ASSET MANAGEMENT - SLIDES

Our values
• Inclusion
• Integrity
• Innovation
• Impact

Our vision
We strive to improve the world through engineering by:
• Developing engineers
• Promoting engineering
• Informing opinion
• Encouraging innovation

Improving the world through engineering 2

Asset Management training course -
Institution of Mechanical Engineers

Asset Management

Presented by
Andy Stevenson
CEng FIMechE

Helping talented technical professionals reach their full potential

AGENDA

1. Introduction and background to 6. Asset maintenance best practice

asset management
7. Asset disposal or refurbishment
2. What is asset management?
8. Asset management requirements
3. The business benefits of asset
9. Implementation issues, change and risk
management
10. Course summary
4. Asset acquisition best practice

5. Asset operations best practice

1
Asset Management training course -
Institution of Mechanical Engineers

INTRODUCTION

01
6

INTRODUCTION

This course explores:

• the definition of assets and asset
management
• identifies the necessary structures
and processes that are required to
support and manage assets
throughout their life cycle
• introduces the many tools and
techniques required to optimise the
application and operation of physical
assets to deliver the very best
return on capital employed to the
business.

2
Asset Management training course -
Institution of Mechanical Engineers

THE 4-PART FRAMEWORK

1. Organisation and leadership

• Vision, objectives, goals, skills, culture, asset management (ISO55001)

2. Maintenance fundamentals

• RtF, PM, PdM, planning and scheduling, stores

3. Maintenance optimisation

• FMEA, RCM, RBI, CM

4. Maintenance improvement tools

• Proactive, TPM, RCA, QA/QC, metrics

INTRODUCTION
ASSET MANAGEMENT

Asset ACQUIRE
Management DESIGN SELECT OPERATE MAINTAIN DISPOSE
INSTALL
Lifecyle

Strategy
Maintenance
Strategy
SIMPLE Management Execution
quality

But not Execute the

easy… work
Maintenance
Execution
Management Execution
efficiency

3
Asset Management training course -
Institution of Mechanical Engineers

INTRODUCTION
The aim of this course is
• to provide a thorough understanding of all aspects of the management of
physical assets to those who have responsibility for the delivery of company
objectives associated with the effective:

ORGANISATION STRATEGIC PLAN

VISION, MISSION, VALUES, POLICIES, STRATEGY, OBJECTIVES

Organisation
Strategic Plan

Quality Environmental
Management Risk Management OHS Management Asset Management
Management
System System System System
System
(ISO31001) (ISO45001) (ISO55001)
(ISO9001) (ISO14001)

10

INTRODUCTION
The aim of this course is

ASSET MANAGEMENT SYSTEM

Asset Management Policy, Strategy, Objectives & Planning

Managing Asset Life Cycle Decisions and Activities

IMPROVED
PERFORMANCE

ACQUIRE
DESIGN SELECT OPERATE MAINTAIN DISPOSE
INSTALL

Finance and Business Impact Assessing and Managing Asset

Management Risks

11

4
Asset Management training course -
Institution of Mechanical Engineers

INTRODUCTION
POLICY,
STRATEGY
Asset management is:
“Effective control and governance of assets by IMPROVED
LIFECYCLE
organisations is essential to realise value through PERFORMANCE
managing risk and opportunity to achieve the desired
balance of cost, risk and performance” – ISO55000
COST RISK

The performance of an asset is based on 3 factors:

• Reliability – how was it designed? Reliability
• Maintenance plan – how will it be maintained?
Maintenance
• Operating environment – in what environment & with
what methods will it operate? Environment

12

BUSINESS PROCESSES Where does

PRODUCT DEVELOPMENT your business
work?

Idea
ASSET OPERATIONS

Power Product
design

Raw Waste
materials - Material
Manufacturing - Noise
- Smell
Finance - Heat

Product
Fuel

Distribution

13

5
Asset Management training course -
Institution of Mechanical Engineers

INDUSTRY 4.0

Analyse data
Visualise
data
Cloud
storage

Interpret
data

Transmit data
Temperature,
vibration,
pressure etc

Maintenance
Sensors team

14

INDUSTRY 4.0
• can share information about how they perform through built-in sensors that
Intelligent capture real-time data.
products

• Agile, adaptable, visualise

• flexible manufacturing units making it possible to reduce lot or batch sizes
Intelligent that increase product variety at affordable cost.
factories

• high automation and connected processes

Intelligent • linked to every process and are dynamically maintained.
assets

• The role of operators moves away from manual intervention towards

monitoring and exception handling.
Empowered • Operators and maintenance technicians need to know what is happening
people

15

6
Asset Management training course -
Institution of Mechanical Engineers

INDUSTRY 4.0

Improve Business Processes with Industry 4.0 transformation

Source: SAP’s strategy for industry 4.0

16

Maintenance Asset & Risk

RECAP: EVOLUTION Management Management
Connect the Data driven
business decisions

1st Industrial 2nd Industrial 3rd Industrial 4th Industrial

Revolution Revolution Revolution Revolution

1760 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 2030

4th
1st 2nd 3rd
Generation
Generation Generation Generation
Predictive &
Reactive Preventive Proactive
Analytics

Value ISO
TQM QMS PAS 55
Engineering 55001

17

7
Asset Management training course -
Institution of Mechanical Engineers

ASSET MANAGEMENT

Asset Management began in numerous

industrial sectors and countries.
• Financial services sector
• UK board of trade and manufacturing sector in the 1970s
• UK North Sea oil & gas sector established norms for whole
life cycle planning and management of assets during the
1990s after Piper Alpha incident, and Australian/NZ public
sector were similar during this period.

As with most best practices, these have evolved from many

sources, and over the last 40 years in particular, have
become increasingly popular domestically and internationally.
SOURCE: IOSH.COM

18

ASSET MANAGEMENT

Institute of Asset Management (IAM)

The international professional body for asset management.
• produce projects, standards and publications to develop the
discipline and provide resources for professionals and organisations
to realise the value of asset management
• have their own conceptual model which conveys core components.
• Qualifications can be achieved to demonstrate competence and gain
professional recognition in asset management.
As described on the IAM website (www.theiam.org) BSI PAS 55:2008
is the British Standards Institution’s Publicly Available Specification for
the optimised management of physical assets.
PAS 55 was initiated by the IAM, and is an internationally recognised
specification defining what good asset management means.

https://theiam.org/knowledge/bsi-pas-55/

19

8
Asset Management training course -
Institution of Mechanical Engineers

ASSET MANAGEMENT

ISO 55000
ISO 55000 is the international standard for the
management of physical assets throughout their
whole life cycle.

• return on assets (ROA)

• return on capital employed (ROCE)
• by ensuring that assets
• acquired, deployed, operated and maintained
• support the objectives of the business
https://www.iso.org/standard/55089.html
• performance, reliability and operating costs
required. ~ £70

20

ASSET MANAGEMENT

The three current international standards are:

1. BS ISO 55000 Asset management — Overview, principles and terminology:
covers the concepts, principles and terminology relating to this generic
definition of good practice in the optimized management of physical assets.
2. BS ISO 55001 Asset management — Management systems — Requirements:
specifies the requirements for an effective Asset Management System
3. BS ISO 55002 Asset management — Management systems — Guidelines for
the application of ISO 55001: offers interpretation and guidance for such a
system to be implemented.

Although the structure is very different, most elements of PAS 55 are

incorporated into the requirements of ISO 55001.

ISO 55001 is a standard for ANY asset type,

whereas PAS 55 is focussed on the physical assets.

21

9
Asset Management training course -
Institution of Mechanical Engineers

WHAT IS ASSET
MANAGEMENT?
• Definition of an asset
• Asset life cycle
• The scope of asset management

02
22

ASSET MANAGEMENT

The management of physical assets

through their life cycle in order to
achieve the objectives of the business

Systematic and co-ordinated activities

and practices which an organisation
optimally and sustainably manages its
• assets
• their associated performance
• risks
• expenditure
over their life cycle for the purposes of
achieving the organisational plan.

23

10
Asset Management training course -
Institution of Mechanical Engineers

ASSET MANAGEMENT Exercise:

What does
it mean to
According to the standard ISO 55000:
you?
the definition of asset management is (clause 3.3.1):
“The co-ordinated activity of an organisation to ASSET MANAGEMENT AT YOUR
realise value from assets” BUSINESS

Where an asset is (clause 3.2.1):

“An item, thing, or entity that has potential or
actual value to an organisation”

An asset can be deemed critical if (clause 3.2.8):

“the asset has potential to significantly impact on
the achievement of the organisations
objectives”.

24

ASSET CRITICALITY.
1 2
An asset can be (Note 1):

Safety Environment Performance

critical critical critical

and can refer to those assets necessary to provide services to critical customers (Note 2).

Legal Regulatory Statutory

requirements requirements requirements

So, what does this all actually mean?

utilise assets to deliver value based on the objectives of the organisation.
What does this mean for your organisation?

25

11
Asset Management training course -
Institution of Mechanical Engineers

ASSET MANAGEMENT

Asset management is based on a set of fundamentals.

Value: Assets exist to provide value to the
organisation and its stakeholders.
Alignment: Asset management translates the
What does ‘VALUE’ organisational objectives into technical and
mean? financial decisions, plans and activities.
Leadership: Leadership and workplace culture
are determinants of realisation of value.
Assurance: Asset management gives assurance
that assets will fulfil their required purpose.
Has the value been achieved? Use KPI’s.

26

INTRODUCTION Is this good value?

www.volkswagen.co.uk/en/new
Golf 8 GTI 2.0 TSI 245PS 6-speed Manual 5 Door, Petrol,
38.7 - 38.2 mpg, CO2 emissions: 168 - 167 g/km £36,185
0 to 62 mph in just 6.4 sec
• red line stretching across the front
• radiator grille features a honeycomb design, black air
intakes
• three letters on the badge: GTI,
• slim LED headlights,
• a strikingly dynamic bumper and extended side skirts At
the back, the roof spoiler and chrome-plated tail pipes
are essential features
• LED tail light clusters round off the unique appearance.

£17,800
FABIA Hatch SE comfort 1.0 80PS 5-speed Manual 5 Door,
Petrol, 54.2 – 55.6 mpg, CO2 emissions: 115 - 118 g/km
0 to 62 mph in just 15.5 sec
• Rear vents and USB
• Heated front seats
• Heated windscreen Is this better value?
• Park assist

www.skoda.co.uk/new-cars/fabia/hatch-se-comfort

27

12
Asset Management training course -
Institution of Mechanical Engineers

COST

ASSET MANAGEMENT
Oxford dictionary definition of Value:
'The regard that something is held to deserve; the
My definition:
importance, worth, or usefulness of something’.
’What you want
to achieve over
Asset management in other words means: the life of the
Value: Know what you want to achieve. asset,
determined by
Alignment: Make decisions and plan to deliver value.
internal and
Leadership: Make sure vision is communicated and the external
actions are completed. stakeholders’
Assurance: Check the value been achieved.

What does value mean to your business?

28

IMPROVED
THE ASSET LIFECYCLE LIFECYCLE
PERFORMANCE

Examination of the management techniques which are used in engineering for profit
improvement indicates that the principal target has long been the cost of direct labour.

29

13
Asset Management training course -
Institution of Mechanical Engineers

THE ASSET LIFECYCLE

If managers have: Plan – do – check - act cycle:

Vision

PLAN DO
Plan

Communicate their vision &

plan continuously

Have some acceptance from ACT

their people around their plans
CHECK

Then we have a good starting point.

We can build on this. At the core of a Quality Management System (QMS)

30

THE ASSET LIFECYCLE

The asset management system, using ISO 55001
clauses, follows a similar theme to Deming’s process

Clause 1: Scope Context of the

Organisation (4) Support &
Clause 2: Normative references Operation
(7, 8)
Clause 3: Terms and definitions

Clause 4: Context of the organization

Clause 5: Leadership
Performance
Clause 6: Planning
Planning Leadership evaluation Intended
(6) (5) (9) outcomes
Clause 7: Support

Clause 8: Operation

Clause 9: Performance evaluation

Improvement
Clause 10: Improvement Needs &
(10)
expectations of
stakeholders
(4)

31

14
Asset Management training course -
Institution of Mechanical Engineers

THE ASSET LIFECYCLE

ISO55001 contents
1 Scope, 2 Normative reference, 3 Terms and 5 Leadership
definitions • 5.1 Leadership and commitment
4 Context of the Organization • 5.2 Policy
• 4.1 Understanding the organization and its • 5.3 Organizational roles, responsibilities and
context authorities
• 4.2 Understanding the needs and expectations of 6 Planning
stakeholders
• 6.1 Actions to address risks and opportunities for
• 4.3 Determining the scope of the asset the asset management system
management system
• 6.2 Asset management objectives and planning
• 4.4 Asset management system to achieve them
• 6.2.1 Asset management objectives
• 6.2.2 Planning to achieve asset management
objectives

32

THE ASSET LIFECYCLE

ISO55001 contents continued

7 Support 8 Operation
• 7.1 Resources • 8.1 Operational planning and control
• 7.2 Competence • 8.2 Management of Change
• 7.3 Awareness • 8.3 Outsourcing
• 7.4 Communication 9 Performance evaluation
• 7.5 Information requirements • 9.1 Monitoring, measurement, analysis, evaluation
• 7.6 Documented information • 9.2 Internal audit
• 7.6.1 General • 9.3 Management review
• 7.6.2 Creating and updating 10 Improvement
• 7.6.2 Creating and updating • 10.1 Nonconformity and corrective action
• 10.2 Preventive action
• 10.3 Continual improvement

33

15
Asset Management training course -
Institution of Mechanical Engineers

THE ASSET LIFECYCLE

If we focus purely on the asset life cycle itself:

Maintain asset Decommission

Asset creation Installation Commission Operation
reliability & dispose

Life cycle cost. (Source:Courtesy

of Mr. Manabu Sawaguchi)

34

LIFE CYCLE COST

Life cycle
• The value of an item includes the costs
to acquire it and also the cost to use it
and dispose of it the Life Cycle Cost
(LCC) - the initial capital cost plus future
operation and maintenance costs
• Costs of repairs, operations, preventive
maintenance, logistic support, utilities,
depreciation and replacement, in
addition to capital cost, all reflect on the
total value of a product to a user.

35

16
Asset Management training course -
Institution of Mechanical Engineers

Exercise:
LIFE CYCLE COST
Write down
1 for each
Costs to consider fall into the following three categories.

2. Annual 3. Non
1. Initial costs
recurring costs recurring costs

1. Initial Costs
Item Cost: to produce or construct the item.
Development Cost: design, testing, prototype and models.
Implementation Cost: expected to occur after approval of the idea such as
redesign, inspection, testing, contract administration, training, and documentation.
Miscellaneous Cost: such as owner furnished equipment, financing, licenses, fees.

36

LIFE CYCLE COST

2. Annual Recurring Costs

Operation Cost: include estimated annual expenditures associated with the item such
as for utilities, fuel, custodial care, insurance, taxes, other fees, and labour.
Maintenance Cost: scheduled upkeep and preventative maintenance
Other Recurring Costs: annual use and support of equipment associated with an item
3. Nonrecurring Costs:
Repair and Replacement Cost: estimated on the basis of predicted failure and
replacement of major system components, capital improvements predicted necessary to
bring systems up to current standards at given points in time. Each estimated cost is for
a specific year in the future.
Salvage: Salvage value is often referred to as residual value. Salvage value represents
the remaining market value or use value of an item at the end of the selected LCC life
span.

37

17
Asset Management training course -
Institution of Mechanical Engineers

THE ASSET LIFECYCLE

Iso 55000 clause 2.4.3 states that:

“an asset management system is used by

the organization to direct, coordinate and
control asset management activities.

It can provide improved risk control and

gives assurance that the asset
management objectives will be achieved
on a consistent basis.”

