Delivering Sustainable Reductions in Infrastructure Costs. An Introduction

Delivering Sustainable Reductions in Infrastructure Costs An Introduction

Delivering Sustainable Reductions in Infrastructure Costs Contents Introduction to AMCL Overview Our Ethos Our Provenance The Services AMCL Provides Overview Developing People Developing Organizations Delivering Improvements Core Skills and Capabilities Business Architecture, Strategy and Planning Life-Cycle Investment Decision-Making and Optimization Life-Cycle Delivery (Acquisition,, Operations and Disposal) Asset Information Strategy, Standards, Systems and Data Risk and Performance Systems Business Process Review, Re-Engineering and Standardization 2 Copyright 2014, Consulting Limited. All rights reserved

Overview AMCL ( Consulting Limited) is a dynamic consultancy with a world-wide reputation for leadership in Asset thinking and practice. We work with asset intensive and regulated industries to help our clients get a better return on their investment in physical assets. The discipline of helps businesses to achieve their stated objectives in the most cost effective way. It combines engineering and mathematical analyses with sound business practice and economic theory. AMCL has one of the largest teams of dedicated Infrastructure consultants in the world. We work with clients wherever they are based globally and have dedicated operations across Europe and in North America, South America, China, South-East Asia and Australasia. This provides us with an unprecedented global reach in terms of capability and knowledge of current and emerging best practice. Our Ethos Introduction to AMCL AMCL s integrity and professional reputation is based on providing the optimal value to clients via fully independent best appropriate practice guidance and enabling clients to achieve sustainable and optimized improvements in value for money. To achieve this, AMCL s underlying methodologies are always guided by the principles of assuring output performance in a sustainable and economic manner via development of the underpinning capability. Outputs Performing but Unsustainable / Uneconomic Performing Sustainably & Economically AMCL always provides advice that is in the best interests of our clients as we are independently owned and can demonstrate full independence in our approach. Under Performing Promising Other key principles of AMCL s approach include: Capability A criticality and risk based approach to assure that effort, resources and costs are always focused on getting the most bang for your buck. Full alignment with BSI PAS 55 and the emerging ISO55000 standards - AMCL personnel are trained both in terms of the concepts of BSI PAS 55 / ISO 55000 and how to implement them within the boundaries of specific organizations. An integrated and team based approach, working closely with our clients to develop strong, open and frank relationships. Utilizing AMCL s global experience across multiple sectors to establish best appropriate practice for our clients, aligned with their corporate objectives and constraints. Providing advice, guidance and recommendations which are always SMART (specific, measureable, achievable, results-based and time-bound). Identifying appropriate measurements for benefits realization of key deliverables. Establishing an exit strategy and associated knowledge transfer for the development of in-house capability within our clients organizations at the start of any assignment. Our Provenance AMCL s commitment to the professionalization of as a global discipline is peerless. AMCL is a founder member and Patron of the Institute of (IAM) and is heavily involved in the development and definition of Institute guidelines and standards on practice. This has included leading roles in the development of both issues of BSI PAS 55, the IAM Competences Framework, and chairing the committee that produced the IAM Asset Information Guidelines. Following on from the establishment of the IAM Competency Framework, AMCL staff led the development of the IAM s Certificate and Diploma qualifications. AMCL also led the development of the Landscape work undertaken by the IAM to set the strategic agenda globally for Asset, including the definition of capability Copyright 2014, Consulting Limited. All rights reserved 3

