HEADING GOES HERECALIBRI BOLD,
UPPERCASE, 32pt
PRESENTER: Name Goes HereTitle: Organisation/Country
20 November 2012
SUB-HEADING GOES HERECALIBRI BOLD, UPPERCASE, 20pt
“Enterprise Asset Management for the Public Sector”
Ernst Swanepoel – 10 April 2014
TOPICS• Accountability for Asset Management• Physical asset management: Strategic Business
Process Model• Asset Management “Best Practices”• Business and Asset Life Cycles• Life Cycle Asset Management Costs• Best Practices:
– Asset Management– Maintenance Management
• Who is accountable for the condition of the asset?
• What is our core service to our customers?
Accountability for Asset Management
• Treasury systems’ requirements
–“The effectiveness and appropriateness of systems and procedures used to manage state assets is vital”
–“Great emphasis should be placed on ensuring better accounting practices and procedures, to ensure that state assets are managed and utilized in the most effective way to achieve the required results as defined for each entity within the Public Sector”
a) Accountability & PFMA
• Treasury’s systems requirements“Good asset management is critical in any business environment and more so in the public sector as they are vital to providing a foundation for economic activity”
• PFMA Section 38–places the responsibility on the accounting officer for financial and risk management of the entity as well as the effective and efficient use of the resources thereof. The section further specifically tasks the accounting officer with the management, including the safeguarding and maintenance of assets and the management of liabilities.
b) Accountability & PFMA
• Asset and work–enterprise-wide visibility and lifecycle management for your physical assets to decrease costs, increase asset availability and minimize downtime.
• Material and Procurement–Leverages your corporate buying power by centralizing purchasing for multiple locations and helps you manage and optimize spare parts inventory while minimizing carrying costs and providing inventory visibility across your entire organisation
c) Accountability & PFMA
• Safety and Compliance
–Helps you comply with all regulatory issues in your industry while reducing non compliance penalties and improving asset utilisation and uptime.
• Design Engineering
–Utility engineers can create accurate plans for new construction, including necessary equipment and budgets in a fraction of the time
d) Accountability & PFMA
• Adhere to all applicable legislation
• Implement and maintain a compliance management system for each construction and maintenance project
• Compliance with the requirements of the OHSACT and its Regulations
–Attract personal liability, penalty and criminal record
e) OHS Act & PFMA
Until July 2003• Liability for health and safety vested with the asset owner,
and ………• Section 37 (2) agreement implemented to ensure that
contractors accept joint responsibility– which is project managed
f) OHS Act & PFMA
1
1Identify Infrastructure
(What do we have?)
3Supporting Systems
(Do we have rightinformation?)
3
4Record Keeping
(Do we have the rightdocumentation?)
42
2Resourcing & Skills(Who is responsibleand accountable?)
5Aligned Reporting
(Does our reporting make business sense?)
5
6Business Architecture(Consolidate on Logistics
For Life Cycle Management)
6
8System Architecture(Consolidate Systems, Strategies & Interfaces)
8
7PPSG Formulation
(Policies, People, ProcessesStandards & Guidelines)
7
9Critical Systems & Processes(Head Office, Regional Support
Structures and Compliance)
9
10Different Asset Condition(Differentiation, PrioritisationStrategizing and Reporting)
10
11Reliability & Modeling
(Service Delivery StructuresLife Cycle Assessment)
11
12Financial Optimisation
(Service Delivery StructuresEnhanced to Estate Management)
12
ConfigurationDesign
Maintenance& Workflow
MasterPlanning
IMS, BPRIntegration
Asset LifeOptimisation
2 3 44
5
6
5
6788
9
Asset ConditionModelling
10 1111 12
Complete Organisational EAM
EAS-14/03-11
Business Process Model
CONSIDER NON-ASSET SOLUTIONS
• Failure Management• Insurance• Demand Management
CONSIDER NON-ASSET SOLUTIONS
• Failure Management• Insurance• Demand Management
CUSTOMER EXPECTATIONS• Level of Service• Cost
LEGISLATIVEREQUIREMENTS• Financial• Environmental
CUSTOMER EXPECTATIONS• Level of Service• Cost
LEGISLATIVEREQUIREMENTS• Financial• Environmental
STRATEGIC PLANNING PROCESSSTRATEGIC PLANNING PROCESS
SERVICE LEVEL REVIEW PROCESSSERVICE LEVEL REVIEW PROCESS
ASSET MANAGEMENT PROCESSASSET MANAGEMENT PROCESS
CONSIDER ASSET SOLUTIONS
• Maintain/ renew/ upgrade/ dispose of existing assets
• Create new assets
CONSIDER ASSET SOLUTIONS
• Maintain/ renew/ upgrade/ dispose of existing assets
• Create new assets
IMPLEMENT ASSET MANAGEMENT SOLUTION
IMPLEMENT ASSET MANAGEMENT SOLUTION
Strategic Planning
Tactical Planning
Operational Planning
Reference: The Total Asset Management Process InternationalInfrastructure Management Manual, 2006-2012
EAS-14/03-12
Asset Management “Best Practices”
Requirements of Property Users
As defined by Business Planning Strategy
Current property user requirements
are delivered?
