We Need to Talk - An Asset Management Intervention
We need to talk. Has anything enjoyable ever followed those four little words? “We need to talk,” says your wife/husband/attorney/boss/tax preparer. How did that work out? The truth is, those people generally have our best interests at heart, even if the lead-in to their discussion causes our defensive shields to activate. The same is true with this article. You and I need to talk. The subject? An asset management intervention.
This is an asset management intervention, which should tell you that you (and I) haven’t really been performing asset management correctly. It’s true, we haven’t been. When we see a family member heading down the wrong path, is our responsibility to intervene. You and I might not know each other, but we share a common bond. There is a good chance that you are a maintenance or reliability professional just like I am. I care about you. In a greater sense we’re family.
So, as family, let me give it to you straight. There’s a new ISO standard making its slow cycle around the globe, ISO 55000 − Asset Management. Admittedly, this standard is slow-rolling through industry, but believe me, it is coming. In fact, for you, it may already be here. You just don’t know it. We need to be ready for its arrival.
My intention is not to go into a deep dive on ISO 55000, but rather to introduce the idea of asset management and how, with an ISO standard to back us, we have another chance to reinvent our approach to maintaining capital equipment and ensuring that the company’s physical assets are cared for by everyone in the organization. Where did we go wrong in the past?
Our first, and perhaps greatest (to date) opportunity to include everyone in asset care was the advent of Total Productive Maintenance (TPM). TPM is a phrase and methodology minted by Seiichi Nakajima, in Japan, in the early 1970’s that made its way to the shores of the United States in the 1980’s.
Interestingly, many of Nakajima’s foundational thoughts on the matter were formed while he served as an interpreter for the American industrialist George Smith, founder of Marshall Institute, Inc.
While this isn’t necessarily an article on ISO 55000, it is definitely not a TPM article. However, it is important that we agree that TPM and ISO 55000 have more in common than they have differorder: making it a maintenance program, and failing to fully engage all of the stakeholders. These are exactly the same two things that will cause ISO 55000, or for that matter, any reliability continuous improvement effort, to fail. My colleague Steve Gowan says, “Show me an improvement process that failed, and I’ll show you a management team that lost interest.” He is so right.
“We are All Responsible for Asset Reliability”
The good news? ISO 55000 is not a maintenance program. In fact, it isn’t written for maintenance people. I believe it is written for those other guys. The genesis of this international standard is telling. The purpose of putting such a standard together in the first place is explained in the opening text of the ISO 55000 standard. Reading into the ‘official’ language of this international product, it is clear that the global community of standards entities felt it necessary to institutionalize the knowledge that the world possesses on such things.
This isn’t a maintenance program. But, make no mistake, maintenance is involved. In fact, everyone is involved or certainly should be. The mandate from ISO is that all stakeholders are to be engaged in the development of the asset management approach. ISO 55000 directs those adhering to this standard that an organization’s top management, employees and other stakeholders are the groups responsible for conceiving and executing what is referred to as “control activities.” These activities might include: policies, procedures, and performance measuring and monitoring techniques. Along with top management and employees, stakeholders can include: customers, government agencies, ences. In fact, I would counsel organizations that they shouldn’t lose heart if they’ve developed an outstanding TPM program. ISO 55000 will do nothing but enhance their efforts. But, if we failed at TPM, we might have similar trouble compelling others that ISO 55000 is different. What causes TPM to fail?
There are exactly two things that will cause TPM to fail. They are, in this the community at large, and vendors: essentially anyone that has an interest in the company being successful.
This mandate of engagement is the first element that gives me a sense that this process is different from but can complement TPM. By insisting on engagement of those who might become the victim of a corporation’s asset strategy, the metaphorical tables are turned, and people are not only encouraged to participate, but required to do so. TPM has a similar philosophy; we are all responsible for asset reliability.
Care should be taken to avoid making this a maintenance program. The standard itself is meant to educate the masses. ISO 55000 lists the primary targets for the creation and deployment of the standard itself. Specifically:
- All those engaged in determining how to improve the returned value for their company from their asset base (this means all assets, but we are focused on physical assets)
- All those who create, execute, maintain, and improve an asset management system
- All those who plan, design, implement and review the activities involved with asset management
If you read that list again, you could see how an organization could accidently make the adoption of ISO 55000 a maintenance program.
The second element that we should take heart in for our intervention is to ensure that those responsible for the execution of the activities, or as stated above, the “control activities,” are properly resourced to be successful. ISO 55002 instructs organizations to develop these asset management plans for the purpose of defining the activities that will be implemented and the resources that will be used to meet the asset management objectives. And, those resources have to be ‘aware and competent.’
There are three thoughts in that last paragraph that require further definition. I mentioned ISO 55002. ISO 55000 is actually made up of three companion standards: 55000, 55001, and 55002. They build on each other like Russian nesting dolls. I’d recommend an investment in each. Control activities are essentially the very foundational activities that each organization executes in the care strategy of their assets: PM/ PdM, planning, scheduling, work management, storeroom control, KPIs and metrics, etc. The last thought is the idea of asset management objectives. I want to expand on this by illustration.
The figure below is meant to show the entire life cycle of a physical asset from concept to grave. Give this some thought.
What exactly is your company’s objective towards each phase of the asset’s physical life? It needs to be noted that the asset’s life does not necessarily end when your organization is done with it. No, not at all. The asset could have value at another location. Understanding this leads to the crux of asset management. To what end are we managing assets? We are managing assets to ensure that the asset, through the various phases of its life, can continue to provide ‘value’ to the organization. This, of course, is predicated on our ability to determine what ‘value’ means to our organization in terms of the return on asset utilization.
This last point is where the intervention takes its initial shape. I feel that organizations have failed in clearly defining how utilization, continued reliability, and availability of the asset contributes to the value that organizations seek from their assets. It is the responsibility of top leadership to translate their organizational objectives into an asset management policy. This translation takes place in the SAMP, or Strategic Asset Management Plan. The figure below helps to illustrate this interchange.
You’ve no doubt noticed the ‘Asset’ block between ‘Organizational Objectives” and the ‘Asset Management Policy.’ This is the genius of ISO 55000 and a detail we absolutely missed in adopting TPM. The Asset Management standards clearly stipulate that it is the responsibility of the organization to determine which physical assets, specifically, are to be included in the asset management plan. This is a critical point of distinction.
Let this summary remind you of the path you need to walk going forward to have a better (asset) life:
- Don’t make asset management a maintenance program
- Engage all stakeholders
- Resource those responsible for executing the control activities
- Determine which assets really matter
- Translate organizational objectives into an asset management policy
This intervention is meant to shake you up and help you see the light and, in a sense, the error of your ways, in terms of asset management. I do this because I care. Please reach out if you feel ‘we need to talk.’
Companies enhance their productivity and profitability by performing appropriate maintenance on their physical assets. The assets need to operate optimally and be available throughout production cycles. Most organizations optimize their maintenance programs to lower maintenance, repair, and operations (MRO) costs. Excessive expenditure on equipment maintenance results in lower profit margins.
The importance of materials technology usually only becomes clear when something goes wrong, such as if a component fails during a production process or breaks under wear. The number one question should be “how do we prevent this from happening again”.