Accounting for Risk in Your Asset Management Strategy

Transcription

1 Rx Whitepaper Executive Summary If yur asset management strategy is nt risk-based, yu may be spending mney n symptms f prblems instead f the rt cause f yur lsses. Fr example, ne cmpany withut a cmplete asset management strategy in place experienced a limiting factr that impacted prductin capacity by 25% (t the tune f $30 millin), yet had n cntrl plan in place t address the cause, nr the key perfrmance indicatrs and analytics t even knw the prblem existed. A risk-based asset management system will help yu apprpriately priritize hw yu spend time, mney and materials fixing the mst critical prblems, prvide the infrastructure fr cntinuus imprvement and help yu meet yur crprate business bjectives, including regulatry cmpliance. This paper ffers an verview f the three key elements f an asset management strategy and presents the six steps t building a rbust, risk-based asset management prgram. CONTENTS PAGE 1: Executive Summary Backgrund Intrductin PAGE 2: Frnt End Lading Apprach t Asset Management PAGE 3: The Asset Management Plan PAGE 4-10: The Six Steps t Risk-Based Asset Management Accunting fr Risk in Yur Asset Management Strategy Backgrund Asset management has evlved significantly as machine technlgy has changed. Until abut 50 years ag, crprate assets were run t failure. Then effrts t reduce breakdwns led t the birth f preventive maintenance. With the inceptin f the jet engine and the cmplexities f equipment that came with it, prbability tables much like thse used in the insurance industry were used t develp this maintenance strategy. The relatinship between age and risk in asset management was brn. Fllwing time-based maintenance, the airline industry nce again drve fr imprvement and frmed the Maintenance Steering Grup. Fault tree lgic and the applicatin f analysis yielded the dawn f reliability-centered maintenance. Tday, with a glbal market, shrinking availability f natural resurces, rising fuel cst and a weakening ecnmy, increasing asset utilizatin and decreasing ttal cst f wnership are standard crprate bjectives. Any rganizatin planning t sustain a viable value stream must ptimize asset perfrmance t survive these tugh business cnditins. The fcus n cntinuus imprvement and Lean events t increase verall equipment effectiveness while lwering life cycle csts is nw cmmnplace but this apprach desn t g far enugh. Faced with the lack f technically qualified peple, an aging wrk frce, and shrinking margins, all industries must cnsider risk when applying resurces t the management f assets. Intrductin t Risk-based Asset Management > Only knwn Internatinal Standard n Asset Management is the British Standards Institute PAS55: 2008 A risk-based asset management strategy cuples risk management, standard wrk, and cnditin-based maintenance t prperly apply resurces based n prcess criticality. This ensures that prper cntrls are put in place and reliability analysis is used t ensure cntinuus imprvement. An effective risk-based management system includes an enterprise asset management r resurce slutin that prperly catalgs asset attribute data, a functinal hierarchy, criticality analysis, risk and failure analysis, cntrl plans, reliability analysis and cntinuus imprvement. This paper utlines the develpment and applicatin f risk-based management t include life cycle strategies Life Cycle Engineering, Inc. 1

2 Risk-based Asset Management Prcess Frnt End Lading Apprach t Asset Management As in capital imprvements and prject management, frnt end lading is a pwerful methdlgy that helps yu facilitate change early in the life cycle withut having a large impact n life cycle cst. Thugh it ften adds a small amunt f time and cst t the early prtin f a prject, these csts are minr cmpared t the alternative impact n ttal cst f wnership. Yu can use frnt end lading t develp yur asset management plan as a part f yur crprate bjectives. There are typically fur stages in frnt end lading, with a gate between each that will nt be passed thrugh until milestnes are all met. T craft an asset management plan, the stages wuld be Cnceptual Idea, Feasibility Study, Design and Implementatin, as illustrated belw Life Cycle Engineering, Inc. 2