Possible future property user
requirements known
Demands on the future property base
Current property base
Property Management
strategies to close the Gaps
CurrentGap
FutureGap
Future Demand
PropertyGap
User Needs
PropertyResponse
Dem
and
Supply
EAS-14/03-13
Property Management “Best Practices”
Business Mission
PRASA CRESStrategy
DivisionalObjectives
ProjectPortfolios
ExecutableProgrammes
Projects
CONCEPT
FEASIBILITY
PLAN
NING
IMPLEMENT
HANDOVER
MAI
NTAI
N
IDEA
DEVELOP
Projects
Business Life Cycle
a. Project Life CycleSCM Cycle
Business and Asset Life Cycles
EAS-14/03-14
Issue TR
BriefingSession
Alig
n Q
& A
’s
EvaluateTechnicalFinancialScreening
Approve/Reject
App
oint
SP
PN & BudgetRequirements
Close Tender
Start(Originate from
AMU - PMO)
(Business CaseURS)
(Briefing)
(Note theExistence of PPSG)
(PM Governance)
(Asset Management Unit)
(AMU Leadership)
(AMU and StrategicPMO)
b)SCM CYCLE (Generic)
Legend:• AMU = Asset Management Unit• PMO (Organisational Programme Management Office)• PPSG = Policies, Procedures, Standards & Guidelines EAS-14/03-15
EAS-14/03-16
Co
nd
itio
n
Rou
tine
wor
k on
ly
Mai
ntai
n
Mai
nta
in
Rehabilitate
Rou
tine
wor
k on
ly
100%
SP
SL
A C
riti
cal T
hre
sho
ld
EOL1
Cost effort – Time Frame
XEOL2
Replacement Condition
“Serviceability” Threshold
Ro
uti
ne
wo
rk o
nly
Mai
nta
in &
C
risi
s R
epai
rEOL3
X XEOL4
X
Rehabilitate(“partial” upgrade)
Rehabilitate(“Major” upgrade)
c)Maintenance Cycle (Generic)
EAS-14/03-17
Co
nd
itio
n
Rou
tine
wor
k on
ly
Mai
ntai
n
Cri
sis
Man
agem
ent
Rehabilitate
Rou
tine
wor
k on
ly
100%
SP
SL
A C
riti
cal T
hre
sho
ld
EOL1
Cost effort – Time Frame
XEOL2
Replacement Condition
“Serviceability” Threshold
Ro
uti
ne
wo
rk o
nly
Mai
nta
in &
C
risi
s R
epai
rEOL3
X XEOL4
X
Rehabilitate(“partial” upgrade)
Rehabilitate(“Major” upgrade)
c)Maintenance Cycle (Generic)
1. General Requirements
(ISO 5500x)Master IntegratedAsset Management
Programme)
2. Asset Management Policy (PPSG)
3. Asset Management Strategy
4. Asset Management Enablersand Project Performance
5. Asset Management Plans(Implementation)
6. Performance Assessment and improvement
7. Management Review
PLAN
DO
CHECK
ACT
u Asset Investment Policyu Maintenance Management Policyu Programme Prioritisation Policy
u Master (Investment) PlansØ Technology PlansØ Asset types and Life CyclesØ Programme Management PPSG
u Maintenance (Strategic & Operational)Ø Routine Maintenance Ø Fault Management Ø Replacement Management
u Programme Upgrade Cycles
u Project Governance and Structuresu Configuration and documentationu Management of Changeu Training, awareness & competence u Contingenciesu Management Production Systems
Ø Integrated Asset Management Ø GIS and SpatialØ Drawing Offices
u Information Managementu Risk and Legal
u Life Cycle Planningu Maintenance Policyu Tools, Facilities & Equipmentu PMO and Project Support
u Condition Monitoring (ON LINE)u RCM (Reliability Centered)u Audits (DYNAMIC)u Compliance Evaluationsu Differentiationu New technologies (Impacts)u PMO streamlining (Technology)
u Organisational Alignmentu Business Plan Impact & Updatesu Values, Policies, etc.