Delivering Sustainable Reductions in Infrastructure Costs maturity beyond BSI PAS 55 compliance. AMCL subsequently led the development of the IAM document - An Anatomy, which was utilized as the basis for the Global Forum on and s (GFMAM) 39-subjects based Landscape. One of AMCL s Directors also sits on the board of the GFMAM and another is the current chair of the IAM Patrons Group. AMCL is amongst the first organizations globally that is fully endorsed by the IAM to provide BSI PAS 55 assessment and certification and training. Overview The Services AMCL Provides Richard Edwards, Martin Pilling and Chris Lloyd, three of AMCL s directors, are contributing authors of : Whole-life of Physical Assets (ISBN 0727736531), the world s first comprehensive textbook on Infrastructure. AMCL has extensive experience of infrastructure gained over many years working in the rail, metro rail and utilities sectors, including the provision of network-wide strategic services to numerous asset intensive organizations and industry regulators. Employees are regularly requested to provide presentations at industry conferences and seminars. In order to deliver sustainable reductions in infrastructure costs AMCL supports clients under three key service lines. Developing People Developing Organisations Delivering Improvements Developing People as a discipline is relatively new. AMCL provides a range of training and development programmes aimed at individuals and corporations to fast-track the development of their competence. We were one of the first organizations in the world to have our training courses accredited by the Institute of Asset (IAM). Our Primer Course is suitable for those on their first steps into, covering key principles and introducing both BSI PAS55 and ISO55000. Our Principles Course is for more experienced Asset Managers, and covers the full scope of and an in-depth appreciation of BSI PAS55 and ISO55000. We hold regular public courses across the globe, and can offer bespoke, tailored programmes in your place of work or a location that is most suitable to you. One size does not fit all, and our training programmes can be adapted to suit your needs. Whether you have a small team that is looking to further their understanding and knowledge, or hundreds of new starters that need to quickly get up to speed, we can offer a programme to suit. A1 B1 B3 B5 The Benefits of Asset A foundation course for new entrants to teams The System A detailed work-through the main components of a BSI PAS 55:2008 compliant system for Leaders, specialists and team members Effective Strategies and Plans Essential training for people new to Asset Manager roles on how to develop effective BSI PAS 55:2008 compliant plans Implementing Asset Plans A review of good practice approaches, tools and techniques for lifecycle analysis and whole-life costing, determining costs and budgets, allocating resources and managing work activities across the asset lifecycle for Leaders and team members A2 B2 B4 B6 Introduction to Asset Policy A review of key policy challenges and approaches for senior managers Defining Policy and Strategy A detailed review of policy and strategy identification, development and evaluation for Asset Leaders Building an Organisation A detailed review of the organisationsal, knowledge management, risk management implications of effective for Executives and Leaders Assessing Risk and Performance A review of good practice approaches, tools and techniques for assessing Asset plans and investments 4 Copyright 2014, Consulting Limited. All rights reserved

From London to New York, from Sydney to Jakarta, we have helped organizations and individuals to understand the potential behind reaching excellence in, and have issued more IAM Endorsed Certificates than any other provider. Developing Organizations is an enterprise-wide discipline drawing on the skills, processes and knowledge across the organization. Ensuring organizations implement excellent is of increasing interest and importance not only to the organizations themselves - who stand to save vast amounts of money and to control risks more effectively - but also to regulators and customers who seek best value for money and consistently good output performance both now and for future generations. Risk & Review Asset Strategy & Planning Strategy & Planning Policy Strategy Demand Analysis Strategic Planning Plans Asset Knowledge Enablers Asset Information Strategy Asset Knowledge Standards Asset Information Systems Asset Data & Knowledge Organisation & People Enablers Asset Knowledge Enablers Asset Decision-Making Lifecycle Delivery Activities Decision-Making Capital Investment Decision-Making Operations & Decision-Making Life Cycle Cost and Value Optimisation Resourcing Strategy & Optimisation Shutdowns & Outage Strategy & Optimisation Ageing Assets Strategy Lifecycle Delivery Activities Technical Standards & Legislation Asset Creation & Acquisition Systems Engineering Configuration Delivery Reliability Engineering and Root Cause Analysis Asset Operations Resource Shutdown & Outage Incident Response Asset Rationalisation & Disposal Organisation & People Enablers Contract & Supplier Leadership Organisational Structure & Culture Competence & Behaviour Risk & Review Criticality, Risk Assessment & Contingency Planning & Resilience Analysis Sustainable Development Weather & Climate Change Assets & Systems Performance & Health Monitoring Asset & Systems Change Review, Audit & Assurance Accounting Practices Stakeholder Relations Our Excellence Model (AMEM) is one of the world s leading assessment methodologies, through which we can assess, measure, evaluate and benchmark the Asset capability maturity of an organization. Our model was the first to be fully aligned with the 39 subjects of the Global Forum on and s (GFMAM) Landscape as well as the IAM Anatomy, BSI PAS55, and the emerging ISO55000 standard. The AMEM utilizes a maturity assessment methodology developed over many years and assessment provides evidence for prioritizing areas of opportunity by identifying those which have the maximum business impact. Learning Applying Embedding Integrating Innocent Aware Developing Competent Effective Excellent 1 2 3 4 5 6 Compliance with BSI PAS 55 Beyond PAS 55 Compliance The maturity scale has six maturity states as follows: Innocent Aware Developing Competent Effective Excellent The organisation is starting to learn about the importance of activities The organisation is aware of the importance of the Activities and has started to apply this knowledge The organisation is developing its Activities and embedding them The organisation s Activities are developed, embedded and are becoming effective The organisation s Activities are fully effective and are being integrated throughout the business The organisation s Activities are fully integrated and are being continuously improved to deliver optimal whole life value Optimising Limit of known Asset Best Practice Copyright 2014, Consulting Limited. All rights reserved 5

