facilitate and capture analyses like Root Cause Analysis and Failure Modes and Effects Analysis so that the same analyses don't have to be repeated over and over. If something breaks down, engineers simply search in the history to find that a similar asset broke down in the same way 12 months ago in a different plant, and this is what the problem was, and this is how they fixed it, and this is how they are preventing future failures like this, etc.

Asset Performance Management is power. APM gives a company the ability to know what to do and when to do it to keep their physical assets up and running. No only does APM help companies increase their availability, these companies are able to increase availability while lowering their costs. This often provides companies with a competitive advantage. For more information on APM software, click here.

Reliability: The Quest for Excellence

Wednesday, January 11, 2012 by Stephen Rucker

Excellence can mean many things to many people. For some, it may mean doing their job consistently and meeting all expectations. For others, excellence may mean doing their job better than expected and "going the extra mile." Others will define excellence as changing the rules of the game, innovating and shifting the paradigm not only for themselves but for everyone around them as well. It is this last definition of excellence that is at the heart of progress.

England's Roger Bannister changed the world of running in 1954 by being the first person to run a mile in less than 4 minutes. To some, this seemed like an impossible feat but Bannister pushed himself. Finally, on May 6th, 1954, Roger Bannister's broke down the 4 minute barrier in what became a famous 3:59.4 minute mile run. Once the 4 minute barrier was broken, other runners pushed themselves and broke it also. It was as if the knowledge of the possibility gave others the power to succeed.

In the world of Asset Performance Management, excellence is applied to many different aspects of life inside the plant. There are teams focused on maintaining "operational excellence." Others manage maintenance excellence by seeking to ensure that all maintenance tasks are done correctly and on time. Many others apply such ideologies as Lean and Six Sigma in order to facilitate continuous improvement. With the advent of tools like APM software and reliability best practices, companies are able to optimize maintenance to the point that they spend millions of dollars less than reactive companies and still maintain high levels of availability.

Like Roger Bannister's famous 3:59.4 minute mile run, excellence is contagious. With the tools and work processes available today, companies are no longer settling for efficient fire-fighting. Reactivity has become an unacceptable way of doing business and little by little companies are accepting reliability as a necessary part of risk reduction. Far from being a Quixotic quest, the pursuit of excellence in asset management is a worthwhile endeavor for any CEO of CFO. While they may not work on the shop floor, the physical asset management that goes on in the plant will ultimately influence the revenue and cost figures in the boardroom. For more information on APM software tools and work processes, click here.

Leadership and Change Management in Reliability

Friday, January 6, 2012 by Stephen Rucker

Projects are interesting things. Just like New Year's resolutions, projects are attempts to improve or change a wide variety of facets of the business world. These facets may include communication, processes, products, quality, or any other number of things. The thing that I find so interesting is the results. Sometimes a team tasked with a given project will fail abysmally. New procedures and policies fail to take root and the company abandons the project altogether or pushes it to the back burner. Other times a team will see success and barely achieve their objectives. Sometimes, however, a team tasked to complete a project will succeed by leaps and bounds, magnifying their results to the point that even others outside the team catch the vision and begin to change.

Tools (like tennis rackets) can empower champions but people ultimately drive success.

How is this possible? Are some projects simply better or more inspiring than others? Those who have seen monumental success in projects know that it takes more than great tools. Great success requires motivation, discipline, and leadership. In other words, it requires people. Tools can empower people and magnify their actions but it can't replace them. Even with the best tennis racket in the world, not just anyone can play and win at Wimbledon. On the other hand, the greatest tennis pro in the world will struggle if forced to play with a broken tennis racket. For those who are committed to succeeding in the area of reliability, APM software is the enabling technology for making reliability and operational excellence projects a success.

People are the key to having success with reliability and asset performance management. In order to implement reliability best practices, companies need their employees to have the vision to understand why the project needs to be implemented correctly. They need to see the project's success as their success. They need to be motivated to throw off all excuses for failure and commit themselves to seeing the project through to the end.