Full Life Cycle Asset Management ISO 55000
u PRASA Business Visionu Macro-economic Impactu H/L Transformation Plan
v ISO 9000 Compliantv IIMM supportedv BCI compliantv RSR Compliant
EAS-14/03-18
IMPLEMENT THE AMPINFORMATION FLOWSv Information flowsv Information Management
SERVICE DELIVERY ISSUESv Defining core servicesv Contract types/ delivery
mechanismsv Contract issues
THE AM PLANPREPARE AM PLANv Purpose (ST, MT)v Steps in preparing AM planv Plan structurev Key Stakeholders
DEVELOP LIFE CYCLE STRATEGIES
v Develop strategies for each stage of asset life
AMP REVIEW & AUDITCyclic audit of:v AM Performancev Technical content of AMPv Compliance with legal requirementsv Internal/ external audits
ASSET MANAGEMENT IMPROVEMENT PLAN
v Condition Assessmentsv AM status reviews v The improvement programv Pilot studies
SERVICELEVEL
REVIEW
Reference: Flow chart for developing and using Asset Management Plans (AMP)International Infrastructure Management Manual – version 1
CORPORATE AM DIRECTIONv Corporate need definedv Obtain organisational commitmentv Adopt corporate AM goals and
objectivesv Define AM roles and responsibilitiesv Involve key stakeholders
THE AM TEAMv Oversee AM implementationv Co-ordinate AM activitiesv Internal Audit (Configuration Audits)
LEGISLATIVEREQUIREMENTS
CUSTOMER/STAKEHOLDER EXPECTATIONS
EAS-14/03-19
PREVENTATIVE MAINTENANCE
Enterprise Asset Management
(EAM)
ContinuousImprovement
TotalProductive
Maintenance
FinancialOptimisation
PredictiveMaintenance
OperationsInvolvement
ReliabilityEngineering
Work Flow &Documentation
System
CMMS (ComputerisedMaintenanceManagement
System)
Technical andInterpersonal
Training
Stores andProcurement
Configuration Management
Asset Condition Management
EAM: Best Practices Model
Our Challenge
Asset OptimisationAchieved
EAS-14/03-20
Revenue GeneratorsProject Life Cycle
Product Life Cycle
AssetCreation
AssetDesign
AssetConfiguration
Delivery
Warrantee Period
Routine Maintenance
Preventive Maintenance
Front Line Maintenance
First Line Maintenance
Profitable FacilitiesManagement
Post Warrantee
Routine Maintenance
Preventive Maintenance
First Line Maintenance
2 nd Line Maintenance
Front Line Maintenance
Repairs & Refurbishment
High Cost FacilitiesManagement EAS-14/03-21
Life Cycle Asset Management Costs
Life Cycle Cost Schematic
Asset DesignLife Labour rates Disposal Process
Costs
ScrapCosts
TOTALCAPITALCOSTS
DISPOSALAMOUNT
Throughput(e.g. commercial)
Availability MTTR MTBF
Composite Yield(Maintenance)
Asset Management Costs
Availability MTTR MTBFFacilities Management
OperatingCosts
Investment CapitalCost
Facil
ities
Man
agem
ent
“Dea
th Tr
ap”
Investments
Operations
S“Calculator”
Project Life Cycle
Product Life Cycle
Life Cycle Asset Management Costs
EAS-14/03-22
FUNDS
EQUIPMENT & MATERIAL PEOPLE
FACILITIES&
INFORMATION
RELIABILITY MAINTAINABILITY
No OFFAILURES/
ANNUM
DETERIORATION
SKILLS BENEFITS
Unavailability &Environmental
Safety & QualityEffects, etc.
