Professional Documents
Culture Documents
Enterprise Asset
Management
FOR
DUMmIES
Introduction
Introduction
Foolish Assumptions
In writing this book, we made some assumptions about you,
the reader. We assume that:
You work in an asset-intensive industry and understand
the need for implementing good EAM practice to achieve
improved asset outcomes.
Youre interested in management of physical assets
(including the financial aspect) as opposed to the management of purely financial assets (such as derivatives,
bonds and so on).
You appreciate the difference between implementing
Enterprise Asset Management and implementing an EAM
IT system. This book focuses on implementing Enterprise
Asset Management to meet your overall business needs,
although we do reference IT system considerations.
You want to know more about the techniques and
approaches for EAM implementation taken by other
successful asset managers.
You want to know how you can tune your EAM implementation to achieve, track, maintain and improve
compliance with standards and external bodies (both
regulatory and statutory).
Youre interested in harnessing the efforts of previously
disconnected groups across your enterprise towards the
achievement of better asset management.
You understand some asset management jargon (but
dont worry we include a glossary at the back of the
book, just in case).
Introduction
Part IV Implementing EAM: We explain the measures
necessary for EAM implementation (with continuous
improvement) programmes, including performance
tracking, organisational (re)design points and important
implementation behaviours and activities.
Part V Top Ten Implementation Points to Remember:
If you read nothing else, this part lists the essential things
to bear in mind when discussing EAM implementation.
This icon marks the place where technical matters are highlighted and where you might need to think a little more carefully about something.
Part I
The preceding example focuses only on the operational lifephase of your assets. However, Enterprise Asset Management
takes into account the whole lifecycle, including:
Design
Procurement and construction
Commissioning
Operation
Decommission and disposal
The objectives of each phase can have detrimental effects on
the other phases for example, if two metres of clearance is
needed to maintain an asset when its designed, but in the
rush to complete construction, the building has less than one
metre clearance, then maintenance costs are higher.
So the scope of Enterprise Asset Management encompasses
all the lifecycle of the asset.
The consensus is presented as a convergence of the disciplines mentioned in the preceding section with a core of 39
subjects see www.theiam.org for details.
While we dont attempt to deal with these topics in detail, we
do refer to them throughout this book.
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Everythings related
The design of the asset determines its physical shape,
which determines how easy or hard it is to maintain,
which affects the cost to maintain.
Profit (or regulatory funding) finances all support activities relating to asset management.
12
Objective Description
Level 1 objective
Level 2 objective
Level 3 objective
Level 4 objective
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These hard facts (as well as providing indisputable proof for the benefits for implementation of Enterprise
Asset Management) helped justify
the continuation of the programme
for ongoing improvements.
The project referenced in this example, and all examples in this book,
was delivered by Logica which CGI
acquired in August 2012.
Steps to success
You can strategise all you like, but if you dont have a plan to
get from A to B, then you wont get any improvement in asset
outcomes. This book provides guidance in this area.
15
Table 1-2
Laggard Steps to
Success
Industry-Average
Steps to Success
Best-in-Class Steps to
Success
Invest in analytics
Establish integration
between EAM and the
plant floor as well as
business systems
Implement reliability
centred maintenance
as a primary maintenance approach
16
A learning organisation results where the understanding
of the root causes of failures is continually fed back into
processes and procedures for higher performance assets
with reduced unexpected failures.
Cost-effective, efficient compliance occurs with statutory,
mandatory and regulatory standards.
An organisation is created where planned maintenance
takes priority and reactivity is resisted.
An organisation effectively prioritises emerging work.
An organisation maintains strategy conformance and
high asset performance, and a low cost of asset management when compared with its peers.
Part II
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Establishing policies
To optimise business performance against the backdrop of
customer demands, a strong focus on risk associated with
EAM is essential. Management of risk associated with assets is
central to everything a high-performing organisation does and
is reflected strongly in its asset management policy.
The establishment of the asset management policy is important because it:
Is aligned with business strategy and confirms the organisations commitments related to its assets.