In Meridium's APM Advisor publication, Paul Casto discusses how to successfully achieve change management in maintenance and reliability projects. During his time at Eastman Chemical, Paul effected a reliability-based culture change that increased communication and cooperation between maintenance and operations personnel. For more information on succeeding with change management in reliability, click here.

Question No. 6 - How much money do we need?

Friday, January 6, 2012 by Marc Laplante

Any organizational context whether it be a church or an oil company has money as a critical focal point of its existence (even if making a profit is not the objective). Money to an asset management system is like oxygen to a living organism.

The following quote is taken by an interview of Gian Piero Pavirani, Maintenance Engineering Manager for Rete Ferroviaria Italiana (Italian Railway Network).

"...when we know what needs doing for maintenance purposes, also taking into consideration other investments required, we can begin to plan the relative activities over time"

The asset management plan for this company answers to the top business metric of infrastructure availability. In order to answer No. 6 they need to know when they have to act. This investment consideration also takes into effect the level of reliability the organization is will to pay for.

"...this study allows us to establish what is the level of reliability we can expect...maybe it is too expensive or maybe such a high level of reliability is not required for that specific type of mission."

For this company reliability analytics go hand in hand with determining the appropriate level of investment for the care and management of the assets.

Asset Performance Management: Start 2012 with a Clear Vision!

Wednesday, January 4, 2012 by Stephen Rucker

No matter what way you cut it, 2011 was a tough year for the world economy. Unemployment is still high. Countries as well as companies are going further and further into debt as they apply both short-term bandages as well as long-term projects in order to try to fix the problem. All the while, risk and uncertainty loom overhead. As companies begin the new year, they will be looking to move strategically towards greater prosperity...but where to begin?

Data is everywhere but actionable intelligence is not. Actionable intelligence is more than raw data in that it provides direction. People who work in maintenance and reliability need clear direction because they are inundated with mobile inspections data, work orders, notifications, historical data, pressures, and temperatures. For those planning work, it can be hard to know how to sift through all this data to order to find the actionable intelligence necessary to make decisions. For many, it is such an insurmountable task that they abandon their efforts and rely on manufacturers' suggestions for PM intervals. While these suggestions can serve as a good starting point, there is a better way.

Rather than spending another year drowning in data, why not cut through the fluff and get some clear direction? Tools like APM Software use analytical capabilities to show businesses how they can increase their revenue (more dependable production) and cut costs (reduced failure risks with reduced work). When manufacturing facilities can count on their ability to reach production goals, management can turn their attention from typical fire-fighting and focus on future growth opportunities. For example, reliability growth modeling tools can extrapolate data and predict equipment failures before they happen, thus giving maintenance crews the opportunity to move proactively and prevent those failures.

Where should you focus your efforts and resources this year? The answer is hidden in your data. APM Software is the tool to show you where to find that answer.

Question No. 6 - how much money do we need?

Tuesday, January 3, 2012 by Marc Laplante

This question is clearly related to "No. 2 - What's it worth?". The work of asset management is about doing the right things at the right time which of course is governed by money. If you accept the definition of an asset as "a technical object that has potential value which is realized via its intended function". Asset performance is bound to its function over time.

Perhaps a more appropriate way of asking the question is how much money do we need to invest? "There's a growing sense of the importance of capital efficiency", says Paul Yarka of Accenture in an October 2010 issue of Intelligent Utility. There are numerous other questions that exist inside this one question - many of which are obvious. A performance management plan that aims for stability and predictability has investment as its key focus. "We're moving toward the ability to combine a deep understanding of the condition and failure mode of an asset with how it's performing under load" add Mr. Yarka.

From But based on the conversations I have every week, I am convinced that most organizations don't have enough visibility into the condition and state of their assets in order to make an incisive spend decision. I have clients that want to build a capital investment plan without having a sufficient line of sight on what is causing the hidden plant. Master equipment locations are isolated from events. Events are isolated from condition data. None of this data is connected directly to finance data or work order history. With asset life data being scattered to the four winds this makes the task of answering question No. 6 a challenge to say the very least.