38

THE ASSET LIFECYCLE

Managing
the
Organisatio Co-ordinated activity
The relationship between n if an organization to
key asset management realise value
terms is shown as Managing
follows: the Assets

Set of interrelated or
Asset interacting elements
Manageme to establish policy,
nt System objectives,
There is not a single
processes
perfect model which
describes asset
management. Asset
Assets within the
portfolio
scope of the asset
management system

39

18
Asset Management training course -
Institution of Mechanical Engineers

THE ASSET LIFECYCLE

The model below is based on my experience of asset management

Improvement Policy
Risk and opportunity Strategy
review Stakeholders inc.
Scope

Act Plan

Leadership & People

Check Do
Performance Asset information
evaluation Legislation
Monitor Resources – training,
Measure competence, comm’s
Analyse Design, development,
production, service

40

THE SCOPE OF ASSET

MANAGEMENT
The IAM expanded 10
box conceptual model
(increased from prior
version of 6) aligned to
the 39 subjects
(Source: Institute of Asset Management,
www.theiam.org)

41

19
Asset Management training course -
Institution of Mechanical Engineers

THE SCOPE OF ASSET

MANAGEMENT

The IAM 39
Asset
Management
Landscape
Subjects with
the Six Subject
Groups

(Source: Institute of
Asset Management)

42

THE SCOPE OF ASSET

MANAGEMENT

(Source: ISO 55001)

43

20
Asset Management training course -
Institution of Mechanical Engineers

THE SCOPE OF ASSET

MANAGEMENT
The model for an asset management system consists of the following key headings:

Policy and strategy;

POLICY,
Information, risk assessment and planning; STRATEGY

IMPROVED
Implementation and operation; LIFECYCLE
PERFORMANCE

Checking and corrective action COST RISK

Management Review

44

1. Organizational plan
Define the scope:
- The assets 2. Align the organization
- Actions (vision, objectives, strategy) Change strategy
- Business process and procedures - Starts with leadership
- Data - Communicate the vision
- Empower
Gap Analysis
- Self assessment Change culture
- Identify gaps - Clear message
- Collaboration/ownership
- Communicate
3. Prepare the Asset Management Plan
Best practices and world class Incorporate processes
- Reasonable, agreed levels - Identify new requirements and integrate
- Continuous improvement and growth - Define and provide data for new measures
- Resources and equipment
- Metrics Establish roles
- Competency identification, roles and
Select a methodology (maybe) responsibilities
- PAS55, ISO55001, ASTM… - Identify leaders and champions

Select technology
- Only once the strategy as developed
- Only tech that adds value

45

21
Asset Management training course -
Institution of Mechanical Engineers

MANAGEMENT
PROCESSES.
Planning should follow – if you fail to plan, you plan to fail:

REVIEW
IMPLEMENT – it is all about
MEASURE
ORGANISING – run the continuous
– how well did it
- 5s, data collection maintenance improvement. If we
work, 6 Sigma, Lean
optimisation process stand still, we are
going backwards

46

“PAUSE FOR REFLECTION”

• Key Learning Points

• Questions to consider:
– What are the main assets of your business, where
2
should you focus your attention? min
– What value does each asset create?
– What do your asset lifecycles look like?

47

22
Asset Management training course -
Institution of Mechanical Engineers

“PAUSE FOR REFLECTION”

48

THE BUSINESS
BENEFITS OF ASSET
MANAGEMENT

03
49

23
Asset Management training course -
Institution of Mechanical Engineers

CHALLENGES
What are the main challenges
your business faces?

50

CHALLENGES

What are the main challenges

your business faces?
• Management support
• Funding
• Development of a business case,
strategy, model
• Deployment of new technologies
• Security
• Scalability
• Talent development
• The right mindset

51

24
Asset Management training course -
Institution of Mechanical Engineers

OPPORTUNITIES
What are the main opportunities
your business could gain?

52

BENEFITS OF ASSET
MANAGEMENT
Asset management will:
• maximise value for money

• improve risk management and governance

• lead to improved HSE performance

• and to confident long-term planning, sustainability and performance.

It is no wonder that interest in optimising asset management systems is increasing in

popularity, is becoming more disciplined and an expected normal practice in mature
organisations.

According to ISO 55000 (clause 2.2), the benefits include the following:

53

25
Asset Management training course -
Institution of Mechanical Engineers

BENEFITS OF ASSET
MANAGEMENT
Improved financial performance
•improving the return on investments and reducing costs can be achieved, while preserving asset
1.
value and without sacrificing the short or long-term realization of organizational objectives;

informed asset investment decisions

• enabling the organization to improve its decision making and effectively balance costs, risks,
2.
opportunities and performance

managed risk
• reducing financial losses, improving H&S, good will and reputation, minimizing environmental and
3.
social impact, can result in reduced liabilities such as insurance premiums, fines and penalties;

improved services and outputs

• assuring the performance of assets can lead to improved services or products that consistently
4.
meet or exceed the expectations of customers and stakeholders;

demonstrated social responsibility

• improving the organization’s ability to e.g. reduce emissions, conserve resources & adapt to climate
5.
change, enables it to demonstrate socially responsible and ethical business practices and stewardship

54

BENEFITS OF ASSET
MANAGEMENT
demonstrated compliance
• transparently conforming with legal, statutory, regulatory requirements, & adhering to asset
6. management standards, policies and processes, can enable demonstration of compliance

enhanced reputation
7. • through improved customer satisfaction, stakeholder awareness and confidence;

improved organisational sustainability

• effectively managing short and long-term effects, expenditures and performance, can
8. improve the sustainability of operations and the organisation

improved efficiency and effectiveness

• reviewing and improving processes, procedures and asset performance can improve
9. efficiency and effectiveness, and the achievement of organizational objectives.

55

26
Asset Management training course -
Institution of Mechanical Engineers

BENEFITS OF ASSET
MANAGEMENT
The key point is that asset management is about:

optimising the management of assets, based on a

systematic and structured approach
For example, doing too much maintenance is overly expensive, but cutting back on
maintenance or not making enough capital investment can be a false economy because of
increased and unexpected failure of equipment or reduced quality of products.

The best solution is found somewhere in between these two extremes.

The main driver for developing the techniques has been:

• more effective performance for organisations

• cheaper unit costs

• more consistent (or higher) quality products.

56

BENEFITS OF ASSET
MANAGEMENT
Processes &
procedures
Asset management Governance Quality
has the benefit of
cost saving and
improved
productivity. But in Reputation Cost
real terms, the
benefits to an
organisation are
much more than this.
Safety –
Asset
personnel & Productivity
process
Management

57

27
Asset Management training course -
Institution of Mechanical Engineers

“PAUSE FOR REFLECTION”

• Key Learning Points

– There are many opportunities and challenges to
improving management of your assets.
– ISO55001 states what to do but not how to do it.

• Questions to consider:
1. What are the benefits to your organisation of
improving asset management? 2
• In other words, why did you join this course? min
2. What are your opportunities and challenges?

58

“PAUSE FOR REFLECTION”

59

28
Asset Management training course -
Institution of Mechanical Engineers

ASSET ACQUISITIONS

• Approaches to quality
• Specifying requirements
• Life cycle costing and management

Finance and Business Impact

Managing Asset Life Cycle Decisions and Activities

IMPROVED
PERFORMANCE

04
ACQUIRE
DESIGN SELECT OPERATE MAINTAIN DISPOSE
INSTALL

60

QUALITY Is this good

quality?
Golf 8 GTI 2.0 TSI 245PS 6-speed Manual 5 Door, Petrol,
38.7 - 38.2 mpg, CO2 emissions: 168 - 167 g/km £36,185
0 to 62 mph in just 6.4 sec
• red line stretching across the front
• radiator grille features a honeycomb design, black air
intakes
• three letters on the badge: GTI,
• slim LED headlights,
• a strikingly dynamic bumper and extended side skirts At
the back, the roof spoiler and chrome-plated tail pipes
are essential features
• LED tail light clusters round off the unique appearance.
www.volkswagen.co.uk/en/new
£17,800

FABIA Hatch SE comfort 1.0 80PS 5-speed Manual 5 Door,

Petrol, 54.2 – 55.6 mpg, CO2 emissions: 115 - 118 g/km
0 to 62 mph in just 15.5 sec
• Rear vents and USB
• Heated front seats Is this better
• Heated windscreen quality?
• Park assist
www.skoda.co.uk/new-cars/fabia/hatch-se-comfort

61

29
Asset Management training course -
Institution of Mechanical Engineers

APPROACHES TO
QUALITY
Total Quality Management (TQM)
Quality is defined by:
A. BS EN ISO 9001

also by defined 3 distinguished authors based

on Total Quality Management (TQM)
B. Philip B Crosby
C. William Edwards Deming
D. Joseph M. Juran

62

QUALITY MANAGEMENT

BS4778-3:1991
Quality vocabulary. Availability, reliability and maintainability (ARM) terms.
Guidance to concepts and related definitions.
It’s objective is to assist understanding and communicating in the fields.

BS4778 defines quality as:

‘The totality of features and characteristics of a

product or service that bear on its ability to satisfy
stated or implied needs’.

63

30
Asset Management training course -
Institution of Mechanical Engineers

QUALITY MANAGEMENT

ISO9001:2015
ISO 9001 is an International Standard that is used worldwide by over one
million organizations. It assists businesses of all sizes by providing best
practice requirements for an effective Quality Management System (QMS).
A. ISO 9001:2015 - sets out the requirements of a quality management
system
B. It does not specify what the objectives relating to “quality” or “meeting
customer needs” should be, but requires organisations to

“define quality objectives themselves and continually

improve their processes in order to reach them”.

64

QUALITY MANAGEMENT

Quality Management System (QMS)

Quality
Quality assurance and quality control are aspects of quality
System
management, or Quality Management System (QMS).
• a formalised system that documents processes,
procedures, and responsibilities for achieving quality Quality
policies and objectives. Assurance
Quality control is a system of activities designed to assess
the quality of a product or service to a customer.
• Inspecting and checking a product for defects
Quality Assurance is designed to control the activities at all
stages from design to delivery, to prevent quality problems Quality
Control
and to ensure only conforming products reach the
customer.
• Catch defects before getting into a product or service

65

31
Asset Management training course -
Institution of Mechanical Engineers

QUALITY MANAGEMENT

QA in Standards
EEMUA 197 offshore structures
BS EN ISO 3834-1:2005
Quality requirements for fusion
welding of metallic materials.
Criteria for the selection of the
appropriate level of quality
requirements
BS EN 1090 - Structural Steel
and Aluminium
BS EN 1990:2002 Basis of
Structural Design

66

QUALITY MANAGEMENT 1: Customer focus

8: Mutually
QMS Beneficial 2: Leadership
Supplier Relations

The basic steps to implementing a quality

management system are as follows:
7: Factual
3: People
Approach to
1. Design You might Quality involvement
Decision Making
2. Build have this Management
Principles
3. Deploy
4. Control
5. Measure Do you have this? 6: Continual 4: Process
improvement approach
6. Review
5: Systematic
7. Improve
approach
to management

67

32
Asset Management training course -
Institution of Mechanical Engineers

APPROACHES TO
QUALITY
What is total quality management?
• A total quality management system 8 Principles of TQM
enables business to run more 1. Customer focused
efficiently & profitably
2. Total employee involvement
• It provides a way to organise people,
3. Process centered
resources and processes to achieve
organizational goals, regardless of the 4. Integrated system
size of the business. 5. Strategic and systematic approach
• The American response to the quality 6. Continual improvement
revolution in Japan gave birth to the 7. Fact based decision making
concept of total quality management, a
8. Communications
method for quality management that
emphasised not only statistics but
approaches that embraced the entire
organisation

68

APPROACHES TO
QUALITY
CROSBY
Born in 1926, Philip B. Crosby was an author and businessman who
contributed to management theory and quality management practices.
He started his career in quality much later than Deming and Juran.
He is best known for the popularising the “Zero Defects” concept that
originated in the United States where Crosby worked during the 1960’s

To Crosby, quality means

• conformance to requirements and Doing It Right the First Time
• zero defects ought to influence every decision that we make

Quality must be defined in measurable and clearly stated terms to help the
organisation take action based on tangible targets, rather than on hunch,
experience, or opinions.

69

33
Asset Management training course -
Institution of Mechanical Engineers

APPROACHES TO
QUALITY
DEMING
Organizations can improve the quality of the product and concurrently reduce costs.
Deming does not define quality in a single phrase. He asserts that the quality of any product
or service can only be “defined by the customer”.
Quality is a relative term that will change in meaning depending on the customers needs.

Deming cycle (PDCA):

PLAN DO

ACT
CHECK

Source: https://deming.org/photo-gallery/

70

APPROACHES TO
QUALITY
JURAN
PARETO
Joseph M. Juran held degrees in Electrical Engineering and Law. He
had worked as an Engineer, Industrial Executive, University
Professor.
20%
Along with Deming, he is well known in Japan for his contribution to Effort
the practice of total quality control.
Juran defines quality as ‘fitness for use’.
80%
He stresses a balance between product features and products free Result
from deficiencies.
Features refers to technological properties designed to meet the
customer needs.
One of the first to write about the cost of poor quality.

71

34
Asset Management training course -
Institution of Mechanical Engineers

PARETO

Example:
Cause of downtime Count
Boiler 13
Generator 4
Feedwater pump 32
Turbine 1
Electrical supply 27
Condensate pump 5
PRV 1
Air supply 2
Gas supply 1
Circulating pump 8

72

APPROACHES TO Six sigma – TQM is a philosophy

QUALITY of quality, Six Sigma is a
definitive measurement of quality

• Deming's views on quality are believed by many to Define

have laid the foundations for Total Quality
Management (TQM), however, the works of
Feigenbaum, Ishikawa and Imai also had impact. Control Measure
• It uses strategy, data, and effective
communications to integrate the quality discipline
into the culture and activities of the organisation
• It has been mostly replaced by more modern
approaches since late 20th century Improve Analyse
• Because of the multitude of unique systems that
can be applied, the term “Quality Management
System” or “QMS” is preferred DMAIC model: define opportunity,
measure performance, analyse
opportunity, improve performance,
control performance.

73

35
Asset Management training course -
Institution of Mechanical Engineers

APPROACHES TO
QUALITY
YOUR DEFINITION
BS4778 – the totality of the features and Quality is personal, subjective and value
characteristics of a product or service that bear on based.
it’s ability to satisfy stated or implied needs. It is the ability of a product or service to
meet customer requirements or
Philip Crosby – Conformance to requirements expectations.

W Edwards Deming– Defined by the customer The customer requirements are the
Scope of Work Objectives
Joseph Juran – Fitness for use

Overall Craft effectiveness

Write down your own OCE = CU% x CP% x CSQ%

definition of what quality Craft x Craft x Craft Service
means to your department Utilisation Performance Quality

74

“PAUSE FOR REFLECTION”

• Key Learning Points

– There is no one size fits all definition for quality.
– You and your business need to determine the
definition at the beginning of a project and
document/agree with client in the SOW or BOD.

• Questions to consider:
1. Does your definition of quality match other
definitions?
2
min
2. How can you use these definitions to improve your
quality of work?

75

36
Asset Management training course -
Institution of Mechanical Engineers

“PAUSE FOR REFLECTION”

76

What is the hidden factory?

Why does it matter? What are the causes? How can we address it?

77

37
Asset Management training course -
Institution of Mechanical Engineers

COST

REWORK

The hidden factory

A low cost base helps us:
Weather the short term variation and unpredictable
customer demands and market conditions
Be flexible on pricing based on economic condition,
competition, changing customer perceptions of
product and service

How do you lower costs without reducing resources

and increasing risk?

Reduce rework!

78

REWORK

Waste
One way to reduce rework is through Lean concepts
Lean = focus on waste reduction
But how much do we focus on the customer and quality?

Do you think quality is a given?

How much variation exists in your process?

Lower your costs, increase profits by eliminating rework and

the hidden factory.

We need a strategy and comprehensive approach

79

38
Asset Management training course -
Institution of Mechanical Engineers

REWORK

• Correct a typing mistake What is a hidden factory?

Real time • Access wrong file
• The percentage of an organisations total
rework • Adjust machine setting
while in production capacity or effort that is being used to
overcome the cost of poor quality
• Activities in a system or process that do not
Post • Rewrite a report meet the ‘standard’ of quality
• Reprocess out of spec
activity component • Therefore, impacts quality and efficiency
rework • Repair incorrect setting (OEE)
• Quality issues are hidden as they are not
known until further down the line
• Handle customer
Rework complaint • Tasks that are repeated to address ‘bad’
• Manage returns quality
processes • In field repair • Tasks to manage impact of ‘bad’ quality

80

REWORK

How does it affect your business?

