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facility repair and software upgrades can improve plant availability. Enterprise asset management’s basic philosophy encompasses cross-functional collaborative management of all kinds of assets spanning their entire lifecycles. Part 2 will focus on the deployment of WCAM. since the change involves people. Some performance measures are listed with indicative industry benchmarks. and information technology (hardware and software). Part 1. TATA Consultancy Services. operator training. politics and individual resistance increases organisational inertia. when globalisation triggered a search for newer sources of competitive advantage. facilities. This challenged the traditional direct value chain approach that gave managers just two ways to improve the bottom-line . A Whole Lifecycle Perspective The cost of creating and managing assets needs to be driven down to improve the return on capital AMMJ 20th ANNIVERSARY YEAR . The Enterprise Asset Management Philosophy Asset management improvement is more transformational than strategic. information systems and work design.by either increasing revenues or by cutting costs. PART 1: AN APPROACH TO WORLD CLASS ASSET MANAGEMENT The Evolution of Asset Management The maintenance function was seen as a hygiene function until the 1990s. were just not practical without information technologies. preventive maintenance tasks. Besides global competition. and eventually led to the birth of asset management – maintenance with a strong business focus. The lack of crossfunctional coordination. These capabilities though always desirable. harmonised schedules for production. Part 3 dedicated to the standard measures of the effects of WCAM deployment. What emerged were opportunities in the indirect value chain. Parts 2 & 3 will appear in the October 2008 issue of the AMMJ. the other driver that spurred on the evolution of traditional maintenance to asset management was information technology. Synergies can be leveraged if they are managed at an enterprise level. Looking at maintenance as a possible source of competitive advantage was a major paradigm shift. Affordable data storage. Multiple Asset Classes Organisations possess four broad categories of assets that are usually managed in silos. (UK) This document is divided into three parts. organisational structure. practices. Managers realised that maintenance aimed at optimising business value involved trade-offs between cost and asset health. discusses the evolution and the philosophy of World Class Asset Management from the enterprise perspective. production assets.A World Class Approach to Asset Maintenance Rohit Banerji. releasing capital by using existing assets more efficiently. For instance. networking and analysis capabilities made it easy for managers to apply business-oriented metrics such as Operating Equipment Effectiveness (OEE) and Total Cost of Ownership. fleet.

vendor maintenance contracts and subcontracted maintenance services are all blurring the lines of contractual responsibility. Asset management takes a lifecycle perspective of assets. knowledge of the approximate total cost of ownership of a machine over its remnant life can help managers make informed repair-or-replace decisions. It generates enthusiasm to achieve difficult standards and pride when progress is made.World Class Asset Maintenance 23 employed (ROCE). creating. Seamless collaborative processes between these internal and external stakeholders become a must for effective asset management. financial institutions. HR. Shared maintenance responsibility is not just an emerging in-house approach between operators and mechanics or various in-house agencies. and external ones like OEMs. Vibration patterns of a compressor can be used to arrive at SPC based proactive maintenance strategies. maintenance. regulatory authorities. engineering. designing. Collaborative Focus Many agencies may get involved in planning. maintaining and retiring of assets. World Class Asset Management – A Shared Vision WCAM serves as a clear and credible vision of the new strategic orientation. Similarly. EPC contractors. Total life cycle involvement. Costing on a lifecycle basis prevents the erosion of overall enterprise value that happens when efforts are made to reduce cost in silos. World-class organisations stay ahead by institutionalising . Data from varied sources of information must be analysed to optimize asset management. O&M agencies. insurance agencies etc are players in this process. from planning to retirement. Collaborative asset management concepts recognise common cross-functional interests guided by higher organisational objectives. logistics and operations. Internal participants like finance. procurement. it is also being adopted by alliances along the supply chain. operating. Long term technology deployment plans can impact the strategy to maintain an asset over its remnant life.