What are Your New Year's Resolutions?

Friday, December 30, 2011 by Stephen Rucker

Once again, the New Year is upon us. As the time ticks down towards the end of 2011, we are faced with yet another chance to change and improve ourselves through various New Year's Resolutions. People rush to join gyms and buy smaller clothes as they commit themselves to shed holiday pounds and get into shape. Others decide to pick up a new hobby or improve themselves in other ways.

Unfortunately, most New Year's Resolutions fail to bring about any real change. Despite their good intentions, people generally stay the same. Why does this happen?

As we see in the world of asset performance management and reliability, change does not come about by simply adding a new tool or a new software. Even the best tools won't help if they aren't used. Exaustive RCM studies help no one if they are only kept in binders. Just as buying a gym membership does not shed a person's unwanted pounds by itself, tools are powerless if work processes and discipline are faulty or non-existent.

Work processes and personal discipline are the key. If your New Year's resolution is to lose weight, build a process around it! Decide that you will walk/run/go to the gym every day before/after work and enlist the support of friends. If you can, exercise with friends because they can hold you accountable. Make a point to have your gym bag constantly ready and accessible. Don't simply say, "I will eat healthier." Make sure you have healthy things to snack on and have the discipline to make sure that you only buy healthy food. You can do this by planning out healthy meals and going to the grocery store with a detailed list (going there without a detailed list will make it easier to buy the same old junk food).

In order to implement reliability best practices, you will need similar work processes. Decide now that you are going to collect good data. You can do this by ensuring that your EAM/CMMS system is utilizing an effective asset taxonomy/hierarchy and that you have an effective list of failure codes. Hold a meeting with your plant and help everyone see why reliability should be important to them. Talk to them on a personal level and offer incentives. Once they see "what's in it for me," they will be more likely to comply.

Change takes time and requires patience and leadership. Make sure that you follow up with your employees on a regular basis to ensure that they still have the vision. As Jeff Dudley of Dow suggests "[if you want to effect change], you've got to talk about it all the time." Performance management plans need to be reviewed often. You may also need to take the time to ensure that your employees were trained properly and understand what is required of them.

While it will take time, may all of your personal and reliability goals be fulfilled in the coming year.

Question No. 5 - When do we need to do it?

Wednesday, December 21, 2011 by Marc Laplante

This should start as a risk management question. As an asset manager answers all of these questions in sequence there is a certain amount of accountability that develops. I own a car and therefore I am an asset manager. I know the answers to questions one and two. As I answer question No. 3 I begin to answer question No. 4 because this becomes a question of asset performance expectations. Commensurate with that I need to consider the question of safety and regulatory requirements as well. So here is goes:

The region where I live requires me to have my car inspected at an accredited facility once per year. My vehicle is visibly tagged so that law enforcement knows at a glance whether I've met that basic obligation. That inspection will tell me additional information about when the tires and brakes will be at their limit. I will know from this required activity when I will need to do something about the condition of my vehicle. By going through this process I am informed and am able to make a decision on this Question No. 5 (and 6).

Money is one of the prime considerations for asking the "when" question. What are the other factors that contribute to the answer?

One of the best stories I've heard about the successful application of this "when" question is from Xcel Energy. They utilized reliability analytics to determine from their work history to assess the following:

The asset system that could pose the greatest performance problems
What condition is the asset system is (including all of its maintainable items)
Whether they should plan a scheduled outage (during peak season) to proactively address the issues or take forced outages to address the issues as they come up
Decision support in order to begin to answer Question No. 5 - How much money do we need?

For Xcel Energy, the "when" question was central to the outcome of the decision. The "when" question restricted the number of answers that were possible. If you'd like to read about the decision that was made, click here to read about it yourself.

"Demonstrating... that you are proactive in maintaining your equipment assets isn't the struggle - proving that what you're doing is actually reducing the risk of breakdowns and business interruptions is much more difficult."