Spare partsCost/Failure
RepairTime
Wages( + x )
CAPITAL COSTS
RESOURCE COSTS
CONSEQUENCE COSTS
TRAINING COSTS
Maintenance Services,Tools & Depots,Energy Costs
Costs of Systems& Documentation
JOB COSTS
Costs of Lost Production, Safety & Quality effects
Extra Capacity Costs,Refurbishment & Upgrade
Lost Opportunity Costs
The COST Model
TRAINING COSTS
Maintenance Services,Tools & Depots,Energy Costs
Costs of Systems& Documentation
JOB COSTS
Extra Capacity Costs,Refurbishment & Upgrade
Lost Opportunity Costs
Crisis Management
EAS-14/03-23
Life Cycle Asset Management Costs
Asset to bereplaced
Optimum Life Cycle Investment CostsT
otal
Cos
t of O
wne
rshi
p(a
ccum
ulat
ive)
(T
CO
)
30
20
10
40
50
60
70
80
90
100
%
Years30% 100%
Acquisition(Project Costs)
Operating &Maintenance
Real Time
Total CostOf OwnershipTCO (100%)
Latest Start ofReplacementAcquisition
50%X
EAS-14/03-24
Operating &Maintenance
Asset to bereplaced
Cost OverrunT
otal
Cos
t of O
wne
rshi
p(a
ccum
ulat
ive)
(T
CO
)
30
20
10
40
50
60
70
80
90
100
%
30% 100%
Acquisition(Project Costs)
(~40% to 50%)
Real Time
Operating &Maintenance
• Dramatic Increase in Total Costs
• Substantial REDUCTION of total Asset Life
• ORG forced into new acquisitions prematurely
• Major IMPACT on MTEF
EAS-14/03-25
The maintenance system DoMaintenance
Work
ActivateMaintenance
Work
DevelopMaintenance
Strategy
DetermineEquipmentImportance
DevelopMedium-term
Plan
DevelopBusiness
Plan
DevelopProduction
Plan
MaintainInfrastructure
PlanInfrastructure
MeasureWork &Improve
ImprovementAdministration
Work management cycle
MeasureInfrastructure
& Improve
Infrastructure management cycle
ProvideResources
MeasurePerformance
& Improve
Asset management cycle
DevelopPeople
MaintainOrganisation
Structure
MeasureOrganisation
HUM & improve
Organisation management cycle
Produce
MeasureSafety & Improve
Maintain SafetyAwareness
Methodology (SAM)
Do SafetyAwareness Field
Education (SAFE)
Safety management cycle
The desired asset management strategyEAS-14/03-26
DoMaintenance
Work
ActivateMaintenance
Work
DevelopMaintenance
Strategy
DetermineEquipmentImportance
DevelopMedium-term
Plan
MeasureWork &Improve
ImprovementAdministration
Work management cycle
ProvideResources
MeasurePerformance
& Improve
Asset management cycle
Produce
Crisis Management will get us stuck here …
(manual measurements)
EAS-14/03-27
MAXIMUMUTILISATION
OF RESOURCESVISION
TRAINING
LEADERSHIPAND
INVOLVEMENT
VALUEFOR
MONEY
COMMUNICATION
Maintenance VISION
Maintenance Focus: AMU
EAS-14/03-28
ORGANISATION
POLICIES
ORGANISATION SYSTEMS
ACTIVITIESDEVELOPMENT
PEOPLE
PLANNING
CONTRACTINGCONTROL
COMPUTERSYSTEM
SOLUTIONS
ASSETMANAGEMENT
SUPPORT
AUDITS
Maintenance Governance
EAS-14/03-29
Maintenance Focus: AMU
Asset Conditionbased Management
CircumstantialManagement
“Fix-it” Mentality
Planned & Predictable
“Wait until Disaster Strikes, then go out and
fix it”
“Can you plan a disaster?”
(Fix it while it breaks!!)
“Working harder,distribute maintenance
teams, fix it in a workshop”
“Working smarter, prevent the asset to fail!
- Asset Management (Evolution)
EAS-14/03-30
This is where we come from
CURRENTPREDICAMENT
TURN-AROUNDTHRUST
SUSTAINABLEGROWTH
“Fire FightingMaintenance”
PreventiveMaintenance
Ad hocMaintenance
Apply Systems
MaintenanceIntegration
ContinuousImprovement
Availability
Life CycleProfit
Business Approach
Asset ConditionMonitoring
Asset ConditionManagement
SAN 55ISO (9000+14000)
Planned & Predictable
CircumstantialManagement
Asset Conditionbased Management
“Fix-it” Mentality
- Asset Management (Evolution)
EAS-14/03-31
• The management of physical assets is the cornerstone of our Economy
• Asset Management Practitioners should take the lead in the management of assets towards maturity.
• Programme and Project Management are the most critical focus areas for the restructuring of our assets and the creation of jobs for the years to come.
CONCLUSION