John Woodhouse Managing Director, TWPL UK Expert Representative, ISO 55000 Development Project Chairman, PAS 55 Development
February 2014
An introduction to the first international standard for asset management The Woodhouse Partnership Ltd 2014 Your course leader Summary CV
CEO and Managing Director, The Woodhouse Partnership Ltd since 1995 Founder, Fellow & Chair of Experts Panel, Institute of Asset Management UK Expert Representative, ISO PC251 developing ISO 55000 Project Director, BSI PAS 55 development Development Director, IAM Competency Requirements Framework v1 Director, SALVO Project (Strategic Assets: Lifecycle Value Optimisation) Member of UK Safety & Reliability Society for 30 years Author of Managing Industrial Risk, Publ. Chapman & Hall, 1993
Prior career with Shell (UK, Netherlands, Brunei, Norway) then senior management (Director) role in Kvaerner Engineering UK John Woodhouse MA, FIAM, MSaRS The Woodhouse Partnership Ltd 2014 What is (good) Asset Management? Sweating the assets? Maintaining them? Purchasing or creating the right assets in the first place? The Woodhouse Partnership Ltd 2014 Hierarchy of assets & systems Corporate/ Organization Management Manage Asset Portfolio Manage Asset Systems/Networks Manage individual Assets over their Life Cycles Activities efficiency & effectiveness System performance, cost & risk optimization Capital investment optimization and sustainability planning Keeping stakeholders happy System performance, cost & risk control Portfolio investment performance & compliances Typical priorities & values The Woodhouse Partnership Ltd 2014 150 years gestation 19 th Century Industrial revolution: specialisation of roles but an Engineer was also a businessman, communicator & leader 20th Century Vast improvements in technology and efficiency Increased specialisation: deeper but narrower knowledge 1970s onwards Departmental silos and conflicting KPIs creating ineffectiveness Slow realisation that the whole jigsaw puzzle needs re-assembly The Woodhouse Partnership Ltd 2014 Earliest UK attempts 1970 UK Department of Industry established the Committee for Terotechnology (from Greek Terein' meaning to care for). A combination of management, financial, engineering, building and other practices applied to physical assets in pursuit of economic life cycle costs. Involves systematic application of engineering, financial, and management expertise in the assessment of the lifecycle impact of an acquisition (buildings, equipment, machines, plants, structures) on the revenues and expenses of the acquiring organization. Practice of terotechnology is a continuous cycle that begins with the design and selection of the required item, follows through with its installation, commissioning, operation, and maintenance until the item's removal and disposal and then restarts with its replacement.
1975 The committee published Terotechnology. An introduction to the management of physical resources
1977 BSI BS3843 Guide to Terotechnology (the economic management of assets) Last updated in 1992, by British Institute of Managements Asset Management Group The Woodhouse Partnership Ltd 2014 Wake-up calls in N.Sea O&G North Sea oil & gas
1 st UK oil 1975 (Hamilton Bros) BP Forties field started 1976 1 st decade: massive development 1980s production costs c.$15/barrel 1. Oil price crash 1980 $40/bbl 1987 $10/bbl Oil price drop 2. Piper Alpha disaster 1988 167 died The Woodhouse Partnership Ltd 2014 The response Piper Alpha - Cullen Report: 106 recommendations. By 1993 all substantially implemented. Included goal-based safety case for every installation, and ALARP concept. 1994 BP Mature ASsets Team (MAST) Given total responsibility for asset life cycle value improvement: achieved 20% cut in production costs (100 million) and 4-year life extension, deferring 270 million of decommissioning costs. 1995 Shell Asset Management business model Defines company-wide AM Policy Defines specific asset (business unit) Mandate from CEO with decision-making authorities & budget freedoms Single point of accountability (Asset Holder) for delivering asset life cycle value in line with business goals Establishes asset life cycle management plans (ARP) Creates culture of a small company with the resources of a big one 1993 CRINE Programme Pan-industry Cost Reduction in the New Era report identified scope for radical efficiency improvement & tax reform. The Woodhouse Partnership Ltd 2014 The results By 2001, offshore industry accidents reduced by >75% Asset systems uptime (5 platforms) Total operating cost per platform By 2004, unit production costs reduced to c.$5/barrel The Woodhouse Partnership Ltd 2014 Meanwhile, down under 1984-7 South Australian public sector True cost of services and Cost and timing of asset replacement reports (Dr Penny Burns) resulting in a first, brief, government task force on Asset Management.