Loa Jansen, Xcel Energy, person who is responsible for answering Question No. 5.

Question No. 4 - What do we need to do with it?

Tuesday, December 20, 2011 by Marc Laplante

Your performance management strategy should largely determine what you need to do with your assets. Does measuring asset availability satisfy the demands of and asset management system?

I need to refer back to the examples I learned about at the IET/IAM Annual Conference, where the Royal Navy gave a presentation that taught the subtle but important difference between availability and readiness. Asset availability, according the definition being deliberated by the ISO PC251, "Asset availability" refers to the time from the start of an asset’s utilization by an organization to the cessation of its need". The Royal Navy not only measures availability but it measures readiness as well. Its asset management does not assume readiness just because the platform is available.

So a state of available readiness is a key topic that this question points to. If the aim is availability and readiness, then the asset management system needs to have certain measures of assurance which can only be answered if question no. 4 is considered. Here are some additional questions that contribute to the answer for this question:

Is my car available?

Yes I am able get behind the wheel and drive to my destination.

Is my car in a condition to take a long trip?

Hmm... I'm not sure... maybe I should check the tire pressure and the oil level. Maybe I should check and see the last time I changed the oil filter and checked the coolant. Now that I think of it, I may have skipped that expensive transmission flush...

I had a great discussion with Harold Gudmundsen about this very topic yesterday. Harold is the General Manager of Asset Management at North American Construction Group (see the video below). I can't think of anyone else who'd be more qualified to answer this question no. 4. During our discussion of the current draft of the ISO 55000 standard, he made some very poignant statements about the section that deals with monitoring, measurement, analysis, and evaluation. Among the pearls he shared with me, he suggested that asset managers need to follow the measures that point to the predictability of their assets and how well they can anticipate future asset performance and cost.

The previous question, No. 3 - what condition is it in?, begins the discussion about risk and performance. This question No. 4 - what do I need to do to it, begins the discussion about risk and reliability analytics.

To all who have participated in this discussion I encourage you all to continue weighing in on this topic. I greatly appreciate this discussion and how it may help to shape the future ISO standard.

Question No. 3 - What condition is it in?

Friday, December 16, 2011 by Marc Laplante

So let's relate this to a common personal experience. Many of us have bought a used car. What's the first question we typically ask ourselves after we consider price (what's it worth)? Obviously we look at the odometer, the tire (tyres for our UK participants) for tread depth, and the body for rust. Some of us look for fluid leaks and we'll listen carefully for sounds that shouldn't be heard when we take it for a test drive.

So it is with asset management. But if your assets are part of a nuclear decommissioning project you will be surfacing different information about the condition of your assets than if you're an organization that manufactures frozen french fries. And so it is with all of these Seven (or so) questions a number of additional questions naturally spring up. Let's consider a few:

What does "good" look like?

When answering the question about what condition the asset is, what should the answer be compared to? When buying that used car, we'd compare it to other used cars in that same class and we would compare that used car to the latest version (or we'd spend a lot of time watching Top Gear which is something we should all do at least once per week).

The idea to blog about this topic came from the IET/IAM Annual conference and the workshop during which the City of Hamilton presented the overview of how it manages its assets. When determining what condition the asset is in they utilize what looks remarkably like a Pf curve (this is not the graphic they used).

The City of Hamilton rates its assets on the curve against 1) condition and performance, 2) capacity and need, and 3) funding versus need. This produces an aggregate rating of the asset condition. This is great it you have the master data structure through which you can surface information and data for this type of analysis. So the next question should be:

Is it even possible to find out the condition of the asset?

“When we perform an audit on a new client, we often find that asset information is either absent, incomplete, inaccurate, or out of date”. This is a quote from John Rivenell, President of Sage Data, from Assets Magazine, Nov. 2011, P. 12. This issue of Assets had more to say on this very topic, and I encourage you to read P. 12 if nothing else. Many organizations I talk to are fired up about doing failure modes and effects analysis when they can't even aggregate the basic equipment tags needed to do the analysis. I submit to you that this is a risk of critical importance to any organization. It's especially important particularly when that organization impacts lives and communities (look back at the post regarding San Bruno for a vivid, heartbreaking example). Worst of all I suspect this is a large unidentified risk and thus an unmitigated one.

