ISO 55000 - What, Why and How

An introduction to the first

international standard for
asset management
John Woodhouse
Managing Director, TWPL
UK Expert Representative, ISO 55000 Development
Project Chairman, PAS 55 Development

February 2014
The Woodhouse Partnership Ltd 2014

Your course leader

John Woodhouse MA, FIAM, MSaRS

Summary CV

CEO and Managing Director, The Woodhouse Partnership Ltd since 1995
Founder, Fellow & Chair of Experts Panel, Institute of Asset Management
UK Expert Representative, ISO PC251 developing ISO 55000
Project Director, BSI PAS 55 development
Development Director, IAM Competency Requirements Framework v1
Director, SALVO Project (Strategic Assets: Lifecycle Value Optimisation)
Member of UK Safety & Reliability Society for 30 years
Author of Managing Industrial Risk, Publ. Chapman & Hall, 1993

Prior career with Shell (UK, Netherlands, Brunei, Norway) then senior
management (Director) role in Kvaerner Engineering UK

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What is (good) Asset Management?

Maintaining them?

Sweating the assets?

Purchasing or creating the right

assets in the first place?
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Hierarchy of assets & systems

Typical priorities & values

Keeping stakeholders happy

Corporate/
Organization
Management

Portfolioinvestment
investmentoptimization
Capital
and
sustainability
planning
performance
& compliances

Manage Asset Portfolio

System
performance,
System performance,
cost
cost &
& risk
risk optimization
control
Activities
efficiency &
effectiveness

Manage Asset Systems/Networks

Manage individual Assets over their Life Cycles

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150 years gestation

19th Century
Industrial revolution: specialisation of roles
but an Engineer was also a businessman, communicator & leader

20th Century
Vast improvements in technology and efficiency
Increased specialisation: deeper but narrower knowledge

1970s onwards
Departmental silos and conflicting KPIs creating ineffectiveness
Slow realisation that the whole jigsaw puzzle needs re-assembly
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Earliest UK attempts
1970

UK Department of Industry established the Committee for Terotechnology

(from Greek Terein' meaning to care for).

A combination of management, financial, engineering, building and other practices

applied to physical assets in pursuit of economic life cycle costs.
Involves systematic application of engineering, financial, and management expertise in the assessment of the
lifecycle impact of an acquisition (buildings, equipment, machines, plants, structures) on the revenues and
expenses of the acquiring organization. Practice of terotechnology is a continuous cycle that begins with the
design and selection of the required item, follows through with its installation, commissioning, operation, and
maintenance until the item's removal and disposal and then restarts with its replacement.

1975 The committee published Terotechnology. An introduction to the management

of physical resources
1977 BSI BS3843 Guide to Terotechnology (the economic management of assets)
Last updated in 1992, by British Institute of Managements
Asset Management Group

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Wake-up calls in N.Sea O&G

North Sea oil & gas

Oil price
drop

1st UK oil 1975 (Hamilton Bros)

BP Forties field started 1976
1st decade: massive development
1980s production costs c.$15/barrel

1. Oil price crash

1980
$40/bbl
1987
$10/bbl
2. Piper Alpha disaster
1988
167 died

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The response
Piper Alpha - Cullen Report:
106 recommendations. By 1993
all substantially implemented.
Included goal-based safety case for
every installation, and ALARP concept.

1993 CRINE Programme

Pan-industry Cost Reduction in the New Era
report identified scope for radical efficiency
improvement & tax reform.

1994 BP Mature ASsets Team (MAST)

Given total responsibility for asset life cycle value
improvement: achieved 20% cut in production costs
(100 million) and 4-year life extension, deferring
270 million of decommissioning costs.

1995 Shell Asset Management business model

Defines company-wide AM Policy
Defines specific asset (business unit) Mandate from CEO
with decision-making authorities & budget freedoms
Single point of accountability (Asset Holder) for delivering
asset life cycle value in line with business goals
Establishes asset life cycle management plans (ARP)
Creates culture of a small company with the resources of
a big one
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The results
By 2001, offshore industry
accidents reduced by >75%
By 2004, unit production costs
reduced to c.$5/barrel
Asset systems uptime (5 platforms)

Total operating cost per platform

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Meanwhile, down under

1984-7 South Australian public sector True cost of services and Cost and timing of
asset replacement reports (Dr Penny Burns) resulting in a first, brief, government
task force on Asset Management.
1988 Nick Greiner, new Premier of NSW, stated that government should run as
efficiently as the private sector: first NSW Water Industry seminar on Asset
Management
1993 First NSW Public Sector Total Asset Management Manual
1995 New Zealand Asset Management
Support group (NAMS) established
2002 NAMS International Infrastructure
Management Manual published

