Chapter 2
The Asset Management Function
Chapter Aim: To describe the aim,
structure and activities of asset management.
To indicate the competencies
needed by people who work in asset management.
Chapter Outcomes: After reading
this chapter you will know:
• Why asset management is needed
and what it’s main activities are
• How the asset management
function should be structured
• The need for personnel working
in particular technical asset areas
• The need for financial, legal
and engineering support
• The basic knowledge required by
asset managers
• The personnel roles required in
asset management and the competencies required
for those roles
• What is meant by asset
management policy
• What is meant by asset
management strategy
Chapter Topics:
• The asset management function
• Structure
• Asset management groups
• Knowledge required for
effective asset management
• Asset management activities
• Asset management policy
• Policy statement
• Asset strategy factors and
model
• Personnel roles
• Personnel competencies
• Personnel development
2.1 The Asset Management Function
Asset management activities
permeate to many levels of an organization, and are not confined to a central
group. For this reason we shall use the term Asset Management Function as a
flexible descriptor for the activities involved, and apply the term Asset
Manager to those involved significantly, but not necessarily exclusively, in
asset management activities. The purpose of the Asset Management Function is to
provide resources and expertise to support the acquisition, in-service support
and disposal of the physical assets required by the organization.
2.2 Structure
Asset management activities and
responsibilities impact on a wide range of roles within an organization are not
confined to a specific department. However, in a large organization, effective
asset management will benefit from the existence of recognized asset management
personnel with expertise in specific areas. These may be formed into distinct
groups, the title of which will depend on company historyand structure. An example in defence is the Defence Materiel
Organization, which has divisions managing land, sea and air assets. Within
each division are asset management groups referred to as System Program Offices
(SPOs).
2.2.1 Asset Management Groups
Example Asset management groups are based around the various major equipment
areas operated by the company.
Figure 2.2 shows an example of
the asset management groups for an electricity transmission company. The
company installs and operates transmission lines and substations. There are
asset management groups for ‘substations’ and ‘field’ with sub-groups for
switchgear, transformers, transmission lines and so on. Each group is headed by
an asset group manager, supported by technical, logistics, financial and
commercial staff with competence in the particular field.
2.3 Asset Knowledge The
management of assets is dependent on knowledge about the organization’s assets,
in terms of both current equipment, business role of the assets and future
prospects. Asset managers need to have a practical working knowledge of the
major assets at a management level so as to be able to make sound business
decisions. They need to be aware of the assets which constitute elements in any
given capability, that is, the array of subsidiary items which are necessary to
support particular prime equipment.
the lead time for acquisition of
replacements, so that we can plan our replacement strategy sufficiently far in
advance. This knowledge, combined with an assessment of the future requirements
of the business, and of developments in the types of vehicles available from
manufacturers, will enable us to make sound and timely decisions within the
constraints of business risk. A summary of points of knowledge which an asset
manager may need to have is shown in Table 2.1.
2.3.1 Asset Management Activities
The asset management function has
a role to play in relation to a substantial numberof activities, as shown in
Table 2.2 Asset management activities.
2.4 Asset Management Policy
A policy statement is a statement
of the overall aims or principles adopted by an organization. A classic policy
statement from history was made by a senator in ancient Rome: “Carthage must be
destroyed”. PAS-55, the Asset Management specification, calls for an
organization to have an asset management policy. Some suggested general points
to be covered in the asset management policy statement are shown in Fig.
2.5 Asset Management Strategy
A strategy is a broad level plan
set by senior management as a guide to how and organization intends to achieve
its aims. Figure 2.4 illustrates an overall life cycle model and related asset
strategy factors. Under this heading, we set out the procedures, or refer to
existing documents which specify procedures to be followed in managing assets.
The asset strategy2.5.1 Capital Items
Asset replacement plans are to be
created and to be reviewed annually
2.5.2 In-Service Support
A systematic approach to the
support of in-service assets is to be established and operated in accordance
with the following requirements. Actions: Acquire, Retain, Replace, Dispose
Acquisition: Life Cycle Cost, Commonality, Maintenance strategy: e.g. Outsource
or not, Through Life Logistic Support, Training Operations: Physical plan,
Performance, Profit, Return On Investment Maintenance tactical detail: Quality,
Reliability, Maintainability, Availability.
2.5 Asset Management Strategy 21
Asset maintenance plans, which
may include outsourcing, are to be established and to be documented in the
organization’s maintenance management computer system. Plans will be created
and maintained, to deliver the required level of service of assets. Asset
maintenance plans are to minimize life cycle costs consistent with achieving
the outcomes specified. Risk analysis of asset operations is to be undertaken
in accordance with specified procedures. Risk management and mitigation
strategies are to be implemented as indicated by the analysis. The specified
information management system is to be used for recording plans, procedures and
work management.
2.5.3 Business Strategy and Asset
Strategy
The asset strategy must be
responsive to and interact with the business strategy. Issues deriving from the
business situation which will impact on asset management strategy include the
following.
• Changes in demand for product
or service.
• Changes in revenue and costs.
• Technological developments.
• New business developments
• Acquisitions
• Divestment, sale or phasing
out;
• Redeployment;
• Changed operating practices;
• Equipment replacement/Leasing;
• Outsourcing or In-sourcing of
services.
Other factors are the extent to
which we plan for long term growth or to just do enough to meet short term
requirements; degree of commitment to in-house repair and logistic support as
opposed to use of outsourced support facilities; the use of redundancy to
achieve system reliability, rather than seeking high reliability of individual
items; the degree of co-ordination between related parts of a supply chain,e.
g. electricity generation, transmission, and distribution; maintenance and
replacement strategy in regard to run-to-failure, age-based, condition-based,
spend-limit based replacement decisions.