Reduced
capacity
Uses
Delays
resources

Increased
Waste
process costs

It is
unplanned
Customer Employee
dissatisfaction
work you morale
don’t get paid
for

81

39
Asset Management training course -
Institution of Mechanical Engineers

REWORK

Waste
Capacity = Value adding + Waste (necessary + unnecessary)
Value adding = what the customer pays for

Waste

Product Work Product

ordered processed shipped

Assuming 100% customer satisfaction

82

REWORK

Waste
With added defects, capacity problem keeps getting worse
As defects feed back in, volume of work to be processed increases, defects
increase
Internal
defect found Waste
- rework
Quality is
Continually satisfying
Product Work Product customer requirements

ordered processed shipped

Total Quality is
Achieving Quality without
Waste
Defect found
at customer -
rework

83

40
Asset Management training course -
Institution of Mechanical Engineers

REWORK

It is a quality driven problem

Source: https://deming.org/deming-chain-reaction/

84

REWORK

Root Cause Analysis (RCA) & Additional costs

Failure Mode Effect Analysis (FMEA) What if the process continues and we are
If it is not right the first time, it could be due to: unaware of the defect – more work
1. Lack of standardisation What if it slips through to the customer?
• No agreed, measurable description of ‘good’ • Unhappy
• No agreement/involvement with those • Brand and reputation impact
operating the process – how best to do it
• Cost of claims, recall
2. Process is designed for the output you allow
What if it can’t be fixed?
– ie. Failures are allowed to occur
• Sell for reduced price
3. Insufficient control of variation
• Scrap

85

41
Asset Management training course -
Institution of Mechanical Engineers

THE COST OF POOR

QUALITY
Do more inspection, right? You are now an inspector and
This is the normal reaction to poor quality. have 10 seconds to identify all of
How useful is it? the ‘F’ in the following sentence.

FINISHED FILES ARE THE RESULT

OF YEARS OF SCIENTIFIC STUDY
COMBINED WITH THE
EXPERIENCE
OF MANY YEARS
86

When can RISK

REWORK inspection be
useful?

• Excessive inspection is a waste - when is it too

much?
• Inspection doesn’t work on it’s own
• Some defects will always get through
• Some ‘good’ product may be classified as ‘bad’
product
• Should you do x2, x3, more inspection?
• It still doesn’t work

Inspection to detect defects is not viable long term.

Deming says in #3 of his 14 points from TQM:

Cease dependence on inspection to achieve quality.
Eliminate the need for inspection on a mass basis
by building in quality in the first place

87

42
Asset Management training course -
Institution of Mechanical Engineers

REWORK

Why is it hidden? Why is it hidden to me?

When a defect is found, more time is spent finding others Management systems
• This is not a long term solution
Systems/processes/procedures to detect defects
• But it is the most common
and alert operator – do they exist?
• It is a WASTE!
Inspection may be valid for part of a response, use RCA to No information or data collected – not checked
eliminate the cause or measured
Culture
Wrong information or data is collected
• may believe routine collection is a waste
• We have always done it this way There is a problem feeding back the information
• Rework is a part of our process • Informal collection
• No employee engagement, No interest to find a better
way • Delays
What about the management system? • Not at all

88

REWORK

What should you do about it?

Deming’s System of Profound Knowledge

1. Engage the organisation

• Ensure everyone involved in the process is learning and improving the process
2. Build quality in
• Identify where the defects and rework exist
• Prioritise (Pareto) to achieve biggest gain
• Understand root cause
• Make controlled changes (6 Sigma)

“What we need is cooperation and transformation to a new style of

management. The route to transformation is what I call Profound Knowledge”.
- W. Edwards Deming

89

43
Asset Management training course -
Institution of Mechanical Engineers

REWORK

3. Improve your management system 4. Adopt the right mindset and thinking
• Make inspection part of your process to learn and Employees must be able to, and allowed, to
improve, but focus on prevention too contribute:
• Improve ability to detect abnormalities • Understand variation and waste concepts
• React faster
• Recognised responsibility for quality
• Prioritise quality of quantity
What do you measure and why?
• Cost of poor quality outweighs cost of ensuring
Where are you measuring it?
good quality
How are you measuring it and how often?
• Build quality int
Are the measurements being collected?
Does the data get looked at and communicated?
How effective is the process? Leaders are responsible, accountable to ensure
the vision exists, communicated and employees
are educated, trained and empowered

90

SUMMARY

How do we address the problem?

• Lower costs, better ‘good’ quality = happy business, happy customer
• Eliminate waste to lower cost base
• Rework is often hidden, so the size of the problem is too, and the opportunity
• We need better visibility, we need better management systems
• Focus on quality and satisfy your customer – internal and external
• There is a cost to ensure good quality, there is a higher cost for poor quality

91

44
Asset Management training course -
Institution of Mechanical Engineers

THE COST OF POOR

QUALITY
Four categories of COPQ

Internal External
Prevention Appraisal
Failure Failure

1. Prevention costs (costs incurred to keep failure and appraisal costs to a minimum).
2. Appraisal costs (costs incurred to determine the degree of conformance to quality requirements)
3. Internal failure costs (costs associated with defects found before the customer receives the
product or service),
4. External failure costs (costs associated with defects found after the customer receives the
product or service),

Created by Armand Feigenbaum in his 1956 Harvard Business Review essay Total Quality Control

92

THE COST OF POOR

QUALITY
Failure
Appraisal Prevention
Internal External
Pre production verification Quality planning Scrap Complaints
Replacement, rework,
Receiving inspection Design Qualification Testing repair Warranty
Lab acceptance tests of purchased Product reject &
materials Design reviews Downgrading returns

Inspection & testing Development of test equipment Troubleshooting Goodwill

Inspection & test equipment Quality review & verification of design Reinspection & testing Discounts
Analysis and reporting of test & Calibration and maintenance of
inspection results equipment Fault of subcontractor Lost sales

Field testing Supplier assurance Downtime Product recall

Approvals Quality training and auditing Product liability

Stock evaluation FTA, FMEA, FMECA

Records storage Analysis and reporting of data
Quality improvement programs

93

45
Asset Management training course -
Institution of Mechanical Engineers

THE COST OF POOR

QUALITY
Exercise
Categorise A - J as one of the following: A. Assessing a supplier service
B. Scrapping a bolt as the thread is damaged
1. Failure costs - Internal costs
C. Responding to a customer complaint
2. Failure costs - External Costs
D. Checking a welding machine setup
3. Prevention costs
E. Creating an ISO9001 quality assurance
4. Appraisal costs system
F. Repair of a broken down rental generator
G. Training new maintenance staff
H. Inspecting a steel for the new fabrication
I. Readjusting a robot due to weld misalignment
on a car door
J. A warranty claim on a vessel that is dented

94

TOTAL COST OF
QUALITY
TCOQ = Sum of 4 categories
Prevention
Cost of Good
Quality
Appraisal
Total Cost of
Quality
Internal
Failure
Cost of Poor
Quality
External
Failure

95

46
Asset Management training course -
Institution of Mechanical Engineers

TOTAL COST OF
QUALITY
Total Cost of Quality
• These four categories can now be applied to form Total Cost of Quality equation. Total
Cost of Quality is the sum of Cost of Good Quality and Cost of Poor Quality.

• The Cost of Good Quality is the sum of Prevention Cost and Appraisal Cost
(CoGQ = PC + AC)
• The Cost of Poor Quality is the sum of Internal and External Failure Costs
(CoPQ = IFC + EFC)

• By combining the equations, Total Cost of Quality can be more accurately defined:
TCOQ = (PC + AC) + (IFC + EFC)
96

TOTAL COST OF
QUALITY
Juran’s quality cost curve version 1 and 2

Source: Juran’s Quality Handbook

97

47
Asset Management training course -
Institution of Mechanical Engineers

THE COST OF POOR

QUALITY
Problems?
How do you minimise quality problems and associated cost:
1. Compensate the customers for their losses
2. Screen out products outside specification at the end of the production line
3. Institute tighter tolerances through process control on the manufacturing line
4. Change the nominal values of critical parameters so that the function becomes
insensitive to the cause, namely, manufacturing variation.

Approach 4 is the robustness strategy.

– Moving from approach 1 to 4, progressively moves upstream in the product delivery

cycle and also becomes more efficient in cost control
– Move towards Quality Assurance

98

“”
Quality comes not from inspection but
from improvement of the process.

W. Edwards Deming

99

48
Asset Management training course -
Institution of Mechanical Engineers

PAUSE FOR REFLECTION

• Key Learning Points

– 4 cost categories are used to understand where the
costs of quality are adding up and reducing profit

• Questions to consider:
– What is costing you lost profit through ‘bad’ quality?
– Where in the process is this occurring?
– What are you going to change?
2
min

100

“PAUSE FOR REFLECTION”

101

49
Asset Management training course -
Institution of Mechanical Engineers

IMPROVED
LIFECYCLE
ASSET ACQUISITION PERFORMANCE

A business should have in place

documents to show: Mission

• The importance of asset management Business

to the business Objectives
• The objectives for the business relating
to AM AM Policy
• The strategy that will be implemented
to achieve best practice and the
AM Objectives
objectives
• A plan that will be followed
AM Strategy

AM Plans

102

ASSET ACQUISITION

The first stage of the life cycle:

• Justifying the purchase of an asset
• Identifying the functional operational requirements
• Developing a specification
• Selecting a supplier
• Procure the asset
• Installation and commissioning
• Hand over to operations

Who is responsible for these in your organisations?

103

50
Asset Management training course -
Institution of Mechanical Engineers

ASSET ACQUISITION

A key part of asset management is knowing what the organisation

wants to achieve – what is the reason for going where it is going.
We must view the plant as a system which requires excellence in teamwork, and
application of the reliability process
• we design, buy, store, install, operate, and maintain for reliability and excellence.

Once the tasks have been developed, we need to set up planning and control
systems.
• Schedules done by operators
• Schedules done by maintenance
• Reporting defects

104

ASSET ACQUISITION

Management activities include:

• Application of investment policies
• Application of investment processes
• Development of construction processes
• Execution of construction processes
• Project management
• Developing of commissioning processes
• Execution of commissioning processes
• Handback to operations
If we consider life-cycle costs, up to 50% of maintenance defects and safety
problems may be built in at the design and equipment manufacture stage
(Asset maintenance management: a guide to developing strategy and improving performance, Wilson, 1999).

105

51
Asset Management training course -
Institution of Mechanical Engineers

COST

DECISION MAKING -
CAPITAL INVESTMENT
Capital investment decision making includes evaluating investments with a
vision of long term benefits and scenarios related to capital investments
including new assets (greenfield) and/or assets at end of life.
Steps include:
• define
• characterise
• evaluate
• analyse the best options
Consideration of life cycle costs,
risk and demand should be
incorporated.

106

DECISION MAKING -
CAPITAL INVESTMENT
2 important financial ratios:
Return on capital employed (ROCE): Return on Assets (ROA):

= earnings before interest and tax = Net income

capital employed by the business Value of average total assets

It shows how much a company earns from

Measures company profitability and efficiency each £ of assets it controls
based on capital employed
Ideally > 5%
ROCE should be higher than rate of
borrowing, ideally >2x current interest rate
What affects these ratios?
Asset management –
better AM = > ROCE & ROA

107

52
Asset Management training course -
Institution of Mechanical Engineers

ECONOMICS

Vibration analysis

Vibration analysis costs Cumulative costs

16000 30000

14000
25000
12000
20000
10000

8000 15000

6000
10000
4000
5000
2000

0 0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
manual digital manual digital

108

Exercise: what are the considerations that

ECONOMICS effect cost in implementing a new system?
E.g. initial purchase cost
Mean Time To Repair
Downtime and repair time or ‘broken down’ time
Do a cost analysis of all graphs to decide
on the best economic solutions

Cost to perform tasks

140

120

MTTR 100

Time (hrs)
80

3 60

40
2
1.5 1.5
20

0
Q1 Q2 Q3 Q4
Year 1 Year 2 Year 3 Year 4 manual digital

109

53
Asset Management training course -
Institution of Mechanical Engineers

ECONOMICS

evaluating the costs and benefits Example: wind farm

• custom built or off the shelf Some basic tools:
• integrations with other tools 1) Simple payback time (SPT)
• own access to data or only by 3rd party 2) Net present value (NPV)
• subscription fees
• skills needed internal or outsource We can make a simple calculation that indicates
• speaking to other people in your industry • how long it will take to pay back the
• small steps, do a trial and measure the results investment, using the SPT tool.
• The decision on whether to go ahead with a
1. agree a use case
project can be helped by evaluating the net
2. decide what the goal is present value of the project, using the NPV
3. identify who will be involved and who tool.
will benefit from an improved system
4. shortlist a selection of appropriate
systems for the scale of the business

110

ECONOMICS

1. Simple payback time (SPT)

How long it will take to pay back the investment
Assume:
Capital investment Annual O&M costs Electricity sales

50MW 2MW 7.5p

£65M £40k each Per kWh

Simplistic calculation (ignoring any time-value of money):

1. Estimate annual production - 50MW farm & capacity factor 0.25
2. Annual revenue – production & electricity sale’s price, 7.5p/kWh
3. Annual operating costs – 25 turbines, each of 2MW capacity
4. SPT = (Capital investment)
(Annual revenue – annual costs)

111

54
Asset Management training course -
Institution of Mechanical Engineers

ECONOMICS

2. Net Present Value (NPV)

Decide if a proposed project is an attractive investment

NPV is the sum of the cash flows in today’s money minus the original
investment
• It is a measure of the attractiveness of the investment.
• In general (although there are other factors):
• If NPV > 0 then the project is profitable: go ahead!
• If NPV < 0 then the project is not profitable: stop now!

Sum of PVs and initial investment gives Net Present Value (NPV)

Income – operational costs – capital investment

112

ECONOMICS

2. Net Present Value (NPV)

Decide if a proposed project is an attractive investment
Assume:
Capital investment Annual O&M costs Electricity sales Decommissioning cost

50MW 2MW 7.5p £3M total

£65M £40k each Per kWh

• Assume wind farm operates for 20 years

• 110GWh @ 7.5p/kWh gives £8.25M annual revenue
• 25 x 2MW wind turbines gives annual expenditure £1M
• Discount rate = 8%
• Calculate NPV in Excel = +£6.2M

what is the present value of all the maintenance

costs for the 20 years of operation (£)?

113

55
Asset Management training course -
Institution of Mechanical Engineers

DECISION MAKING - OPERATIONS

AND MAINTENANCE
required to
meet the
determining operations and maintenance activities strategy
objectives
quality requirements – internal and external, product and
service
existing asset capability
risk based approaches – RBM, FMEA
cost vs risk – determine intervals
forecasting based on demand analysis
financial analysis
documentation requirements of specifications and standards
impact of capital alternatives

114

DECISION MAKING

Lifecycle value
The activities of the organisation to balance the costs and benefits of different
renewal, maintenance, overhaul and disposal/ decommissioning decisions.
Methods for ensuring the best total value is obtained in acquiring the asset,
creating, utilising, maintaining, improving, renewing and disposing are
referred to, considering risk, cost, performance and sustainability.
Steps include:
• evaluate the process and criteria for use
• multi-disciplined approach and quantify value, cost (purchase, operate,
maintain), risk, performance
• consider the system it will be utilised in – system life time scale may be
different to individual asset
• model the system to anticipate results – do they align with stakeholders
expectations?

115

56
Asset Management training course -
Institution of Mechanical Engineers

DECISION MAKING -
LIFECYCLE VALUE

We offer 3 kinds of service:

GOOD – CHEAP – FAST
You can pick any 2

The procurement paradox, reproduced from (Wilson, 1999)

116

DECISION MAKING -
LIFECYCLE VALUE
Life Cycle Cost Analysis (LCCA)
The earlier we detect a defect, the less it will impact cost.
A general rule using the model of product delivery:

Each phase increases impact by x10

Initiation With
Design Prototype Production
(scope) customer

£1 £10 £100 £1,000 £10,000

117

57
Asset Management training course -
Institution of Mechanical Engineers

IMPROVED
LIFECYCLE
ASSET HIERARCHY PERFORMANCE

Asset information standards should be developed to provide a

structure for collecting and storing asset information.
This includes:
• Asset hierarchy
• Asset attributes
• Asset location
• Condition
• Defects and failure history
• Consequences of failure
• Utilisation

Where do we store asset information?

118

COMPUTERISED MAINTENANCE
MANAGEMENT SYSTEM (CMMS)

CMMS

People Equipment

skills schedules cost tools spares stores

• The main maintenance (and therefore reliability) management system

• A type of management software that performs functions in support of
management and tracking of operations and & maintenance activities.

119

58
Asset Management training course -
Institution of Mechanical Engineers

There are over 223 CMMS Products on the market…

With so options available, it’s hard to know which products are best for you. That’s why we
recommend software’s specific to your needs and based on our deep understanding of
the market (we receive 2+ hours of product demo with every vendor we work with).

SMB. ENT.

