Life Cycle Asset Management

THE VITAL DIFFERENCE BETWEEN USING CONSEQUENCE OR CHANCE REDUCTION STRATEGIES IF YOU WANT OPERATIONAL EXCELLENCE RESULTS, IS CONSEQUENCE REDUCTION REQUIRES REPAIRS AND MAINTENANCE, WHEREAS CHANCE REDUCTION REMOVES REPAIRS AND MAINTENANCE.

In reading “Enterprise Asset Management Success the Plant Wellness Way for CEOs and Senior Executives” I was interested in your table on page 15 that showed risk based inspection and condition based monitoring techniques as consequence reduction strategies.

My understanding is that both RBI and CBM are specifically designed to prevent failure through reducing the likelihood of failure i.e. by detecting failure before it happens within timescales that allow mitigation action to be taken. In the API 581 RBI standard, consequence is treated as a constant over time so the methodology specifically targets risk reduction through more effective inspection or design changes.

I appreciate that this is only a small point in terms of the overall approach and key messages challenging readers, but if you have time to reply I would like to understand the reasoning behind not viewing RBI and CBM as chance reduction.

Hello Paul,

When I developed the table I decided that if a technique or methodology required a failure to start in order to provide evidence that failure had been initiated, then it fell into the consequence reduction strategy. Once an embryonic failure existed then the eventual outcome COULD be complete failure if circumstances went badly. CBM and RBI look for evidence of failure, in fact they need a failure to have started in order to provide the signal that the P-F degradation has begun.

The Physics of Failure Factors Analysis for selecting maintenance strategy is a one-person exercise that identifies all ways a component can physically fail. Equally important to its simplicity is its ability to select the most effective life cycle strategies for maximising reliability. Another powerful business advantage is the failure-addressing solutions arrived at are universal solutions that apply to every other identical component, whatever equipment it is in. Do a Physics of Failure Factors Analysis for one part and you do it for all identical parts for the life of your operation. It is a highly accurate and cost-effective maintenance strategy selection methodology.

Charting historic equipment failure events visually shows the Failure Probability Density Function curve for that equipment. It is also known as a Failure Density Distribution Curve.

VALUE OF A DISTRIBUTION CURVE

Failure Probability Density Function curves, Failure Density Distribution Curves contain useful information about what has happened to equipment. These curves illustrate the chance of failure of an equipment over a period. Here, our fixed variables are the equipment’s components’ material-of-construction and design. As such, the only changing variable is the operating and maintenance strategies, including work processes, used by the company.

How to conquer the last frontier in equipment reliability, maintenance, and industrial engineering asset management: Our machines and materials of construction do not cause our equipment problems and failures. The real problem for industry is the ‘human factor’ in stopping people making mistakes. You gain control over the ‘human factor’ by providing clear and comprehensive work procedures that explain exactly how to deliver the performance required and that give users the means to check and improve their performance. The Accuracy Controlled Enterprise 3T procedure layout and content lets you provide your people with the details of how to do their work with exceptional quality, and the means to correct and improve their efforts until they are that good.

There is only one reason companies do maintenance on their physical assets—because it’s cheaper than not doing it. Unless doing maintenance makes a profit by saving money, it is wasting money. In the end, maintenance is about getting the best economics from physical assets. 

Keywords: plant maintenance management, equipment reliability, production risk management

The depreciation rate for equipment varies depending on the operational situation of the asset and the tax laws that apply to your company. The depreciation rate is more an accounting decision than an engineering one. The engineering aspect in the depreciation rate for equipment choice is deciding how long is the operating lifetime for an equipment item. 

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I want to know how we calculate the value for the depreciation rate of equipment. Want is done on other industrial sites, we apply an depreciation rate of 8 percent per year?

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 Overview the Plant Wellness Way EAM Methodology for a simple and successful Enterprise Asset Management System. Learn how to apply the Plant and Equipment Wellness enterprise asset management methodology. Follow the steps to get the best performance from your plant and equipment. Learn what systems and processes produce the optimal plant and equipment reliability results. From creating low stress component environment for lasting equipment health through to establishing the simplest and most effective business system and processes for world class asset management performance, this overview guide to the Plant Wellness Way takes you step by step in creating the outstanding asset performance needed for world class operational excellence. As with human wellness, the Plant Wellness Way requires you to build a healthy life for your machines. Learn to control your plant’s reliability by managing the stresses put on equipment parts and reducing the risk of failure so plant and equipment remains fit and healthy to produce its best performance. The Plant Wellness Way EAM methodology lets you find the ideal health conditions for your equipment and machines and makes you establish business processes and systems to achieve and maintain outstanding reliability performance. 

