Developing and implementing asset lifecycle management strategies

DEVELOPING & IMPLEMENTING ASSET
LIFECYCLE MANAGEMENT STRATEGIES
by Ntozelizwe B. Mqenebe

Presenter
Ntozelizwe B Mqenebe
Senior Engineer ArcelorMittal South Africa, Newcastle Works
Professional Engineer (Engineering Council of South Africa)
Certified Plant Maintenance Manager Candidate (Association for
Facilities Engineering)
Certified Maintenance and Reliability Candidate (Society for
Maintenance & Reliability Professionals)
• 8 years in Asset Management in Water, Wastewater, Mining
and Steel industry.
5/19/2012 Ntozelizwe Mqenebe 1

Factors in Maintenance
“We have learned to live in a world of mistakes and defective
products as if they were necessary to life”
- Dr. W. Edward Deming

“It Isn’t What You Know That Will Kill You, It is What You Don’t
Know That Will”

“A Proactive Reliability Process is a supply chain. If a step n the
process is skipped, or performed at a substandard level, the
process creates defects known as failures. The output of a healthy
reliability process is optimal asset reliability at optimal cost.”
- Ron Thomas, Reliability Director
Dofasco Steel

Understanding the overall lifecycle of an asset
and how it impacts maintenance management
Planning
Acquisition
Operations &
Maintenance
Disposal

The phases through which an asset passes during its life are:
The Planning process, where the requirement for an asset is
identified and established having regard to service delivery
considerations;
The Acquisition phase, where the asset is purchased,
constructed, leased or otherwise brought into service;
The Operations and maintenance phase, where the asset is
used for its intended purpose. This phase includes periodic
maintenance, refurbishment or major repair; and
The Disposal phase, initiated when the economic life of the
asset has expired, or when the need for the service provided by
an asset has disappeared.

NOTE:
Asset management decisions made in one phase of the Asset Life
Cycle can affect the assets performance in other phases.
Example:
Proposals for the disposal of surplus assets should be in
accordance with approved asset management plans in order for
the plant to retain 75% of sale proceeds.

Companies should ensure that Asset Management planning
reflects a Life Cycle Approach.
Limiting asset planning to a single phase (such as acquisition, or
operation and maintenance) will not lead to sound long-term
decisions about assets. Managers should be accountable for the
life cycle effects of their decisions.

• Low bid purchasing is widely used as the primary criterion for
equipment or system selection.
• That is, the initial procurement or acquisition cost often is the
only criterion used.
• For many large scales systems, the cost of system maintenance
and support often ranges from 60 to 75% of the total overall life-
cycle cost for that system.
• Prior to the birth of a new plant, all estimated potential costs are
controlled. As soon as the life of the building or component
begins, the control of the total life-cycle cost of the facility
diminishes.

diminishes.

P-F curve

Using CMMS tools
• A Computerized Maintenance Management System (CMMS) is
a tool to facilitate management of maintenance.
Three phases to a successful CMMS project are:
• Selection
• Implementation
• Utilization

Using CMMS tools
• Proper selection of a CMMS begins with an analysis of the
maintenance organization and its 3 to 5 year strategic plan.
• An analysis of the CMMS in the marketplace will help an
organization find a system that will assist the organization to
achieve its goals.

Using CMMS tools
• Proper implementation of a CMMS consists of standardizing,
gathering, and updating information about equipment, spare
parts, preventive maintenance, personnel, and purchasing.

Using CMMS tools
• The on going use of a CMMS requires staffing for system use,
timely and accurate data collection, and continuous
improvement in maintenance management methods. This will
aid in checking the increased life cycle cost of an asset.

Using CMMS tools
All features included in the CMMS are designed to provide the
following advantages to the user:
• Improve maintenance efficiency
• Reduce maintenance costs
• Reduce equipment downtime by scheduling preventive
maintenance.
• Increase the life of equipment.
• Provide historical records to assist in maintenance planning,
budgeting and equipment repair/replace decisions.
• Provide maintenance report in the format required by the user.

