Synergetic Asset Management
A
innovation in
implementation of asset management practices as a
source of additional profitability
Businesses in the manufacturing, process or infrastructure
industries have a large capital
investment in the physical assets used in their operation.
Maintenance
is a significant part of direct operating cost for these
businesses. With profit margins being increasingly squeezed,
maintenance is one of the few areas where a business
can improve profitability. Maintenance has traditionally
been managed as a cost to be minimized rather than a strategic process that assures
the profitability of the business.
The first step to realizing the full payback
potential of a maintenance management program and
it’s associated cost, is to understand that:
Programmed maintenance management increases
the efficiency and life span of equipment,
therefore increasing profitability. These ideas form
part of the concept of “Asset Life Cycle
Management”. To fully understand the benefits of
addressing asset management issues, it is
useful to define a model of “Asset Life Cycle Management” as
a business management system.
Asset Life Cycle Management
There are essentially three stages in the life cycle
of an asset:
-
Acquisition,
-
Operation and Maintenance, and
-
Disposal.
Figure 1, below, is one model of an asset life cycle
management system. The Maintenance
Engineering Society of Australia (MESA is at www.mesa.org.au)
uses a similar model to define
criteria used for awarding the annual Maintenance Excellence
Awards.
Acquisition Phase:
At the beginning of the
asset life cycle, business goals provide the inputs
used during the design, procurement, installation and commissioning
of the plant or equipment
[assets]. The specifications developed during this stage
relate to the physical characteristics
and capabilities of the required assets. Operation and Maintenance Phase:
Business
goals also define the requirements of how the
assets will be operated. A known range of raw material
will be processed into products and
offered into the market place.
Thus the business goals
define the operating environment for the
assets and the performance goals needed. The ability
to deliver products to an eager market at
lowest possible unit cost of production is the ultimate
goal. Operational performance is defined
as a combination of production rate, quality and yield
targets. Asset dependability is defined in
terms of reliability and availability targets.
Disposal Phase:
The end of the asset life cycle
is reached when the asset is no longer capable
of delivering the required operational performance, or
cannot be cost effectively maintained to
achieve the required levels of dependability. The options
are either modification or disposal and
replacement of the asset.
Optimising the Operation
and Maintenance Phase:
Optimal performance during this phase of the asset life cycle
is only achieved by organisations that embrace a holistic
approach. This encourages a close working link between the
production and maintenance areas. They are jointly responsible
for achieving business plan requirements.
There are many definitions of maintenance,
however it must be defined and managed as a “process”,
in order to achieve optimum pay back from expenditure. Hence
the need to identify a
maintenance management system as an integral part of the
asset life cycle management model
shown in Figure 1.
During the operation
and maintenance phases of the asset life cycle there are
three critical factors needed to realise optimal performance.
-
Plant [assets] must be managed to achieve
the required dependability goals in the most
cost effective way. To do this, a strategy is developed
for maintaining assets with a focus
on the asset’s function. The asset function
defines what is needed to achieve operating
performance targets. Thus, effective maintenance
is about preservation of asset function
to deliver the required operating performance, rather
than just preservation of the asset
itself.
The development of a strategy in this way provides
the method for defining and
managing an accurate and realistic maintenance budget.
This is basically a technical
matter that has been done effectively by application
of processes such as PM
Optimisation (Visit www.pmoptimisation.com.au for additional
information.)
-
Processes need to
be established in order to efficiently manage maintenance
activity, evaluate performance against targets, and
initiate any required improvement actions.
The processes
should reflect the “plan, do, check and
act” cycle of continuous
improvement. The improvement actions that will be taken
are determined by the
prevailing business needs at that stage of the asset’s
life. This is also a technical matter
but is not usually addressed within an organisation
unless an asset life cycle
management model similar to that depicted in Figure 1
is adopted. Without such a
model, it is difficult to gain acceptance and management
commitment to the concept of
maintenance as a process that plays an important role
in achieving business profitability.
My experience shows
that this is most easily done if the business employs a
systems approach to organising itself, and quality management
principals have been deployed
within the organisation.
-
People need to be
effectively engaged to realise the potential of the
plant by using established management processes. People
need to understand their role, responsibility
and goals in terms of the maintenance management
processes. This helps people
understand how to achieve their performance goals
and will ultimately lead to the
achievement of business goals.
People are the means of
achieving performance and
dependability targets that assure the achievement of
business goals. This is not a
technical matter, and so, is often not perceived as an
integral part of asset and
maintenance management. Maintenance management personnel
are usually managed according to a prescribed HR doctrine within
the organization. It would be far more
effective if HR policies for these people were tailored to
suit the “Plant , Process and
People” approach to maintenance management.
Twenty years of experience working in manufacturing
and process industry has shown me that
these factors are usually dealt with in isolation. There
are many organizations that have spent
millions of dollars on maintenance software, reliability
analysis programs and forming self
managed work teams, but still have not achieved the required
business results. The poor results
are caused by a failure to successfully link all three of
these critical factors to address asset life
cycle management. Failures of this kind, only reinforces
the workforce perception that they are
experiencing another one of those “flavour of the month” management
fads.
Addressing all three factors, delivers synergetic
asset management to your business. When this
happens:
-
Business goals drive decisions for the use
and care of assets.
-
Production and maintenance work together
as manufacturing teams to develop
mutual targets.
-
Performance and dependability
targets become drivers for business profitability.
-
All
resources are optimized, not just maintenance resources.
Results achieved by an organization
that has been successful
in integrating these factors as
part of their asset management system include:
-
Profit increases of 25-60%
-
Productivity increases of
20-50%
-
Machine downtime reduced by up to 98%
-
Maintenance cost
reductions up to 30%
Asset management
needs to be considered as
a holistic management system. This will ensure that good
decisions for the use and care of
equipment are consistently made and implemented – decisions,
which constitute the best
business value. The purpose of such a management system
is to ensure assets remain capable
of delivering the performance required by the business,
over the asset life cycle.
There is huge untapped potential for Australian
industry to improve performance and
profitability. Effectively deploying asset and maintenance
management practices will guarantee
that your business goals are realized. Every business needs
to manage assets for their entire
life cycle.
Angelo Agresti is principal of Asset Capability
Management. |
