Ian Maxted - Transfield Services - Managing the challenges of diverse and complex assets across Australia

Utilities | Telco | Transport | Defence | Property | Social | Oil & Gas | Resources | Industrial

Q&A

22nd September 2015

Transfield Services

Ian Maxted – Chief Executive Defence, Property and Social Sectors &Chief Development Officer, Transfield Services

Managing the challenges of diverse and complex assets across Australia

- Achieving technical excellence whilst translating to non-asset management

professionals

- Extending physical asset management approach to link to financial and other

stakeholders imperatives


Context

About TSL – Briefly

Extract of What we Present

Other Risk Management Frameworks

What is an Asset?

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About TSL – Briefly

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10countries

18industries

+200clients

+19,000 employees

Transfield Services

Transfield Services – An overview

Tot alRevenue

$3.7b

TransfieldGroup founded in

1956

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What we do – selected examples

We maintain and operate Sydney’s Harbour City Ferries for the NSW Government in partnership with Transdev

We provide shutdown maintenance and drilling services to various mining and oil & gas operators globally including for Woodside

We maintain coal seam gas wells in Queensland for QGC’s CSG to LNG program utilising Easternwell’s well servicing rigs and provide services across the value chain

We install telecommunications networks for the National Broadband Network in Australia and the Ultrafast Broadband Network in NZ

We provide garrison and welfare services for the Australian Government on Nauru and Manus Island

We operate and/or maintain civil, mechanical, electrical and tolling assets for the Hills M2 Motorway and Lane Cove Tunnel in Sydney, City Link and East Link in Melbourne, and Presidio Parkway in the US

We provide estate management and garrison support services to the Australian Department of Defence on bases in Victoria,South Australia, Tasmania, Western Australia and the Northern Territory. We alsoprovide emergency services, stores, food services and Army sustainment nationally.

We provide operations and maintenance services to oil & gas assets in both the upstream and downstream sectors in the US for clients such as Chevron, Exxon Mobil and Valero


Extract of What We Present

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We offer the following services in asset management:

Evaluation

Data Integrity Program (DIP)

Process & Maintenance Improvement Program (PMIP)

Technical Asset Scheme Knowledge (TASK)

Comprehensive Rick based Asset Management Solution

Capital Investment Strategy

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In this section we describe the data assessment phase of our procedures commencing with the analysis step followed by the decision step.

Analysis

The range of data gathered during the application of various tools and techniques now needs to be assessed in order to understand the urgency of any intervention activity. Additionally, the data may inform the tactical and strategic levels of asset management planning.

Our overall data assessment system is based on the relevant Australian Standard. This standard basically states that Consequence of failure x Probability of failure = Risk (see Table 8 below). This risk is known as the inherent risk. It is then usual to apply controls and mitigation effort to reduce the level of risk to an acceptable amount and the formula is re-run to determine the residual risk.

Data Assessment

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Table 8: Risk Matrix Used to Rank Risks

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Probability of Failure:

As a surrogate for the probability of failure, we use Asset Condition. Accordingly, asset condition rating is an important aspect to our overall approach to asset & maintenance management. An additional consideration is whether the tools & techniques are to be applied whilst the status of the assets are on-line or off-line.

Our approach is to utilise both methods in order to gain a full picture of asset condition. For example:--

On-line …usually desk-top, interviews and visual external inspection / data monitoring, and

Off-line …usually a structured internal evaluation using key tools & techniques

Both sub-approaches will identify a range of data which is then matched / evaluated against a series of condition statements, such as those listed in Table 9 below, which can then be used as the surrogate for the probability of failure in the risk matrix.

Consequence of failure

As a surrogate for the consequence of failure, we use Asset Criticality and a workshop is normally held to develop the criteria to determine asset criticality. Factors impacting on asset criticality are included in the following table:-

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Table 9: Asset Criticality Factors (typical)

For Active Assets

(mechanical & electrical)

For Passive Assets

(pipelines)

Level of redundancy Affect on customers / disruption

Opportunity to by-pass Impact on adjacent areas

Characteristics of product (water / wastewater / recycled water)

Financial impact / loss of revenue / loss of product

Mean time to repair (MTTR) Cost of repair / cost of alternative supply

Availability of spares and/or replacement parts

Time to repair

Early warning Distribution to traffic

Asset criticality can thus be matched / evaluated against a series of criticality statements, such as those listed in Table 10 below which can then be used as the surrogate for the consequence of failure in the risk matrix.

