The maintenance of asset management: maximising value of existing assets
15 November 2016
The global economic downturn of the past few years has put additional pressure on asset intensive companies to pull more value from their existing assets. Increasingly, these companies view asset management as a competitive advantage and it now occupies a robust position in management cultures. Good asset management will mean more effective performance from equipment. An integral part of that management programme is the maintenance to ensure performance is optimised and failures minimised.
The growing importance of quality asset management and associated maintenance was brought to the fore a few years ago with the introduction of ISO55000. This standard was a direct replacement for PAS55 which had been widely adopted by industry.
Maintenance affects all aspects of business effectiveness and risk, safety, environment, energy efficiency, product cost and quality and customer service. Previously, the main focus of a maintenance department was to carry out repairs when the asset was not functioning. Making sure that a failure was resolved rapidly and effectively was the core business of maintenance. This is still a prerequisite for maintenance, but it is not enough in the context of overall asset management. As organisations began to embrace asset management a whole new strategy was required to reduce repetitive failures and to become more effective and efficient. Reliability and efficiency of the asset was key. Many organisations moved to embrace techniques such as RCM (Reliability Centred Maintenance) and TPM (Total Productive Maintenance).
Reliable and efficient production
The primary goal of any business is to produce reliably and efficiently at the lowest possible cost. In this context, management often see the primary objective of maintenance as being equipment fixers, to respond to equipment needs, especially emergencies, and to keep it in good operating condition. However, in a business context, maintenance alone is not the goal. Any equipment-intensive business must have reliable equipment performing functions that lead to its business goals. Maintenance contributes to equipment reliability through the use of proven actions, tools, techniques, and people, as part of the overall asset management strategy.
As with any emerging technology, development is inevitable, hence the scope of asset management is no longer simply maintenance, but also involves operations. From the perspective of Total Cost of Ownership (TCO), companies are looking at the whole life cycle of the asset. TCO is critically affected by the ‘intrinsic or built-in’ reliability, maintainability and safety of assets. Therefore, the role of the engineering department is crucial. Companies need to guarantee the reliability of the intervention, the technique, the function and the lifespan of the assets. But, they also need to assure the reliability of the policy and strategy. Many financial, safety and environmental disasters can be traced to an inconsistent or absent asset management policy and strategy. Asset management plays an increasingly active part in realising the company’s strategy.
Managing assets strategically involves every function in the plant working towards the same goals. One cannot emphasise this enough as every department has an impact on the operation. For example, operations and maintenance maximise the capacity of the equipment by working closely. Purchasing has its main goal as operating reliability, with cost as an important but secondary goal, HR aims to employ people most suited to the work positions. Engineering is based on total life-cycle value, including production capability, maintainability, operability, and minimum total cost per unit produced.
In tandem with this must be a continuous improvement process, that looks forward a minimum of five years, which looks at maintenance, operations, engineering, and management. This improvement plan must be a live document which is reviewed and updated frequently. Without these updates the plan will become stale and outdated as the business operation evolves.
However, to complicate the situation a little, one single solution will never cover all requirements. Asset management means getting the right methods in place, understanding the complexity of the situation, providing a framework to harness the commitment of the total workforce, and connecting all activities to the key business drivers. It needs a clear vision, outstanding communication skills, in-depth knowledge of modern tools and techniques, and extreme tenacity.
Co-operation of maintenance and operations
To achieve the best and most efficient asset management regime it is essential that all parties and especially maintenance and operations co-operate. This co-operation helps to ensure equipment is operated correctly and released on time for maintenance. Operating personnel can provide a significant source of information on impending difficulties. Operators will visit their equipment on a regular basis. By working with maintenance and communicating simple indicators, such as unusual noise, increased temperature and unusual gauge readings, many impending issues can be identified, thus allowing a proactive approach. This is the most cost effective approach and will yield benefits in terms of yield and quality and increased co-operation.