120

Some key pointers in implementing a CMMS software

1. Decide how you are going to measure CMMS success

2. Map out all your current maintenance workflows (and future workflows,
often a CMMS is particularly helpful in reducing unncessary processes)
3. Get to know the current capabilities of the CMMS system (e.g. it’s
work order management, inventory management and H&S compliance
functionality)
4. Decide on your implementation plan (a phased approach might work for
more agile organisations)
5. Tap into your software vendor’s industry expertise (they’ve likely
worked with hundreds of companies like yours)
6. Get your data right from the beginning (As a guideline, you should spend
30 to 40% of your total implementation time on data.)
7. Start employee training (Having a couple of champions within the
organization is key for ensuring there is buy-in but also know-how)

121

59
Asset Management training course -
Institution of Mechanical Engineers

Do you need any help? Contact Comparesoft

Comparesoft’s here to help you to find the right software for your unique business
requirements. We use Artificial and Human Intelligence to recommend the right
software options to you.

• 19,213+ businesses have used Comparesoft to find software.

Why? •

•
70+ CMMS Products Listed

Ad-free, product focused information

• Software options matched to your requirements

Email: lauren@comparesoft.com

Who?
•

• Call: 020 3963 5379

• Visit: www.comparesoft.com

122

PAUSE FOR REFLECTION

• Questions to consider:
1. How early in the life cycle do you focus on the
asset management?
2. Do you design, buy, store, install, operate, and
maintain for reliability and excellence?
3. What involvement do the various departments
have in the process?
1. Purchasing
2. Engineering 2
min
3. Operations
4. Maintenance
5. Other

123

60
Asset Management training course -
Institution of Mechanical Engineers

“PAUSE FOR REFLECTION”

124

ASSET OPERATIONS

• Operator training and development

• Standard operating procedures
• Continuous improvement
• Data collection and metrics
• Operator asset care

Managing Asset Life Cycle Decisions and Activities

IMPROVED
PERFORMANCE

05
ACQUIRE
DESIGN SELECT OPERATE MAINTAIN DISPOSE
INSTALL

125

61
Asset Management training course -
Institution of Mechanical Engineers

IMPROVED
LIFECYCLE
COMPETENCE PERFORMANCE
FRAMEWORK
The useful life of the asset
• Developing and implementing operating methods and procedures
• Training operators and maintenance teams
• Continuous improvement of processes
• Asset care activities
• Measure and monitor effectiveness

126

TRAINING AND
DEVELOPMENT

There are many benefits to training and updating skills of employees, of

having a highly skilled, motivated and committed workforce.
• online learning,
• short courses and workshops,
• educational exhibitions.

Employees:
• Remain competitive
• Differentiation
• Knowledgeable staff
• Back up roles
• Safety

127

62
Asset Management training course -
Institution of Mechanical Engineers

TRAINING AND
DEVELOPMENT
CPD
Exercise

What do you want to

learn and what is
stopping you?

Maslow’s Needs Hierarchy

128

UK SPEC

UK Standard for Professional Engineering Competence and Commitment

Explains the requirements that people must Each registration title requires demonstration of
meet to become registered as an: five broad areas of competence and
1. Engineering Technician (EngTech), commitment:

2. Incorporated Engineer (IEng) or A. Knowledge and understanding

3. Chartered Engineer (CEng). B. Design, development and solving engineering

problems
Includes examples of activities that demonstrate
the required competence and commitment. C. Responsibility, management and leadership
D. Communication and interpersonal skills
E. Professional commitment

https://www.engc.org.uk/standards-guidance/standards/uk-spec/

129

63
Asset Management training course -
Institution of Mechanical Engineers

COMPETENCE

Is training the same as competence?

Training is essential to ensure personnel have
the necessary knowledge, competency
assurance ensures the personnel are
competent
• the ability of individuals to perform their
roles and activities
• It combines practical and technical
knowledge and an understanding of the
requirements.
This includes what people should be able to
do and what they need to know and
understand. This should be assessed and
combined with training needs.

130

COMPETENCE

ISO 55000 Clause 2.5.3.5 –

• The asset management system should specify the competency
requirements for personnel involved in asset management.
• The implementation, maintenance, evaluation and improvement
of these competencies normally requires close cooperation with
the organisation’s human resource management system.

These two systems should be mutually supportive.

Exercise
What competencies do operators require?
What competencies do maintenance techs require?

131

64
Asset Management training course -
Institution of Mechanical Engineers

COMPETENCE
What competencies do people require?
Professional competence Personal competence
Knowledge Stress management
Software Information collecting
IT, electronic, mechatronics Reflection
Systems Reliability
Mechanical, process engineering Time keeping
Eg. Machine operator coping with large qty
Capabilities machines, reliable decision making, stress

Programming
Failure investigation
Quality control
Maintenance tasks

132

COMPETENCE

Cultural competence Methodical competence

Intercultural competence Technical
Cultural awareness Adapt documentations specs to systems/processes
Communication within rules, norms, goals Apply new work procedures and methods

Professional cultural competence Non technical

Values and morals Planning
Standards of practice Procurement
Communication etiquette Problem solving
Multiple languages Project management
Finance

133

65
Asset Management training course -
Institution of Mechanical Engineers

COMPETENCE

Leadership competence Social competence

Defining goals Team working
Decision making Integrity
Control Honesty
Communications Respect
Motivation Conflict management
Provide feedback Appropriate behaviour

Interaction competence
Collaborate with humans and machine
Use media and technical equipment

134

COMPETENCE

Organisational competence Process competence

Self Technical and operational process assurance
Employees Process sequences
Machines and equipment Process engineering
Information Identify faults
Eg. machine operator has to be able to identify Checking automated executed actions
bottlenecks in the current production process
and to restructure the resources to avoid such
bottlenecks .

135

66
Asset Management training course -
Institution of Mechanical Engineers

STANDARD OPERATING
PROCEDURES

Asset operation includes the processes that provide operators instructions

on how to operate and asset within the design, maintenance and
operational parameters – Standard Operating Procedure (SOP).

As described by ISO 5500 Clause 2.5.3.6 Operation –

• The organisation’s asset management system can enable the directing,
implementation and control of its asset management activities, including
those that have been outsourced.
• Functional policies, technical standards, plans and processes for the
implementation of the asset management plans should be fed back into
the design and operation of the asset management system.

136

STANDARD OPERATING What are they

PROCEDURES related to?

Most losses from production are not related to

equipment downtime.

• Of those that do relate to equipment downtime, causes are

generally due to poor operation and maintenance, but mainly
operation.
• Working as a team, we can effectively reduce the losses.
• Operating personnel have the best knowledge of operating and
equipment problems.

137

67
Asset Management training course -
Institution of Mechanical Engineers

CONTINUOUS
IMPROVEMENT
According to ISO 55000 Clause 2.5.3.8 Improvement is defined as
• “Continual improvement is a concept that is applicable to the assets, the
asset management activities and the asset management system, including
those activities or processes which are outsourced.
• Opportunities for improvement can be determined directly through
monitoring performance of the asset management system, and through
monitoring asset performance.
• Of particular importance are asset-related incidents or emergency
situations….… All such incidents, including unanticipated events, should be
investigated and reviewed”
As described by clause 2.5.3.7
• the organisation should evaluate the performance of its assets, its asset
management and its asset management system.

138

CONTINUOUS
IMPROVEMENT
According to ISO 55000 Clause
2.5.3.8 Improvement is defined as
The performance of the asset management system should be
evaluated against any objectives set specifically for the system
itself (either when it was established, or following previous
evaluations).

The primary purpose of evaluating the system should be to:

- determine whether it is effective and efficient in
supporting the organisation’s asset management.

139

68
Asset Management training course -
Institution of Mechanical Engineers

CONTINUOUS
IMPROVEMENT
Lean and The Toyota Way
Lean is:

• A process

• A guiding philosophy

Lean is not:

• A set of tools and techniques

The Toyota Way 2001

• is a set of guiding principles and lean is a part of this reinforcing

the value of continuous improvement and respect for people

140

CONTINUOUS
IMPROVEMENT
Challenge RESPECT FOR PEOPLE
• Create value Respect
• Respect for stakeholders
• Spirit of challenge
• Trust and responsibility
• Long term thinking/perspective • Sincere communication
• Thorough decision making
Kaizen Teamwork
• Education and development
• Innovative thinking
• Respect for the individual
• Lean systems
• Organisational learning Source: Toyota Global, “The Toyota Way, 2001”

Genchi gembutsu
• See the problem for yourself
• Consensus in decisions
• Commitment to achievement

141

69
Asset Management training course -
Institution of Mechanical Engineers

CONTINUOUS
IMPROVEMENT
The Toyota Way 14 Management
Principles (an alternative) Problem solving
• Continuous Improvement
4 P’s (Jeffrey Liker 2004):
People & Partners
• Respect, Challenge, Grow

Process
J. K. Liker, “The Toyota Way: 14 Management • Eliminate waste
Principles from the World’s Greatest Manufacturer”,
© McGraw Hill, 2004, p. 6
Philosophy
• Long term thinking

142

CONTINUOUS
IMPROVEMENT
The Toyota Way 14 Management Principles (an alternative)

1. Long-term Philosophy
1. Base management decisions on a long-term philosophy, even at expense of short-
term goals
2. The right process will produce the right results
2. Create continuous flow to expose problems
3. Use “pull” systems to avoid overproduction
4. Level out the workload (mura, muri, heijunka)
5. Build a culture of stop-and-fix (jidoka)
6. Standardize tasks and processes (mura)
7. Use visual controls so no problems are hidden
8. Use only reliable, thoroughly-tested technology

143

70
Asset Management training course -
Institution of Mechanical Engineers

CONTINUOUS
IMPROVEMENT
The Toyota Way 14 Management Principles (an alternative)
4. Add value by developing people
9. Grow leaders who understand the work and live the philosophy
10. Develop exceptional people
11. Respect your extended network of partners and suppliers
5. Continuously solve root problems and drive learning
12. Go and see the problem for yourself (genchigembutsu)
13. Make decisions slowly, and by consensus. Implement quickly.
14. Relentless reflection and continuous improvement

144

RISK

THE WHY DIAGRAM

A more visual method to determine root causes is by using a branched diagram.

Cause
1.1
Cause 1
Cause
Problem 1.2
Cause
Cause 2
2.1

145

71
Asset Management training course -
Institution of Mechanical Engineers

CONTINUOUS
IMPROVEMENT
The importance of incident reporting
1. Problem and scope definition
1. Preparing an incident statement
2. Planning the investigation
2. Investigating an incident
1. Collecting information
2. Developing a timeline
3. Analysing an incident or failure
1. Root cause analysis process
4. Reporting
1. Writing the investigation report
2. Making recommendations

146

CONTINUOUS
IMPROVEMENT
CONTINUOUS IMPROVEMENT (Defined by Liker)
• Create continuous flow to expose problems
• Use “Pull” Systems to Avoid Overproduction
• Level the workload (Heijunka)
• Build a culture of stopping and fixing problems (Jidoka)
• Standardize tasks and processes
• Use visual controls to expose problems

147

72
Asset Management training course -
Institution of Mechanical Engineers

RECAP: MEASURING PROCESS RELIABILITY

Another way is Overall Equipment Effectiveness (OEE), a best practice metric that
measures manufacturing productivity.

equipment Availability

equipment
Performance efficiency OEE
Quality Rate

A x P x Q = OEE

148

OEE

Overall Equipment Effectiveness

Overproduce
Performance x Availability x Quality = Defect
OEE
Slow speed Process Issues

Each factor has two associated losses making Breakdown

6 in total, these 6 losses are as follows: Error
QC Quality
Performance = (1) running at reduced speed - (2)
Minor Stops
Sampling Testing

Availability = (3) Breakdowns - (4) Product Shut down

changeover Start up Operations
Quality = (5) Start-up rejects - (6) Set up
Running rejects

149

73
Asset Management training course -
Institution of Mechanical Engineers

OEE

How does it work?

ALL TIME (24/7)

SCHEDULE LOSSES PLANNED PRODUCTION RUN TIME

AVAILABILITY DOWNTIME AVAILABLE RUN TIME

PERFORMANCE SPEED USED RUN TIME

QUALITY DEFECT EFFECTIVE PRODUCTION TIME

150

OEE
PERFORMANCE
AVAILABILITY

QUALITY

151

74
Asset Management training course -
Institution of Mechanical Engineers

OEE

TIME

ALL TIME (24/7) 720

SCHEDULE -130 LOSSES PLANNED PRODUCTION RUN TIME 590

AVAILABILITY -105 DOWNTIME AVAILABLE RUN TIME 485

PERFORMANCE -60 SPEED USED RUN TIME 425

QUALITY 365
-60 DEFECT EFFECTIVE PRODUCTION TIME

152

OEE

Benchmarking
Find another company that does something better than you, and learn from them, adapt it
to your process and improve.

Benchmark your OEE score against industry standards for manufacturing and strive for
world class results.

Reference: www.leanproduction.com/oee

153

75
Asset Management training course -
Institution of Mechanical Engineers

OPERATORS OF
RELIABILITY

It is easy to focus on asset management as purely managing assets but

we cannot forget that people are at the heart of asset management.

Asset ASSET People

MANAGEMENT

154

OPERATOR DRIVEN
RELIABILITY (ODR)

Operator driven Keep plants running Identify problems

Reduce unplanned
reliability is integral to better, longer, cost proactively to eliminate
downtime and increase
overall proactive effectively, or reduce failures and
uptime
maintenance strategies competitively increase reliability

Operators take
Operators perform Includes activities such
responsibility for Maintenance/operations
basic maintenance as as leaks, noise,
identifying problems are closer aligned
well as operator duties temperature, vibration.
and detecting faults

155

76
Asset Management training course -
Institution of Mechanical Engineers

OPERATORS OF RELIABILITY

Equipment, tools, technology are all very

important but the workforce must be
engaged with (clear) leadership as the
driving force and collaboration and
empowerment of the team to drive change.

The qualities that make a good leader can

depend on the situation or context. They can
vary according to:
•The immediate situation (i.e. the leadership
qualities required can change over a short time
span)
•The leadership culture (i.e. what makes a good
leader remains stable over time within an
organisation).

156

OPERATORS OF
RELIABILITY
TPM
Inspections are a fundamental part of the TPM
process with heavy emphasis on involving equipment
operators in the inspection process.
Total Productive Maintenance (TPM) is
• a team based approach to improve the condition
and performance of facilities and processes.
• encourages production personnel to be involved in
maintaining their machinery and improving their
workplace and includes subjects such as the 6 big
losses, OEE and autonomous maintenance.
• Operator Asset Care (OAC) was initially developed
from these principles and migrated from Japan
during the late 1980’s.

157

77
Asset Management training course -
Institution of Mechanical Engineers

TOTAL PRODUCTIVE MAINTENANCE

TPM consists of eight pillars of activities that impact all areas of the organization.

TOTAL PRODUCTIVE MAINTENANCE

Early Equipment

Safety, Health,

Administration
Improvement

Management

Environment
Maintenance

Maintenance

Maintenance
Autonomous

Training and
Education
Focused

Planned

Quality

TPM in
1 2 3 4 5 6 7 8

158

OPERATOR ASSET CARE

OAC teams focus on their facilities and all aspects of the machinery that they
operate or support, their operational processes and their working environment

The best people to look after and improve manufacturing facilities are the people
who operate and set them up in conjunction with maintenance personnel.

Most Common Mistakes

• If it is a separate initiative set up by just one department
• Poor communication/rivalry between operations and maintenance and shift teams
• Lack of management buy-in
• Lack of planning, OAC can mean different things to different people so it is a key
requirement to define and scope the programme.
• Not introducing a pilot programme first
• LACK OF TRAINING.

159

78
Asset Management training course -
Institution of Mechanical Engineers

OPERATOR ASSET CARE

Implementing OAC
The key to the Explain and train personnel – awareness, advice, skills
introduction of
OAC is in the Select one or more ‘pilot’ or ‘demonstrator’ areas on the factory floor
effectiveness of
communications. Ensure team are onboard and supported throughout the organisation (culture)

Baseline the condition of the machinery (appraisal)

Establish any actions required to restore it to a reasonable operating condition

can be planned and implemented – improves machine and gets buy in
Local shop floor personnel should take an active part in reviewing/developing
tasks
The resulting tasks and schedules should be produced in a user-friendly format
that can be easily understood by all production personnel
Training needs can then be identified and specific skills training put in place

160

OPERATOR ASSET CARE

Implementing OAC
A proven is part of Continuous Improvement
approach to OAC is a key part of any
achieving asset management,
addresses all aspects of operational processes and
effective facilities maintenance or
machinery manufacturing
allows the vicious circle of reactive
and operations/maintenance to be broken improvement programme
equipment as and is complimentary to
it: relieves maintenance personnel from routine tasks and a
large proportion of reactive maintenance other improvement
provides a framework for company-wide improvements
techniques and
and motivation approaches
brings about a profound change in the culture of the
business
makes it a nicer place to work and a more competitive
business.