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Table 10: Condition Table RatingCondition Rating For Active Assets

(mechanical & electrical)

For Passive Assets

(sewer pipelines)

1Excellent ( > 75% remaining life )

Almost perfect with no defects or (repaired to original specification)

Adequately performing required function

All wear and tear well within allowable tolerances

Excellent ( > 75% remaining life )

Recently constructed sewer less than 10 years old with no failure

history

No pipe cracking or deformity

No joint or displacement

No debris or root penetration

2Good ( 50% - 75% remaining life )

Some superficial deterioration, defects repaired to an acceptable

standard

Adequately performing functions

Nothing beyond “normal”maintenance

Has been subject to minor works (less than $ 1,000)

Good ( 50% - 75% remaining life )

Some deterioration causing minimal influence on performance

Fine pipe cracking but no deformity evident

Minor joint displacement

No evidence of gas attack

3Average ( 20% - 50% remaining life)

Future maintenance problems identified; effort increasing annually

Damaged but not noticeably affecting performance

Has failed more than once and has required significant work up to $

5,000

Average (20% - 50% remaining life)

Sewer pipes which are generally sound, although with some defects

Cracks or occasional fractures over not more than 25% of the length

0% - 5% pipe deformity

Minor corrosion (gas attack) apparent

4Poor ( 5% - 20% remaining life )

Deterioration is affecting asset and noticeable reduction in performance

Has failed twice in past year with substantial work up to $ 100, 000

Major reconstruction or refurbishment imminent

Poor ( 5% - 20% remaining life )

Records show sewer has collapsed in the last two years

Blockages retarding flow

Open joints with evidence of infiltration

5Unacceptable ( < 5% remaining life )

Major renewal or replacement required

Unsafe to operate

Maintenance cost are greater than 20% for a similar asset

Unacceptable ( < 5% remaining life )

Already collapsed

Fractured, cracked or broken over 50% of its length

Totally blocked

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Table 11: Criticality Rating Table

Asset Redundancy (relates to restoration cost)

Image / Reputation Environment Safety Water QualityExtent of Impact

(No of customers served)

Catastrophic 5

Significant long term financial

impact. Organisation

operation change required.

Major supply interruption

greater than 48 hrs

State Government and EPA

involvement

(State Govt Inquiry). National

Press and TV news item over

several days

Widespread environmental

impact with long term effects.

Significant resources required

to rectify with impact resolution

greater than 1 month

Multiple fatalities. Serious

injury/illness requiring

hospitalisation and ongoing

treatment.

Breach of agreed /

contractual aesthetic and

biological limits requiring a

Boiled Water Alert

Extended loss of pressure

and/or supply to > 1000

homes for more than 3 days

Major 4

Long term financial impact.

Major supply interruption

greater than 24 hrs


involvement (EPA

prosecution, SA Health

Action). National news item on

single day

Extensive environmental

damage requiring immediate

mitigation intervention. Impact

resolution over several

weeks

Single fatality. Serious

injury/illness requiring

hospitalisation and some

ongoing treatment.

Breach of agreed /

contractual aesthetic and

biological limits

Loss of pressure and/or

supply to > 1000 homes 24

hrs

Medium 3

Some financial redirection

required, medium impact.

Medium supply interruption

up to 24 hrs


advised (Breach of License,

SA Health involvement).

Adelaide press news item --

front page headline

Detrimental environmental

damage with short term effect.

Limited post event clean-up

monitoring required. Impact

resolution up to 1 week

Moderate injury or outbreak

of illness. No hospitalisation

and no long term effects.

Breach of agreed /

contractual aesthetic limits


supply to 1000 homes for 8

hrs

Low 2

Some financial redirection

required, medium impact.

Minor supply interruption

under 8hrs

EPA advised, matter handled

internally. Adelaide press

news item ------ page 3

Low environmental impact

and event handled as part of

normal business operation.

Impact resolution in several

days.

Minor injury or a few isolated

cases of illness. Medical

attention required but no long

term effects.

Taste & odour complaints for

24hours following repairs


supply to < 500 homes for 8

hrs

Insignificant 1

Insignificant financial impact.

Event absorbed in normal

business operation. Minor

supply interruption under 4

hrs

EPA advised, matter handled

internally. No media

involvement

Matter handled as part of

normal business operation.

Negligible ecological impact

with impact resolution same

day

Potential injury or illness. No

medical attention required.

minor loss of chlorine residual

following repair


supply to < 100 homes for

8hrs

Degree of Failure

Consequence Types (Criticality Criteria)

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The Tactical Asset Management Plan (TAMP) is then used to extract the specific action / response statements that direct how to treat each risk-score. For instance:-

Commence detailed investigations

Add to the knowledge base

System configuration modification

Event / incident recommendations

Maintenance planning adjustments

System operational configuration

Input to the SAMP

Update asset valuations (WDV)

Input to the “state of asset” report

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Other Risk Management & Asset Frameworks

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International Banking

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Reference: KPMG


What is an Asset ?

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Political

Environmental - Compliance and Impact

Stakeholders - Community

- Action groups

Financials

Cost/Benefit?

Etc, etc

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Let’s presume we do our job right. What’s the risk?

The areas of disconnect –

Scope: We limit ourselves to the physical and don’t

consider or at least highlight the non physical

areas e.g. Political

Alignment: We avoid the angst of consultation and become

detached from those we are choosing to service

Different Language: Engineer versus Finance versus Novice. We do agood job but they just don’t understand whatwe are doing.

Convergence: We don’t recognise

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“The Implementation Risk is that as we drive for excellence no one knows what we are doing.”

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Business

Ian Maxted - Transfield Services - Managing the challenges of diverse and complex assets across Australia