2016 Asset Management & Maintenance Priorities Survey

2016 Asset Management & Maintenance Priorities Survey An Original Study from

2016 Asset Management & Maintenance Priorities Survey Copyright 2016 Assetivity Pty Ltd. All Rights Reserved. Published by Assetivity Level 4/170 Burswood Road, Burswood WA 610 2016 Asset Management & Maintenance Priorities Survey 2

Table of Contents 4 Introduction 5 Chapter 1: Business Challenges 6 Chapter 2: Asset Management & Maintenance Initiatives 8 Chapter 3: Improvement Initiatives Addressed Using Outside Resources 9 Chapter 4: Industry Sector Breakdowns 19 Sample & Methodology 22 Conclusion 23 About Assetivity 2016 Asset Management & Maintenance Priorities Survey 3

Introduction It is more than likely that your organisation is facing Maintenance or Asset Management issues and in today s climate a variety of external influences may be amplifying the severity of your problems. Which issues are at the forefront of your improvement strategy? Have you ever wondered what issues other organisations are tackling and how they are attempting to solve these issues? Do they have the capabilities in-house or are they outsourcing support? Assetivity conducted a survey which was answered by individuals from an array of different sectors to find the answers. In this report we will analyse the results both in the wider context of Maintenance and Asset Management professionals and with respect to the top 5 industries within the sample. 2016 Asset Management & Maintenance Priorities Survey 4

Business Challenges First we asked the respondents to rate the significance of a number of Maintenance and Asset Management issues that may occur at their worksite. Below are the top 10 out of 22 issues that respondents thought were either very or extremely significant. 67% of all participants think that Asset Management Planning is a very or extremely significant issue Figure 1. Issues respondents perceived as very or extremely significant Asset Management Planning Issues Alignment and Communication Across Departments Asset and Maintenance Management Strategy Issues Maintenance Cost/Budget Pressures Compliance with Safety and Environmental Standards and Regulations Assuring Equipment Reliability Achieving Equipment Availability Targets Risk Management Finding and Keeping Good People Motivating and Managing People 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Extremely Significant Very Significant The most significant issues overall were Asset Management Planning and Strategy, and Inter-Departmental Communication and Alignment. This appears to indicate that higher level, whole of business issues are currently the greatest areas of concern to most respondents. 2016 Asset Management & Maintenance Priorities Survey 5

It is interesting that Safety and Environmental compliance is seen as being a significant challenge. We would have imagined that most organisations would have had compliance with safety and environmental requirements under control. The survey results suggest that perhaps this is not the case. Although not represented in the graph in figure 1, we can see from cross analysis of the data that in small organisations Equipment Availability, Reliability and Statutory Compliance were major issues. In mid-sized organisations costs were the most significant issue and in larger organisations alignment was perceived as the most significant issue. Also across roles, communications issues were perceived to be more significant to higher levels of the organisation, while to more technical roles cost management was the greatest challenge. 62% of participants consider Safety and Environmental Compliance to be very or extremely challenging 6

Asset Management & Maintenance Initiatives Next, we asked respondents what initiatives their worksite were undertaking in 2016 to address their business challenges. The results revealed that organisations intend to implement a wide variety of initiatives in 2016 using either in-house or outsourced expertise. Figure 2. Top 10 Initiatives being implemented in 2016 Maintenance Planning And Scheduling / Work Management Improvement Developing Asset Management Plans Predictive Maintenance / Condition Monitoring Program Enhancement Training Developing A Strategic Asset Management Plan Defect Elimination / Root Cause Analysis Program Upgrading / Replacing Plant And Equipment Preventive Maintenance Program Review / RCM / PMO Work Force Restructure / Role Redefinition Recruitment 0% 10% 20% 30% 40% 50% 60% 70% 80% 90%100% Yes Implementing this ourselves Yes Using external assistance 85% of all participants are planning to implement improved Maintenance Planning and Scheduling 2016 Asset Management & Maintenance Priorities Survey 7