161

79
Asset Management training course -
Institution of Mechanical Engineers

PAUSE FOR REFLECTION 2

min

• Questions to consider:
1. Training and development (competence) – what
areas do you or you team need to invest time into
training and why?
2. Is Continuous Improvement an important process
for you? How can you utilise it better?
3. How much of a focus is quality management? Do
you have a definition of good quality for your
product or service?
4. Would OEE be a good metric? If not, what else
could you use?
5. Can you introduce Operator Asset Care (OAC) into
your organisation?

162

“PAUSE FOR REFLECTION”

163

80
Asset Management training course -
Institution of Mechanical Engineers

THANK
YOU.

+ 44 (0)20 7304 6907 For more information please contact:

training@imeche.org Matthew Laskaj CEng FIMechE
imeche.org/training
matthew.laskaj@imeche.org
/imeche Andy Stevenson CEng FIMechE
/imecheevents Andy.Stevenson@member.imeche.org
/imecheuk
/imecheteam
/showcase/imeche-events-and-training

Copyright: Project Engineering Management Ltd 2022

164

81
Asset Management training course -
Institution of Mechanical Engineers

Asset Management
Part 2

Presented by
Andy Stevenson
CEng FIMechE

Helping talented technical professionals reach their full potential

165

ASSET MAINTENANCE

• Organisational structures
• Maintenance plan development and work management
• Spares and materials management
• Production engagement
• Data collection and metrics

Managing Asset Life Cycle Decisions and Activities

IMPROVED
PERFORMANCE

06
ACQUIRE
DESIGN SELECT OPERATE MAINTAIN DISPOSE
INSTALL

166

1
Asset Management training course -
Institution of Mechanical Engineers

IMPROVED
LIFECYCLE
ASSET MANAGEMENT AND PERFORMANCE
WORLD CLASS MAINTENANCE
Asset maintenance involves:
• Developing and carrying out planned maintenance tasks
• Monitoring and assessing the condition of the asset
• Taking corrective actions when required
• Fitting replacement parts when required
• Measuring and monitoring asset reliability and performance

Ensuring the asset is kept in good

condition and meets operational
requirements

167

WHAT YOU NEED TO KNOW.

• Improve safety
• Reduce maintenance and production costs
• Reduce spare parts inventory Fundamentals
• Increase process stability and predictability of Maintenance
• Extend equipment life Optimisation
• Less overtime and stress
• Improve sense of employee ownership
• Increase profits

3 critical steps to improve your How to build

maintenance and reliability: your plan
1. ?
2. ?
3. ?

168

2
Asset Management training course -
Institution of Mechanical Engineers

ASSET MANAGEMENT
AND WORLD CLASS
MAINTENANCE

You need more than the ISO 55001 standard, to build and achieve world
class maintenance performance.

Write down 3 principles you would like your maintenance team to live by.

PRINCIPLE 1:

We will always……

169

World Class Maintenance

1. Strategy - Identify and prioritise needs, conduct a review

2. Gather data - calculate costs and performance of maintenance

BEST PRACTICE
3. Create a supportive plant working environment, SOP’s for
Becoming world class: maintenance, investigate failures

4. Develop and implement a maintenance plan

5. Planning and scheduling, spares and stores

6. Use technology

7. Incorporate TPM and RCM

8. Evaluate, confirm and sustain the program

170

3
Asset Management training course -
Institution of Mechanical Engineers

MAINTENANCE INVOLVES:

“You cannot improve what you cannot measure.” – W. Edwards Deming

• Asset maintenance involves:
• Developing and carrying out planned maintenance tasks
• Monitoring and assessing the condition of the asset
• Taking corrective actions when required
• Fitting replacement parts when required
• Ensuring the asset is kept in good condition and meets operational
requirements

• Measuring and monitoring asset reliability and performance

What do you measure?

171

ROLES OF ASSET
MANAGEMENT
SUPPORT OPERATIONS ASSET MANAGEMENT
Short term – output focus Longer term – equipment focus

Short reaction time Plan maintenance

Minimal cost Eliminate failures
Low mean time to repair High mean time between failures

2 key characteristics: EFFICIENT EFFECTIVE

Do things right Do the right things
1. Manage the assets
2. Engage the operators

Cost Investment

Maintenance balance

172

4
Asset Management training course -
Institution of Mechanical Engineers

IMPROVEMENT TOOLS

Identify and fix the root causes of equipment failures.

Preventive maintenance will try to perform repairs or

parts replacement based on a maintenance schedule.

Root Cause Analysis (RCA) will look at why a

machine broke down.

Failure Mode Effects Analysis (FMEA) will look

at how a machine might break down.

173

SUPPORTIVE
ENVIRONMENT
A structure is:

- A system that outlines how certain

activities are directed in order to achieve
the goals of an organisation and defines
the hierarchy within the organisation.

These activities can include rules, roles and

responsibilities.

The organisational structure also determines

how information flows from level to level
within the company.

174

5
Asset Management training course -
Institution of Mechanical Engineers

STRUCTURE.
What do they
do?
A supervisor is:
the person in the first-line management
• monitor
• regulate
• recommend and/or effect hiring
• disciplining
• promoting
• punishing
• rewarding

175

STRUCTURE.
What do they
do?
A manager is:
Responsible for the high-level success of a business group or unit.
• less concerned with the day-to-day activities of individual employees
• more concerned about the overall success and productivity of the group as a
whole
• responsible for planning department goals
• and directing employees to achieve certain end products and results
Planning – Setting objectives, strategy development, timetable for
implementation & achievement
Organising – who, what, how: people, materials, information, equipment,
facilities, structure
Leading – formal & informal, direct & motivate to achieve high productivity,
understand individuals and groups
Controlling – Quality Assurance, Planned vs actual performance

176

6
Asset Management training course -
Institution of Mechanical Engineers

LEADER What is a
leader?
Effective leaders must do more than just lead,
they need to inspire the team and influence
people towards a vision and purpose.

• They are problem solvers

• They find a way to achieve targets and to
evolve
• provide the direction, guidance, and
motivation needed to excel in these areas
• need to have strong communication, time
management, delegation and decision-
making skills
• be flexible in their leadership style

177

STRUCTURE.

Leadership in relation to supervision has two interconnecting elements:

1. leading practice, applying the skills of the individual supervisor.
2. leading the organisation in establishing an effective supervision culture

Strategic and operational leadership can ensure that the process of

supervision is embedded in the organisation and will set the tone and
behaviours to support it.

Leadership at a strategic level can then be confident that what an

organisation says it is delivering is matched in practice

What does the organisational structure look like to support the supervisors?

178

7
Asset Management training course -
Institution of Mechanical Engineers

STRUCTURE.

Functional Structure
Also known as CEO
bureaucratic, this
structure breaks up
the personnel into Manager Manager
specialisation or Production Sales
departments.

Supervisor Supervisor Sales

Fabrication Assembly people

Operators Operators

179

STRUCTURE.

Divisional Structure
the leadership team is based on products or projects also known as business units

Manager
Production

Production Production Production Production

Manager Manager Manager Manager
Engine Paint Chassis Suspension

Supervisor Supervisor Supervisor Supervisor

180

8
Asset Management training course -
Institution of Mechanical Engineers

STRUCTURE.

Flat Structure
flattens the chain of command resulting in fast implementation

CEO

Production Design
Manager Manager

Employee Employee Employee Employee Employee

181

STRUCTURE.
Matrix Structure

President

Operations Finance Engineering

Car 1 Employee Employee Employee

Car 2 Employee Employee Employee

employees work across different divisions or departments

182

9
Asset Management training course -
Institution of Mechanical Engineers

THE ORGANISATION AS
A SYSTEM
More
distinctive

More
common
More cultural More
infrastructural

183

MAINTENANCE DEPENDENCE

REACTIVE PROACTIVE RELIABILITY WORLD CLASS

ADAPTABLE
Value

PREDICTABLE

UNDERSTAND

CONNECTED
VISIBLE

CROSS FUNCTIONAL
FUNCTIONAL TEAMS MATRIX TEAMS
TEAMS

184

10
Asset Management training course -
Institution of Mechanical Engineers

STRUCTURE. Exercise

Which type of structure do you have?

Which type of structure should you have?

Do you have supervisors, managers or leaders?

Are you a supervisor when you should be managing or leading?
185

MAINTENANCE OPTIONS

Maintenance Engineering

Unplanned Reactive Reactive Planned Scheduled Redesign

Maintenance Maintenance Maintenance or Modify

Deferred Emergency Failure

Preventive Predictive
(schedule) (do it now) Finding

Condition
Time Based Risk Based
Monitoring

186

11
Asset Management training course -
Institution of Mechanical Engineers

WHAT IS MAINTENANCE?

Technical to retain an item in,

Actions or restore it to,
a state in which it can
Administrative perform its required
Actions function

The goal of maintenance is to keep the production

system in good working order at minimal cost.

187

MAINTENANCE & ENGINEERING

Looking from an engineering perspective, there are 2 elements to the management

of a physical asset:

1. It must be maintained
2. It may need to be modified

Photo by Антон
What is the best choice? Дмитриев on
Unsplash

188

12
Asset Management training course -
Institution of Mechanical Engineers

THE MAINTENANCE HIERARCHY

Risk Based Maintenance

Reliability Centered Maintenance

Total Productive Maintenance

Predictive Maintenance

Preventive Maintenance

Reactive Maintenance

MAINTENANCE
189

RELIABILITY There are 2 types of reliability:

RELIABILITY

Asset Process
Reliability Reliability
Material properties
Asset loads (failure) Process model
Operating Manufacturing
environment model
Operating Process control
conditions

BS 4778-3.1:1991
Quality vocabulary. Availability, reliability and maintainability
terms Guide to concepts and related definitions

190

13
Asset Management training course -
Institution of Mechanical Engineers

RELIABILITY

Reliability, according to RCM3:

“The probability that any physical asset
According to BS4778-1:1987: will perform it’s function to satisfactory
performance standards for a given
period of time under specified operating
RELIABILITY: conditions”.
“Ability of an item to perform a
required function under stated
conditions for a stated period of time”. Reliability is a probability:
1. The probability that the product
or system will function when
activated
2. The probability that the product
or system will function for a given
length of time

191

RELIABILITY MANAGEMENT SYSTEM

A successful maintenance program consists of a number of elements and metrics.

Reliability Management Systems

Equipment performance
Maintenance management RELIABILITY
Planning
Scheduling Incident management
Organisation
Compliance Personnel Safety
Metrics Strategy/tasks Environment
- OEE RCM Equipment
- CMMS - RCA
- OCE - FMEA

192

14
Asset Management training course -
Institution of Mechanical Engineers

THE MAINTENANCE STRATEGIES

193

REACTIVE MAINTENANCE

Identify, isolate and rectify a fault

• Failures are evident
• Restore to a condition it can perform it’s
intended function

Also called corrective maintenance, breakdown

maintenance, Run To Failure (RTF)

Maintenance tasks that are performed in order Photo by Skitterphoto from Pexels

to fix and repair faulty systems and equipment

No scheduled maintenance

194

15
Asset Management training course -
Institution of Mechanical Engineers

REACTIVE MAINTENANCE

Failure is Determine
Asset fails
detected urgency

Detected during:
 Operation Create work Fix
 Maintenance/repair
 Routine inspection order immediately

195

PREVENTIVE MAINTENANCE.

The aim is to reduce breakdowns through a program of:

Interval based:
• Lubrication, filtration or servicing
• Overhaul
• Restoration
• Discard

Photo by Nordic Overdrive from Pexels

Scheduled restoration
Scheduled discard

196

16
Asset Management training course -
Institution of Mechanical Engineers

PREVENTIVE MAINTENANCE

Preventive maintenance is a schedule based program which aims to reduce

unscheduled breakdowns and repairs:

 Calendar based (time)

 Usage based (operating hours)

The goal is to increase asset lifetime by preventing excess depreciation and

deterioration or untimely breakdown;

and to strike a balance between the cost of preventive maintenance and the cost
of breakdown

197

PREVENTIVE MAINTENANCE

There is a trade off over maintaining and asset vs to run to failure.

198

17
Asset Management training course -
Institution of Mechanical Engineers

PREVENTIVE MAINTENANCE

Determine
Define PM
Select asset maintenance
interval
task
Repeat

Interval is Perform Record

reached maintenance action

199

PREVENTIVE MAINTENANCE.

Assumptions: PREVENTIVE
MAINTENANCE
PROBABILITY OF FAILURE

• Follow the failure profile

WEAR-OUT
ZONE
• Failure statistics available LIFE

• All equipment is Average

TIME
…….is this likely?
Classical Failure Curve

200

18
Asset Management training course -
Institution of Mechanical Engineers

PREVENTIVE MAINTENANCE

2 main areas of failure are Disadvantages:

captured by this profile: • The scheduled maintenance may take
place too soon, while the machine still
Wear out characteristics operates well

• where equipment comes into direct contact • It may come too late if the machine fails
with the product before the scheduled maintenance time.
• In some cases, the machine may still be
running but producing unacceptable parts.
Age related failures
• fatigue, corrosion, erosion, evaporation

201

PREDICTIVE MAINTENANCE

Predictive maintenance (PdM) is a maintenance

strategy that attempts to predict when a failure
will occur through condition-based maintenance
that monitors the condition of an asset.

This information is used to predict when the

asset will require maintenance and prevent
equipment failure.
Photo by neil kelly from Pexels

Scheduled on condition

202

19
Asset Management training course -
Institution of Mechanical Engineers

PREDICTIVE MAINTENANCE

Establish Identify
Monitor
condition change in
condition
baseline condition

Predict Perform
Create
remaining planned
workorder
life maintenance

203

CONDITION
MONITORING
What is the difference between predictive
maintenance and condition monitoring?

Predictive maintenance tries to predict into

the future when you will need to service
your equipment.

Condition-based maintenance uses

EXERCISE
conditions or thresholds to say when it is
time to perform maintenance.

Collection may be from:

• Flow rates
• Temperature
• Pressure
• Electrical current/voltage (infrared test)
• Vibration analysis
• Oil condition

204

20
Asset Management training course -
Institution of Mechanical Engineers

SUMMARY - THE MAINTENANCE STRATEGIES

+ Proactive
maintenance

No scheduled Scheduled restoration

Scheduled on condition
maintenance Scheduled discard

205

6 TIPS TO OPTIMIZE
MAINTENANCE
ANY OTHERS?
Pre checks:
• Do you have the resources?
• Are they trained and competent?
• Do you have the administrative processes in place?

6 tips:
1. Maintain Assets and Equipment List
2. Emphasize Proactive Maintenance (preventive and predictive)
3. Focus on the areas that need the work – priority, correct task
selection
4. Schedule frequently enough to catch the problem, cost effectively
5. Measure performance and stay on schedule
6. Involve operators

206

21
Asset Management training course -
Institution of Mechanical Engineers

PLANNING VS SCHEDULING

What is the difference?

PLANNING SCHEDULING PLANNING SCHEDULING

Reduces Reduces
WHAT WHO delays delays
DURING BETWEEN
HOW WHEN jobs jobs

207

HOW DOES YOUR COMPANY PLAN AND SCHEDULE?

How does your company currently
plan and schedule?