To get world class operation and profits your Asset Lifecycle Management System must prevent every opportunity for defect-creation in all life cycle phases, for all your operating equipment

Every physical asset has a lifecycle starting at conception through to its eventual disposal and site remediation. In each phase of the lifecycle errors can occur that cause defects within the asset. In operations with hundreds of assets there easily can be tens-of-thousands of defects. Each defect is a risk that eventually contributes to breakdowns, losses, wastes, safety incidents during operation, and shortens the asset’s service lifetime. Eliminating thousands of defects and risks forever is what Plant Wellness Way EAM does for its users.

Turn ISO 9001 Clauses into Your Business Quality System Specifications.

In 1987 the ISO9000 quality management series was launched; superseding the earlier BS5750 document. It has progressed from its initial product quality focus to its now customer satisfaction focus. During all its life the question of the usefulness of ISO9001 to business growth and performance has dogged it. The greatest fault of ISO9001 is its lack in setting quality performance. It mistakenly asks companies to select their own quality standards to work to. That is its single greatest problem—the lack of quality benchmarks and is the reason why it is common to hear managers call ISO 9001 a waste of time. But if you address ‘quality’ correctly in your ISO 9001 quality management system you can turn your company into a world-class performer within three years.

 It is a mockery to use business performance indicators to manage a company or department. Using the information that shows up on the management dashboards on your screen can wreck your company. Measuring a process does not put you in control of it. A process is totally self-controlled. You always get what the process gives you. Organizational processes work well or do not because of their design.1 A business process that cannot achieve its aims is the wrong design for its purpose.

Your views on why enterprise asset management fails intrigued me. I am currently undertaking a master’s study on “Understanding the Difficulties of Developing an Effective Planned Preventive Maintenance Regime at an underground coal mine”.

My masters is based on finding the reasons why in the mining field the other methods of maintenance methodologies such as RCM, TPM, Six Sigma, etc. do not seem to get embraced by the mining maintenance teams, and there is always a weak attempt to implement them on the part of management.

OPERATIONAL EXCELLENCE IS A RESULT 

Operational Excellence requires a business system-of-reliability. Reliability is the chance of success, so a company built as a ‘system-of-reliability’ maximizes its operating profits and production success. The three requirements needed to create a system-of-reliability for Operational Excellence are: 

1. A defect eliminating work quality assurance system where your processes are robust and anti-fragile to disruption, and insure right-first-time results. Only if processes are built to go right every time; are anti-fragile to error; and proactively prevent causes of problems, can you reach Operational Excellence. 

2. Business-wide process innovation focused on optimizing for the highest productivity, least cost, and right quality output. Then you install the next generation of solutions for ever better productivity. 

3. Holistic, lifecycle physical asset management for stable, reliable operation with outstanding availability, highest utilization and most sustainable throughput. 

You do three phases to reach Operational Excellence the Plant Wellness Way: Design your system-of-reliability – Teach your system-of-reliability – Build your system-of-reliability. First, design a business that can be the best. Second, teach your leaders how to do the right things, rightly. Third, apply and do the right behaviours for success. 

Every physical asset has a lifecycle starting at conception through to its eventual disposal and site remediation. In each phase of the lifecycle errors can occur that cause defects within the asset. In operations with hundreds of assets there easily can be tens-of-thousands of defects. Each defect is a risk that eventually contributes to breakdowns, losses, wastes, safety incidents during operation, and shortens the asset’s service lifetime. Eliminating thousands of defects and risks forever is what Plant Wellness Way EAM does for its users

 An endless Dilemma confronts every business. It is how to ensure that the activities we undertake will always produce the intended results. 

Explosions, workplace deaths, harmful accidents, physical injuries, damaged goods, scrapped jobs, repeat work, manufacturing errors, operating mistakes, bad repairs, misunderstanding, wrong decisions, supplier miscommunication and poor delivery performance are all examples of the many unwanted troubles and problems caused by the Dilemma. Its impacts and effects have been written about for more than 6,000 years of recorded human history. 

The Dilemma’s prevalence throughout the world indicates that human beings are a major contributor. A second major factor is business design: how your processes are configured and operate determines your degree of success in addressing the Dilemma. A third big cause is our training and education processes which have transferred the Dilemma all through businesses and across cultures for over 60 centuries. To stop the Dilemma affecting your company you can use what we have learnt about the universe, people and business processes during the last 100 years. 

 Value Driven Maintenance is a financial modelling method to pick maintenance process improvements. Used alone VDM gives you a “starry-eyed” view of maintenance savings. Once you combine VDM with Plant Wellness Way system-of-reliability analysis you get practical solutions.