Asset Performance Management_Deepak Sahoo

Asset Performance Management

Leading the industry in a new way.

Prepared By :DEEPAK KUMAR SAHOO

CMRP, SSBB, Lean ExpertPG in Engineering Management, B.Tech in Mechanical

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An effective Asset Performance Management Systemcan improve EBITDA as much as 15-25%

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Why Industry need to focus on Asset Performance Management. 03

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39

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Asset Performance Management the Core.

New era of ISO 55000 Series.

Integrate management initiatives with Asset Performance Management.

Making Assets work for you. Developing robust Asset Performance Management System.

Focus on future uncertainty and long term strategy for better profitability and sustenance.

Prepared by : - Deepak Kumar Sahoo | [email protected] | +1 – 310 929 7404 | DD14PA16 Oct – 2015 | Asset Performance Management

CONTENTS I

03 Why Industry need to focus on

Asset Performance Management ?

GO TO CONTENTS SLIDE

04 This is APM.Asset Performance Management

“APM goes beyond maintenance: It cuts across many boundaries. The bottom line is return-on-assets [ROA]”

ARC Advisory Group

“We need to send the correct data to the right people to make a good decision”

Parthasarathy KannanMeridium EMEA APM Forum

Performance Criteria Used to Identify Best-in-Class

BENCHMARKING THE BEST IN CLASS 05

Best-in-Class

IndustryAverage

Laggard

Operational EquipmentEffectiveness (OEE)

Asset Downtime

88% 81% 75%

02% 11% 18%

Return on Asset vs Plan 25% 07% - 10%

Source : Aberdeen Group


GOALS FOR TOP MANAGEMENT (CFO/COO/CEO) 06

Source : Aberdeen Group

ReduceOperatingExpense

RevenueGrowth

ImproveProfitability

CustomerSatisfaction

Riskmanagement

63% 46% 40% 28% 24%

Sample Size, n=139


Demonstrated complianceEnhanced reputationImproved organizational sustainabilityImproved efficiency and effectiveness

Improved Financial PerformanceInformed Asset Investment DecisionsManaged riskImproved services and outputsDemonstrated social responsibility

BENEFIT’S OF APM 07

Improve Financial Performance such as Profits, Return on net Assets, Efficiency, Service Factor,

Manage and Optimize Risk level.

Improve Financial Performance such as Profits, Return on net Assets

Enhance reputation, Brand Image.

Improve Organizational sustainability and demonstrated Social responsibility.

APMBENEFIT’S


08

ASSET PERFORMANCE MANAGEMENT

THE CORE.


Something you own that has value. There can be assets that gain value over time or lose value over time

ABOUT ASSET 09

Human

Virtual

Physical

ASSET TYPE


ASSET LIFE CYCLE 10


RETURN ON ASSET 11

ROAReturn On Asset


12 BRIDGING THE GAPBETWEEN

CAPEX &

OPEX

Asset Performance Management :

APM is a holistic approach used to ensure that the business of caring forcorporation’s maintainable assets is done in the most cost-effective manner topromote asset longevity, performance and capability.

It cultivates a partnership between operations and maintenance, whosecommon goal is equipment uptime.

APM optimize the equipment performance and reliability on daily basis. It will help to identify the current asset health and able to provide a long

term view to drive capital planning.Visibility into complete lifecycle of asset – Understanding the Economic

Value AddAligning asset performance to corporate performance

An effective APM process involves the development and implementation of reliability programs for operational assets coupled with application of ongoing performance

monitoring and improvement to drive program optimization overtime.