A We don’t (much), maintenance is mostly

reactive

B We perform P&S, but it is not formal

C Maintenance carries out P&S

D Operations dictate when we work

E We have a dedicated planner

F We have a dedicated planner, scheduler and

formal process

208

22
Asset Management training course -
Institution of Mechanical Engineers

PRODUCTIVITY Productivity
factors
Equipment Craft Employees

A: % availability to CU: % true wrench

add value time/ craft
OEE & OCE Effectiveness utilisation

P: % performance CP: % craft

1. Effectiveness – Doing the right against design speed performance
things Efficiency against a standard
planning time
2. Efficiency/performance – Doing the
right things and giving the best
Q: % good quality CSQ: % good
personal performance possible compared to produced quality repairs vs
Quality total repairs
3. Quality - Doing the right things and
giving the best personal
Overall Equipment Overall Craft
performance possible to a high
Effectiveness (OEE) Effectiveness
quality (OCE)

209

OTHER MEASURES

KPI’s

KPI 1: Emergency/reactive work %

S Specific
KPI 2: Planned completion %
M Measurable
KPI 3: Safety critical backlog

KPI 4: Scheduled maintenance backlog

A Achievable
KPI 5: Rework
R Relevant
KPI 6: Maintenance cost T Time based

210

23
Asset Management training course -
Institution of Mechanical Engineers

TOTAL PRODUCTIVE 8 Pillars

MAINTENANCE
Autonomous
Maintenance
• No Waste
TPM in Planned
Administration Maintenance

• No Defects

• No Breakdowns
HSE
5S Quality
Maintenance

• No slow/stopped running

• No Accidents Training and Focused

Education Improvement
Early
Equipment
Management

211

RELIABILITY CENTERED MAINTENANCE

Reliability-Centered Maintenance (RCM) is the process of determining the most

effective maintenance approach supported by sound technical and economic
justification.
RCM uses a combination of:
Proactive tasks:
• Preventive Maintenance (PM)
• Predictive Maintenance (PdM)
• Condition Monitoring (CM)
Default tasks
• Reactive / Run to failure (RTF)
• Failure finding tasks (FFT)
• Redesign
Photo by Mike from Pexels

212

24
Asset Management training course -
Institution of Mechanical Engineers

SEVEN BASIC RCM

QUESTIONS OF RCM
SAE JA1011:2009 Evaluation Criteria for RCM Processes
Shall ensure that the following steps are completed in order:

1. What are the functions of the asset? (operational context & function)
2. In what way can the asset fail to fulfil its function? (functional failure)
3. What causes each functional failure? (failure mode)
4. What happens when each failure occurs? (failure effect)
5. What are the consequences of each failure? (failure consequence)
6. What should be done to prevent or predict the failure? (proactive task)
7. What should be done if a suitable proactive task cannot be found? (default task)

213

RELIABILITY CENTERED MAINTENANCE

Collect data

Analyse data –
Revise
Plan: strategy
Criticality
Pre-work assess

Do:
Act: RCM SAE JA Review data
Operating
sustain context
1011/1012

Develop Cause & effect

Check: strategy – RCA/FMEA
Fine tune

Consequence Detection

214

25
Asset Management training course -
Institution of Mechanical Engineers

POLICY,

SO FAR STRATEGY

How long is a typical journey to world class?

3 – 5 years

World class

Production losses and

maintenance costs
Why so long?

Asset reliability and

• Change of culture along with strategy
In control

performance
• Opinion
• Customs
• Practices Reactive
• Mindsets
• Structure Chaotic
• Processes
• Procedures…..

215

PAUSE FOR REFLECTION

• Questions to consider:
1. Are you caught in the reactive maintenance cycle?
2. Do you mainly use reactive, planned, predictive of
proactive maintenance strategies? Can this be
reviewed?
3. What metrics do you collect, what else should you
collect? 2
min

216

26
Asset Management training course -
Institution of Mechanical Engineers

YOUR 5-DAY CHALLENGE

Develop a 5-day maintenance action plan

Day 1 Day 2 Day 3 Day 4 Day 5

Pick a theme for the Pick a theme for the Pick a theme for the
Gather the team day day day Gather the team
Ask them what has
Cakes and coffee Pick an area of focus Pick an area of focus Pick an area of focus changed
Tell them about your
plan Get feedback
Show them the
principles Develop another plan
Post it on a wall Thank them
Pick one simple task

217

“PAUSE FOR REFLECTION”

218

27
Asset Management training course -
Institution of Mechanical Engineers

ASSET DISPOSAL OR
REFURBISH
• Asset condition appraisal
• Maintain, refurbish or replace decisions
• Disposal and recycling

Managing Asset Life Cycle Decisions and Activities

IMPROVED
PERFORMANCE

07
ACQUIRE
DESIGN SELECT OPERATE MAINTAIN DISPOSE
INSTALL

219

IMPROVED
LIFECYCLE
ASSET DISPOSAL OR PERFORMANCE
REFURBISHMENT
The final stage
This is the process used by an organisation to decommission and dispose of
assets due to age or changes in performance and capacity requirements.
(Source: IAM)
Costs and benefits should be considered using a life cycle approach and the
impact on other assets and infrastructure disposal processes.

Factors to be considered include: Due to:

• Environment • Reaching end of useful life
• Land rehabilitation • Superseded by new technology
• Residual asset value • No longer complies with
regulations or statutory
• Continued service delivery requirement

220

28
Asset Management training course -
Institution of Mechanical Engineers

ASSET DISPOSAL OR
REFURBISHMENT
When do you change your car?

When the maintenance costs get too

expensive:
• As a one off repair
• As repeated yearly repairs
When the car no longer suits your purpose
(eg. Size)
When the technology is outdated (eg.
Emissions, electric vehicle)

“Should we continue to maintain it, refurbish

it, or simply replace it?”

221

ASSET DISPOSAL OR
REFURBISHMENT
4 key performance criteria to distinguish asset intensive Leaders from Follower organisations:
On time, on budget delivery is particularly important for decommissioning projects as there is
no profit for this phase in the asset life cycle.
Speed at which decisions are made and how late a late project is are the final 2 criteria.

Source: The Importance of Decommissioning in Asset Intensive Industries, (Aberdeen Group, 2014),

222

29
Asset Management training course -
Institution of Mechanical Engineers

ASSET DISPOSAL OR
REFURBISHMENT
Decommissioning is often an afterthought as described in Figure 2
of this document shown below.

223

ASSET DISPOSAL OR
REFURBISHMENT
Decommissioning in the nuclear industry is especially challenging because
it involves radioactive material as well as physical assets such as plant.
• Determining the option or method for decommissioning (SAFSTOR,
DECON, Entombment)
• Submitting and obtaining relevant licenses (European Commission)
• Providing decommissioining funding assurance through multiple levels
or requirements (minimum funding assurance, annual adjustments,
continual reporting on funding status etc)
• Detailed cost estimates for decommissioning

Decommissioning needs the same focus as the other stages in the asset
life cycle.

224

30
Asset Management training course -
Institution of Mechanical Engineers

ASSET DISPOSAL OR
REFURBISHMENT

A lot can be learned from

other industry sectors.
Start with setting the right
requirements.

Setting and managing the

requirements (Source: Aberdeen
Group, 2015)

225

ASSET DISPOSAL OR
REFURBISHMENT
Key opportunities and risks should also be considered when
developing a decommissioning strategy and priorities.
Priorities, as described by the Oil and Gas Authority, might include:
• Cost certainty and reduction in a technically competent, safe and
environmentally responsible manner
• Decommissioning delivery capability in terms of supply chain expertise
and capacity, effectively supported by appropriate business models,
contracting arrangements and industry alignment
• Decommissioning scope, guidance, and stakeholder engagement by
working with the Department of Energy and Climate Change (DECC) and
other relevant parties to identify and evaluate opportunities to optimise
and define parameters for decommissioning scope and to improve
industry engagement with the organisations that regulate the
decommissioning process.

226

31
Asset Management training course -
Institution of Mechanical Engineers

OPPORTUNITIES AND RISK

The decommissioning strategy is focused on three main priorities.

Opportunities and risk.

Source: section 4 of the Oil and Gas Authority Decommissioning Strategy 2016

227

Decommissioning Strategy Overview

Source: section 5.4 of the Oil and Gas Authority Decommissioning Strategy 2016

228

32
Asset Management training course -
Institution of Mechanical Engineers

DECISION QUALITY PROCESS

DQ is designed to achieve several things, but the key is
alignment and commitment across all stakeholders.
Specifically, DQ will assist in identifying key decisions that need to be made and their
dependencies by examining and ensuring:
• The problem or decision is properly framed and understood
• The values or decision-making criteria are known, agreed and documented
• The options available as outcomes to the decision are identified, before being
evaluated
• Information required to assist in the option evaluation is identified and captured
• Robust analysis of the options, using the gathered information and evaluation criteria
is undertaken and documented
• Decision stakeholders are brought along with the process as it develops so all parties,
including the decision maker, are “decision-ready” when the recommendation is
presented
Source: section 5.4 of the Oil and Gas Authority Decommissioning Strategy 2016

229

RECAP: WHICH WAS MOST COMMON?

230

33
Asset Management training course -
Institution of Mechanical Engineers

AGE RELATED FAILURE CURVES

231

RANDOM FAILURE CURVES

232

34
Asset Management training course -
Institution of Mechanical Engineers

A CHANGE IN STRATEGY

Two discoveries were especially important:

1. Scheduled overhaul has little effect on the overall reliability of a
complex item unless the item has a dominant failure mode
2. There are many items for which there is no effective form of
scheduled maintenance

89% of equipment has no “end of life”

Should we still replace it? Use LCCA.

233

CHANGE YOUR
STRATEGY.

Does this mean there

is no relationship
between reliability
and operating age?

Project Engineering Management Ltd ©2022

234

35
Asset Management training course -
Institution of Mechanical Engineers

CHANGE YOUR STRATEGY.

• Asset Management: ISO55001

We must improve how we:

ACQUIRE OPERATE
Design, Buy & Install, Start Up MAINTAIN DISPOSE
Store & Shut Down

Project Engineering Management Ltd ©2022

235

ASSET DISPOSAL OR
REFURBISHMENT
Example
Well-defined models include both the costs and benefits of aspects such as design,
manufacturing, acquisition, storage, installation, commissioning, operations, maintenance,
decommissioning, removal, and disposal. Typically, LCC models are built within spreadsheets.
7, 15, 30 yrs +. Net Present Value (NPV)

Step 1: Create an LCC model for the replacement of the existing asset. A: Buy New.
Step 2: Create an LCC model, in the same spreadsheet as Option A, for keeping the old asset.
B: Keep Old.
Step 3: Use the spreadsheet tools to vary the maintenance costs of Option B, until the NPV
for Option B is equal to Option A.
Step 4: Divide the annual (or total) maintenance costs for Option B by the annual (or total)
maintenance costs for Option A.
This is the Maintenance Costs Multiplier or the threshold limit for the repair versus replace
decision. See Figure 1 as an example.

236

36
Asset Management training course -
Institution of Mechanical Engineers

ASSET DISPOSAL OR
REFURBISHMENT
Example – VW Golf car used for deliveries
Option A – buy new Option B – Keep old
Purchase: -£10,165 Purchase: £0
Benefit: £2,000/yr Benefit: £2,000/yr
Maintenance costs: -£200/yr Maintenance costs: -£1000/yr
NPV (10 years): £7,835 NPV (10 years): £10,000

Maintenance costs B = A x 5

What else do we need to take into account?

Downtime, efficiency (fuel), rebuild, ease of use (comfort), new features, resale of old asset,
unplanned maintenance, time frame

237

ASSET DISPOSAL - WASTE MANAGEMENT

The waste hierarchy (Source: LLW Repository Ltd, 2015)

238

37
Asset Management training course -
Institution of Mechanical Engineers

ASSET DISPOSAL - WASTE MANAGEMENT

The waste hierarchy

(Source: Figure 3, LLW
Repository Ltd, 2015)

239

ASSET DISPOSAL - WASTE MANAGEMENT

Benefits of applying
the waste hierarchy
(Source: LLW
Repository Ltd, 2015)

240

38
Asset Management training course -
Institution of Mechanical Engineers

PAUSE FOR REFLECTION

• Key Learning Points

1. Asset disposal vs refurbishment:

• Questions to consider:
1. Have you ever done a cost analysis – refurbish vs
buy new?
2. Where can you and on what equipment? 2
3. Do you need to think about waste and disposal of min
assets?

241

“PAUSE FOR REFLECTION”

242

39
Asset Management training course -
Institution of Mechanical Engineers

ASSET MANAGEMENT
REQUIREMENTS
• ISO 55001 standard
• Developing an asset management policy and strategy
• Developing an asset management plan
• Integrated asset management and industry 4.0

Asset Management Policy, Strategy, Objectives & Planning

08
243

POLICY,
EFFECTIVE ASSET STRATEGY

MANAGEMENT
Key to success:
• Senior management support and Use ISO 55000 to establish a framework
sponsorship that formally maps elements such as
mandated requirements, overall policy
• Engagement of operations and
goals, and key objectives to the
technical personnel
management strategy.
• Policy, strategy, objectives defined and
agreed
In addition, with the advent of so many
• Process and structured approach new digital asset management solutions,
implementing an ISO 55000 program
• Benchmark against best practice
helps ensure that these solutions are
• Assess and monitor performance and consistent with the company's overall
measure using metrics objectives and ROI concerns.

244

40
Asset Management training course -
Institution of Mechanical Engineers

ISO 55000 STANDARD

According to ISO 55000:

Asset management translates the organization’s objectives into
asset-related decisions, plans and activities, using a risk based
approach.

An organization’s top management, employees and stakeholders

should implement planning, control activities (e.g. policies,
processes or monitoring actions) and monitoring activities, to exploit
opportunities and to reduce risks to an acceptable level.

Asset management involves the balancing of costs, opportunities

and risks against the desired performance of assets, to achieve the
organizational objectives.

245

THE ASSET LIFECYCLE

The asset management system, using ISO 55001
clauses, follows a similar theme to Deming’s process

Clause 1: Scope Context of the

Organisation (4) Support &
Clause 2: Normative references Operation
(7, 8)
Clause 3: Terms and definitions

Clause 4: Context of the organization

Clause 5: Leadership
Performance
Clause 6: Planning
Planning Leadership evaluation Intended
(6) (5) (9) outcomes
Clause 7: Support

Clause 8: Operation

Clause 9: Performance evaluation

Improvement
Clause 10: Improvement Needs &
(10)
expectations of
stakeholders
(4)

246

41
Asset Management training course -
Institution of Mechanical Engineers

IT STARTS WITH THE VISION

Vision The inspiration

Why the company

Mission, Values &
exists and what it
ORGANISATIONAL Goals
STRATEGIC PLAN
was set up to achieve

The principles to
Policies achieve the
objectives

Results the company

Objectives
wants to achieve

Long term plan to

Strategy
achieve the objective

Tasks and action plan

Plan & Tactics to achieve the
strategy

247

VISION
Exercise: go
to tab
How do you want to inspire? ‘Strategy’
What do you see the department becoming?

248

42
Asset Management training course -
Institution of Mechanical Engineers

MISSION, VALUES AND

GOALS Exercise: go
to tab
Why the company exists and what ‘Strategy’
it was set up to achieve

249

POLICY

The principles to achieve the objectives

• provides the principles by which the organisation intends to apply
to develop and achieve its organisational objectives.
• documented in a strategic asset management plan (SAMP) - It
should be consistent with stakeholder requirements, and with
other organisational policies, objectives and constraints.
• It must start with the top management – the leadership.
• It must be effectively communicated and regularly reviewed with
a view to continual improvement.
Responsibilities
The General Counsel and Director of Compliance and Risk Management are
responsible for the programs and policies associated with corporate ethics and
integrity.
The global management team is charged with assuring compliance with corporate
policies and initiatives.

250

43
Asset Management training course -
Institution of Mechanical Engineers

WHAT ARE YOUR

POLICIES?

251

MANAGEMENT
PROCESSES
Review &
continual Policy
improvement
To achieve an effective Health and
Safety management system, we
follow:
• So why can’t we adopt the
same principle when it comes to
other areas? Measuring
Planning
performance

The directive, and leadership,

must start at the top of the
organisation and work down
through the business – set the
policy. Implementing
Organising
& Operating

252

44
Asset Management training course -
Institution of Mechanical Engineers

LEADERSHIP DRIVES THE

BUSINESS
Leadership drives
Strategy, People,
Technology Strategy

Lean maintenance, repair and overhaul Mandyam Srinivasan

Leadership

Technology People

253

OBJECTIVES

Results the company wants to achieve

Build a business case
• Strategic case - why the project is necessary?
• Options - overview of solutions you have considered, including
do nothing.
• Benefits - assessment of what will be gained financially and
otherwise (including any unavoidable negative impacts).
• Investment - the total costs (including resource costs) to fund
the project.
• Risk - what could go wrong, how it could be mitigated, and what
impact it would have on the business case.
• Timescales - schedule your plan including the outputs to be
achieved, and when the benefits will be realised.