What role does taxonomy have?

Taxonomy is a global system of classification that encompasses all of your production assets. It is an enterprise-wide standards for classifying equipment and measuring performance. You can't build a legitimate performance management plan without it and you certainly cannot systematically understand the condition of your assets without it.

Okay back to the question, "What condition is it in"? Well why is it important to know? Who wants to know? Industries like the water and waste water are regulated and need to satisfy the futures assessment requirement. But regulators are not the only stakeholders. If you're manufacturing consumer goods or commodities like gasoline and tube socks, there are boards, analysts, and investors to answer to. Most of all those who consume your products have the ultimate say as to whether you're successfully managing the condition of your assets. It's not hard to answer the question when the organizational context is well established.

Okay I've droned on for long enough and I think I resisted the temptation to bring in my particular slant of reliability best practices in to the discussion. The discussion over these questions has been lively and I appreciate everyone's response. I look forward to the next round of responses.

Question No. 2 - What's it worth?

Thursday, December 15, 2011 by Marc Laplante

The worth of an asset has to do with its function. The battleship’s functions are, at the highest level, to float, move, and fight. The battleship has a replacement value of hundreds of millions of dollars. The US mirror committee to ISO PC 251 has a position that an asset is something that has potential value. How can a fighting platform produce value? Perhaps it could be said that the battleship’s potential value is the fact that it protects the nation’s sovereignty. What if the Royal Navy’s battle platforms all disappeared one day? Would the UK be vulnerable? The UK’s sovereignty is invaluable so the collection of battle platforms that defends her interests and sovereignty are certainly worth more than their replacement value. But is it up to the asset management function of the UK military to figure that worth into the worth of the asset?

Perhaps it’s more cut and dried for the process manufacturing industry. If International Paper were to determine the worth of all of its paper machines it would have to consider more than the asset replacement value. If it were to lose one of its paper machines in a particular region that produces coated paper made from hardwood pulp depending on the market price for that product that asset may be worth more at one time than another.

For BC Hydro, if a base load unit goes off line the consequence is lost revenue. The lost revenue is compounded by the fact that the power generation company needs to buy replacement power from someone else to service its customers. If the unit goes off-line due to an unplanned event resulting in a forced-outage, it may not get paid as much for the megawatts it produces. In some regions power generation units are bid into the grid and can fetch a premium of the forced outage rate is lower than its competitors. If an asset is something that has potential value, depending on where the asset is located there are implications about the worth of the asset.

Ann McDowall, Asset Management Specialist at BC Hydro posted a comment earlier this week that suggested, "The other key question to ask is "Why do we own it and what do we need it to do?" What we need to determine then, is Ann's suggestion part of question no. 2, or should it stand as a separate question. If it is a separate question, what order of the sequence should it occupy?

Inside all of these questions are the answers that guide us to applying methodologies for improving the way assets are cared for. Many of these questions have quick answers because many people reading the blog are from organizations that have been answering these questions for years through established work processes. I look forward to the continued discussion on this topic.

Question No. 1 - What assets do we own and where are they?

Wednesday, December 14, 2011 by Marc Laplante

Asset management is a broad subject but isn’t always considered such by most people involved in asset management. I used to think it had a lot to do with reliability and asset performance. I was partially correct but it was more than that. One of my colleagues on the US TAG thought that property management was asset management. He too has broadened his vision as well. A recent trip to London is what really helped me to broaden my vision of asset management and learn how encompassing asset management is.

A universal asset management framework can be established easily by asking and answering seven questions.

What do we own and where is it?

