A short overview of 4th generation asset management, risk based, and some information on how to achieve this in most organizations.

1. The 4th Generation of Asset Management An overview of leading practices in modern asset management

2. What is strategy? Vision or goals How we are going to make that vision or goal a reality What resources, tools, capacities, skills and other requirements are they to carry this out Strategy is means of taking converting a vision into reality.

4. In the context of RCM a strategy is the management plan for a specific failure mode. (E.g. A detective maintenance task on Oil-filled circuit breakers)

5. The corporate vision will revolve around either reduced cost, improved performance or reduced risk

6. The strategy is what we are going to do to achieve that vision (Task type and frequency)

7. And the tactics are how we are going to achieve that vision:

9. In the context of strategic asset planning it could mean something like “We will implement comprehensive risk profiling for each critical asset group”

10. The corporate vision or requirement could be regarding a response to the passage of C-45, or potentially for capital planning purposes…

11. The strategy is the decision of what we are going to do (What end goal and initiative possibly)

13. MRP

15. Asset resource Planning

18. Need for defensible budgeting within institutions and public sector

20. Increasing performance from each $ spent on asset maintenance… Direct maintenance costs Impacts of traditional methods of cost reduction …driving unit costs of maintenance down Easy benefits have been removed from asset management during the 1980’s and the 1990’s… Expectations… Profitability…

22. Lower direct costs / greater value for money…

23. Baseline maintenance regimes…

24. Expert judgement in place of quantified analysis..

25. Data rich and information poor…

27. Expert judgement

28. Predictive maintenance

29. Online condition monitoring

30. Enterprise systems

32. Time based maintenance

33. Mainframe computers

34. Beginning of automationReactive Fix it when it breaks 1800’s 1930’s 1970’s Advancement in understanding

36. Collaborative systems

37. Knowledge capture and use

38. Remote working solutions

40. Expert judgement

41. Predictive maintenance

42. Online condition monitoring

43. Enterprise systems

45. Time based maintenance

46. Mainframe computersReactive Fix it when it breaks 1800’s 1930’s 1970’s 2000 Advancement in understanding

48. Manufacturers recommendations

49. Low confidence decisions

50. High NPC

51. Condition based maintenance

52. Tied to performance and risk

53. Processes and procedures for capture of data

54. Higher confidence

55. Lower NPC

56. Risk based maintenance

57. Maximum confidence in decision making

58. Lowest NPCDeterministic Proactive Stochastic Risk Based Proactive Preventive 2000 1930’s 1970’s The path to high confidence decision making

59. The problem with data… Most attempts at historic analysis fail due to one fundamental fact…. The vast majority of reliability analyses are completed with approximately 70% Knowledge and 30% data…

60. What is whole of life costing? WoL asset management is also referred to as Life-cycle costing or LCC. The Hydraulic Institute’s LCC guidebook, defines the equation is as follows LCC = Cic + Cin + Ce + Co + Cm + Cs + Cenv + Cd ic = initial cost or purchase price (e.g., of the pump, system, pipe, auxiliary equipment) in = installation and commissioning e = energy costs o= operating costs (the labor costs for normal system supervision) m = maintenance costs (e.g., parts, worker-hours) s = downtime (loss of production) env = environmental costs d = decommissioning

61. ic = initial cost or purchase price in = installation and commissioning Start-of-Life Preventive Net Present Value e = energy costs o= operating costs (the labor costs for normal system supervision) m = maintenance costs (e.g., parts, worker-hours) s = downtime (loss of production) env = environmental costs Confidence In-Service-Life Net Present Cost YR1 YR2 YR3 YR4 YR5 Deterministic End-of-Life d = decommissioning The journey to 4th generation asset management What’s wrong with this??? LCC = Cic + Cin + Ce + Co + Cm + Cs + Cenv + Cd

62. Preventive Net Present Value Confidence Net Present Cost YR1 YR2 YR3 YR4 YR5 Deterministic The journey to 4th generation asset management What’s wrong with this??? LCC = Cic + Cin + Ce + Co + Cm + Cs + Cenv + Cd It’s focused on low costs, not low unit costs. There is no mention of the performance required!!