Ensures that the organisations asset management policy
is aligned with wider organisational policies, including
risk management, environment health and safety and
regulatory, legislation and statutory compliance.
Provides the foundation for the asset strategy, objectives
and plans.
Commits to continual improvement in asset management
and asset management performance.
As the key definition document, its essential that the asset
policy is controlled, communicated and reviewed as appropriate. This may include internal and external stakeholders, such
as the Health and Safety Executive (HSE).
19
Conforming to standards
EAM documentation needs to cross-reference PAS 55 to
ensure active compliance. PAS 55 prescribes the definition of
an asset management policy and an associated strategy.
The following is an example of an asset management policy
that illustrates the things that may be contained in a working
EAM policy. (This list will vary by organisation, and we pro vide it here simply for illustrative purposes.)
Designing, constructing, operating, maintaining and
disposing of enterprise assets to ensure compliance to
applicable legislative requirements and high standards
of health, safety, environmental and commercial performance throughout their complete life.
Ensuring that the enterprises total supply chain risks are
identified and that relevant policies and procedures are
in place to mitigate identified risks.
Measuring and improving the effectiveness of the enterprises approach to asset management by continuous
review and adjustment as required.
Enabling employees to have the competencies necessary
to effectively deliver asset policies and procedures.
Communicating all necessary information to the relevant
stakeholders to enable delivery of asset management
policy and procedures.
Identifying the risks inherent in assets that may prevent
the delivery of stakeholder needs and develop optimum
asset strategies to mitigate identified risks.
Managing all the enterprise assets in a way that optimises whole life costs.
Developing short- and long-term performance targets for
assets that optimise the use of resources.
Developing and maintaining an approach to data management that can underpin asset decision-making by promoting cooperation, consultation and communication of
knowledge.
Developing and maintaining asset plans that enable the
asset policy objectives to be delivered.
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IT systems: Is the landscape that supports asset management up-to-date and modern, or does it need a lot of
expensive investment? At some stage in every organisation, the need for process, consistency, acceleration and
repeatability necessitates appropriate IT system support.
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Controlled: Governance needs appropriate leadership.
Accountable: Empowered benefit owners.
Achievable: The roadmap is possible.
Staged: Benefits released throughout.
Measurable: Clearly defined benefits.
Relevant: A catalogue of business requirements.
Part III
26
27
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Establishing Leadership
The asset policy and strategy can guide the range and scope
of asset management activities you undertake within your
organisation (see Part II). This approach only works, however,
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People
Once the appropriate asset management leader is in place,
appropriate skilling and staffing is needed. A close alignment
with Human Resources activities is needed. Dependent on
the start point, a baselining activity may be required to understand available skills and identify any skills gaps.
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Systems
Systems enable the automation of processes and the consequent efficiencies from automation. In the Predicts 2012:
Economy and Energy Sustainability Guide Energy Utility
Agenda (Nov 2011), Gartner suggests that utilities are striving
for better equipment reliability, and this, in turn, is driving
utility IT departments to get as much intelligence as possible
from their Enterprise Asset Management systems. Because
this need for knowledge requires more comprehensive data
feeds and the data for the physical plant and equipment is
locked away in the operational technology (OT), having interfaces to extract OT data will be a high priority.
This means that the wall (lack of links and lack of desire for
links) between IT and OT needs to be broken down to deliver
greater benefit.
IT systems
As record systems, IT systems are immensely scalable and
allow easy cross-referencing and analysis compared to paper
filing. Many of the shortfalls of the paper record systems
still persist for example, the need for data quality management. However, you can cross-reference IT systems with OT
systems to promote better alignment with the physical asset
estate.
IT systems are also used for design and reporting on assets.
The implementation of an IT system to manage assets can be
a complex undertaking. Fortunately, many vendors exist with
decades of experience with asset management. These vendors
offer packages of functionality that support different EAM processes. As many of these IT systems were designed for multiple industries, they usually offer process support for a wide
range of business scenarios usually wider than is needed for
any given implementation in an asset-intensive organisation.
This is called the functionality of the IT system.