While both Asset Management Plans and Strategic Asset Management Plans appear in the top 10 initiatives, the focus appears to be on classic maintenance engineering and reliability engineering techniques, particularly Maintenance Planning and Scheduling and Preventive Maintenance Program improvement. Some of these are not directly connected with the issues indicated in question one. More in-depth analysis of the data shows that there is little difference in the initiatives being pursued by large, mid-sized and small organisations. However mid-sized organisations appear to be more ready to engage external assistance, and are also focusing more on upgrading plant and equipment. It is interesting to note that personnel outside the engineering and maintenance work groups had a comparatively high interest in implementing Asset Management initiatives. This may reflect an understanding that Asset Management is a whole of business activity, rather than a purely technical one. Geographically, Australia appears to be conducting less training than other regions. There is also a lower level of use of external assistance in Asia, South America, Africa and the Middle East. 25% of all participants stated that they are using external assistance for improvement activities 2016 Asset Management & Maintenance Priorities Survey 8

Improvement Initiatives Addressed Using External Assistance Below are the top 10 initiatives identified by respondents who are implementing their improvement strategy using external assistance such as management consultants. Figure 3. Top 10 Initiatives being addressed by external assistance Training Outsourcing Maintenance Activities ISO 55001 / Asset Management improvement project Developing A Strategic Asset Management Plan Upgrading / Replacing Plant And Equipment Maintenance Planning And Scheduling / Work Management Improvement Work Force Restructure / Role Redefinition Cataloguing / Bills Of Materials / Parts List Development Yes Using external assistance Developing Asset Management Plans Recruitment 0% 5% 10% 15% 20% 25% 30% Yes Using external assistance 30% From the total number of respondents who said they will be using external assistance, 25% plan to use external assistance for Training, 23% will be Outsourcing Maintenance Activities and 19% said they would be seeking external assistance to implement an ISO 55001 / Asset Management Improvement Project. The results indicate that many organisations may feel they have sufficient internal resources or expertise to develop and implement Asset Management and Maintenance improvement programs. Alternatively these organisations may just not have the budget. We note that benefits are unlikely to be realised without adequate expertise and resources being applied to these programs. 2016 Asset Management & Maintenance Priorities Survey 9

Industry Sector Breakdowns The previous sections discussed the results of the survey overall. In this section of the report we will examine the results for each of the industry sectors for which there was sufficient data to draw meaningful conclusions. Mining In the Mining sector Maintenance Cost and Budget Pressures are perceived as the most significant issue. This no doubt reflects the recent downturn in commodity prices and the financial pressures that most mining companies are currently facing. The second most significant issue was Achieving Equipment Availability Targets and third important was Asset Management Planning. Operational Readiness and people issues also feature among the top 10 issues. Figure 4. Top business challenges for mining organisations Maintenance Cost/Budget Pressures Achieving Equipment Availability Targets Asset Management Planning Issues Operational Readiness of New Assets Assuring Equipment Reliability Alignment and Communication Across Departments Assuring the Availability of Adequate Spare Parts Finding and Keeping Good People Risk Management Reducing Spare Parts Stock Levels 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Extremely Significant Very Significant 2016 Asset Management & Maintenance Priorities Survey 10

Nearly 80% of respondents from the Mining sector indicated that they will be implementing improved Maintenance Planning and Scheduling / Work Management Improvements in 2016. Predictive Maintenance or Condition Monitoring Program enhancement was the second most popular initiative and Spare Parts Optimisation and Cataloguing was the third most popular. Figure 5. Top maintenance and asset management initiatives for mining organisations Maintenance Planning And Scheduling / Work Management Improvement Predictive Maintenance / Condition Monitoring Program Enhancement Spare Parts Review / Optimisation Developing Asset Management Plans Defect Elimination / Root Cause Analysis Program Training Cataloguing / Bills Of Materials / Parts List Development Preventive Maintenance Program Review / RCM / PMO Upgrading / Replacing Plant And Equipment Recruitment 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Yes Implementing this ourselves Yes Using external assistance In comparison to other industries the results show a slightly lower level of interest in implementation of Asset Management initiatives and slightly higher activity in Spare Parts Optimisation and Cataloguing than other sectors. 2016 Asset Management & Maintenance Priorities Survey 11