This seems to be a fairly obvious question but for anyone new to the asset management business, it may shock you to learn that many organizations don’t have a full accounting of the assets they own. There is a famous individual on LinkedIn named Cliff Williams who shared with me the fact that the company he helps run had been generating work orders for equipment that did not even exist. So what does it mean to have an accounting of your assets? For a military organization this means knowing how many battleships you own and where they are. For cities it means knowing the quantity and location of linear assets, buses, libraries, swimming pools, bus stops, water treatment plants, building, etc. For a pulp and paper company it would be handy to know how many machines you have and where they are.

You also need to draw the fence line around what that asset includes. Does the asset include the complement of officers and sailors or are these humans separate assets? An aircraft carrier is an asset that will carry a number of additional assets that include other fighting, rescue, and reconnaissance platforms, IT assets, thousands of line items of property, intelligence, and of course human assets.

The Seven (or so) Questions of Asset Management

Wednesday, December 14, 2011 by Marc Laplante

In order to fully establish the organizational context of asset management, seven questions need to be asked. They are simple but as you can probably surmise, they can lead to numerous additional questions along the way.

Where did I come up with these questions? Naturally I did not come up with these questions, I stole them from someone who is far more clever than me. I was an attendee of the IET/IAM annual conference and lecture at the beginning of December. The brightest and the best in the world of asset management we in attendance and many excellent papers were presented.

The City of Hamilton Ontario (Canada... see I told you there were some clever folks at this event!) during their asset management workshop used these seven questions as the elemental structure of their asset management framework.

I encourage you to ponder these seven questions to establish the organizational context of your asset management program. What implications do the answers have for risk management and performance analytics? How do the answers align to the requirements of PAS 55?

*This is not the environmental connotation for the word sustainability. Rather it means to sustainably carry out the work of asset management.

Maintenance at an Asset Management Conference?

Wednesday, November 30, 2011 by Marc Laplante

Tor Idhammer was the keynote speaker who opened the 2011 IET IAM Annual Conference. For the IET and IAM to invite a maintenance expert to open the asset management conference is very significant. It tells me how significant the role of maintenance is in the world of asset management. Afterwards, there were many references being made to his presentation by other speakers and delegates. Clearly his message resonated.

He took the position that doing the right things over and over again will generate substantial and sustainable results; that is you will get the asset performance you're aiming for. He also compared maintenance practices to dieting and exercise. It's easy to read a book on dieting but much more difficult to watch what you eat and to get out and exercise.

Much of what he talked about pointed to the hidden plant, which, is largely a result of unplanned downtime. The measure of asset availability is a key one in the discipline of asset and risk management. Tor clearly demonstrated to this conference how critical maintenance is to managing your assets.

PAS-55: Making Asset Management Integrated

Wednesday, November 23, 2011 by Stephen Rucker

Over the past few months, I have made it a point to watch the live Republican GOP debates. During these debates Republican candidates have discussed various topics of concern to the United States, from the economy to health care to national security. As these debates have continued, it has become increasingly apparent to me that very few of the issues have isolated effects. One problem can exacerbate other problems.

No single issue only affects itself. For instance, the USA's lack of energy independence on its own may not seem like a big deal but it affects many other aspects of American well-being. Becoming energy independent could boost the economy because citizens would pay less for gasoline produced domestically instead of having to buy foreign oil, which costs more. Becoming energy independent would require additional factories, refineries, and powerplants to be build domestically, which would create jobs for those building these facilities, as well as continuous work for those that would work in these new facilities. Being energy independent also affects national security as the USA wouldn't need to depend on unstable foreign powers, which currently create many conflicts of interest.

The same is true in the world of asset management. The British Standards Institution's PAS-55 standard has given asset-intensive industries a clear basis for setting up their asset management programs. One of the key principles of PAS-55 is that successful asset management program need to be well integrated. Asset management does deal with specifics but should include an overall holistic view of the many ways that the performance of equipment affects the business. As such, reliability solutions should be all-inclusive, integrating asset-related data to drive reliability best practices.