254

45
Asset Management training course -
Institution of Mechanical Engineers

WHAT ARE YOUR

OBJECTIVES? Exercise: go
to tab
Results the company wants to achieve ‘Strategy’
KPI’s/Metrics

255

STRATEGY

Describes the long-term approach to the

management of physical assets.
• the current situation and future service levels planned to provide to
deliver asset management capabilities.
Typically, the strategy will include:
• Asset management objectives
• Key accountabilities for activities covered by the strategy and ongoing
maintenance of the strategy
• Decision making criteria for life cycle cost and risk analysis
• How the organisation will develop the asset information to support the
analysis
• Methodology for determining asset and network criticality

256

46
Asset Management training course -
Institution of Mechanical Engineers

OPERATING STRATEGY

Select the approach that fits you

Build Buy Partner Invest Incubate

Maintain asset Decommission &

Asset creation Installation Commission Operation
reliability dispose

257

OPERATING STRATEGY

Organisational
design

Where does asset

management fit in,
is it the main focus?

Project

Product &
Service Culture change
Innovation

258

47
Asset Management training course -
Institution of Mechanical Engineers

RESOURCE STRATEGY

Resources include procure and use of people, plant, tools and

materials to deliver the asset management objectives and plan.

This includes:
• Competent labour - staff, 3rd party/outsourcing
• Spare parts
• Plant and equipment
• Tools
• Hardware
• Software
• Storage
• Assess cost and risk for timing and quantity

259

1. Define the
OPERATING STRATEGY strategy
10. Review
2. Get buy in
and refine

Don’t rush in without first

9. Prepare
laying a solid foundation for for culture
3. Plan the
strategy
success change
Define the right business
model for your business Motivation
4. Assess
8. Manage strategy with
risk business
goals

7. 5. Tools
Implement (Skills,
(Agile, small technology)
fast steps) 6. Present needed
the strategy

260

48
Asset Management training course -
Institution of Mechanical Engineers

STRATEGY

Asset Strategy Management

A best practice approach to
managing asset strategies,
organisation wide.

A process, enabled by people,

technology, data to ensure the
optimal strategy is on every asset,
all the time.

261

STRATEGY
Who needs to start the process?
What are the key aspects of the strategy that
would be useful to your business?
What is going to stop it from being
successful?

Strategic case - why the project is

necessary?
Options - alternatives
Benefits – why are you doing it?
Investment - the total costs
Risk - what could go wrong?
Timescales - schedule your plan

262

49
Asset Management training course -
Institution of Mechanical Engineers

OPERATING STRATEGY

Strategy Operating Products and

Model Technology
How do you What are the How can you use
create a vision for steps needed to technology to
the future? succeed in terms accelerate new
of people, product
communication development and
and culture? use new
products?

Strategic thinking and leading technological and

organisational change

263

Any
WHY STRATEGY FAILS ideas?

This list of problems shows what goes wrong in strategy execution

and what keeps going wrong over and over again.
• Unclear communication • Silo behaviour and sub-optimisation
• No or insufficient communication • Wrong or ineffective culture
• Lack of commitment • Resistance to change
• Insufficient or inadequate resources • Over-complexity
• Isolated and fragmented actions
• Insufficient management capabilities
• Ambiguous or conflicting goals
• Delay, plans are not met
• No or unclear strategy
• Budget is exceeded
• No clear priorities
• Ambiguous responsibilities • Lack of middle management support
• Lack of performance information • Strategy is not adapted to changes
• Poor leadership
Ref. Sep 10, 2019, 20 Reasons Why Strategy Execution
Fails, Jeroen Kraaijenbrink

264

50
Asset Management training course -
Institution of Mechanical Engineers

WHAT IS YOUR AM
STRATEGY? Exercise: go
to tab
Long term plan to achieve the objectives ‘Strategy’

265

PLAN

As described by ISO 55000 Clause 2.5.3.4, Planning is –

“The organisational objectives provide the overarching context and direction to the
organisation’s activities, including its asset management activities.

The organisational objectives are generally produced from the organisation’s strategic
level planning activities and are documented in an organisational plan”.

An organisation’s SAMP should be used to guide the setting of its asset management
objectives, and to describe the role of the asset management system in meeting these
objectives.

This includes the structures, roles and responsibilities necessary to establish the asset
management system and to operate it effectively.
Stakeholder support, risk management, continuous improvement are important issues.

266

51
Asset Management training course -
Institution of Mechanical Engineers

PLAN

The plan should include the following:

• Review of previous plans
• Activities to deliver the asset management objectives
• Costs for these activities
• Outcomes expected
• Resources required
• Integration with other plans
• How it will be monitored, reviewed, updated.

267

WHAT IS THE PLAN?

WHAT WILL YOU DO NEXT? Exercise: go
to tab
Tasks and action plan to achieve the strategy ‘Strategy’

268

52
Asset Management training course -
Institution of Mechanical Engineers

GAINING ISO55001
ACCREDITATION
How is the standard structured?
ISO 55001 is made up of a number of 10: Improvement 4: Context of the
different sections, each concentrating on the organisation
5: Leadership
requirements involved in different aspects of
6: Planning
a quality management system.
Clause 0-3 – Introduction and scope of the
standard Act Plan
Clause 4 – Context of the organization
Clause 5 – Leadership
Clause 6 – Planning
Check Do
Clause 7 – Support
9: Performance 7: Support
Clause 8 – Operation evaluation 8: Operation
Clause 9 – Performance evaluation
Clause 10 – Improvement

269

GAINING ISO55001
ACCREDITATION

Buy standard(s)
1. Buy ISO55001:2014 standard from BSI (£75 member £150 non
member)
2. Do the work – set up and run your AM strategy, keep records Set up your AM
strategy, activities
3. Submit application – Lloyds Register, Bureau Veritas etc, must
have been minimum 3 months operational, subject to Submit
management review and internal audits application

4. Gap analysis (optional – identify any areas for improvement)

5. Formal assessment – in 2 stages. 1) Check procedures and Gap analysis

controls are developed (+feedback), 2) assess implementation

of procedures and controls Formal
assessment
6. Certification and beyond – receive certificate, valid for 3 years,
annual surveillance audits + 3 yearly recertification audit - then
continuously improve! Certification

270

53
Asset Management training course -
Institution of Mechanical Engineers

DON’T FORGET THE

OTHER PLANS
If maintenance managers:

• Have a strategy and vision

ACT PLAN
• Have a plan
• Have communicated their vision and the
improvement plans continuously
• Have some acceptance from their people
around their plans CHECK
DO

Then we have a good starting point. We can

build on this.

271

BEST PRACTICE World Class Maintenance

1. Identify and prioritise needs – conduct a review
Becoming world class:
2. Gather data and calculate costs and performance of maintenance

3. Create a supportive plant working environment and SOP’s for

maintenance

4. Develop and implement a maintenance plan

5. Planning and scheduling, spares and stores

6. Use technology

7. Incorporate TPM and RCM

8. Evaluate, confirm and sustain the program

272

54
Asset Management training course -
Institution of Mechanical Engineers

IMPROVED
LIFECYCLE
TECHNOLOGY PERFORMANCE

How can it change how the business operates?

A successful digital transformation makes sure your technology lets every
function of your business:

Reduce
Collaborate Save time
costs

Connected data is key.

Industry 4.0 is all about designing and deploying intelligent

systems in every way, in our life and also at work.

273

Strategy drives innovation, not

technology.

Ideas remain ideas until they

become actions.

274

55
Asset Management training course -
Institution of Mechanical Engineers

Direction
DIGITAL STRATEGY
Strategy
The Star Model
• Digital transformation Skills/mindset Power
requires a proper
methodology or
framework that considers People Structure
all organisational levels.
• The Star Model, that
consists of five
dimensions to influence
employees’ behaviours
and enable change

Why is strategy at the top

and Rewards/Processes at
Rewards Processes
the bottom? Source:
Adapted from
Motivation Information Galbraith (2011)

275

Direction
DIGITAL STRATEGY
Strategy
The Star Model
1. Define the business structure:
Skills/mindset Power
• primary strategic task the
structure must manage
• what roles should report to the
senior leader People Structure
• how is power allocated (silos)
2. Process:
• how does work flow between
groups
• how are decisions made
3. Metrics/rewards drive
behaviour/culture:
• how is progress measured
• what guides behaviour Rewards Processes
4. Skills:
Source:
• set objectives
Adapted from
Motivation Information Galbraith (2011)

276

56
Asset Management training course -
Institution of Mechanical Engineers

Source:
Direction
Adapted from
DIGITAL STRATEGY Galbraith (2011)
Strategy What can we do
already?
What do we need to
do better?

Capability

People Structure

What talent is needed? How should we

Develop HR practices organize?
and routines What are the key
roles?
Organisational
structure (matrix)?

Rewards Processes
How are decisions made?
Define the metrics Who does work flow
What incentives will we between roles?
use to drive the right Define the management
behaviour? Culture, Performance, Results processes

277

As we go through the next

TECHNOLOGY section, think about how your
organization can apply the
star model to measure the
Connected data success of your digital
transformation
• is key in a digital world – data, machines, humans

Storing Managing Interpreting Securing

Storing: Data capture, big data, Internet of Things (IoT)

Managing: Blockchain, data analytics, digital twin
Interpreting: Data mining, predictive analysis, machine learning (AI)
Securing: Cyber security

278

57
Asset Management training course -
Institution of Mechanical Engineers

INDUSTRY 4.0 Buildings

SMART….
Mobility Products
What is SMART?
Where does it come from?

Data,
Smart is computing Services,
power + connectivity IoT
Grids Factory

Source: Application fields of intelligent

networked systems, Forschugsunion
2012
Health Logistics

279

TECHNOLOGY

What has changed in the world of asset management?

Traditional world
• What? Where? When?
• How much?
Modern world
• Where is it and what is around it, who is around it?
• Is it moving and how fast? Accelerating/decelerating/direction?
• What are the conditions? – temperature, sound, air quality, health
• Payment methods – cash, electronic, bitcoin, other

280

58
Asset Management training course -
Institution of Mechanical Engineers

THE INTERNET OF
THINGS (IoT)

Communication
• How do you get the data? Collect
• How do they communicate to each other?
• What will the understand and learn?
Identity and ownership
Decide
• How will the recognise you (the owner/operator)?
• How will they recognise each other?
• Who can control them, can they control themselves?
Security Act
• How can you ensure it is digitally secure (cyber security)?

281

THE INTERNET OF THINGS (IoT)

More than 57% of organizations regard IoT as a strategic investment to help
them meet internal efficiency goals and deliver increased time to value for
their customers.
- Source: The Value of IoT for Manufacturers, IDC
• As IoT evolves, assets are moving from just being connected to incorporating
digital services – asset monitoring, predictive analysis
• Opportunities for understanding quality, defects, efficiency, quantity

Tracking behaviour
SMART FACTORY VIDEO

282

59
Asset Management training course -
Institution of Mechanical Engineers

THE INTERNET OF THINGS

Top 5 Questions to Ask Your IoT Solution Vendor

1. What makes this IoT offer worth the investment from a business
standpoint?
2. Is your solution interoperable across systems (even other vendors’
components)?
3. Which cybersecurity certifications and measures are in place with your
solution?
4. Do you have a comprehensive partner ecosystem that can help with
installation and integration?
5. Do you have digital services that go along with this offer?

Source: The Value of IoT for Manufacturers, IDC

283

DATA ANALYTICS

Once the data is ready, it can be analysed with the software commonly used
for advanced analytics processes.

That includes tools for:

data mining
• which sift through data sets in search of patterns and relationships;

predictive analytics
•which build models to forecast customer behaviour and other future developments;

machine learning
•which taps algorithms to analyse large data sets;

deep learning
•a more advanced offshoot of machine learning – a way to automate predictive analytics

284

60
Asset Management training course -
Institution of Mechanical Engineers

ARTIFICIAL INTELLIGENCE

Oil & gas is showing strong deployment

of AI, but demand for AI skills remains
surprisingly low.

This may indicate that companies are

collaborating with external partners on
AI technologies.

What does chess and backgammon have

in common with AI?

285

Source: AI Demystified | Callaghan Innovation

286

61
Asset Management training course -
Institution of Mechanical Engineers

GARTNER HYPE CYCLE EMERGING TECH 2019

Source:
Gartner.com

287

GARTNER HYPE CYCLE 2021

Source:
Gartner.com

288

62
Asset Management training course -
Institution of Mechanical Engineers

GARTNER HYPE CYCLE 2022

Source:
Gartner.com

289

SELF AWARE MACHINES

Health Performance
Collect data Health diagnosis
assessment prediction

Component level Machine level Fleet level Enterprise level

Self driving car

Apollo 13

290

63
Asset Management training course -
Institution of Mechanical Engineers

SELF AWARE MACHINES

A cyber-physical system
is characterised by a
physical asset, such as a
machine, and its digital
twin.

The IoT is generally

limited to the physical
assets, not their digital
models.

Source: BEHRAD BAGHERI, NSF I/UCRC for

Intelligent Maintenance Systems (IMS)

291

SELF AWARE MACHINES

5 level architecture
• to represent the way
data passes to higher
levels & gets reduced in
size while the value of
the information rises.
• upper levels of the
hierarchy use analytical
methods to aggregate
data from lower levels
while passing important
high-level information
back down hierarchy

Source: BEHRAD BAGHERI, NSF I/UCRC for

Intelligent Maintenance Systems (IMS)

292

64
Asset Management training course -
Institution of Mechanical Engineers

CYBER SECURITY
Cyber crime

Information Denial of Trojan

Hacking E-mail
theft service attack
Passive: Active:
• Eavesdropping • Blocked service (known or unknown)
• Traffic pattern analysis • Spoof (fake sender)
• Footprint test to detect installed software • Modify message
• Replay packet again to gain access

293

CYBER SECURITY

What needs to be in place

Passwords

Separate networks

Limit physical access

Limit connectivity

Port blocking

Encryption

Update

294

65
Asset Management training course -
Institution of Mechanical Engineers

WHY DO DIGITAL TRANSFORMATION

STRATEGIES FAIL?

Digitalisation is a project.

Idea Do Operations
Initiate, Using Handover,
Innovate Digitalisation Use

A typical digital innovation process

295

WHY DO DIGITAL TRANSFORMATION

STRATEGIES FAIL?

Think about what happens offshore:

Difficult to
Lots of
Shift begins – Paper based Poor access Shift ends -
systems &
2/4, 3/3 etc. systems internet/WiFi information, handover?
devices
and find it

296

66
Asset Management training course -
Institution of Mechanical Engineers

WHY DO DIGITAL TRANSFORMATION

STRATEGIES FAIL?
What is our Digital Transformation strategy trying
to fix?

Carry out Document

See a fault
work order Task

Get Data
Report fault
information Created

Create Get Data

notification notification Analysed?

297

WHY DO DIGITAL
TRANSFORMATION STRATEGIES
FAIL?

Source: A Guide to the Project Management Body of Knowledge, pg

298

67
Asset Management training course -
Institution of Mechanical Engineers

WHY DO DIGITAL TRANSFORMATION

STRATEGIES FAIL?

We should go this way.

Operation
Idea Progress
s
Using
Initiate, Business
People &
Innovate Case &
Tools
Strategy

299

REVIEW OF KEY TOPICS

What are some of the new technologies you

could investigate for your business?

• IoT, IIoT
• Data analytics
• Artificial intelligence, digital twin
• Self aware machines
• Cyber security

Integrate technology into your

business, only when it helps
achieve the objective

300

68
Asset Management training course -
Institution of Mechanical Engineers

The LEGO Group will continue to accelerate its strategic

investments in product innovation, retail channels,

DIGITAL STRATEGY production capacity, digitalization, and

sustainability to drive in-year and long-term growth.

Strategy
Example: LEGO
Manufacturing, sales and

Capability
distribution, design

People Structure
New business incubator
Skills exist to lead new
product development
Build a community
Use the expertise outside the
organisation

Rewards Processes
Allow customers to design
products
The highest voted design will
be made
1% revenue to the designer
Culture, Performance, Results

301

PAUSE FOR REFLECTION 2

min

• Key Learning Points

• Strategy alignment determines effectiveness.
• Leadership and workplace culture help realise
organisational value.
• Leadership and commitment from all managerial
levels is essential for successfully establishing,
operating and improving asset management within
the organisation.

• This includes:
1. PEOPLE: clearly defined roles, responsibilities and
authorities; ensuring that employees are aware,
competent, and empowered;
2. COMMUNICATION: consultation with employees and
stakeholders regarding asset management.