3 The Asset Management Plan An asset management plan is created t meet yur crprate bjective pertaining t asset management plicies and strategies relating t the prcess flws, business prcesses, and infrastructure t supprt asset sustainment, utilizatin, perfrmance measures and cntinual imprvement. Cnceptual Idea: Determine the backgrund and bjectives, such as interactin with ther gals, and prcedures and plans. Feasibility Study: This study shuld utline the planning perid, stakehlder interest, accuntability and respnsibilities fr asset management, and details f asset management systems and prcesses. Design: The design stage includes a descriptin f asset cnfiguratin, identificatin f assets by categry, justificatin fr assets, prpsed levels f service, custmer-riented perfrmance targets, ther asset perfrmance targets, and justificatin fr target levels f service. Implementatin: The implementatin stage puts the prject plan in mtin, including resurces, milestnes and budgetary cnstraints, asset age and cnditin. Additinally, there shuld be a fcus n detailed infrastructure perfrmance measures. The Cmpnents f an Asset Management Plan Asset Operatin Plan: The peratin plan defines the bundary cnditins, startup and shutdwn cycles, permissible perating ranges and methds, perating campaigns, and specific prcedures fr nrmal and abnrmal perating mdes Asset Risk Plan: The risk plan defines the risk identificatin prcess, risk analysis, risk mitigatin, cmmunicatin plan, and the use f the risk management table Asset Maintenance Plan: The maintenance plan defines the prcess f mapping failure mdes t failure detectin methds, cntains rebuild / refurbishment criteria, assigning crafts and trades, determining frequency, establishing duratins, and level lading tasks created frm the cntrl plan Life Cycle Engineering, Inc. 3

4 The Six Steps t Risk-based Asset Management 1. Build the Enterprise Asset Management database (a fur phase apprach): Design (Functinal Requirements Specificatin) Business Prcess Review Review yur existing business prcesses and wrk flws against best practice Functinal Requirements Create a crss-functinal team t determine the bjectives f each functinal department and define thse specificatins that are required t supprt the value stream. This table prvides an example f the different functinal areas and the team members that need t help define requirements Life Cycle Engineering, Inc. 4

5 Selectin Specificatins fr RFP The next step is t cnvert the engineered specificatins defined in the functinal requirements dcument int cntractual language t be used t prvide sftware vendrs the request fr prpsal. Demnstratins Select the tp tw r three prpsals and ask the vendrs t demnstrate hw their slutin adheres t the engineered specificatins and functinal requirements. Grading Create a table that will help yu evaluate and cmpare the slutins based n cst, perfrmance, reputatin, etc. Implementatin Due t the duratin f the implementatin, the integratin f wrkflws, business prcesses, resurce requirements, mdule mapping, etc., use bth a Gantt chart and prject management plan t ensure all milestnes are adequately captured and all resurces are clearly accunted fr. Database Develpment This is prbably ne f the mst verlked cmpnents f a successful riskbased asset management system. Fr yur system t meet crprate bjectives, data fr each asset must be clearly captured based n its type and required attribute data. Cllectin Data can be cllected manually, with the aid f electrnic media, and even digital imagery Life Cycle Engineering, Inc. 5

6 Catalging It s critically imprtant t create a functinal hierarchy. The hierarchy will prvide the level t which wrk rders are assigned, bills f material are written, and failure analysis is cnducted. It als allws fr rll ups t cst centers, prviding ttal cst f wnership and budgetary analysis. Here s an example: > Taxnmy derived frm ISO 14224: Life Cycle Engineering, Inc. 6

7 Criticality Analysis The next step is t create an analysis f yur equipment and the significance f failure t wrk flws, business prcesses, value stream, etc. As the example belw illustrates, this analysis includes such cnsideratins as envirnmental impact, safety, prductin, r reputatin issues assciated with the rganizatin. System Test & Validatin Once yu have cllected the data, created the functinal hierarchies and entered all data int yur system, test the system t make sure it meets the functinal requirements yu identified in yur RFP. Custmizatin Reprts / Queries Evaluate whether the canned reprts supprt yur KPIs. Then develp any custmized queries r reprts yu need t manage yur assets. Standard Operatin Prcedure This dcument is nt the vendr-supplied User s Manual. Develp a custmized prcedure that clearly utlines the integratin f wrk flws and business prcesses t the applicable mdules. Training Develp training, bth frmal intrductry training and interactive repetitive training. Bth are necessary t reinfrce the methdlgy and applicatin. Change Management Implementing a new system successfully requires a prcess f changing the culture t accept and execute, such as the ADKAR mdel utlined belw: 2009 Life Cycle Engineering, Inc. 7