ASSET PERFORMANCE MANAGEMENT 13


BASIC MODULES OF APM 14

Strategy & Planning•Asset Management Policy•AM Strategy & Objectives•Demand Analysis•Strategic Planning•AM Planning (AMP)

Decision-Making•Capital Investment•Operation & Maintenance•Lifecycle Value Realization•Resourcing Strategy•Shutdown and Outage Strategy

Organization and People•AM Leadership•Organization structure•Organization Culture•Competence Management

Lifecycle Delivery•Technical Standards and Legislation•Asset Creation & Acquisition•System Engineering•Configuration Management•Maintenance Delivery•Reliability Engineering•Asset Operations•Resource Management•Shutdown & Outage Management•Fault & Incident Response•Asset Decommissioning and Disposal

Asset Information•Asset Information Strategy•Asset Information Standard•Asset Information System•Data and information Management

Risk and Review•Risk Assessment and Management•Contingency Planning & Resilience Analysis•Sustainable development•Management of Change•Asset performance and health monitoring•AM System monitoring•Management Review, Audit & Assurance•Asset costing & Valuation•Stakeholder Engagement

1 2 3 4 5 6


The processes an organization uses to undertake strategic asset management planning.

The activities to develop the Asset Management plans that specify the detailed activities and resources,responsibilities and timescales and risks for the achievement of the asset management objectives.

APM MODULES -||- STRATEGY & PLANNING 15

Asset Management Policy

Asset Management Policy providing a framework for the development and implementation of the assetmanagement strategic plan and the setting of the asset management objectives.

AM Strategy & Objectives

The strategic plan for the management of the assets of an organization that will be used to achieve the organizational corporate objectives.

Demand Analysis

The processes an organization uses to both assess and influence the demand for, and level of service from,an organization's assets.

AM Planning (AMP)

Strategic Planning


The management activities and processes involved in determining the Operations and Maintenance requirements in support of the Asset Management objectives and goals.

APM MODULES -||- DECISION-MAKING 16

Determining the activities and processes to be undertaken by an organization in order to procure and use people, plant, tools and materials to deliver the Asset Management Objectives and Asset Management Plan(s).

The activities taken by an organization to develop a strategy for shutdown and outages.

Capital Investment Decision-Making The processes and decisions to evaluate and analyses scenarios for decisions related to capital investments

of an organization. These processes and decisions may relate to new assets for the organization (e.g.Greenfield projects) and/or replacements of assets at end of life (CAPEX sustaining programs).

Operations & Maintenance Decision-Making

Lifecycle Value Realisation The activities undertaken by an organization to balance the costs and benefits of different renewal,

maintenance, overhaul and disposal interventions. This processes an organization uses to both assess andinfluence the demand for, and level of service from, an organization's assets.

Shutdown and Outage Strategy

Resourcing Strategy


APM MODULES -||- ORGANIZATION AND PEOPLE 17

The processes used by an organization to systematically develop and maintain an adequate supply of competent and motivated people to fulfil its asset management objectives including arrangements for managing competence in the boardroom and the workplace

Asset Management Leadership

The leadership of an organization required to promote a whole life asset management approach to deliverthe organizational and Asset Management objectives of the organization.

Organizational Structure

The structure of an organization in terms of its ability to deliver the organizational and Asset Management objectives.

Organizational Culture

The culture of an organization in terms of its ability to deliver the organizational and Asset Managementobjectives.

Competence Management


A management process for establishing and maintaining consistency of a product's physical and functional attributes with its design and operational information throughout its life.

APM MODULES -||- LIFECYCLE DELIVERY - I 18

Technical Standards & Legislation

The processes used by an organization to ensure its asset management activities are compliant with therelevant technical standards and legislation.

Asset Creation & Acquisition

An organization's processes for the acquisition, Installation and commissioning of assets.

Systems Engineering

An interdisciplinary, collaborative approach to derive, evolve and verify a life cycle balanced systemsolution which satisfies customer expectations and meets public acceptability.

Configuration Management


Implementing the Resourcing Strategy to manage the use of funds, people, plant, tools and materials in delivering asset management activities.

APM MODULES -||- LIFECYCLE DELIVERY - II 19

Maintenance Delivery

The management of maintenance activities including both preventive and corrective maintenancemanagement methodologies.

Reliability Engineering

The processes for ensuring that an item shall operate to a defined standard for a defined period of time in a defined environment.

Asset Operation

The processes used by an organization to operate its assets to achieve the business objectives.

Resource Management


APM MODULES -||- LIFECYCLE DELIVERY - III 20

Shutdown and Outage Management

An organization's processes for identification, planning, scheduling, execution and control of work relatedto shutdowns or outages.