302

69
Asset Management training course -
Institution of Mechanical Engineers

“PAUSE FOR REFLECTION”

303

IMPLEMENTATION ISSUES,
CHANGE AND RISK
• Risk assessment and management of change
• Culture change
• Organisational and people requirements
• Auditing and assurance

RISK

Asset Management Policy, Strategy, Objectives & Planning

09
304

70
Asset Management training course -
Institution of Mechanical Engineers

THE SOCIAL DILEMMA

Driverless cars
We are making premeditated decisions that have safety, environment and cost
implications every day in our business.
1 - Can you stand by your decision?
2 - Do you shut down for maintenance or keep running to make more production?

HOW DO YOU MANAGE THIS RISK?

The ethical dilemma of self-driving cars - Patrick Lin

https://www.youtube.com/watch?v=ixIoDYVfKA0&t=240s

305

RISK MANAGEMENT

For maintenance and facilities engineers, risk management can be

anything that prevents a failure in the facility.
• A risk-based maintenance approach allows organisations to
evaluate the criticality and the consequence of potential failures
against the likelihood of the event happening.
• These scores are ranked and works can be prioritised according to
the severity of the risk.
• Risk-based maintenance (RBM) prioritizes maintenance resources
toward assets that carry the most risk if they were to fail.
• It is a methodology for determining the most economical use of
maintenance resources.
• This is done so that the maintenance effort across a facility is
optimized to minimize any risk of a failure.

306

71
Asset Management training course -
Institution of Mechanical Engineers

RISK BASED
MAINTENANCE
Risk Risk Analysis Risk Treatment
Identification
Consequence
of Failure

Re-
Collect Rank Evaluate Build Record &
RISK Evaluate
Data Risk Risk Plan Report
& Mitigate

Probability of
Failure

Reassess

307

MANAGEMENT OF
CHANGE (MOC)
Management of Change (MOC) is
a systematic approach to dealing When is MOC Needed?
with organizational change • Changes in Equipment Design
• The goal of this approach is to safeguard • Changes in Operating Procedures
workers from potential harm during the
• Changes in Inspection and Test Maintenance
crucial period of transition.
Procedures
• Management of Change can be implemented
• Facilities Changes
in any organization, but it is mandatory for
industries dealing with certain chemical • Temporary Changes
hazards. E.g. OSHA, EPA, COMAH,

Hazard recognition is the most important aspect of successful

MOC implementation.

308

72
Asset Management training course -
Institution of Mechanical Engineers

RELIABILITY LEADERSHIP

Leaders manage risk and culture to achieve high performance

LEADERSHIP is a leading
If you do not manage indicator of CULTURE.
RELIABILITY CULTURE, it
manages you, and you CULTURE is a leading
may not even be aware of indicator of
the extent to which it is PERFORMANCE.
happening.
Focus on LEADERSHIP and
Adapted from Edgar H. Schein CULTURE to achieve high
PERFORMANCE.

309

POLICY,

CULTURE STRATEGY

What is the first thing that pops in your mind

when you hear the term ‘corporate culture’?
“It’s how we do things around here." Source: McKinskey organisation

But what else?

Define the culture

Develop the culture that supports the
goals of the organization and will deliver
the asset management objectives

310

73
Asset Management training course -
Institution of Mechanical Engineers

CULTURE

Culture can be defined as:

• an evolving set of collective beliefs, values and attitudes, a key component in
business, has an impact on the strategic direction of business.
• influences how we manage decisions in all business functions in the
manufacturing process of production.
• unique for every organisation and one of the hardest things to change.
Implementation requires a culture receptive to changes, improvement-based
motivation both on a personal and an organisational level, people willing to get
involved and understand – and later implement – a particular group of principles.

It all comes back to leadership

311

CULTURE

4 Key areas to enable cultural change:

Make changes
Identify the to foster the
Identify the Review and
people involved cultural
issue monitor
and their needs environment
required

• Leadership
• Organisational values
• Organisational structure
• Employee satisfaction - Competence Management, empowerment

The Cultural Web, developed by Gerry Johnson and Kevan Scholes in 1992, provides
one such approach for looking at and changing your organization's culture.

312

74
Asset Management training course -
Institution of Mechanical Engineers

CULTURAL WEB 1. Analysing the

culture as it is now

2. Analysing the
culture as you want
it to be

3. Mapping the
difference between
the 2

4. Prioritise changes,
and develop a plan
to address them
From "Fundamentals of Strategy" by G. Johnson, R. Whittington, and
K. Scholes. Published by Pearson Education, 2012.

313

ALIGNING YOUR ORGANISATION'S Think

CULTURE WITH STRATEGY about your
1. Analysing the culture as it is now business
What is working, what isn't working, and what needs to be changed.
Stories – The past events and people talked about inside and outside the company.
Who and what.
Rituals and Routines – The daily behaviour and actions of people that signal
acceptable behaviour. What is expected to happen in given situations, and what is
valued by management.
Symbols – The visual representations of the company including logos, how plush the
offices are, and the formal or informal dress codes.
Organisational Structure – both the structure defined by the organisation chart, and
the unwritten ones.
Control Systems –ways that the organisation is controlled: financial systems, quality
systems, and rewards.
Power Structures – The pockets of real power in the company. This may involve one
or two key senior executives, a whole group of executives, or even a department.
The key is that these people have the greatest amount of influence on decisions,
operations, and strategic direction.

314

75
Asset Management training course -
Institution of Mechanical Engineers

CULTURAL WEB

2.Analysing the culture as you want it to be

With the picture of your current cultural web

complete, now's the time to repeat the process,
thinking about the culture that you want.

Starting from your organization's strategy, think

about how you want the organization's culture to
look, if everything were to be correctly aligned,
and if you were to have the ideal corporate
culture.

315

CULTURAL WEB

3. Mapping the Differences Between the Two

Now compare your two Cultural Web diagrams, and identify the differences
between the two. Considering the organisation's strategic aims and
objectives:

• What cultural strengths have been highlighted by your analysis of the

current culture?
• What factors are hindering your strategy or are misaligned with one
another?
• What factors are detrimental to the health and productivity of your
workplace?
• What factors will you encourage and reinforce?
• Which factors do you need to change?
• What new beliefs and behaviours do you need to promote?

316

76
Asset Management training course -
Institution of Mechanical Engineers

CULTURAL WEB

4. Prioritise Changes, and Develop a Plan to Address Them

Implementing cultural changes is not simple: it involves re-moulding values,
beliefs and behaviour, and it's a major change management challenge,
taking a great deal of time and hard work from everyone involved.

By providing a framework for analysing the current culture, and designing

changes, Johnson and Scholes' Cultural Web provides a good foundation for
the difficult business of changing organizational culture.

Using it, you can create a cultural environment that encourages success,
supports the organization's objectives and, all-in-all, makes for a better
place to work.

317

CULTURE

A Motivated workplace
3 Human cravings:
1. Freedom to make decisions on their own
2. Opportunity to build expertise at some activities
3. Participation in an effort that is larger than the task at hand

7 Fundamental Aspects of
Corporate Culture

318

77
Asset Management training course -
Institution of Mechanical Engineers

CULTURE
7 Fundamental Aspects of
Corporate Culture

Source: The Power of

Company Culture, Chris Dyer

319

POLICY,
STRATEGY
STAKEHOLDERS

Identify the Key Stakeholders and their agendas

A roadmap will not work without the support of the people.

How many different types of

stakeholders can you name, and
their motivations?

For example – the go getter.

320

78
Asset Management training course -
Institution of Mechanical Engineers

STAKEHOLDERS
Personality types
Understand yourself and others:

you’ll learn what really drives,

inspires, and worries different
personality types, helping you build
more meaningful relationships.
List in order the strengths you think
you possess from highest to lowest.
Now find out which ones you actually
possess
Link

https://www.16personalities.com/free-
personality-test

321

STAKEHOLDERS

How do you identify different stakeholders?

In 2015, CEB (The Corporate Executive Board Company) published
research identifying 7 types of stakeholders within an organisation.
What percentage does each of A, B, C make up?
1. 2. 3. 4. 5. 6. 7.

Go
getter
Teacher Sceptic Guide Friend Climber

Mobilisers Talkers Blockers

A. B. C.

322

79
Asset Management training course -
Institution of Mechanical Engineers

STAKEHOLDERS

How likely is
each of them
to be on
board?

323

PEOPLE
Ideas?

How do you win them over?

Present
cost of
Prepare doing
concessions nothing
for blockers
Identify
negotiables

Get
mobilisers
support

324

80
Asset Management training course -
Institution of Mechanical Engineers

PEOPLE

LEARNING STYLES
Ideally we all want to be in a
growth mindset.
So let’s look at how to learn if we
are fixed mindset, and the best
way to get going if we are in either
mindset.
VARK four learning styles:
1. Visual,
2. Auditory,
3. Reading/writing preference,
4. Kinaesthetic

325

PEOPLE

LEARNING METHODS LEARNING PRINCIPLES

A learning method is a specific process or learning 1. I craft myself consciously.
activity; while a learning style refers to the type of 2. I can learn anything, anytime.
learning involved in the activity
3. Learning happens outside the classroom.
Self Directed learning –
4. Learning is connected to the environment.
• Self motivation
5. Learning is meaningful.
• Self management
• Self monitoring 6. Learning is fun!

• Self modification 7. Learning involves changing my brain.

Source: The Self-Directed Learning Handbook by Maurice 8. I integrate failure.

Gibbons 9. I take responsibility for my own learning.
10. We are all learners.

Developed by the Alternative University of Bucharest

326

81
Asset Management training course -
Institution of Mechanical Engineers

PEOPLE

• This leads to a cycle of good fortune.

• Resulting in solidifying company priorities, values and image.
• People want to return to work each day
• Attract good people and keep them.

Result = Good company culture

327

CHANGING TEAM
DYNAMICS
If a change, or improvement to team dynamics or employee satisfaction is
required, a few recommendations might include:
• A change of organisational structure, or reassignment of personnel.
• Team development or personality workshops designed to address specific work or
team performance issues.
• A cultural change program to introduce new types of attitudes and behaviours to
the organisation’s norms.
• New processes, tools, or technology
• Clear job descriptions
• Integration of TPM activities
Above all, communication is key.

328

82
Asset Management training course -
Institution of Mechanical Engineers

AUDITING AND
ASSURANCE
ISO55001 Clause 9: Performance evaluation
Monitoring and evaluating the performance of assets, asset management and
the asset management system against objectives ensures the desired outcomes
are being achieved effectively.
9.2 Internal audit
• On a regular basis the organisation is to examine and report on its own asset
management system effectiveness, the operation of its processes, the
resulting performance against the respective standards it has set itself
9.3 Management review
• a review of the suitability, adequacy and effectiveness of the management of
asset management, i.e. the successfulness of the asset management system
at delivering its objectives

• Don’t forget the external audits if you get accredited!

329

NOW WHAT?
Do you want to:
•Save money
•Improve safety
•Be more predictable
•Reduce stress
•Have a happier life…..

How can you become this person?

What are your 3 key steps?

330

83
Asset Management training course -
Institution of Mechanical Engineers

1. Set up the support:

• Leaders: provide the vision and set goals
• Operators: provide basic care and condition monitoring
3 KEY STEPS TO • Maintenance and Engineering: support operations with
MASTERING more advanced problem detection and problem solving
MAINTENANCE methods
AND 2. Do the right things:
RELIABILITY. • Maintenance techniques, RCM, TPM, RBM methods
3. Embrace and utilise new technology to improve
CBM
• IoT, AR, predictive and condition-based maintenance tools

Project Engineering Management Ltd ©2022

331

PAUSE FOR REFLECTION

• Key Learning Points

Remember, Transformation is about people
• Motivation, formation of teams, changing mindset
and culture.
• Leaders must establish a clear direction.
• Establish metrics
• Culture must allow ideas to be generated,
information to flow
• Tools need to be made available to the teams in 2
your organisation and partners. min

• Questions to consider:
1. What are you going to change?

332

84
Asset Management training course -
Institution of Mechanical Engineers

“PAUSE FOR REFLECTION”

333

COURSE SUMMARY

10
334

85
Asset Management training course -
Institution of Mechanical Engineers

ASSET MANAGEMENT

Asset management is all about utilising assets to

deliver value based on the objectives of the
organisation.

BS ISO 55000 Asset management — Overview, principles and

terminology: covers the concepts, principles and terminology
relating to this generic definition of good practice in the optimized
management of physical assets.

335

ASSET MANAGEMENT
• to provide a thorough understanding of all aspects of the management of
physical assets to those who have responsibility for the delivery of company
objectives associated with the effective:

ASSET MANAGEMENT PRINCIPLES

Asset Management Policy, Strategy & Planning

Managing Asset Life Cycle Decisions and Activities

IMPROVED
PERFORMANCE

ACQUIRE
DESIGN SELECT OPERATE MAINTAIN DISPOSE
INSTALL

Finance and Business Impact Assessing and Managing Asset

Management Risks

336

86
Asset Management training course -
Institution of Mechanical Engineers

ASSET MANAGEMENT

The beginning
A key part of asset management is knowing what the organisation wants to
achieve – what is the reason for going where it is going. The asset management
approach is applied in a prioritised way and looks at optimising the whole system.
• Policy
• Strategy
• Plan

We must view the plant as a system which requires excellence in teamwork, and
application of the reliability process –

we design, buy, store, install, operate, and maintain for reliability and
excellence.

337

ASSET MANAGEMENT
LIFE CYCLE DELIVERY

Acquisition Maintenance
• Cost • Reactive
• Information • Preventive
• Hierarchy • Predictive
• RCM
Operation
• Fault and incident response Disposal/Refurbishment
• Metrics • Environment
• Land rehabilitation
• Residual asset value
• Continued service delivery

338

87
Asset Management training course -
Institution of Mechanical Engineers

ASSET MANAGEMENT
PEOPLE

So now let’s talk about the heart of the asset management system, PEOPLE.
Structure
• Supervision
• Management
• Leadership
• Organisation
• Competence framework - Training vs competence
Culture
• TPM
• Team dynamics

339

ASSET MANAGEMENT
IT ALL BEGINS WITH YOU.

• So you want to be a low cost producer? How will you contribute?

• You want to minimise your losses? We must focus on all areas of the business:
• You want to optimise your asset utilisation? • Design
• And to assure benchmark performance? • Purchasing/Stores
• Installation/Commissioning
• Operation
Where is your focus?
• Maintenance
It all starts with Leadership
• LEADERSHIP

340

88
Asset Management training course -
Institution of Mechanical Engineers

ASSET MANAGEMENT
CONTINUOUS IMPROVEMENT
Asset management is all about utilising assets to deliver value based
on the objectives of the organisation.

ACT PLAN

CHECK
DO

341

BEST PRACTICE World Class Maintenance

1. Identify and prioritise needs – conduct a review
Becoming world class:
2. Gather data and calculate costs and performance of maintenance

3. Create a supportive plant working environment and SOP’s for

maintenance

4. Develop and implement a maintenance plan

5. Planning and scheduling of PM’s and PdM’s

6. Use technology

7. Incorporate TPM and RCM

8. Evaluate, confirm and sustain the program

342

89
Asset Management training course -
Institution of Mechanical Engineers

ASSET MANAGEMENT
THE STEPS
Or, to put it another way, the steps could be:
• Policy Improvement Policy
Risk and opportunity Strategy
• Identification and review Stakeholders inc.
prioritisation Scope

• Setting objectives
• Maintenance tasks Act Plan
and procurement
• Implement Leadership & People
• Evaluate
• Review Check Do
• Audit Performance Asset information
evaluation Legislation
Monitor Resources – training,
Measure competence, comm’s
Analyse Design, development,
production, service

343

ASSET MANAGEMENT
THE STEPS

It all comes back to what your company deems

as value and what are the objectives.

What does your ‘ideal’ process look like now?

344

90
Asset Management training course -
Institution of Mechanical Engineers

ASSET MANAGEMENT YOUR TURN

YOUR STEPS
What does your ‘ideal’ process look like?

POLICY,
STRATEGY
Act Plan
IMPROVED
LIFECYCLE
PERFORMANCE

Check Do COST RISK

345

THANK
YOU.

+ 44 (0)20 7304 6907 For more information please contact:

training@imeche.org Matthew Laskaj CEng FIMechE
imeche.org/training
matthew.laskaj@imeche.org
/imeche Andy Stevenson CEng FIMechE
/imecheevents Andy.Stevenson@member.imeche.org
/imecheuk
/imecheteam
/showcase/imeche-events-and-training

Copyright: Project Engineering Management Ltd 2022

346

91
 Contact details
For any queries or bookings, please contact our Customer Service Team
using the following contact details:
T: +44 (0)20 7304 6907
E: training@imeche.org
W: imeche.org/training

Improving the world through engineering 3