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Gathering information
Information is a critical enabler for Enterprise Asset
Management. An effective, enterprise-wide asset management
implementation needs to have data and decision needs at the
heart of its design.
You can help define what information is needed by using
techniques such as the following from the Institute of Asset
Management. Figure 3-2 helps you understand the importance
of some factors:
You need to know what youll use the data for and what
decisions youll make, and then build that into your data
design.
You need to know the cost to capture and maintain quality asset information so that you can right-size the data
requirement.
You need to realise how low data confidence breeds negative behaviours, so you need to build confidence and a
sense of value and ownership for the data for all stages
(except design) of the asset cycle.
You need practical, cost-effective data governance and
management processes, as well as data update tools to
make those processes easy to implement.
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Enterprise Asset Management IT systems: Used for all
asset mastering and processes.
Geographical Information Systems (GIS): Used to geographically identify widely dispersed assets in their
terrain.
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Computer Aided Design (CAD) systems: Used to depict
the local, geometric shape of the asset and its immediate
operating environment.
Asset Performance Management systems: Function as
a hub for the IT and OT where both sets of information
meet.
Figure 3-3 shows flows of information that you need to control
throughout the lifecycle of an asset. You need a holistic view
so that sufficient understanding of the asset is retained to
optimise business decision-making.
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Figure 3-4: The part that systems play (or dont play) in preserving asset
lifecycle information flows.
Considering IT strategy
The enterprise asset manager needs to build understanding
within the IT services function to ensure that the most appropriate systems strategy is in place. This is the first of many
relationships that the asset manager needs in order to knit
together the appropriate end-to-end processes of the strategy.
Some useful points to note when considering IT systems
strategy:
Information flows are key. Early definition of these is
vital.
Early information stewardship is essential. Owners and
processes are needed for this task.
Avoid functional duplication across departments.
Select systems with an established roadmap and commitment to integrated asset management.
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Minimise systems while maximising functional coverage. These systems include support functions, such as
Finance, Procurement, Inventory Management, HR and
Safety, Health and Environment Management (SHE).
Understand the cost of building and maintaining system
interfaces.
In practice, multiple systems will probably hold asset management data. For example, these systems may interface directly
with the assets for monitoring and control, bring information
from remote sites into the enterprise and describe the spatial
aspects of assets.
Theres a high dependency between asset operation, maintenance activities and equipment reliability for the most profitable lifetime performance of assets. These have the most
touch points, as depicted in Figures 3-5 and 3-6.
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Figure 3-6: The hot spots (table) for inter-dependency in asset intensive
organisations.
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Looking at maintainability
In Part I we explain that the asset shape affects maintainability, which affects maintenance. Figure 3-10 shows a reminder.
So, for cost-effective running of the asset, the maintainability
needs to be optimised during asset design.
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Change complexity
External factors
IT systems
In the following sections, we expand on these guidelines to
show how the appropriate design is achieved.
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Deliver benefits every step of the way.
Deliver large change dependencies early to give flexibility
later on and early benefits.
Provide an appropriate timeline to avoid change
weariness.
Change complexity
Implementing Enterprise Asset Management means changing the way an organisation works, and thats disruptive.
Implementing EAM can be called a lot of things: business pro cess re-engineering, transformation, streamlining and so on
But it is always change.
Change may mean:
Changing the processes people use.
Increasing automation in processes.
Removing unnecessary processes.
Changing the mix of skills people need.
Changing the organisational structure to reflect the change
in the effort required to execute the new processes.
Implementing new IT systems to support the new
processes.
Bringing in external systems integration and consultancy
to support the changes.
Communicating the impacts of the changes throughout
the organisation.
Training people on new processes and new systems.
Often, though not always, the organisation may be reducing
the number of people who carry out the existing processes
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usually the knowledge that these people possess can be redirected to deliver greater value. Early and close coordination
with union representatives can increase the likelihood of successful EAM implementation.
Careful consideration is required to ensure that all the implications of the change are understood and planning is put
in place so that that the change agents are appropriately
equipped and supported.