Using CMMS tools
• Plant and equipment maintenance often comprises a large part
of a company’s budget. This is because of high replacement
costs a plant and equipment, the working life of present
equipment must be extended as long as possible.
• Achieving this goal requires that equipment maintenance be
accurately scheduled and performed efficiently.
NOTE: Necessary records must be kept.

Using CMMS tools
• CMMS systems are used to track all maintenance costs and
equipment repairs.
 This tracking is accomplished by the monitoring of work orders.
 By monitoring work-order costs and using proper scheduling of work
orders, repair costs can be monitored.
• This monitoring provides management with necessary
information to track and plan maintenance budgets.

Using CMMS tools
• The Second method of cost control is the monitoring of
inventory and purchasing.
 This monitoring will tract equipment parts costs to each piece of
equipment.
 This part will help prevent excessive inventories.
 The purchasing module helps with vendor selection and monitoring
shipping time.

Using CMMS tools
• Another prime feature of CMMS is: -
 The scheduling of the preventive maintenance function. Proper
scheduling of preventive maintenance can reduce “over
maintenance”, increase uptime, and extend the life of plant and
equipment.
 There are few maintenance incurred when the system is installed.

Involving the maintenance functions as a key
contributor to the asset acquisition phase
Asset Acquisition
It is the key strategic asset management activity. It is imperative,
therefore, that acquisition decisions be taken within an integrated
planning framework that takes account of service delivery needs,
corporate objectives, financial and budgetary constraints, and the
Governments overall resource allocation objectives.

Project Initiation process
This is a significant component of strategic asset management,
ensuring that new investments in assets are only utilized where
they clearly support improved service delivery outcomes.
It establishes a structured framework followed by Companies for
projects proposed for inclusion in the Capital Investment Program.

Project Initiation process: -
Facilitates capital investment decision making through a
framework whereby Companies are required to rigorously
evaluate proposals for capital works projects at the earliest stage.
NOTE: No mention of maintenance functions.

Proper Analyses in support of the project, they must include: -
Value management;
Cost-benefit analysis;
Risk analysis; and (through Maintenance History)
Statutory and planning issues

Operational Plans: -
• Companies should establish and maintain management
processes to regularly monitor and assess the assets under
their control.
• Operational plans enable companies to ensure that existing
assets are being managed and maintained efficiently and
effectively, and that they fully support the delivery of services.
• The physical, operational, functional and financial performance
of assets should be monitored continually, and processes
established both to address any performance deficiencies and
to increase performance.

Operational Plans should address: -
Responsibility for the asset;
Arrangements for monitoring asset performance;
Operational training; and
Estimated operating costs.

Maintenance Plans: -
• Usefulness of an asset depends on how effectively it meets its
purpose. For many types of asset, this will depend on the
regularity and appropriateness of its maintenance.
• While regular maintenance will help to preserve an asset value,
maintenance should only be undertaken where it will preserve
the asset’s service delivery potential.
• Deferred maintenance across the portfolio of assets controlled
by Companies is a significant issue to be addressed within the
strategic planning process.

Maintenance Plans: -
• The preparation of asset maintenance plans will ensure that
maintenance activity is undertaken in a targeted and timely
manner which facilitates the most cost-effective use of
maintenance resources.

The outcomes of effective asset maintenance include:
A long-term reduction in life cycle costs;
Better asset performance and service;
Optimization of asset life; and
Improved public perception of the asset’s service and safety
standards.

A Maintenance Plan: -
• Defines the asset and the level to which it is to be maintained,
Usefulness of an asset depends on how effectively it meets its
purpose. For many types of asset, this will depend on the
regularity and appropriateness of its maintenance.
• While regular maintenance will help to preserve an asset value,
maintenance should only be undertaken where it will preserve
the asset’s service delivery potential.
• Deferred maintenance across the portfolio of assets controlled
by Companies is a significant issue to be addressed within the
strategic planning process.

Developing and implementing asset lifecycle management strategies

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