63. The journey to 4th generation asset management Start-of-Life Preventive Net Present Value Confidence Net Present Cost YR1 YR2 YR3 YR4 YR5 Deterministic Not Lifecycle costs (LCC) … Net Present Unit Costs (NPUC) CSOL Summarized In-Service-Life CISL Net Present Unit Cost (NPUC) End-of-Life CSoL + (∑ (y1+y2+y3…)) + CEoL CEOL (∑ (p1+p2+p3…)

64. The journey to 4th generation asset management Start-of-Life Preventive Net Present Value Confidence Net Present Cost YR1 YR2 YR3 YR4 YR5 Deterministic Yet there are still problems with this… CSOL In-Service-Life CISL Net Present Unit Cost (NPUC) End-of-Life CSoL + (∑ (y1+y2+y3…)) + CEoL CEOL (∑ (p1+p2+p3…)

66. CAPEX Maintenance is generic or ad-hoc

67. Corrective Maintenance forecasts are a guess. (At best!) Net Present Unit Cost (NPUC) CSoL + (∑ (y1+y2+y3…)) + CEoL (∑ (p1+p2+p3…)

68. The journey to 4th generation asset management Tying in to performance and risk (Through application of RCM principles) Inclusion of corrective expectations (Through application of all maintenance tasks) Proactive Net Present Value Confidence Net Present Cost YR1 YR2 YR3 YR4 YR5 Proactive

69. Defining the maintenance tasks

70. The journey to 4th generation asset management Tying in to performance and risk (Through application of RCM principles) Inclusion of corrective expectations (Through application of all maintenance tasks) PTIVE – Predictive Maintenance regimes (Routine) PTED – Action to correct a failing component (Corrective) Proactive Net Present Value Confidence Net Present Cost YR1 YR2 YR3 YR4 YR5 Proactive

71. Defining the maintenance tasks

72. The journey to 4th generation asset management Tying in to performance and risk (Through application of RCM principles) Inclusion of corrective expectations (Through application of all maintenance tasks) PTIVE – Predictive Maintenance regimes (Routine) PTED– Action to correct a failing component (Corrective) PRES – Preventive Restoration (Routine) PREP – Preventive Replacement (Routine) Proactive Net Present Value Confidence Net Present Cost YR1 YR2 YR3 YR4 YR5 Proactive

73. Defining the maintenance tasks

74. The journey to 4th generation asset management Tying in to performance and risk (Through application of RCM principles) Inclusion of corrective expectations (Through application of all maintenance tasks) PTIVE – Predictive Maintenance regimes (Routine) PTED– Action to correct a failing component (Corrective) PREST – Preventive Restoration (Routine) PREP – Preventive Replacement (Routine) DTIVE – Detective Maintenance regimes (Routine) DTED – Action to correct a failed component (Corrective) Proactive Net Present Value Confidence Net Present Cost YR1 YR2 YR3 YR4 YR5 Proactive

75. Defining the maintenance tasks

76. The journey to 4th generation asset management Tying in to performance and risk (Through application of RCM principles) Inclusion of corrective expectations (Through application of all maintenance tasks) PTIVE – Predictive Maintenance regimes (Routine) PTED– Action to correct a failing component (Corrective) PRES – Preventive Restoration (Routine) PREP – Preventive Replacement (Routine) DTIVE – Detective Maintenance regimes (Routine) DTED– Action to correct a failed component (Corrective) RTF – Decision to allow a component to run to failure due to consequences of failure and suitability of tasks (Corrective) Proactive Net Present Value Confidence Net Present Cost YR1 YR2 YR3 YR4 YR5 Proactive

77. The journey to 4th generation asset management Tying in to performance and risk (Through application of RCM principles) Inclusion of corrective expectations (Through application of all maintenance tasks) PTIVE – Predictive Maintenance regimes (Routine) PTED– Action to correct a failing component (Corrective) PREST – Preventive Restoration (Routine) PREP – Preventive Replacement (Routine) DTIVE – Detective Maintenance regimes (Routine) DTED– Action to correct a failed component (Corrective) RTF – Decision to allow a component to run to failure due to consequences of failure and suitability of tasks (Corrective) Sets up the processes, procedures and techniques to move to stochastic WoL management. Proactive Net Present Value Confidence Net Present Cost YR1 YR2 YR3 YR4 YR5 Proactive

79. Raising the level of understanding within the workforce

80. Higher confidence capital maintenance planning

81. Online and on demand condition monitoring

82. Tracking calendar and operational information

84. Lower direct costs / greater value for money…

85. Baseline maintenance regimes…

86. Expert judgement in place of quantified analysis..

87. Data rich and information poor…

88. High resource requirement to sustain the effort…Proactive Net Present Value Confidence Net Present Cost YR1 YR2 YR3 YR4 YR5 Proactive Why is it important to move forward…

90. Semi-automation of reliability analytical information

91. Sophisticated performance management systems and programs

92. Correct the data capture, failure and work coding and work flows surrounding physical data capture (Using new technologies)

93. Determine the correct operational, asset condition and ongoing condition data based on reliability analyses

94. Collaborative techniques and systems