Utilities The main issues in this sector relate to Communications, Organisational Alignment and the workforce. It is surprising that ISO 55000 did not appear as a highly significant issue in this sector, although it is still significant in other sectors. Given the involvement of both safety and economic regulators in this sector and the need to balance their competing needs with those of utility owners, we would have expected ISO 55000 to have rated more highly in this sector even if there is not a documented regulatory requirement to demonstrate compliance. Perhaps this result indicates that most utilities have already achieved alignment or certification with ISO 55001, and that compliance with ISO 55001 is now a normal part of day-to-day business. Figure 6. Top business challenges for utility organisations Access to Adequate Workforce Skills Alignment and Communication Across Departments Motivating and Managing People Finding and Keeping Good People Asset Management Planning Issues Asset and Maintenance Management Strategy Issues Assuring Maintenance Work Quality ERP / EAM / CMMS Issues Leadership/ Internal Change Issues Compliance with Safety and Environmental Standards and Regulations 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Extremely Significant Very Significant 2016 Asset Management & Maintenance Priorities Survey 12

The Maintenance and Asset Management initiatives being most widely implemented in the Utilities sector relate to Asset Management Plans. Upgrading or Replacing Plant and Equipment and Maintenance Planning and Scheduling or Work Management are also being widely implemented. Figure 7. Top maintenance and asset management initiatives for utility organisations Developing A Strategic Asset Management Plan Developing Asset Management Plans Upgrading / Replacing Plant And Equipment Maintenance Planning And Scheduling / Work Management Improvement Training Recruitment Defect Elimination / Root Cause Analysis Program Predictive Maintenance / Condition Monitoring Program Enhancement Work Force Restructure / Role Redefinition Cataloguing / Bills Of Materials / Parts List Development 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Yes Implementing this ourselves Yes Using external assistance The results reflect a higher level of activity relating to Asset Management Plans and Strategic Asset Management Plans and the lowest overall levels of utilisation of external assistance of all industry sectors. 2016 Asset Management & Maintenance Priorities Survey 13

Oil & Gas In 2016 the issues which appear to be most important in the Oil and Gas sector include Assuring Equipment Reliability, with 67% of respondents considering these to be extremely or very significant. This was followed by Compliance with Safety and Environmental Standards and Regulations, plus Achieving Equipment Availability Standards. Figure 8. Top business challenges for oil and gas organisations Assuring equipment reliability Compliance with safety and environmental standards and regulations Achieving equipment availability targets Maintenance cost/budget pressures Risk management 6 Poor Asset condition Asset and Maintenance management strategy issues Asset Management planning issues Maintenance labour productivity issues Operational readiness of new assets 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Extremely Significant Very Significant From these results we draw the conclusion that the Oil and Gas sector is predominantly occupied by reliability, safety, risk and compliance issues. This no doubt reflects the hazardous nature of this industry sector and is highly understandable. We note also that cost pressures are a highly significant issue, no doubt a result of the well-publicised falls in the oil price. It is reassuring to note, however, that safety and environmental concerns still outrank costs in terms of their importance in this sector. Asset Management is of significantly less interest in this industry than in other sectors. The reasons for this are unclear. It could be due to this sector believing that they already have sound, whole-of-business Asset Management practices in place, or it could be due to a lower awareness of Asset Management and ISO 55000 within this sector and potential benefits that these could bring. 2016 Asset Management & Maintenance Priorities Survey 14

The most popular improvement initiatives in the Oil and Gas sector are Maintenance Planning & Scheduling, followed by Risk Based Inspection and Cataloguing. We note that almost all of the most popular initiatives are in areas related to Maintenance and Reliability engineering, unlike other industry sectors where there is a broader range of both technical and business improvement activities. Figure 9. Top maintenance and asset management initiatives for oil and gas organisations Maintenance Planning And Scheduling / Work Management Improvement Risk Based Inspection Cataloguing / Bills Of Materials / Parts List Development Defect Elimination / Root Cause Analysis Program Predictive Maintenance / Condition Monitoring Program Enhancement Upgrading / Replacing Plant And Equipment Spare Parts Review / Optimisation Developing Asset Management Plans Preventive Maintenance Program Review / RCM / PMO Outsourcing Maintenance Activities 0% 20% 40% 60% 80% 100% 120% Yes Implementing this ourselves Yes Using external assistance 2016 Asset Management & Maintenance Priorities Survey 15