Delivering Sustainable Reductions in Infrastructure Costs Immediate benefits of applying the AMEM include: 1) A clear view of organizational strengths and weaknesses; 2) Identification of internal areas of excellence; 3) Identification of applicable external best practices; 4) Gap analysis against and certification to BSI PAS 55, if required; 5) A prioritized list of activities requiring improvement; and 6) Tangible evidence to support decisions for enhancing organizational systems, processes and procedures and competencies. Outputs from the AMEM are configurable to align with the 39 subjects or other frameworks, such as BSI PAS 55 or ISO55000. Delivering Improvements As well as addressing the development needs of the organization and the individual, we work in partnership with our clients to accelerate the delivery of identified benefits. Our team has a wealth of practical experience related to, systems engineering, and information management. We understand how industry works, the regulations that affect it and the business drivers that shape it. We deliver solutions that have real commercial benefit, centered around the high-level scope of shown, which was originally developed by AMCL, gifted to the IAM and subsequently adopted globally by the GFMAM. Just some of our core capabilities are outlined in subsequent sections. Scope of Organisation & People Enablers Customers Legislation Investors Organisational Strategic Plan Strategy & Planning Decision Making Acquire Dispose Asset Knowledge Enablers Lifecycle Delivery Operate Maintain Copyright 2012 Institute of (www.theiam.org/copyright) Commercial Environment Risk & Review Core Skills and Capabilities Business Architecture, Strategy and Planning AMCL works with numerous national infrastructure owners to assure the establishment of appropriate organizational structures, processes, enterprise logic models, systems and tools to achieve and demonstrate the optimal balance of cost, risk and performance across the organizations and their supply chain in a manner which is robust, sustainable and efficient. This includes demonstration of the PAS55 endorsed line-of-sight to assure that every dollar spent on the ground is aligned with overall corporate objectives. To support this we provide best practice guidance and PAS55 aligned templates for Policies, Strategies and Plans and can assess the organization s capabilities in demand analysis, strategic planning and other related activities to identify strengths and opportunities for improvement via development plans/roadmaps and facilitate cross-sector international benchmarking as appropriate. Since 2005, AMCL has directed the development of the UK national rail operator s Asset capabilities and we have been the primary advisor in the industry on how the rail industry can benefit from developing its capabilities. We have also worked extensively with the likes of London Underground Limited and the Crossrail project. Corporate Objectives & Strategy Policy Strategy Objectives Plan Work Execution 6 Copyright 2014, Consulting Limited. All rights reserved

Life-Cycle Investment Decision-Making and Optimization AMCL works with clients to develop and justify expenditure forecasts to investors and regulators that are necessary to deliver sustainable performance and risk outputs. AMCL can support the decision-making process throughout the assets lifecycle, including modelling of future asset and system performance, risk and degradation. We work with clients at all stages of wholelife cost modelling capability and maturity and have developed a progressive three stage approach to support clients in their journey to appropriate best practice for their organization. AMCL s approach is based on our awardwinning Planning For Assets (P4A) model and supporting software to help organizations structure existing knowledge around a whole-life cost and risk approach. It uses a number of techniques to provide clients with the ability to quickly develop optimized and justified whole-life investment plans which include extensive risk modelling. AMCL s approach has been applied widely in a number of asset intensive industries across a range of asset classes and types, including: Major water utilities; National rail networks; Electricity Transmission businesses; and. Multi-billion dollar urban rail systems. Condition Risk Cost Condition Definition 1 WLC-Lite Renewal Cost Routine 2 WLC Optimization 3 System Optimization Mid-life Overhaul Optimum Point of Renewal Description cost increase towards end of life Age / Usage Increasing Failure Risk Declining Condition Process and knowledge led business case approach to review the renewal and maintenance costs and risks associated with an asset type Whole-life cost and risk optimization modelling of an asset type or component which considers the degradation and risks against intervention costs Whole-life cost and risk optimization modelling at system/network level for the long term refurbishment, overhaul and replacement of assets, taking into account the wider business impacts Life-Cycle Delivery (Acquisition,, Operations and Disposal) AMCL provides a range of life-cycle delivery services, from Plan implementation and benefits monitoring of Capital investment plans, optimization of shutdown, access and work packaging arrangements, optimization of maintenance regimes on a cost-risk basis, to asset criticality based asset and system rationalization and disposal processes. We always work on a criticality and quantifiably justifiable basis to assure the demonstrable return on investment at all stages of the lifecycle. We also provide BSI PAS55 aligned templates for and development of Asset Life-Cycle Strategies for each stage of the life-cycle. Cash Flow Design, Purchase Construction Environmental Start Up Operation Development Life (Years) Social Disposal Disposal Copyright 2014, Consulting Limited. All rights reserved 7