1988 Nick Greiner, new Premier of NSW, stated that government should run as efficiently as the private sector: first NSW Water Industry seminar on Asset Management 1993 First NSW Public Sector Total Asset Management Manual
1995 New Zealand Asset Management Support group (NAMS) established
2002 NAMS International Infrastructure Management Manual published
With thanks to Dr Penny Burns AM History project The Woodhouse Partnership Ltd 2014 And in North America 1988 US National Council on Pubic Works Fragile Foundations report
1999 US DOT Asset Management Primer published
2000 ASTM Property Management Systems guidelines
2004 Canadian NRCC publishes first Municipal Infrastructure Asset Management guide
2009 PSAB 3150 requirement for public assets amortized valuation Canadian Asset Managers Network (CNAM) founded
With thanks to Tom Smith, Univ. Wisconsin The Woodhouse Partnership Ltd 2014 Capital Investment, Design & Projects WORK ADMIN Preventive, Detective & Corrective WORK Work programme SCHEDULING Data Collection Inspection & CBM Problem/Oppty INVESTIGATION EVALUATION of Solutions CHANGE Mgmt $ $ $ $ $
CONTINUOUS IMPROVEMENT cycle Problem/Oppty IDENTIFICATION External reporting Operating & Maintenance Strategies Asset Management processes Resource PLANNING & Work DEFINITION Materials RESOURCE ADMIN Labour The Woodhouse Partnership Ltd 2014 Critical systemic enablers People factors o Structure & responsibilities o Leadership o Competencies o Cross-disciplinary teamwork Risk management o Asset criticality & risk registers o Asset health & deterioration mgmt o Risk-based decision-making
Information management o Single source of truth asset register o Data, information & knowledge management systems o Work & resource planning & management systems The Woodhouse Partnership Ltd 2014 First cross-industry standards 1994 Institute of Asset Management (IAM) founded 1995-99 Rapid growth - mostly in post-privatisation utilities (after initial easy efficiency gains, what next?) 2000 Established corporate platforms for Asset Management debate, membership and Council 2002 IAM project started to document good asset management practices: 25 organisations involved BSI Publicly Available Specification template chosen 2004 IAM/BSI PAS 55 published Optimized management of physical assets
Part 1: Requirements specification Part 2: Implementation guidance The Woodhouse Partnership Ltd 2014 Elements of PAS 55 4.3 Asset management strategy, objectives & plans 4.3.1 Asset management strategy 4.3.2 Asset management objectives 4.3.3 Asset management plans 4.3.4 Contingency planning 4.4 Asset management enablers & controls 4.4.1 Structure, authority & responsibilities 4.4.2 Outsourcing of asset management activities 4.4.3 Training, awareness & competence 4.4.4 Consultation, participation & communication 4.4.5 Asset management system documentation 4.4.6 Information management 4.4.7 Risk management 4.4.8 Legal & other requirements 4.4.9 Management of change 4.6 Performance assessment & improvement 4.6.1 Performance & condition monitoring 4.6.2 Investigation of asset-related failures, incidents & nonconformities 4.6.3 Evaluation of compliance 4.6.4 Audit 4.6.5 Improvement actions 4.6.6 Records 4.7 Management review 4.1 General requirements 4.2 Asset management policy 4.5 Implementation of asset management plans 4.5.1 Life cycle activities 4.5.2 Tools, facilities & equipment Plan Do Check Act PAS 55:2008 Management System The Woodhouse Partnership Ltd 2014 BSI PAS 55:2008 2006 IAM maturity scale & assessment tool developed 2007 Industry regulator OFGEM made PAS55 compliance a requirement for gas & electricity networks 2008: Major update: internationalise & broaden 50 organisations 15 industry sectors 10 countries 1300 suggestions! 2009: Spanish version 2011: French, Chinese, Russian, Dutch & Portuguese versions