which conflicts with the requirements of a learning organisation. must deliver the lowest whole lifecycle cost for the organisation (see Figure 1). strategise and plan. Managers rarely find time over and above their operational responsibilities to focus on planning and analysis. An organisation has to be aligned towards identifying opportunities for improvement and innovation in order to sustain evolution. primarily because there is insufficient buy in from all stakeholders. The roadmap should articulate the areas of asset management to be improved and performance measures to assess progress in each. Large companies now have dedicated analysts to monitor KPIs. Progress Measurement As the maxim goes – What is not measured does not get done. spanning areas from strategy to operations. AMMJ 20th ANNIVERSARY YEAR . fundamentally. Getting a buy-in needs careful planning based on a thorough analysis of the impact of change. Organisational Change Imperatives The change process affects processes. WCAM institutionalises the mechanism required to facilitate change continuously and at every stage. World Class Asset Management. Organisational flexibility makes it responsive to change.24 World Class Asset Maintenance a process of continuous improvement. processes to activities. Organisations are inherently configured to maximise efficiency. Over 40% of improvement initiatives fall short of meeting expectations. the total cost of asset management reduces by 8-15% World Class Asset Management TPM. senior management to the junior most operators and from finance to HR. Being a derivative of business focussed asset management. technology as well as work culture. Reliability Centered Maintenance Predictive/Condition Based Manatenance Preventice Maintenance Reactive Maintenance Enterprise wide impact WCAM is an enterprise-wide endeavour. For every pradigm shift. The main challenges facing maintenance managers today according to John Moubray are: • To select the most appropriate techniques to deal with each type of failure in order to satisfy the owners of assets. A well-designed organisational structure can eliminate potential conflicts of interest and foster crossfunctional collaboration. • In the most cost-effective and enduring way • With the active support and cooperation of all those involved. The essence of attaining nirvana in asset management lies in developing a clear roadmap to the target in a manner that the distance covered can be measured at all times. The ability to install and modify assets is the key to create new value streams identified based on changing customer requirements. users and society as a whole. A balanced approach that adequately addresses all three facets of change can make the difference between success and failure. while competitors try and catch up in spurts.

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Supplier collaboration Control & Feedback Execution Maintenance: Work management. GIS. TPM. predictive maintenance. Objectives and Targets Inventory Maintenance Procurement • Open O&M Standards • Asset information management • Collaborative technologies • Asset upgrade Identify areas for improvement • • • • • Capital projects Maintenance programs Process redesign HR management Safety measures Collaboration Identification Technology Selection Stakeholder Involvement Change management Inventory: Action control groups. Reliability centred maintenance. exception management SCADA.26 World Class Asset Maintenance Strategic Planning XC Technology Process Culture Performance Measurement Model Technology Management Benchmarks KPI’s • Asset technology management Business goals • IT deployment strategy EAM Policies Crossfunctional collaboration Regulations Performance management Asset Management Policies. RFID. IT solutions Condition monitoring. PLM Procurement: Vendor management. Mobile. resource management Management Information Systems Project progress assessment Asset management audits Employee feedback Performance Measurement Model: EAM maturity level Figure 3 AMMJ 20th ANNIVERSARY YEAR Portfolic Approach EAM technologies Organisational Structure Model Skill Management Performance Measurement Resource allocation Escalation management Self-directed teams Safety Compliance Performance reviews . asset performance management. TQM.

HR managers etc. A management information system can improve the scope and accuracy of the measurement model. the finance department. Good asset management strategies can then be developed within the framework of asset management policies. achievable within the maintenance budget. Involvement of all stakeholders. The work packages can be capital projects. maintenance programs. identification.Technology. skill development or redesigning performance measurement parameters. The results are fed in to the planning process for the next period. It is a best practice for asset intensive industries to plan for different horizons. Audits are used to feed information to the measurement system. New technologies are evaluated and selected at this stage. Identification The efforts to achieve asset management objectives in the planning stage are distilled in to work packages in the Identification stage. be it altering the reporting structure. The end result of the planning process is a clear set of objectives and targets. managers must choose between acceptable levels of asset reliability and the resources required to attain them. supervisors. From a business perspective. workers. Moreover. Strategic Planning Organisational goals drive the policies. Horizon 1 planning can address the next year’s requirements.27 World Class Asset Maintenance Sustained Cost Reduction The march towards attaining excellence represented by WCAM is a long one. A clearly communicated vision and an early buy-in through stakeholder involvement at the planning and identification stages will go a long way in ensuring a successful execution. Control & Feedback Measurement involves the systematic collection and analysis of huge amounts of data. facilitate improvement programs. At the same time. The work is executed in parallel with managed cultural change. rationalising roles and responsibilities. Progress in fits and starts can impose unnecessary stress on an organisation. Each stage addresses all three areas of change . UK) Vol 21 No 3 2 AMMJ . The WCAM Model The model divides the process of planning to execution. process redesign. An institutionalised working model designed to incubate new ideas. will have a positive impact on work package identification. Execution The work packages usually involve both processes and technology. execution and control. (First published in the Maintenance and Asset Management Journal. The model is designed to track asset management excellence over the long term and on several critical parameters. An EAM performance measurement model is the backbone of the control mechanism. processes and culture (See figure 3). HR programs or safety measures. every change in processes or technology will have to be matched by an appropriate change in culture. PARTS 2 and 3 will be published in the October 08 issue of the AMMJ. The key to cost-effective asset management lies in finding the lowest overall cost point in the resource-reliability equilibrium (See figure 2). Strategic planning. measure progress and analyse current practices can form the foundation for long term improvement. Current and expected project KPIs form part of the work package definitions. into four stages. objectives and targets that need to be defined upfront and cascaded to the businesses. while Horizon 2 and Horizon 3 plans can be made for 5 and 25 years respectively. prioritisation and design. a well-defined process of periodic evaluation and policy review keeps the asset management model alert and responsive to business requirements.