Delivering Sustainable Reductions in Infrastructure Costs Failure System Asset Criticality Annualised Cost Asset Type Planned Corrective Reactive Risk High Medium Low FMECA Quantified RBM Standard RCM Review Historical Regimes (incl. Inspection and Con Mon) Delivery Performance Review Review Assumptions and Analysis P-F Failure Modes Condition Based Task Falure Modes and Effects Analysis Usage-related Failure Modes Hidden Failure Modes Rule Based Task Allocation Preventive Tasks Failure- Finding Tasks How much of each should we do for the correct balance? Cost-Risk Optimisation (CRO) Failures not influenced by maintenance Redesign Tasks Our approach for maintenance efficiency is based on criticality and the utilization of best practice reliability engineering techniques such as Failure Modes, Effects and Criticality Analysis (FMECA). These are used to structure the plan, do, check, act loop at the heart of good reliability engineering and to inform Reliability Centered (RCM) and best practice Rick-Based (RBM) regimes as appropriate for the organization and the asset base. This is supported by structured and rule-based task allocation processes for the development of RCM regimes where appropriate. The extension of classic RCM techniques (such as Moubray) to include the quantified CRO enables a fully justified and best practice RBM regime to be developed for the most critical assets in the system and demonstration to stakeholders that the risks associated with the regime are as low as reasonably practical. AMCL has undertaken extensive lifecycle strategy and RCM and RBM regime development, justification and implementation processes across a range of utilities, national rail networks and metro rail systems. Asset Information Strategy, Standards, Systems and Data Annual Costs 120 100 80 60 40 20 Costs 0 Economic Optimum 1 2 3 4 5 6 7 8 9 10 Renewal Frequency (years) Total Business Impact Risk Exposure The temptation for many organizations is to procure complex IT system solutions, which are often poorly specified and lack alignment to the company s existing requirements and processes. This leaves many organizations data rich but information poor, locked-in to expensive systems which are extensively under-utilized or do not achieve the intended business benefits. AMCL is fully independent and not affiliated with any system providers. We work with infrastructure management organizations to assure they understand, specify, collate, analyze, control and manage only the data they need to inform the business activities on a criticality basis. Once the data and information needs are understood, we work with clients to specify, assess and configure supporting asset information systems and tools to optimize the benefits to the organization and minimize the costs of new technology. To further optimize the overall cost-benefit of investment in asset data, information and systems, AMCL also provides comprehensive change management services incorporating change of processes, systems and people, including staff awareness of and behavior toward asset data. 8 Copyright 2014, Consulting Limited. All rights reserved

AMCL has worked with a range of clients across multiple sectors to implement criticality and cost-benefit based solutions to Asset Information optimization in full accordance with the best practice identified by the Institute of Asset. We work with organizations across the full spectrum of Asset Information maturity. Our experience includes: Regulatory Advice; Asset Information Specification and Integration; Development of asset information strategies, asset knowledge standards and data management procedures; Client Agent and Market Reviews for information technology systems: and Systems Definition and Implementation. DATA Requirements & Specification PROCESS SYSTEMS 1 2 3 4 5 6 7 8 9 High-level assessment to understand current level of maturity Define Framework and core documentation aligned with PAS 55 or GFMAM 39-Subjects - including criticality analysis Define processes and key decisions Define Asset Information Strategy, Requirements and Standards Develop and implement data governance process Develop Master Data to enable integration of asset information and data sets Develop core asset register and only integrate other systems where necessary Develop GIS and topological capability Develop and implement specialist add-ons, e.g Whole-life Cost Models and business planning and budgeting systems Establish Change processes and optimise staff behaviour towards data and systems PEOPLE Learning Applying Embedding Integrating Optimising Innocent Aware Developing Competent Effective Excellent DATA SYSTEMS Asset Registers and Systems (MMS) typically developed in-house No information standards, disparate data quality. Difficult to produce consistent reports Consolidation into single MMS - typically established software product Standards define common hierarchy for Asset Register and MMS. Data fully populated Enhanced user interfaces and management information tools in place Linking of asset attributes between systems allows management information across different systems Contractors required to use corporate MMS and other relevant systems Contractors information standards and data aligned to corporate MMS Extend MMS to other AM activities, e.g failure management, renewals, spares etc. Standards in place and data aligned for all lifecycle activities Enterprise-wide AM system introduced including financial management Standards in place and data aligned with financial data. Unit cost and activity based costing data available All budgeting and financial reporting undertaken within the enterprise-wide AM system Asset Plans, Financial Plans & Budgets derived from enterprisewide system increasing integration with framework and processes Risk and Performance Systems At the heart of good, is the Plan, Do, Check, Act principle, as recognised within PAS55. This assures continuous improvement of the System and associated risks via appropriate monitoring, review and action. AMCL provides BSI PAS55 and best practice aligned services with respect to: Asset risk assessment and management in accordance with corporate risk frameworks; Environmental sustainability and weather and climate change strategies and procedures; Asset condition, stewardship and performance review processes and key performance indicators (KPIs); Continuous improvement review and audit capabilities, including benchmarking via the AMEM; and Review and improvement of the overall System and associated practices. Copyright 2014, Consulting Limited. All rights reserved 9