Now major international best seller: 2012 update or ISO? The Woodhouse Partnership Ltd 2014 ISO 55000 development ISO PC251 committee:
Started in 2011 (BSI proposal, based on PAS 55)
30 participating countries + 14 observer status
Argentina (IRAM) Australia (SA) Belgium (NBN) Brazil (ABNT) Canada (SCC) Chile (INN) China (SAC) Colombia (ICONTEC) Czech Republic (UNMZ) Finland (SFS) France (AFNOR) Germany (DIN) India (BIS) Ireland (NSAI) Italy (UNI)
Japan (JISC) Korea, Republic of (KATS) Mexico (DGN) Netherlands (NEN) Norway (SN) Peru (INDECOPI) Portugal (IPQ) Russian Federation (GOST R) South Africa (SABS) Spain (AENOR) Sweden (SIS) Switzerland (SNV) United Arab Emirates (ESMA) United Kingdom (BSI) United States (ANSI) Armenia (SARM) Austria (ASI) Costa Rica (INTECO) Denmark (DS) Hong Kong (ITCHKSAR) Hungary (MSZT) Iceland (IST) Iraq (COSQC) Israel (SII) Malaysia (DSM) Morocco (IMANOR) New Zealand (SNZ) Slovakia (SUTN) Thailand (TISI) Observers The Woodhouse Partnership Ltd 2014 Development process Publication 10 th Jan 2014 Each meeting = 5 days duration Final one (Calgary): 80 participants London planning
Nov 2010 Month
Stage NWI proposal The Woodhouse Partnership Ltd 2014 The resulting standards ISO 55000 Overview, principles and key terms in Asset Management
ISO 55001 Asset management: management systems - requirements
ISO 55002 Guidance for implementation of ISO 55001 Plus ISO 17021 * part 5 Asset Management competency requirements for auditors of ISO 55001
*Conformity assessment: requirements for bodies providing audit & certification of management systems www.ISO55000.info The Woodhouse Partnership Ltd 2014 Scope of management system Corporate/ Organization Management Manage Asset Portfolio Manage Asset Systems/Networks Manage individual Assets over their Life Cycles Asset Management System Activities efficiency & effectiveness System performance, cost & risk optimization Capital investment optimization and sustainability planning Managing stakeholder expectations System performance, cost & risk control Portfolio investment performance & compliances Typical priorities & values The Woodhouse Partnership Ltd 2014 ISO55001 requirements for management system The Woodhouse Partnership Ltd 2014 Asset Management Resources, Processes, Competencies, & Technologies Development Plan for AM capabilities Asset (life cycle) Management Plans Asset Management Objectives & Strategies Asset Management Policy Organization Strategic Plan Renew/Dispose Maintain Utilize Acquire/Create Operation & Control of Life Cycle Activities A management system for AM
C o n t i n u a l
i m p r o v e m e n t
C o n t i n u a l
i m p r o v e m e n t
Where are we going: therefore what to do, when and why Who does it, and how Asset capabilities input to strategies & objectives Delivery capabilities input to strategies & objectives Continual improvement in AM processes & capabilities The Woodhouse Partnership Ltd 2014 ISO 55001 elements in PDCA layout The Woodhouse Partnership Ltd 2014 Life cycles: generic principles Requires multi-disciplined teamworking De-siloing of the organisation and its culture Decision-making and Key Performance Indicators to favour total business impact over not localised, short-term interests The Woodhouse Partnership Ltd 2014 Institute of Asset Management www.theIAM.org The Woodhouse Partnership Ltd 2014 IAMs Maturity Scale (PAS 55) P A S
5 5
c o m p l i a n c e
good example answers 2 8
e l e m e n t s
1 2 0
q u e s t i o n s