Fault and Incident Response Responding to failures and incidents in a systematic manner, including incident detection and

identification, fault analysis, use of standard responses, temporary and permanent repairs as well as the taking over and handing back of sites.

Asset Decommissioning & Disposal

The processes used by an organization to decommission and dispose of assets due to ageing or changes inperformance and capacity requirements.


APM MODULES -||- ASSET INFORMATION 21

The data and information held within an organization's asset information systems and the processes for the management and governance of that data and information.

Asset Information Strategy The strategic approach to the definition, collection, management, reporting and overall governance of asset

information necessary to support the implementation of an organization's asset management strategy andobjectives.

Asset Information Standard

The specification of a consistent structure and format for collecting and storing asset Information and for reporting on the quality and accuracy of asset information.

Asset Information System

The asset information systems an organization has in place to support the asset management activities anddecision-making processes in accordance with the Asset Information Strategy.

Data and information Management


An organization's processes for the identification. assessment, implementation and communication of changes to people,processes and assets.

The processes and measures used by an organization to assess the performance and health of its assets usingperformance indicators.

APM MODULES -||- RISK AND REVIEW - I 22

Risk Assessment and Management

The policies and processes for identifying, quantifying and mitigating risk and exploiting opportunities.

Contingency Planning & Resilience Analysis The processes and systems put in place by an organization to ensure it is able to continue either to continue

to operate its assets to deliver the required level of service in the event of an adverse impact or maintain the safety and integrity of the assets (whether or not the operate).

Sustainable Development The interdisciplinary, collaborative processes used by an organization to ensure an enduring, balanced

approach to economic activity, environmental responsibility and social progress to ensure all activities aresustainable in perpetuity.

Asset Performance and Health Monitoring

Management of Change


The methods an organization uses to engage with stakeholders.

APM MODULES -||- RISK AND REVIEW - II 23

Asset Management System Monitoring

The processes and measures used by an organization to assess the performance and health of its AssetManagement System.

Management Review, Audit & Assurance

An organization's processes for reviewing and auditing the effectiveness of its asset management processes and asset management system.

Asset Costing & Valuation

An organization's processes for defining and capturing 'as builL maintenance and renewal unit costs and themethods used by an organization for the valuation and depreciation of its assets.

Stakeholder Engagement


24

New era of ISO 55000 Series.


ISO 55000: Asset Management - Overview, Principles and Terminology.

ISO 55001: Asset Management – Management Systems - Requirements.

ISO 55002: Asset Management — Management systems - Guidelines for the application of ISO 55001

Asset Management Fundamentals :

ISO 55000 SERIES STRUCTURE 25

AssuranceLeadershipAlignmentValue


Value: Assets exist to provide value to the organization and its stakeholders.Asset management does not focus on the asset itself, but on the value that the asset can provide tothe organization. The value (Which can be tangible or intangible, financial, or non financial) willbe determined by organization and its stakeholder in accordance with the organizationalobjectives.

Alignment: Transform organizational objectives into technical and financial activities, decisions and tasks

Asset management translates the organizational objectives into technical and financial decision,plans and activities.

Leadership: Leadership and workplace culture are determinants of value realization.leadership and commitment from all managerial levels is essential for successfully establishing,operating and improving asset management within the organization.

Assurance: Asset management enables the assets to fulfil their required functionThe need for assurance arise from the need to effectively govern an organization. Assurance applies to asset, asset management and the asset management system.

THE FUNDAMENTALS OF ASSET MANAGEMENT 26

VALUE ALIGNMENT LEADERSHIP ASSURANCE


FUNDAMENTALS : VALUE 27

VALUE

ALIGNMENT

LEADERSHIP

ASSURANCE

Value: Assets exist to provide value to the organization and its stakeholders.

Asset management does not focus on the asset itself, but on the valuethat the asset can provide to the organization. The value (Which can betangible or intangible, financial, or non financial) will be determined byorganization and its stakeholder in accordance with the organizationalobjectives.

Existing Focus Lifecycle cost Total Cost of Ownership (TCO)

Future Focus Value Creation

Its Like Your Car...People buy carsto realize value.