8 2. Risk and Failure Analysis Risk analysis Identifying risk is the first step in risk management. Yur analysis needs t include ptential surces f risk, the severity if uncntrlled, and the likelihd f ccurrence. An example f a simple risk table is presented belw. Thse items in the A categry have the greatest risk and therefre receive the mst attentin. Failure analysis The next step is t cnduct sme frmal failure analysis t determine the predminant failure mdes that will be addressed based n risk ranking. The cmplexity f the analysis will depend n the criticality analysis. An example wuld be a Reliability Centered Maintenance apprach t thse mst critical. This methd usually requires a crss-functinal team and is fairly intrusive. > Standards such as SAE JA1012 prvides a guide t RCM Then, a simplified failure mde and effect analysis can be created fr the next lgical gruping such as the ne presented belw. > FMEA Standards such as: MIL-STD-1629 SAE J1739 SAE ARP5580 AIAG FMEA-3 VDA V4 IEC Life Cycle Engineering, Inc. 8

9 RCM vs. SFMEA 3. Risk Ranking The risk ranking is a prduct f the risk pririty number frm the failure analysis and the criticality analysis. This ranking enables yu t deply crprate resurces t the assets and predminant failure mdes that have the greatest risk f impacting crprate bjectives and the prcess value stream. This prcess, alng with the failure and risk analysis, allws fr a risk-based inspectin methdlgy such as that depicted belw: > Risk-based inspectin methds are utlined in ASME PLC Life Cycle Engineering, Inc. 9

10 Affiliatin f Risk Ranking Reliability Centered Maintenance Mst intrusive t define asset care task nly a small percentage f assets Simplified Failure Mdes and Effect Analysis Still risk based but nt as intrusive mst assets meet this OEM recmmended tasks nt failure based but meet regulatry and warranty requirement if risk desn t justify failure analysis Run t Fail n planned asset care task criticality and risk justify 4. Cntrl Plans Cntrl plans cnsist f tasks that will be accmplished t mitigate r eliminate the risk f failure by targeting hw equipment is maintained and perated. Examples f cntrl plans relating t maintaining include a preventative maintenance task such as lubricatin, deplyment f a predictive technlgy such as ultrasnic testing, installing a cmpnent using a precisin installatin prcedure, r replacing a cmpnent using a bill f material. Examples f cntrl plans relating t perating include prcedures detailing start-up, shut-dwn, lay-up, and change-ver. As in the Lean principle f standard wrk, these must be defined and must be perfrmed repeatedly in the same manner. Variatins in these plans will create risk. > Prbability and statistics fr reliability are utlined in the American Sciety fr Quality s Bdy f Knwledge fr Certified Reliability Engineers (ASQ.ORG) 5. Reliability Analysis Measures must be established that define the key perfrmance indicatrs supprting the value stream and crprate bjectives. Once the cntrl plans are defined, planned, scheduled, resurced, and then executed, histrical data can then be cupled with wrk rder histry, failure cdes, material usage, etc. and then utilize prbability mdeling, such as Weibull distributin, t gain an understanding f where the limiting factrs reside Life Cycle Engineering, Inc. 10

11 6. Cntinuus Imprvement Utilize tls such as rt cause analysis t ensure triggers are clearly and frmally defined, and define a prcess t implement crrective actins. An example f an effective rt cause analysis wuld invlve the fllwing: A knwledgeable reliability engineer with gd facilitatin and caching skills A crss-functinal team with specific insight int the prblem Time t address the prblem (typically 2 t 12 days) Agreement frm all stakehlders t determine and crrect the prblem Discipline t fllw and cmplete the prcess The crrect tls and prcesses fr each prblem DMAIC is anther methd familiar t Lean practitiners t ensure a frmal prcess is in place t cntinually identify limiting factrs and then place effective cntrls in place t mitigate r eliminate the risk. Cnclusin A risk-based asset management strategy prvides the infrastructure fr cntinuus imprvement and insures that the time, mney and material used t address yur limiting factrs are spent targeting the verall risk t meeting crprate bjectives. This strategy has the added benefit f insuring regulatry cmpliance. Fr mre infrmatin abut creating a risk-based asset management prgram, cntact Mike Pland, Directr f Asset Management Services at Life Cycle Engineering. Yu can reach Mike at mpland@lce.cm r ext Life Cycle Engineering, Inc. 11