Manufacturing Those respondents in the Manufacturing sector perceived Assuring Equipment Reliability and Compliance with Safety and Environmental Standards and to be the most prominent issues. The third most important issue was Achieving Equipment Availability Targets. Figure 10. Top business challenges for manufacturing organisations Assuring Equipment Reliability Compliance with Safety and Environmental Standards and Regulations Achieving Equipment Availability Targets Asset and Maintenance Management Strategy Issues Asset Management Planning Issues Assuring the Availability of Adequate Spare Parts Maintenance Cost/Budget Pressures Alignment and Communication Across Departments Finding and Keeping Good People Access to Adequate Workforce Skills 0% 10% 20% 30% 40% 50% 60% 70% 80% 90%100% Extremely Significant Very Significant Most respondents in the Manufacturing sector were located in North America. The importance of Safety, Reliability and Availability issues is considerably higher than in all other sectors, including Oil & Gas. It is interesting to try and understand why that may be the case. Given the generally lower profit margins that exist in Manufacturing compared with other industry sectors, it may be that manufacturers have a clear understanding of the value of equipment reliability and availability as a driver of profit (and an understanding that cost reduction, while having a part to play, is generally of lower importance). In addition, the generally more labour-intensive nature of manufacturing operations may also be driving them to put a high level of focus on safety compliance. 2016 Asset Management & Maintenance Priorities Survey 16

Maintenance Planning and Scheduling was the most popular initative, with 84% of respondents indicating they will be implementing improvements in 2016. A close second was Training with Defect Elimination or Root Cause Analysis as the most popular improvement initiative. Figure 11. Top maintenance and asset management initiatives for manufacturing organisations Maintenance Planning And Scheduling / Work Management Improvement Training Defect Elimination / Root Cause Analysis Program Recruitment Cataloguing / Bills Of Materials / Parts List Development Preventive Maintenance Program Review / RCM / PMO Predictive Maintenance / Condition Monitoring Program Enhancement Work Force Restructure / Role Redefinition Developing Asset Management Plans Upgrading / Replacing Plant And Equipment 0% 20% 40% 60% 80% 100% Yes Implementing this ourselves Yes Using external assistance In comparison with other industry sectors, Asset Management initiatives were considerably less prevalent. External assistance was also much less likely to be engaged. 2016 Asset Management & Maintenance Priorities Survey 17

Services In the Services sector Alignment and Communication Across Departments is perceived to be the biggest challenge. The second and third most important issues were Asset Management Planning and Asset and Maintenance Management Strategy. Figure 12. Top business challenges for services organisations Alignment and Communication Across Departments (e.g. Maintenance/Production/Supply) Finding and Keeping Good People Motivating and Managing People Maintenance Cost/Budget Pressures Asset and Maintenance Management Strategy Issues Asset Management Planning Issues Assuring Maintenance Work Quality Risk Management Compliance with Safety and Environmental Standards and Regulations Dealing with Economic Regulators 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Extremely Significant Very Significant Most respondents in the Services sector were located in Australia. Unsurprisingly due to the nature of the industry, people issues were much more significant for this sector than for other industry sectors. Costs are also an area of significant concern. 2016 Asset Management & Maintenance Priorities Survey 18

Spare Parts Review and Optimisation was the most popular initiative to be implemented by the Services sector. Big Data and Predictive Analytics is also a popular initiative being adopted, as is Developing Asset Management Plans. Figure 13. Top maintenance and asset management initiatives for services organisations Spare parts review / optimisation Big Data / Predictive Analytics Developing Asset Management Plans Apprentice / trainee program Defect elimination / Root Cause Analysis program Theory of Constraints Preventive Maintenance program review / RCM / PMO Cataloguing / Bills of Materials / Parts List development Staff retention program Recruitment 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Yes Implementing this ourselves Yes Using external assistance In comparison with other industry sectors, the Services sector is most favourable to using external assistance (perhaps because they provide that external assistance themselves). They also have a greater interest in implementing Asset Management Plans and Strategic Asset Management Plans than other industry sectors. 2016 Asset Management & Maintenance Priorities Survey 19

Sample & Methodology Our research gathered responses from 125 Maintenance and Asset Management professionals. As shown in the chart below, we received responses from a diverse range of industry sectors. Industries Industries Figure 14. Sample Composition by Industry Manufacturing Manufacturing Services Services Utilities Utilities Mining Mining Oil and Gas Oil and Gas Other Other Manufacturing Industry - 30% Services Industry - 20% Utilities - 19% Mining - 18% Oil & Gas - 9% Other - 4% 2016 Asset Management & Maintenance Priorities Survey 20