FUNDAMENTALS : ALIGNMENT 28

VALUE

ALIGNMENT

LEADERSHIP

ASSURANCE

Alignment: Transform organizational objectives into technical and financial activities, decisions and tasks

Asset management translates the organizational objectives intotechnical and financial decision, plans and activities.

Objectives into actions

Integration

A supporting Asset Management System


FUNDAMENTALS : LEADERSHIP 29

VALUE

ALIGNMENT

LEADERSHIP

ASSURANCE

Leadership: Leadership and workplace culture are determinants of value realization.

leadership and commitment from all managerial levels is essential forsuccessfully establishing, operating and improving asset managementwithin the organization.

Workplace culture

Roles and responsibilities and authority

Awareness

Stakeholder involvement


FUNDAMENTALS : ASSURANCE 30

VALUE

ALIGNMENT

LEADERSHIP

ASSURANCE

Assurance: Asset management enables the assets to fulfil their required function

The need for assurance arise from the need to effectively govern an organization. Assurance applies to asset, asset management and the asset management system.

Assets fulfill purpose

Processes

Connection to organizational objectives

Continual improvement

Necessary resources


FROM ORGANIZATION TO PORTFOLIO 31

Managing the

Organization

Asset Management

Asset Management

System

Asset Portfolio

Coordinated activity of an organization to realize value from assets.

Set of interrelated or interacting elements to establish APM policy, APM objectives and processes to achieve those objectives.

Assets that are within the scope of the asset management system.


32

IntegrateManagement Initiatives with

Asset Performance Management.


MISSING LINK 33

Normally 15-25% Cost Avoidance is achieved when Asset Performance Management System is used effectively.

It has been shown that typically equipment reliability problems accounts for about 38 percent of all unplanned slowdowns or shutdowns.

Problems with Data Quality, Data Entry, Completion.

No synchronize among people, Process and Application.

End users are not reliability oriented.

No Standardizations.

Strategy & Programs

People & Processes

DISCONNECTED

Applications & Information


APM : THE MISSING LINK 34

APM provides asset owners with a single point of access to a collaborative transactional workspace to manager their assets throughout their productive lifecycle.

Asset performance management is the backbone of reliability culture.

APM enables organizations to identify, contain, analyze and remove production losses and thus improve production performance

Strategy & Programs

People & Processes

APM

Applications & Information


DEVELOP KAI FROM VISION 35

KMI

KPI

KAI

Top Management | KMI : Key Management IndexMiddle Management | KPI : Key Performance IndexFront line Workforce | KAI : Key Activity Index


INTEGRATE MANAGEMENT INITATIVES 36

APM

ISO Series

Operational Excellence

Integrate all Management System towards company Vision


APM INTEGRATION WITH OTHER INITIATIVES 37

APM

TPM

TQM TPS

SIX SIGMAMaintenance Optimization

Program

LEAN

ISO - 9001

Customer Satisfaction Index

Data Analytics

Web Penetration

WCM

KAIZEN

RELIABILITY

FI

Inventory Management

VSM

Condition Monitoring

5S


Better-performing Assetsmake better-performing Companies

38

39 Making Assets work for you.

Developing robust Asset Performance Management

System.


FOCUS ON TEEP & OEE 40

Total Effective EquipmentPerformance (TEEP)

The ratio of the good product produced to maximum possible production over a given calendar time period

Overall EquipmentEffectiveness (OEE)

The ratio of the good product produced to plannedproduction over a given calendar time period


DESIGNING THE APM SYSTEM 41

Real Time Visibility

Flexible & Robust Data

Collection

APM SystemDesign

Operational Governance

Empowering the

Workforce

Driving Accountability

Flexible, Robust Data Collection Real-Time VisibilityOperational Governance Empowering the WorkforceDriving Accountability


Provides robust automated data collection through System Platform objects.

Leverages System Platform device connectivity to interface to any plant

information source

Supports multiple methods for manual data collection such as HMI, Web

and Mobile.

A platform for standardization in support of industry standards.

Data Collection in support of OEE – Overall Equipment Effectiveness.