With thanks to Dr Penny Burns AM History project

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And in North America

1988 US National Council on Pubic Works Fragile Foundations report
1999 US DOT Asset Management Primer published
2000

ASTM Property Management Systems guidelines

2004

Canadian NRCC publishes first Municipal Infrastructure

Asset Management guide

2009

PSAB 3150 requirement for public assets amortized valuation

Canadian Asset Managers Network (CNAM) founded

With thanks to Tom Smith, Univ. Wisconsin

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Asset Management processes

Materials

Capital Investment,
Design & Projects

CHANGE
Mgmt
$

Operating &
Maintenance
Strategies

Resource PLANNING
& Work DEFINITION

EVALUATION
of Solutions

Problem/Oppty
INVESTIGATION

RESOURCE
ADMIN

CONTINUOUS
IMPROVEMENT
cycle

Inspection
& CBM

External
reporting

Work programme
SCHEDULING

WORK
ADMIN
Data Collection

Problem/Oppty
IDENTIFICATION

Labour

Preventive, Detective
& Corrective WORK

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Critical systemic enablers

People factors
o
o
o
o

Structure & responsibilities

Leadership
Competencies
Cross-disciplinary teamwork

Risk management
o Asset criticality & risk registers
o Asset health & deterioration mgmt
o Risk-based decision-making

Information management
o Single source of truth asset register
o Data, information & knowledge management systems
o Work & resource planning & management systems
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First cross-industry standards

1994 Institute of Asset Management (IAM) founded
1995-99 Rapid growth - mostly in post-privatisation utilities
(after initial easy efficiency gains, what next?)
2000 Established corporate platforms for Asset Management
debate, membership and Council
2002 IAM project started to document good asset
management practices:
25 organisations involved
BSI Publicly Available Specification template chosen

2004 IAM/BSI PAS 55 published

Optimized management of physical assets
Part 1: Requirements specification
Part 2: Implementation guidance
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Elements of PAS 55
4.2 Asset management policy
4.7 Management review

Plan
Act
4.6 Performance assessment &
improvement
4.6.1 Performance & condition monitoring
4.6.2 Investigation of asset-related failures,
incidents & nonconformities
4.6.3 Evaluation of compliance
4.6.4 Audit
4.6.5 Improvement actions
4.6.6 Records

4.3 Asset management strategy,

objectives & plans
4.3.1
4.3.2
4.3.3
4.3.4

PAS 55:2008
Management
System
4.1 General requirements

Check

Asset management strategy

Asset management objectives
Asset management plans
Contingency planning

Do
4.4 Asset management enablers &
controls
4.4.1 Structure, authority & responsibilities
4.4.2 Outsourcing of asset management activities
4.4.3 Training, awareness & competence
4.4.4 Consultation, participation & communication
4.4.5 Asset management system documentation
4.4.6 Information management
4.4.7 Risk management
4.4.8 Legal & other requirements
4.4.9 Management of change

4.5 Implementation of asset management plans

4.5.1 Life cycle activities
4.5.2 Tools, facilities & equipment

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BSI PAS 55:2008

2006 IAM maturity scale & assessment tool developed

2007 Industry regulator OFGEM made PAS55 compliance
a requirement for gas & electricity networks
2008: Major update: internationalise & broaden
50 organisations
15 industry sectors
10 countries
1300 suggestions!

2009: Spanish version

2011: French, Chinese, Russian, Dutch
& Portuguese versions
Now major international best seller: 2012 update or ISO?
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ISO 55000 development

ISO PC251 committee:
Started in 2011 (BSI proposal, based on PAS 55)
30 participating countries + 14 observer status
Argentina (IRAM)
Australia (SA)
Belgium (NBN)
Brazil (ABNT)
Canada (SCC)
Chile (INN)
China (SAC)
Colombia (ICONTEC)
Czech Republic (UNMZ)
Finland (SFS)
France (AFNOR)
Germany (DIN)
India (BIS)
Ireland (NSAI)
Italy (UNI)

Japan (JISC)
Korea, Republic of (KATS)
Mexico (DGN)
Netherlands (NEN)
Norway (SN)
Peru (INDECOPI)
Portugal (IPQ)
Russian Federation (GOST R)
South Africa (SABS)
Spain (AENOR)
Sweden (SIS)
Switzerland (SNV)
United Arab Emirates (ESMA)
United Kingdom (BSI)
United States (ANSI)

Observers
Armenia (SARM)
Austria (ASI)
Costa Rica (INTECO)
Denmark (DS)
Hong Kong (ITCHKSAR)
Hungary (MSZT)
Iceland (IST)
Iraq (COSQC)
Israel (SII)
Malaysia (DSM)
Morocco (IMANOR)
New Zealand (SNZ)
Slovakia (SUTN)
Thailand (TISI)
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Development process
London
planning
Nov 2010

Publication
10th Jan 2014

Month
Stage

NWI
proposal

Each meeting = 5 days duration

Final one (Calgary): 80 participants
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The resulting standards

ISO 55000 Overview, principles and key
terms in Asset Management
ISO 55001 Asset management: management
systems - requirements
ISO 55002 Guidance for implementation of
ISO 55001
www.ISO55000.info

Plus
ISO 17021* part 5 Asset Management competency
requirements for auditors of ISO 55001

*Conformity assessment: requirements for bodies providing audit & certification of management systems
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Scope of management system

Typical priorities & values

Managing stakeholder expectations

Portfolioinvestment
investment
Capital
optimization
and
sustainability
planning
performance
& compliances

