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Building block for asset management

1 July 2013 – What is the difference and link between physical asset management and maintenance management? In most cases, senior management and asset management specialists will use the words maintenance management and asset management in the same sentence and refer to the same topic. In actual fact, maintenance management is a subset of asset management.

Says Adriaan Scheeres, CEO of Pragma, “According to the new ISO 55 000 standard, maintenance management is the combination of all technical, administrative and managerial actions during the life cycle of an item intended to retain it in, or restore it to, a state in which it can perform the required function. Asset management, on the other hand, is the optimal lifecycle management of physical assets to achieve and sustain the stated business objectives.

“More and more companies ask the question: What effort and time should I spend on my maintenance management programme and what results should be obtained by when? It’s the good old return on investment (ROI) question. I don’t know what the right number is, but I can at least point you in the right direction.  The diagram below depicts the life cycle of an asset.  I want to draw your attention to stage six.

Asset graph

“Stage six, operation and maintenance, can potentially contribute to as much as 90% of the total life cycle cost. The greatest potential of reaping increased ROI is thus in this stage provided that activities in this stage are well managed and optimised. Other benefits include increased uptime, due to reliability and maintainability and improved reliability through better preventative maintenance and maintainability though better planning and scheduling. Another advantage is lower risks due to asset care plan development and lower costs due to all aspects of maintenance management. The ultimate benefit is a more efficient asset which leads to a profitable organisation.”

Some of the reasons why the efforts to implement and run maintenance management programmes fail include a lack of vision i.e. not knowing how to break the negative spiral of reactive breakdown maintenance. Says Scheeres, “Another factor is a lack of commitment or failure to justify a big enough programme with dedicated resources to implement a maintenance management programme. Lack of procedures and methodology also play a role such as redesigning the wheel and not using available knowledge and experience of best practices, as does lack of support. Finally there is lack of consistency or the stop-start syndrome, due to changing priorities in companies.”

The risks that companies run when not implementing a well-structured maintenance management programme include poor production or service delivery, the need for additional standby equipment to maintain output, high operational and maintenance costs (energy, spares, labour, overtime, waste), a shorter life cycle and more frequent replacement of assets and lastly the risk of accidents, which result in insurance claims and legal battles.

Scheeres adds, “This is surely not where we want to be. With excellence in maintenance management, the ultimate outcome is to enable management to make decisions in support of improving availability, reliability and utilisation of assets.”

The roadmap (steps) to excellence in maintenance management is to establish a maintenance management steering committee, which consists of senior management members with the responsibility to review all the elements of the maintenance management systems and procedures.  Scheeres explains, “Too often senior management does not get involved with maintenance management activities and therefore also do not understand the benefits that can come from an effective maintenance management programme. The committee also has the responsibility to make strategic decisions in support of the implementation effort. One needs to set a maintenance management baseline – an assessment needs to be performed to agree on a base line for maintenance management and the subsequent phases of improvement.”
Companies need to define a maintenance management strategy, defining what they want to improve in the maintenance management system. Scheeres adds, “For example, implement a CMMS, train artisans, move from reactive to pro-active maintenance, establish a formal MRO store, improve plant availability, ensure legal compliance and plant safety, involve operators in maintenance, do structured problem solving to avoid repeat breakdowns, introduce condition monitoring, etc. The next step would be to build an asset register – this is the first and most important building block of any maintenance management programme. This acts as the repository for all data and information associated with an asset during its life cycle. An organisation must have a detailed understanding of what assets they have, where they are, what the condition of the assets is and what the current value of each asset is.”
Companies also need to develop a set of asset care plans per asset. “This will enable the maintenance team to plan for resources needed to maintain an asset. These asset care plans must be based on RCM principles and on high operational and maintenance costs (energy, spares, labour, overtime, waste). Furthermore, establish order and control in the MRO warehouse – this will ensure that all important tactical spare parts and material are available when needed,” says Scheeres.

Another step would be to implement a planning and scheduling system and process, by planning the various resources for required jobs and then scheduling when it will be done in support of the asset strategy. “Finally, provide reports and business intelligence, which will make sure that the maintenance manager can make accurate decisions in support of asset availability, reliability and utilisation. Once these elements are in place and have been running for at least one year, the committee can start thinking of venturing into the next step of the roadmap towards asset management.”          
Scheeres concludes, “Once the maintenance management building blocks are in place, we can leverage them to reduce costs and downtime and drive uptime up. We can therefore strive towards Zero unplanned Stops (ZupS) as well as asset management for sustainability which ensures the long term sustainability of assets at the optimum whole life costs (WLC).”