Delivering Sustainable Reductions in Infrastructure Costs 4.7 review 4.2 Asset management policy Act Plan 4.6 Performance assessment & improvement 4.6.1 Performance & condition monitoring 4.6.2 Investigation of asset-related failures, incidents & noncomformities 4.6.3 Evaluation of compliance 4.6.4 Audit 4.6.4 Improvement actions 4.6.6 Records PAS 55: 2008 System Structure 4.1 General requirements 4.3 Asset management strategy, obectives & plans 4.3.1 Asset management strategy 4.3.2 Asset management objectives 4.3.3 Asset management plans 4.3.4 Contingency planning Do Check 4.5 Implementation of asset management plans 4.5.1 Life cycle activities 4.5.2 Tools, facilities & equipment 4.4 Asset management enablers & controls 4.4.1 Structure, authority & responsibilities 4.4.2 Outsourcing of asset management activities 4.4.3 Training, awareness & competence 4.4.5 Asset management system documentation 4.4.6 Information management 4.4.7 Risk management 4.4.8 Legal & other requirements 4.4.9 of change Examples include the development of multi-stakeholder KPIs covering Opex costs and risks - including asset condition, asset performance, RAM (reliability, availability and maintainability) performance and overall asset stewardship - to assure the monitoring and continuous improvement of future delivery processes for Crossrail; Europe s largest construction project. We have also identified a range of indicators that will help assess the UK national rail operator s performance in the stewardship of its assets, in particular helping assess the long term sustainability of its asset policies. Business Process Review, Re-Engineering and Standardization AMCL has worked across rail, water and power sector clients to reengineer and standardize their activities and processes in line with best appropriate practice. To achieve this we always work with the client to ensure that the corporate objectives, priorities and constraints are fully understood and utilized to define what is best appropriate Asset practice for the organization and align the complexity of the approach with the criticality of the asset or asset system. Complexity of AM Approach High Medium Low Far Too Complex Overly Complex Approach Best Appropriate Practice Low Overly Complex Approach Best Appropriate Practice Overly Simplistic Approach Medium Best Appropriate Practice Overly SImplistic Approach Far Too Simplistic High Asset Criticality 10 Copyright 2014, Consulting Limited. All rights reserved

Organisational Requirements Risk & Cost Trends Performance & Cost KPIs Specification & Required Outcomes Specification Plan-Do-Review Loop - Asset Criticality - Risk Based AHI s - FMECA - Works Analysis Condition & Performance Reporting Cost-Risk Optimisation Analysis and Assessment Asset Knowledge - Approve New Corrective Work - Work Lost - Risk Decisions Works Reporting Standards Works Planning Fault PM Schedule Delivery Plan-Do-Review Loop Access & Resource Scheduling Improvement Recommendations - Preventive - Predictive - Proactive - Corrective - Code Condition & Defects - Identify New Work Record Events Work Execution WORK MANAGEMENT SUPPLY MANAGEMENT Monthly Schedule & Budget This enables us to utilize our best practice knowledge and process templates and configure them appropriately for the client, assuring necessary transition phases, briefing/training and knowledge transfer are encapsulated in the change management programme. We work at all levels with the clients, from the definition of enterprise wide business and contracting models, through Asset System development, gap filling and refinement, to detailed asset information or asset lifecycle phase specific business process. We also undertake overall process assessments utilizing the AMEM to assess and identify areas of opportunity for improvement including appropriate good practice, integration and consolidation. Copyright 2014, Consulting Limited. All rights reserved 11

Copyright 2014, Consulting Limited. All rights reserved