APMSD : FLEXIBLE & ROBUST DATA COLLECTION 42

Flexible & Robust Data Collection



Empowering the Workforce



Asset Performance Management System Design

Drive better equipment utilization through operator awareness

Provide visibility to key performance metrics in real-time

Drive consistent “action” to normal activities (e.g. line setup/change over),

as well as abnormalities.

Get instant notifications of alarms and out of range data points.

Take action, share data and notify colleagues with a click.

Multi-platform support.

Advanced Reporting & Analytics, Single & Multi-Plant.

Easier Dashboard and multi-format report generation.

APMSD : REAL TIME VISIBILITY 43







Define and institutionalize operational practices to sustain improvements Coordinate disparate people and applications into effective processes Measure the effectiveness of your practices Easily adapt and change practices to drive further gains.

APMD : OPERATIONAL GOVERNANCE 44






Ensure that Improvements are Sustained…


Enables people to own and participate in the change management process.

Coordinates and facilitates communication amongst the team members.

Aligns the cross-functional team with business objectives and priorities.

Facilitates and guides the change management process.

APMD : EMPOWERING THE WORKFORCE 45






Ownership Drives Adoption…


Define “action plans” that align with your organizational objectives – close

the loop!

Define how each role in the organization participates in those plans

Measure the effectiveness of the teams and how well they react and respond

Appropriately escalate processes to ensure that they are addressed in a timely

manner

APMD : DRIVING ACCOUNTABILITY 46






Establish Processes to Drive Accountability…


47

Focus on future uncertainty

& long term business strategy for better Profitability & sustenance.


APM : SUSTENANCE 48

DATA QUALITY

ADAPTABILITY

LEADERSHIP


SUSTAINED RESULTS 49

CONTENT

CHANGE


Asset Performance Management is

Cyclicalbut each time

through the cycle there is

improvement.

50

Books and Standards Asset Management: Whole Life Management by Chris Lloyd

Asset Management Excellence by John D. Campbell, Andrew K.S. Jardine, Joel McGlynn

Benchmarking Best Practices for Maintenance, Reliability and Asset Management by Terry Wireman

Physical Asset Management Handbook by John S. Mitchell

Maintenance Best Practices by Ramesh Gulati

Physical Asset Management by Nicholas Anthony John Hastings

The Asset Management Landscape

Sustainable Asset Management by Roopchan Lutchman

Operational Excellence by John S. Mitchell

The (New) Asset Management Handbook – The Guide to ISO 55000

Leader's Guide to ISO 55001: Asset Management System Requirements by Darrin J Wikoff

The Asset Management Landscape

White Papers & Presentations Asset Performance Management by Mehul Shah, Matthew Little field

Asset Performance Management:Bridging the Gap Between CapEx and OpEx by Sandra DiMatteo

Strategic Asset Management Planning Presented by Howard Bulmer

Top Strategies for Asset Performance Management by Mehul Shah

REFERENCE 51


CONTACTS END

If you have any queries regarding this presentation then contact me.

DEEPAK KUMAR SAHOOMobile : +966 – 568 390 270

+1 – 310 929 7404Email : [email protected]

[email protected]

Post graduate in Engineering Management (RCM, TPM, CBM) followed by B.Tech in Mechanical Engineering having over 8 years of experience in the field of Reliability Improvement, Operational Excellence, and Asset Management domain.

Certified Maintenance & Reliability Professional - CMRP in 2015, Six Sigma Black Belt Certified, TPM facilitator and Lean Expert.

Worked in multiple industries such as Petrochemicals, Steel, Ferro-Alloys, FMCG, Facilities Management sectors in Asia Pacific, Middle-East, Eastern Europe and North Africa regions.

Imparted Training on various aspect of OE, Reliability Engineering such as Root Cause Analysis, Lean Manufacturing, Value Stream Mapping, Total Productive Maintenance, Kaizen, Small group Activities, Reliability Analytics, 4.5G maintenance Strategy, Loss, Operator based Reliability, SMED, Six Sigma, ISO – 55000, Asset Performance Management and various continuous improvement Tools.

Published white papers and presented seminars in various international forum.

Educational committee member in GSMP, Bahrain.

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Asset Performance Management_Deepak Sahoo