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 OHSACTand 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 right
information?)
3
4Record Keeping
(Do we have the right
documentation?)
42
2Resourcing & Skills
(Who is responsible
and 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, Processes
Standards & Guidelines)
7
9Critical Systems & Processes
(Head Office, Regional Support
Structures and Compliance)
9
10Different Asset Condition
(Differentiation, Prioritisation
Strategizing and Reporting)
10
11Reliability & Modeling
(Service Delivery Structures
Life Cycle Assessment)
11
12Financial Optimisation
(Service Delivery Structures
Enhanced to Estate Management)
12
Configuration
Design
Maintenance
& Workflow
Master
Planning
IMS, BPR
Integration
Asset Life
Optimisation
2 3 44
5
6
5
6788
9
Asset Condition
Modelling
101
1
1
11
2
Complete Organisational EAM
EAS-14/03-11
BUSINESS PROCESS MODEL
CONSIDER NON-
ASSET SOLUTIONS
• Failure Management
• Insurance
• Demand Management
CUSTOMER
EXPECTATIONS
• Level of Service
• Cost
LEGISLATIVE
REQUIREMENTS
• Financial
• Environmental
STRATEGIC PLANNING PROCESS
SERVICE LEVEL REVIEW PROCESS
ASSET MANAGEMENT PROCESS
CONSIDER ASSET
SOLUTIONS
• Maintain/ renew/ upgrade/
dispose of existing assets
• Create new assets
IMPLEMENT ASSET MANAGEMENT
SOLUTION
Strategic
Planning
Tactical
Planning
Operational
Planning
Reference: The Total Asset Management Process International
Infrastructure 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
Current
GapFuture
Gap
Future
Demand
Property
Gap
User Needs
PropertyRespon
se
Dem
and
Supply
EAS-14/03-13
Property Management “Best Practices”?
Business Mission
OrganisationalStrategy
DivisionalObjectives
ProjectPortfolios
ExecutableProgrammes
Projects
CONCEPT
FEASIBILITY
IMPLEMENT
HANDOVER
IDEA
DEVELOP
Projects
Business Life Cycle
a. Project Life Cycle
SCM Cycle
Business and Asset Life Cycles
EAS-14/03-14
Issue TR
Briefing
Session
EvaluateTechnical
Financial
Screening
Approve/
Reject
PN & BudgetRequirements
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
Co
nd
itio
n
Routine w
ork
only
Main
tain
Ma
inta
in
Rehabilitate
Routine w
ork
only
100%
SP
SL
A C
riti
cal T
hre
sh
old
EOL1
Cost effort – Time Frame
X
EOL2
Replacement Condition
“Serviceability” Threshold
Ro
uti
ne
wo
rk o
nly
Ma
inta
in &
C
risis
Re
pa
ir
EOL3
X X
EOL4
X
Rehabilitate(“partial” upgrade)
Rehabilitate(“Major” upgrade)
c) Maintenance Cycle (Generic)
Co
nd
itio
n
Routine w
ork
only
Main
tain
Cri
sis
Ma
na
ge
me
nt
Rehabilitate
Routine w
ork
only
100%
SP
SL
A C
riti
cal T
hre
sh
old
EOL1
Cost effort – Time Frame
X
EOL2
Replacement Condition
“Serviceability” Threshold
Ro
uti
ne
wo
rk o
nly
Ma
inta
in &
C
risis
Re
pa
ir
EOL3
X X
EOL4
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
Asset Investment Policy Maintenance Management Policy Programme Prioritisation Policy
Master (Investment) Plans Technology Plans Asset types and Life Cycles Programme Management PPSG
Maintenance (Strategic & Operational) Routine Maintenance Fault Management Replacement Management
Programme Upgrade Cycles
Condition Monitoring (ON LINE) RCM (Reliability Centered) Audits (DYNAMIC) Compliance Evaluations Differentiation New technologies (Impacts) PMO streamlining (Technology)
Organisational Alignment Business Plan Impact & Updates Values, Policies, etc.