Mostly just beyond PAS55 The Woodhouse Partnership Ltd 2014 Current work: JWs Bow-tie. !"#$%&%'& "##$% &'(')$*$(% +%, -(.$/$(.$(%01 2$345'60$ #%'(.'3.7 89:() %;$ 6'#-2# -( /0'2$ <$=$0,/*$(% > ?(%$)3'4,( @/4*-A'4,( '(. ?((,='4,( Convergence to a joined-up, managed system for asset management Divergence best appropriate practices (context-dependent) The Woodhouse Partnership Ltd 2014 Using the bow-tie ?(-4'0 #1#%$*'42 3$=-$B +C)'/ '('01#-#D7 Roadmap ?E@FFGGH I$3452'4,( HJ K(.$3#%'(. %;$ ("'&%)& LJ ?.$(4M1 +%,%-.'& 0$'.-() /3'242$# NJ I;'00$()$O -((,='%$O > /&+%&(0 ,1#1&/ PJ Q,'.*'/ > 1#$,%#%'& 23 4%-1%5 > +%$%.& Developing Optimizing 0 1 2 3 4 5 The Woodhouse Partnership Ltd 2014 IAM SAM tool and Q&A set Good for simple self assessments & basic ISO 55001 gap analyses Not so good for objective external reviews & business improvement planning Not adequate for formal certification purposes The Woodhouse Partnership Ltd 2014 Formal certification Accredited certification authorities only e.g. BSI, LR, DNV, BV
ISO 17021 audit process compliance
NEW: ISO 17021-5 requirement for subject matter expertise in asset management IAM & GFMAM role in defining adequacy of such expertise The Woodhouse Partnership Ltd 2014 BUT ISO 17021 means Certification assessors are not allowed to provide any guidance on how to close the gaps. They also cannot have any relationship with any other provider of consultancy services. The Woodhouse Partnership Ltd 2014 TWPL Improvement planning Assessment
Life Cycle Costing Projects & resource prioritisation Major project delivery/completions Minor projects evaluation & delivery Mtce/Ops feedback into projects Risk evaluation & management N o w N o w I n 1 y e a r I n 1 y e a r I n 3 I n 1 y e a r I n 3 I n 3-5 y e a r s y e a r s y e a r s Projects & Investment Maintenance processes Supply chain processes AM processes section The Woodhouse Partnership Ltd 2014 Roadmap development Existing corporate goals & objectives AM team workshops Assessment results Quick (<12 months) Slow (3-5 yrs) <2 2-5 >5 Urgency & value Value (benefits/costs) The Woodhouse Partnership Ltd 2005 A Typical Resulting Roadmap The Woodhouse Partnership Ltd 2014 E f f o r t
&
r e s u l t s
e.g. AM education programme e.g. LCC methods adoption e.g. Shared risk/ reward alliancing Sensitive linkage #1 Exploring a new topic during peak implementation effort for another Sensitive linkage #2 Rolling out the next initiative while stabilising/embedding the previous Achieving sustained, cumulative success The Woodhouse Partnership Ltd 2014 Scottish Power 10% reduction in capital expenditure 20% reduction in O&M costs 22% increase in plant availability 25% reduction in forced outages Hong Kong MTR Train operating costs reduced by 20% Train reliability: MTBF risen from 1000 Km to 3500 Km between failures -30% network total cost of ownership (Nuon, Netherlands) -30% maintenance cost & +10% system availability (Copper mine, Chile) A$11M/year budget savings (New South Wales government) Case studies at: www.twpl.com/?page=CaseStudies China Light & Power ICE, Costa Rica* * Winner of 1 st IAM Asset Management Achievements award 2013 What is being achieved by this? PAS 55 Certified The Woodhouse Partnership Ltd 2014 Closing Summary An Asset Management System is a framework of control, directional alignment, cross-disciplinary collaboration, optimization and continual improvement. It is not a software tool. ISO 55001 provides a very valuable structure but: It is only defines what needs to be done; not how (context dependent) It defines competent asset management; not best practice Line of sight alignment is a vital starting point Optimization of strategies & plans is complex but very high value The people, risk & information enablers have profound impact, especially in sustainment of the system Closing the loop is, perhaps, hardest of all initially, but provides the self-motivating engine once started. ISO 55001 is just a checklist: the real value is found in better integration & optimization, in de-siloing and providing greater clarity of focus The Woodhouse Partnership Ltd 2013 5553.//%&#.'.6%#%'&.(.7%#83("# 55539:;22<<<31'=" 5553&5$,3("# Blended learning classroom, distance/e-learning, in-workplace, mentoring, custom.
Professional Accreditation www.twpl.com THANK YOU john.woodhouse@twpl.com