You must consider factors such as organisational complexity
as well as its change track record. You need to learn from previous experiences and case studies.
So where can you find lessons learned? Try here:
Your carefully recruited people for example, a team of
20 maintenance employees with an average of 10 years
experience each, has 200 years experience between them.
Documented lessons learned in your company.
Independent sources, such as:
External factors
Many asset-intensive organisations face direct or indirect regulatory control. Utilities (water, gas and power distribution),
rail companies, airports, local authorities as well as many
others answer to a regulator who controls their performance
and even their capital allocations. Furthermore, external
factors, including the weather, public perception, taxation,
legislative change, cost of capital and the performance of
international markets, all affect the timing and scale of your
Enterprise Asset Management approach. Factor these items
into the plan as well.
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IT systems
Changing IT systems are disruptive. As EAM is a holistic discipline, IT systems which support EAM are particularly disruptive to the organisations day-to-day work. Conversely, many
organisations have realised that this very disruption can provide a really good opportunity to implement organisation and
process changes. This can be a very good approach so long as
you ensure that the changes are process led. IT systems are
powerful enablers but business process shouldnt be defined
to match to IT system restrictions.
Part IV
Implementing EAM
In This Part
Following your design and plan
Tracking your progress
Improving and measuring the outcome benefits
n this part, we look to pool all the information and guidance from the previous parts into some straightforward
actions that can help you implement effective Enterprise
Asset Management.
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Ownership from the top
Empowerment for tough business decisions
Focused steering group (business, finance and IT)
Transformation programme director
Committed resources from business
Clear business vision to focus requirements
Engagement from business
Implementation and training plan from the start
Strong attention to data
Strong communication channels
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Figure 4-1: Striking the right balance with the pillars of asset management
to drive cashable benefits.
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For example, an organisation in the operations and maintenance stage for the bulk of its assets that views its percentage
of reactive maintenance work as too high, may want to bring
in more people to address backlog, impose planned maintenance rigour and ultimately reduce risk before moving on to
a more controlled, steady state of running. Conversely, a new
build may require more people in design to ensure that safety
and maintainability are properly considered.
Various asset-related factors are relevant when considering
resources needed. These include but arent limited to:
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Complexity of the asset base
Changeable nature of the asset infrastructure (for example, numerous small additions)
Regulatory licensing constraints
Risk mitigation for operation and maintenance
Identification of the key roles to embed the vision is essential.
Key actors in the Enterprise Asset Management organisation
must understand the holistic vision from the start in order to
be able to create an Enterprise Asset Management culture.
Some examples are:
Appointment of a maintenance coordinator responsible
for planned maintenance and delivery of high compliance
with the planned maintenance schedule. This increases
the focus on planned maintenance.
Re-orientation of teams to cover holistic disciplines that
encourage cooperation across the organisation.
After the EAM leader has worked to define the appropriate
structure, recruitment into the Enterprise Asset Management
initiative is required. Recruitment of all parties for the implementation and running of a successful Enterprise Asset
Management requires alignment with the vision. This recruitment includes employees, contractors, IT systems integrators,
consultants, corporate services and so on. All parties must
demonstrate understanding of the importance of effective
Enterprise Asset Management for the success of the business
as defined by the business sponsor.
Recruits may be internal or external depending on the stage
of the asset lifecycle. The recruits should be able to identify
the importance of the vision as it applies to them within their
day-to-day job. The business case should include the costs
(including productivity losses and back-fill costs) of releasing
the best people for the initiative. Nothings quite as demotivating as asking your best employees to execute processes
that have been poorly conceived because the only people
released to define them werent sufficiently experienced.
An excellent source of guidance in this area is the IAMs competency framework, which you can view in conjunction with
your asset management strategy and policy.
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Safe working practices, good document practice, repeatability and consistency were values that the asset
management leadership instilled
from the start in the highly inclusive
culture that was installed. All staff
pooled lessons learned from previous working experiences into the
design of the new Enterprise Asset
Management system. The team
took the opportunity to do high-level
criticality assessments of all assets
on site and use this information to
govern the asset management policy
and asset management strategy.