Full Life Cycle Asset Management ISO 5500+
PRASA Business Vision
Macro-economic Impact
H/L Transformation Plan
ISO 9000 Compliant
IIMM supported
BCI compliant
RSR Compliant
EAS-14/03-18
Project Governance and Structures Configuration and documentation Management of Change Training, awareness & competence Contingencies Management Production Systems
Integrated Asset Management GIS and Spatial Drawing Offices
Information Management Risk and Legal
Life Cycle Planning Maintenance Policy Tools, Facilities & Equipment PMO and Project Support
IMPLEMENT THE AMPINFORMATION FLOWS
Information flows
Information Management
SERVICE DELIVERY ISSUES
Defining core services
Contract types/ delivery
mechanisms
Contract issues
THE AM PLANPREPARE AM PLAN
Purpose (ST, MT)
Steps in preparing AM plan
Plan structure
Key Stakeholders
DEVELOP LIFE CYCLE
STRATEGIES
Develop strategies for each
stage of asset life
AMP REVIEW & AUDITCyclic audit of:
AM Performance
Technical content of AMP
Compliance with legal requirements
Internal/ external audits
ASSET MANAGEMENT IMPROVEMENT PLAN
Condition Assessments
AM status reviews
The improvement program
Pilot studies
SERVICE
LEVEL
REVIEW
Reference:
Flow chart for developing and using Asset Management Plans (AMP)
International Infrastructure Management Manual – version 1
CORPORATE AM DIRECTION Corporate need defined
Obtain organisational commitment
Adopt corporate AM goals and
objectives
Define AM roles and responsibilities
Involve key stakeholders
THE AM TEAM Oversee AM implementation
Co-ordinate AM activities
Internal Audit (Configuration Audits)
LEGISLATIVE
REQUIREMENTS
CUSTOMER/STAKEHOLDER EXPECTATIONS
EAS-14/03-19
PREVENTATIVE MAINTENANCE
Enterprise Asset Management
(EAM)
Continuous
Improvement
Total
Productive
Maintenance
Financial
Optimisation
Predictive
Maintenance
Operations
Involvement
Reliability
Engineering
Work Flow &
Documentation
System
CMMS (Computerised
Maintenance
Management
System)
Technical and
Interpersonal
Training
Stores and
Procurement
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 Facilities
Management
Post Warrantee
Routine Maintenance
Preventive Maintenance
First Line Maintenance
2 nd Line Maintenance
Front Line Maintenance
Repairs & Refurbishment
High Cost Facilities
Management 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
Investments
Operations
“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 OF
FAILURES/
ANNUM
DETERIORATION
SKILLS BENEFITS
Unavailability &
Environmental
Safety & Quality
Effects, etc.
Spare parts
Cost/Failure
Repair
TimeWages( + 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 be
replaced
Optimum Life Cycle Investment CostsTota
l C
ost o
f O
wners
hip
(accu
mu
lative)
(TC
O)
30
20
10
40
50
60
70
80
90
100
%
Years30% 100%
Acquisition
(Project Costs)
Operating &
Maintenance
Real Time
Total Cost
Of Ownership
TCO (100%)
Latest Start of
Replacement
Acquisition
50%
X
EAS-14/03-24
Operating &
Maintenance
Asset to be
replaced
Cost OverrunTota
l C
ost o
f O
wners
hip
(accu
mu
lative)
(TC
O)
30
20
10
40
50
60
70
80
90
100
%
30% 100%
Acquisition
(Project Costs)
(~40% to 50%)
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
Real Time
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
Measure
Safety &
Improve
Maintain Safety
Awareness
Methodology (SAM)
Do Safety
Awareness 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
MAXIMUM
UTILISATION
OF RESOURCESVISION
TRAINING
LEADERSHIP
AND
INVOLVEMENT
VALUE
FOR
MONEY
COMMUNICATION
Maintenance VISION
Maintenance Focus: AMU
EAS-14/03-28
ORGANISATION
POLICIES
ORGANISATION SYSTEMS
ACTIVITIES
DEVELOPMENT
PEOPLE
PLANNING
CONTRACTING
CONTROL
COMPUTER
SYSTEM
SOLUTIONS
ASSET
MANAGEMENT
SUPPORT
AUDITS
Maintenance Governance
EAS-14/03-29
Maintenance Focus: AMU
Asset Condition
based ManagementCircumstantial
Management
“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
CURRENT
PREDICAMENT
TURN-AROUND
THRUST
SUSTAINABLE
GROWTH
“Fire Fighting
Maintenance”
Preventive
Maintenance
Ad hoc
Maintenance
Apply
Systems
Maintenance
Integration
Continuous
Improvement
Availability
Life Cycle
Profit
Business Approach
Asset Condition
Monitoring
Asset Condition
Management
PAS 55 – ISO 5500+
ISO (9000+14000)
Planned & Predictable
Circumstantial
Management
Asset Condition
based Management
“Fix-it” Mentality
Asset Management (Evolution)
EAS-14/03-32
RCMMURAMUDAMURIJIDOKAPOKA-YOKEADNONJIT
• 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
Context of Asset ManagementData management
Condition monitoring
Risk management
Quality management
Environmental management
Systems and software engineering
Life cycle costing
Dependability (Reliability, Availability, Maintainability, Supportability)
Configuration management
Sustainable development
Inspection
Non-destructive testing
Pressure equipment
Financial management
Value management
Shock and vibration
Acoustics
Qualification and assessment of personnel
Project management
Property and property management
Facilities management
Equipment management
Commissioning process
Energy management
ISO
55000