In the video below, Lou Matis of Xcel Energy expains how his company uses APM software to integrate data, optimize maintenance work, and cut costs. For more information on APM software, click here.

The Importance of Cutting Out Wasted Motion

Monday, November 7, 2011 by Stephen Rucker

Last month's SMRP Conference brought maintenance and reliability professionals from all around the world to Greensboro, North Carolina for a week of instruction and inspiration. A good amount of maintenance inspiration came from the presentation by keynote speaker, NASCAR pit crew great, Jeff Hammond.

In his presentation, Jeff told participants about the principles of how he and his pit crew became one of the most successful pit crews in NASCAR. After showing a clip of the synchronized movements of the pit crew, Jeff pointed out a key to having an effective pit crew: no wasted motion. As they replace tires, clean windows, and refuel the race car, every pit crew member knows their job and every action is done in the quickest, most effective way. According to Jeff, his team's success came from cutting out wasted motion in order to make pit stops better. This was accomplished through:

1. Teamwork
2. Good communication between team members
3. Constantly seeking to improve by dealing with problems
4. Having a common goal to win

Maintenance and reliability play a crucial role in NASCAR because, as Jeff Hammond taught participants, "You can't win if you can't finish."

Such wise words are valid outside of the racetrack as well. In the world of asset performance management, companies face fierce competition in order to win. Equipment availability can make or break a company's ability to produce goods and revenue. Corporations will fail to fill orders if they can't finish producing a certain amount of copper, polyethylene, or isobutane because their equipment has broken down. Missing deadlines weakens their customers' trust and could cause them to start buying from a competitor.

In order to cut out wasted motion and improve reliability, many companies rely on the reliability analytics found in APM software. Such tools facilitate methodologies like risk based inspection and failure modes and effects analysis. By taking out non-value-added preventive maintenance tasks (wasted motion), companies add to their profits through greater availability and lower costs.

What do asset management standards and frozen burritos have in common?

Wednesday, October 19, 2011 by Marc Laplante

I was warming up a frozen burrito for my beloved wife the other day. As I read the instructions - the guidance document - on how to heat it. There were a couple of choices. The first is the microwave and the other is the oven. People have been heating their food for centuries as well. Back in Colonial America you can see just how they did so in a place called Yorktown. It took a whole morning. Back in the 1950's and 60's, Mom would heat up food in the oven. Put a frozen pie in the oven for about an hour and it's ready for vanilla ice cream. Well time is money and a feisty, nascent, burgeoning tech society could no longer wait an hour for hot lasagna so guess what? Microwave oven. Can you imagine life without the microwave oven?

So... the burrito connection. I opted for the microwave oven. Didn't want to use the conventional oven - would take too long. One option the guidance document didn't offer is that I could have built a wood fire to heat my burrito (a la Yorktown).

I talk to people every day about their initiatives for developing an asset management system. They know they'd be better off with one. They know it would need to help them manage their assets better. So what are the choices?

Well they could build one from scratch. You may achieve the same results but it will take a very long time. Just like building a wood fire to heat a burrito, smoke might get in your eyes and a strong rain might come along.

You could use more conventional means by bringing in external resources. You might achieve the same results but it too will take a long time and consume a great deal more energy (a conventional oven will use lots more energy to heat that burrito).

Finally you might use a widely accepted, proven method for setting up an asset management system. It's scalable, it's fits into one 2-inch binder, and it's getting to be rather ubiquitous in some industry segments. The PAS 55 specification is to asset management what the microwave oven is to hungry, in-a-rush, burritophiles.

"PAS 55 enables an organization to establish essentially two things. First, it enables a line of sight between the boardroom and the tactical level of the organization. Secondly, most organizations have only a partial view of risk; PAS 55 is a means of helping an organization remove as much uncertainty (risk) about its future performance as possible." (APM Advisor August 2011)

If your risk management efforts demands these outputs from your asset management system perhaps you'll consider familiarizing yourself with PAS 55. You may find that the specification will show you how to setup a structure onto which you can build your MOC, ERM, and asset performance management system.