System
performance,
System performance,
cost
cost &
& risk
risk optimization
control
Activities
efficiency &
effectiveness

Corporate/
Organization
Management
Manage Asset Portfolio

Asset
Management
System

Manage Asset Systems/Networks

Manage individual Assets over their Life Cycles

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ISO55001 requirements for management system

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A management system for AM

Delivery
capabilities
input to
strategies &
objectives

Where are
Asset Management Policy
we going:
Asset Management
Development Plan for
therefore
Objectives &
AM capabilities
Strategies
what
to do,
Continual improvement
in AM processes &
when
and
Asset (life cycle)
capabilities
Asset
Management
Management
why Plans
Resources, Processes,
Operation & Control of
Life Cycle Activities

Competencies,
& Technologies

Continual improvement

Continual improvement

Organization Strategic Plan

Asset
capabilities
input to
strategies &
objectives

Who does it,

and how
Acquire/Create
Utilize

Maintain

Renew/Dispose

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ISO 55001 elements in PDCA layout

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Life cycles: generic principles

Requires multi-disciplined teamworking

De-siloing of the organisation and its culture
Decision-making and Key Performance Indicators to favour
total business impact over not localised, short-term interests
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Institute of Asset Management

www.theIAM.org

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good example answers

PAS 55
compliance

28 elements
120 questions

IAMs Maturity Scale (PAS 55)

Mostly just beyond PAS55

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Current work: JWs Bow-tie.

Convergence to a joined-up, managed

system for asset management

Pu:ng the
basics in place

Development
& Integra4on

Divergence best appropriate

practices (context-dependent)

Op4miza4on and
Innova4on

Competent Asset Management

(to independently cer4able standard)

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Using the bow-tie

0

Developing

Optimizing

Roadmap
Ini4al
systema4c
review
(gap analysis)

ISO55001
Cer4ca4on

1.Understand the context

2.Iden4fy relevant leading prac4ces
3. Challenge, innovate, & stretch limits
4.Roadmap & implement
5.Review & repeat

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IAM SAM tool and Q&A set

Good for simple self assessments & basic ISO 55001 gap analyses
Not so good for objective external reviews & business improvement planning
Not adequate for formal certification purposes

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Formal certification
Accredited certification authorities only
e.g. BSI, LR, DNV, BV

ISO 17021 audit process compliance

NEW:
ISO 17021-5 requirement for subject matter expertise in
asset management
IAM & GFMAM role in defining adequacy of such
expertise

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BUT ISO 17021 means

Certification assessors are not allowed to
provide any guidance on how to close
the gaps.
They also cannot have any relationship
with any other provider of consultancy
services.

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TWPL Improvement planning Assessment

AM processes section
Supply chain processes

Maintenance processes

Projects & Investment

Life Cycle Costing
Projects & resource prioritisation
Major project delivery/completions
Minor projects evaluation & delivery
Mtce/Ops feedback into projects
Risk evaluation & management
Now

I n 1 year

I n 3-5
3 year s
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Roadmap development
Existing corporate
goals & objectives
Urgency & value

AM team
workshops
Assessment results

Quick (<12 months)

Slow (3-5 yrs)

A Typical
Resulting
Roadmap
<2
2-5
>5
Value (benefits/costs)

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Achieving sustained, cumulative success

Effort & results

Sensitive linkage #2
Rolling out the next initiative
while stabilising/embedding the previous
Sensitive linkage #1
Exploring a new topic during peak
implementation effort for another

e.g. Shared risk/

reward alliancing

e.g. LCC methods

adoption

e.g. AM education
programme

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What is being achieved by this?

Scottish Power
Hong Kong MTR
Train operating costs reduced by 20%
Train reliability: MTBF risen from 1000 Km to 3500 Km between failures

10% reduction in capital expenditure

20% reduction in O&M costs
22% increase in plant availability
25% reduction in forced outages

-30% network total cost of ownership (Nuon, Netherlands)

-30% maintenance cost & +10% system availability (Copper mine, Chile)
A$11M/year budget savings (New South Wales government)

China Light & Power

ICE, Costa Rica*

PAS 55 Certified

* Winner of 1st IAM Asset Management

Achievements award 2013

Case studies at: www.twpl.com/?page=CaseStudies

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Closing Summary
An Asset Management System is a framework of control,
directional alignment, cross-disciplinary collaboration,
optimization and continual improvement. It is not a software tool.
ISO 55001 provides a very valuable structure but:
It is only defines what needs to be done; not how (context dependent)
It defines competent asset management; not best practice

Line of sight alignment is a vital starting point

Optimization of strategies & plans is complex but very high value
The people, risk & information enablers have profound impact,
especially in sustainment of the system
Closing the loop is, perhaps, hardest of all initially, but provides
the self-motivating engine once started.
ISO 55001 is just a checklist: the real value is found in better
integration & optimization, in de-siloing and providing greater
clarity of focus
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THANK YOU
www.twpl.com

Blended learning
classroom,
distance/e-learning,
in-workplace,
mentoring,
custom.

Professional
Accreditation

john.woodhouse@twpl.com

www.assetmanagementacademy.com
www.ISO55000.info
www.twpl.com

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