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The Woodhouse Partnership Ltd 2014

ISO 55000 - What, Why and How


John Woodhouse
Managing Director, TWPL
UK Expert Representative, ISO 55000 Development
Project Chairman, PAS 55 Development

February 2014

An introduction to the first
international standard for
asset management
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Your course leader
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
John Woodhouse MA, FIAM, MSaRS
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What is (good) Asset Management?
Sweating the assets?
Maintaining them?
Purchasing or creating the right
assets in the first place?
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Hierarchy of assets & systems
Corporate/
Organization
Management
Manage Asset Portfolio
Manage Asset Systems/Networks
Manage individual Assets over their Life Cycles
Activities
efficiency &
effectiveness
System performance,
cost & risk optimization
Capital investment optimization
and sustainability planning
Keeping stakeholders happy
System performance,
cost & risk control
Portfolio investment
performance & compliances
Typical priorities & values
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150 years gestation
19
th
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

1
st
UK oil 1975 (Hamilton Bros)
BP Forties field started 1976
1
st
decade: massive development
1980s production costs c.$15/barrel
1. Oil price crash
1980 $40/bbl
1987 $10/bbl
Oil price
drop
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.
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
1993 CRINE Programme
Pan-industry Cost Reduction in the New Era
report identified scope for radical efficiency
improvement & tax reform.
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The results
By 2001, offshore industry
accidents reduced by >75%
Asset systems uptime (5 platforms) Total operating cost per platform
By 2004, unit production costs
reduced to c.$5/barrel
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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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Capital Investment,
Design & Projects
WORK
ADMIN
Preventive, Detective
& Corrective WORK
Work programme
SCHEDULING
Data Collection
Inspection
& CBM
Problem/Oppty
INVESTIGATION
EVALUATION
of Solutions
CHANGE
Mgmt
$
$
$
$
$



CONTINUOUS
IMPROVEMENT
cycle
Problem/Oppty
IDENTIFICATION
External
reporting
Operating &
Maintenance
Strategies
Asset Management processes
Resource PLANNING
& Work DEFINITION
Materials
RESOURCE
ADMIN
Labour
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Critical systemic enablers
People factors
o Structure & responsibilities
o Leadership
o Competencies
o 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
4.3 Asset management strategy,
objectives & plans
4.3.1 Asset management strategy
4.3.2 Asset management objectives
4.3.3 Asset management plans
4.3.4 Contingency planning
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
4.6 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
4.7 Management review
4.1 General requirements
4.2 Asset management policy
4.5 Implementation of asset management plans
4.5.1 Life cycle activities
4.5.2 Tools, facilities & equipment
Plan
Do
Check
Act
PAS 55:2008
Management
System
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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)
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)
Observers
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Development process
Publication
10
th
Jan 2014
Each meeting = 5 days duration
Final one (Calgary): 80 participants
London
planning

Nov 2010
Month

Stage
NWI
proposal
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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
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
www.ISO55000.info
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Scope of management system
Corporate/
Organization
Management
Manage Asset Portfolio
Manage Asset Systems/Networks
Manage individual Assets over their Life Cycles
Asset
Management
System
Activities
efficiency &
effectiveness
System performance,
cost & risk optimization
Capital investment optimization
and sustainability planning
Managing stakeholder expectations
System performance,
cost & risk control
Portfolio investment
performance & compliances
Typical priorities & values
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ISO55001 requirements for management system
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Asset Management
Resources, Processes,
Competencies,
& Technologies
Development Plan for
AM capabilities
Asset (life cycle)
Management Plans
Asset Management
Objectives &
Strategies
Asset Management Policy
Organization Strategic Plan
Renew/Dispose
Maintain
Utilize
Acquire/Create
Operation & Control of
Life Cycle Activities
A management system for AM

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Where are
we going:
therefore
what to do,
when and
why
Who does it,
and how
Asset
capabilities
input to
strategies &
objectives
Delivery
capabilities
input to
strategies &
objectives
Continual improvement
in AM processes &
capabilities
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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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IAMs Maturity Scale (PAS 55)
P
A
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5
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good example answers
2
8

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1
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q
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Mostly just beyond PAS55
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Current work: JWs Bow-tie.
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Convergence to a joined-up, managed
system for asset management
Divergence best appropriate
practices (context-dependent)
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Using the bow-tie
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Developing Optimizing
0 1 2 3 4 5
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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

Life Cycle Costing
Projects & resource prioritisation
Major project delivery/completions
Minor projects evaluation & delivery
Mtce/Ops feedback into projects
Risk evaluation & management
N o w N o w I n 1 y e a r I n 1 y e a r I n 3 I n 1 y e a r I n 3 I n 3-5 y e a r s y e a r s y e a r s
Projects & Investment
Maintenance processes
Supply chain processes
AM processes section
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Roadmap development
Existing corporate
goals & objectives
AM team
workshops
Assessment results
Quick (<12 months)
Slow (3-5 yrs)
<2 2-5 >5
Urgency & value
Value (benefits/costs)
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A Typical Resulting Roadmap
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E
f
f
o
r
t

&

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l
t
s

e.g. AM education
programme
e.g. LCC methods
adoption
e.g. Shared risk/
reward alliancing
Sensitive linkage #1
Exploring a new topic during peak
implementation effort for another
Sensitive linkage #2
Rolling out the next initiative
while stabilising/embedding the previous
Achieving sustained, cumulative success
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Scottish Power
10% reduction in capital expenditure
20% reduction in O&M costs
22% increase in plant availability
25% reduction in forced outages
Hong Kong MTR
Train operating costs reduced by 20%
Train reliability: MTBF risen from 1000 Km to 3500 Km between failures
-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)
Case studies at: www.twpl.com/?page=CaseStudies
China Light & Power
ICE, Costa Rica*
* Winner of 1
st
IAM Asset Management
Achievements award 2013
What is being achieved by this?
PAS 55 Certified
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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
The Woodhouse Partnership Ltd 2013
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Blended learning
classroom,
distance/e-learning,
in-workplace,
mentoring,
custom.

Professional
Accreditation
www.twpl.com
THANK YOU
john.woodhouse@twpl.com