When prioritising the criticality of equipment, both production and maintenance must be involved in the process. This will allow maintenance and production to see each other as partners. No matter how friendly the atmosphere may become, there will be occasions when maintenance and production will be in conflict. There are times when maintenance has one priority and production has another. Production should have the final say in some cases, but the reasons should be clear. Situation such as this will ultimately result in increased maintenance costs and it is important to understand why. When push comes to shove, production does take precedence over maintenance work as it is production that pays all of our salaries. However, this should be the exception rather than the norm. This is why there should be a clear business strategy that outlines the guidelines for intervention and this strategy must be fully supported by senior management, because it will not work without the support.
Once the business model and strategy have been developed, every group involved sets goals and works toward a combined action plan. The initial action plan is usually aimed at an improved maintenance environment. Once the maintenance begins to be effective, there will be more time to develop a longer-term forward looking improvement strategy. Frequently, part of that strategy will be management of equipment obsolesce. Many operating plants, especially heavy industry, will have equipment made by manufacturers who no longer exist or do not provide support for the equipment. Obsolesce affects almost all equipment types, but especially:
- rotating equipment;
- electrical switchgear;
- control valves and field instruments;
- conveyor systems; and,
- software / control systems.
The improvement plan must consider how these assets will be managed into the future and a clear strategy defined. One such strategy is to allow capital funding for replacement. This may be diverting funding from more productive spending. Bear in mind that even if the original manufacturer no longer exists, or won’t support the equipment, that is not in itself a definitive reason to replace it. However, it must be recognised that continuing to operate obsolete equipment will require a management strategy that reflects the equipment needs. The management strategy should be built around answers to questions such as
- what is cost of replacement in terms of lost production?
- how reliable is the equipment?
- is the reliability reducing?
- what are failures costing?
- will a major failure result in a significant production loss?
- can the equipment be readily maintained?
- are spares available, either original or by reverse engineering?
- can the equipment cope with the existing process conditions?
There are many other factors, unique to the production environment, that should be considered when making any strategic decision. The important point is to keep your assessment wide ranging and try to cover all angles. Once you have all the information the cost of operating the equipment into the future can be assessed. Most equipment can be managed and maintained very effectively long after its obsolesce date.
The best approach is to risk assess each unit and selectively replace the equipment which cannot be safely maintained into the future and set up a strategy to deal with the remaining units.
Bearing in mind that safety and risk management is a fundamental part of maximising asset value and boosting profits it is not the end as far as asset management is concerned. To extract the full value from any asset and maximise its working life, business must ensure that it has the key management principals in place, that consider the working environment of today and also look forward. Their objective must be to maximise return on all assets over their extended lifetime. Asset managers in these situation’s must be able to manage the diverse array of equipment under their control regardless of its complexity.
Author: John Coleman BSc (Hons), MEng, MIEI, MIAM, MI Ref Eng is maintenance facilitator in the Rusal’s Aughinish Alumina Central Workshop. He is a member of the Institute of Refractories Engineers and of the Institute of Asset Managers.
Coleman worked for several years in the construction contract sector as a fitter and supervisor installing and maintaining mechanical equipment. He worked on the construction of Aughinish Alumina Ltd, the largest construction site in Europe at the time (1978-1983). He was subsequently employed by Aughinish Alumina Ltd on completion of construction as a fitter in the maintenance workshop prior to being promoted to a staff engineering role. Coleman regularly speaks on maintenance at conferences in Ireland and abroad.http://www.engineersjournal.ie/2016/11/15/maintenance-asset-management/http://www.engineersjournal.ie/wp-content/uploads/2016/11/Asset-Mgmt-FEAT1-1024x580.jpghttp://www.engineersjournal.ie/wp-content/uploads/2016/11/Asset-Mgmt-FEAT1-300x300.jpgMechawards,Engineers Ireland,management,MEETA,Rusal Aughinish