2.6 Personnel Roles in Asset
Management
The asset management function
requires persons with business, technical, operations or service experience,
who can work effectively with finance, contract and engineering specialists.
The following are key personnel roles in asset management. The assignment of
persons to these roles will depend on the size and structure of the organization,
and the existence of a role does not necessarily imply that that role
constitutes a full time job.
Chapter 14
Logistic Support
The aim of this chapter is to
describe the factors involved in supporting physical assets from the point of
introduction into service, over their life time through to disposal. These
factors also influence the initial choice of equipment.
In the chapter you will learn
that many problems in physical asset management can be reduced by considering
the supportability of equipment at the acquisition stage. You will learn about
the many factors that need to betaken into account in planning equipment
support, and will be provided with check lists to assist this type of planning.
Chapter topics :
§
Introduction
§
Value engineering
§
Reliability centered procurement
§
Equipment commonality
§
Asset appraisal and acceptance
§
Test and evaluation
§
Preferred suppliers
§
Logistic support analysis
§
Level of repair analysis
§
Integrated logistic support
§
Through life support
§
Supplier viewpoint
14.1 Introduction
Physical assets require the support
of people, service and resources of many types, including operators,
maintainers, repair facilities, consumables, spare parts, documentation and
training. To ensure that these support are provided and budgeted for, several
types of analysis are needed. The following techniques are applicable :
§
Value engineering – involves a critical review of features of the
proposed capability to eliminate unnecessary elements and simplify things where
possible
§
Equipment commonality – aims to ensure that unnecessary equipment
diversity and support systems complexity are avoided
§
Logistic support analysis – the detailed analysis of support
requirements
§
Level of repair analysis – is concerned with deciding where particular
types of repair will be carried out, for example, what will be done by local
technicians, what by central workshops and so on.
§
Integrated logistic support – is a system for ensuring that, once we
have decided on our logistic support concept, all aspect necessary to implement
it are identified and implemented.
§
Through life support – is a concept which emphasizes the need for
logistic support to extend over the whole life of the equipment. This consideration
is important where contracts for support are to be let.
§
Supplier viewpoint – under this heading we consider the issue of
logistic support from the point of view of a manufacturer or supplier, for whom
both commitments and business opportunities exist.
The aims of these techniques are
to :
§
Form a basis for planning and budgeting of equipment acquisition,
operation, through-life-support and disposal
§
Optimize costs over the life cycle of equipment, and not just focus on
minimizing acquisition cost
§
Get value for money
§
Avoid nasty surprises down the track.
In the case of common user
equipment, purchased and used in an urban or industrial environment with many
surrounding support service, the techniques outlined in this chapter are
relatively easy to apply. This does not mean that the principles involved can
be iqnored or that it is impossible to go wrong. However, the available support
of equipment distributors, manufactures and specialized maintenance
organizations can greatly reduce the extent to which asset owners need to deal
with the details of logistic support. By contrast, if we are to operate away
from a supportive environment, great care must be taken to ensure that the
essential logistic support elements are in place.
Figure 14.1, the iceberg diagram,
based on original by ben Blanchard, illustrates graphically the dangers of
failure to recognize the activities and costs involved in logistic and through
life support of physical assets.
Know Your Asset
Chapter Aim: the aim of this
chapter is to draw attention to the need for asset managers to be familiar with
their assets in a techincal, business and operational context. The asset
manager will also have an integrated view of the assets as whole and will
understand the relantionships, interdependance and degree of claticality among
the deployed assets.
Chapter Outcomes: After reading
this chapter you will be aware of the importance of understanding the range of
assets which are used in the business, their roles, the techonologies involved
and the relative criticality of particular assets. You will be aware of the
value of expert which have in depth asset knowledge and of the significance of
bottlenecks which can occur particulary in flow process business.
Chapters topics:
Ø
Awarness of Key Assets
Ø
Block diagrams
Ø
Criticaloity
Ø
Expert teams
Ø
Bottlenecks
Ø
Backlogs
18.1 Awarness of Key Assets
Successful asset management is
dependet on managers having a clear understanding of asset required to
physically sustain the business and to keep it profitable. There is value in
having a register of key asset of the organization which includes information
on their leading specification and age. It is also valuable in providing
essential capabilities.
Asset management information
system contain a cast amount of detailed information . in order to see the wood
for the tress , the register of key assets, which is essentially a report
generated form the full asset register, lists the main items at a senior
management decision level. The register of key assets in a cital document will
incorporate information such as :
Ø
Asset/Capability title
Ø
Brief configuration detail
Ø
Location
Ø
Age
Ø
Estimated remaining life
Ø
Cost
Ø
Replacement cost
Ø
Recent history e.g last overhaul or upgrade date
Ø
know issues
Ø
know plants
There is also value in having
maps, plans, satelite image, photographs and surveilance images at various
levels of detail, making it as simple as possible to understand the location
and nature of ssets and their current condition.
The actual mining machinery and
supporting service. Most industrial complexes involve a wide range of types of
assets.
A statement of quality of assets
under management, pf the budget involved and of the worl crried out annually is
valuable as an indicator to staff to senior management and to the public of the
scale of the asset management task.
At a large electricity transmission
company the CEO aranged for video screens in the head office to display, on a
real time basis, the electricuty throughput of each of the compant's major
transmission lines.