Respondents answered an online survey. The distribution of job roles of survey respondents is shown in Figure 15 below. Figure 15. Sample composition by Role of Respondents Job Role CEO COO General Manager Engineer Planner Superintendent Supervisor Technician/ tradesman CEO Engineer - 42% COO Superintendent - 24% General Manager - 17% Supervisor Engineer - 9% Planner - 3% CEO Superintendent - 3% COO - 1% Supervisor Technician/ tradesman - 1% Technician/ tradesman Engineers were the largest group within the sample. 41% of respondents were in senior to middle management roles. Figure 16. Sample composition by department they work in Total Maintenance - 70% Production - 17% Research & Development - 5% Accounting & Finance - 3% Human Resource Management - 2% Sales & Marketing - 1% Total Accountin Human Re Maintena Productio Research Sales & M The majority of respondents worked in Maintenance departments, with a large proportion from Production and 5% from Research and Development departments. Accounting & Finance Human Resource Management Maintenance Production Research & Development Sales & Marketing 2016 Asset Management & Maintenance Priorities Survey 21

Figure 17. Sample Composition by number of people in the organisation s maintenance department Total 40% 23.81% Less than 20 20-50 50-100 Less than 20-24% 20-50 - 17% 50-100 - 19% 100-40% 100 19.05% We had responses from organisations of all sizes. Figure 18. Sample Composition by country of their organisation 3.81% Total Total Australia & New Zealand - 46% North America - 23% Europe - 10% 44.76% Asia - 10% South America - 6% Africa & Middle East - 6% 16.19% Australia & N Australia & New Zealand North Americ North America Europe Europe Asia Asia South Americ South America Africa & Midd Africa & Middle East The majority of the respondents were from Australia and New Zealand, however there was a good international response. 2016 Asset Management & Maintenance Priorities Survey 22

Conclusion Thank you to everyone who participated in the survey. The most significant business issues related to Strategic Asset Management Planning and interdepartmental cooperation and alignment. Overall the results revealed few surprises, although the comparatively low level of significance placed on ISO 55000 is notable. However it does appear that there is strong awareness of the importance of Asset Management in general. To address the issues highlighted, respondees are planning to implement a wide range of initiatives in 2016, with Maintenance Planning and Scheduling improvements being implemented in most organisations. Business improvement techniques such as lean and Six Sigma are less popular, with preference clearly going to technical processes including Reliability Centred Maintenance and Planned Maintenance Optimisation and Root Cause Analysis. There is also a strong interest in Asset Management planning, despite the low level of interest in ISO 55000. Most organisations are seeking to improve using internal resources, which may reflect commercial realities and a belief that organisations have adequate internal skills. We note that access to adequate improvement skills and resources is critical to achieving the desired business improvements. 2016 Asset Management & Maintenance Priorities Survey 23

Assetivity About Assetivity We are an award winning management consultancy and training organisation, who specialise in improving the performance and productivity of both people and equipment in capital-intensive industries. Trusted worldwide, we have a reputation for excellence in service and results. We bring a holistic approach which incorporates Engineering, Business Analysis and Change Management skills and techniques. We can (and do) engage with all organisational levels, from the boardroom to the shopfloor. This leads to the achievement of sustainable outcome-focused results. How Assetivity Can Help You We can help you to select, design and implement your improvement initiatives. Some of the areas where we have specific experience and expertise include: ISO 55000 and Asset Management Assessments and Audits Maintenance, Reliability and Asset Integrity Assessments and Audits Development of Strategic Asset Management Plans and Asset Management Plans Design and Implementation of improved Asset Management systems and procedures Design and implementation of improved Maintenance Planning and Scheduling procedures and practices Facilitation and application of Reliability Centred Maintenance and PM Optimisation processes to develop and improve Preventive Maintenance programs Facilitation and implementation of Root Cause Analysis and Defect Elimination processes and practices Reliability Engineering, Reliability Modelling and Reliability Improvement Spare Parts Cataloguing, Parts List Development and Spare Parts Optimisation Development and Delivery of world class training in Asset Management, Maintenance Management and Reliability Techniques To find out how Assetivity can help your organisation and experience the benefits of optimal asset performance, contact us! Assetivity Head Office Level 4, 170 Burswood Road Burswood WA 6100 (08) 9474 4044 Brisbane Office Level 6, 135 Wickham Terrace Spring Hill QLD 4004 (07) 3606 1600 www.assetivity.com.au assetivity@assetivity.com.au 2016 Asset Management & Maintenance Priorities Survey 24