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Seeking Continuous
Improvement
After youre live with your newly implemented Enterprise
Asset Management, you need to know how youre performing,
and ensure that you can measure this from the start. Based
on your asset management strategy, you know what KPIs
you need for process health (head to the later section Key
Performance Indicators (KPIs) for more). Make sure that you
use performance and conformance KPIs that are appropriate
to the stage of the asset management lifecycle, because for
new builds, things are fluid.
59
Figure 4-2: P
oints where information flows are measured to assess EAM
performance.
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Business process reports
Process compliance reporting
Key performance indicators (KPIs)
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Job request processing time
Planned/actual costs
Order status management
Damage/cause analysis
Evaluating improvement
When looking at continual improvement, the following questions are relevant:
How are lessons learned?
Is there an opportunity for learning lessons?
Learning from failure (does the culture shun talking
about failure?)
Learning from success (is there the discipline to learn
from success?)
Embedding best practice in design (is learning lessons a
key part of FEED?)
Closing the loop (is there a fully traceable audit trail
from root cause analysis and lessons learned through to
implemented changes?)
The holistic EAM design needs to incorporate continuous
improvement. For many asset-intensive organisations (particularly those with distributed asset networks), continuous
asset build is core business and efficient, and continually
improving capital investment is an essential activity. For
all asset-intensive organisations, the ability to identify true
asset need (with financial payback) for capital-spend is a core
requirement, and harnessing hard facts from a holistic enterprise asset management reduces risk of wasted investments.
Use the organisations measures and performance to inform
continuous improvements with facts. Decisions relating to
improvements should therefore have a solid basis in engineering fact tightly coupled with financial payback. New technology (simulations, what-if scenario modelling) is becoming
more and more powerful through advances in computing such
as Big-Data In Memory computing.
Look outwardly to organisations such as the IAM and EFNMS
who provide excellent guidance.
Part V
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Choose Process-led
Implementation for EAM IT
Systems
Enterprise Asset Management processes can be supported
by the appropriate use of IT systems. The implementation
of such systems should be led by the processes and not the
other way around.
Monitor to Perform
Monitoring and acting on performance of assets and process
conformance measures through effective KPIs is an essential
part of a continually improving Enterprise Asset Management
system. (See Part IV for more on this topic.)
Glossary
Asset Performance Management (APM): Encompasses all
maintenance activities that extend the lifespan of missioncritical assets to ensure that an organisation achieves its strategic goals and objectives.
Capital Programme Management System (CPMS): Refers
to the systems available to help building owner/operators,
program managers, and construction managers control and
manage the information that capital construction projects
create.
Computer Aided Design (CAD): The use of computer systems
to assist in the creation, modification, analysis or optimisation of a design.
Computerised Maintenance Management Systems (CMMS):
A CMMS software package maintains a computer database
of information about an organisations maintenance operations. This information is intended to help maintenance
workers do their jobs more effectively and help management
make informed decisions (for example, calculating the cost
of machine breakdown repair versus preventive maintenance
for each machine, possibly leading to better allocation of
resources).
Customer Information System (CIS): Manages all billing and
customer support processes.
End-to-End (or E2E) processes: End-to-end theory embraces
the philosophy that eliminating as many middle layers or
steps as possible will optimise performance and efficiency in
any process.
Enterprise Resource Planning (ERP): A system that integrates
internal and external management information across an entire
organisation, embracing finance, manufacturing, sales and
service, customer relationship management and so on. ERP
systems automate this activity with an integrated software
Glossary
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Glossary
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improvements in fields such as the establishment of safe minimum levels of maintenance, changes to operating procedures
and strategies and the establishment of capital maintenance
regimes and plans. Successful implementation of RCM will
lead to increases in cost effectiveness, machine uptime and a
greater understanding of the level of risk.
Supervisory Control and Data Acquisition (SCADA): A centralised system that monitors and controls entire sites, or
complexes of systems spread out over large areas.
The Aberdeen Group: An organisation providing research
and analysis of information technology companies and products as well as custom consulting services.
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