The Onset of the CAO Chief Asset Officer a Major trends in the field of asset management.

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The Onset of the CAO Chief Asset
OfficeraMajor trends in the field of asset
management.
Vetasi - Gleneagles
Thursday, 5th November 2008

• Noel Grinsted
• Founder Member Institute of Asset Management UK
• Noel.Grinsted_at_noelgrinsted.com

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Noel Grinsted Director MCP Consulting Training

• Mechanical Engineer
• Trained in
• Management Science
• Operations research
• 37 Years in Asset Management
• Founder Member of Institute of Asset Management
• Experience in many Sectors Countries and Cultures
• Visiting Postgrad Tutor at Manchester University
• Two sons
• Thomas 13 Years
• Edward 11 years

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Noel Grinsted is a Director of MCP Consulting
Training
Europe Austria Germany ,Benelux Portugal
UK Birmingham
Ireland Dublin
USA Houston
Australasia China, Thailand Singapore
,Australia Indonesia
Middle East /Africa Dubai /S Africa / India
MCP has performed more than 4,000 Asset
Management Programmes
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Agenda

• Asset Management Whats it all about/Why is it
  becoming more Important across many sectors ?
• Issues and Trends driving interest in Asset
  Management philosophy, methods, tools and
  techniques
• Getting it Right or Wrong ? Benefits and
  Penalties
• What are the Common Elements for Success in Asset
  Management ?
• PAS 55 British Standard Specification for
  Optimized Asset Management
• Future directions for Asset Management as a Value
  Added Factor

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Asset Management Whats it all about ?

• Responsible, Sustainable, Cost-Effective, Life
  Cycle Care for Built Environment Physical Assets
• Public and Private Buildings/Facilities
• Educational and Health Facilities
• Parks, Public Private Recreation Facilities
• Communications Networks Post, Telecom, TV
• Energy Supply and Distribution Elec, Gas
• Water Utilities Supply, Waste, Storm
• Transportation networks Road, Rail, Sea, Air
• Waterways, Drainage, Flood Protection
• Solid Waste Handling/Recycling Facilities
• Extraction, Process and Manufacturing
  Infrastructure

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Why is Asset Management Important ?What Happens
When we Get it Wrong ?
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(No Transcript)
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More Seriously.

• Marshalls seize GlaxoSmithKline drug batch
  63447 PM Friday, March 04, 2005 United
  States marshals today seized batches of two drugs
  Paxil and Avandamet made by pharmaceuticals giant
  GlaxoSmithKline because the UK companys
  manufacturing standards violated US national
  rules.US Food and Drug Administration
  (FDA).was concerned that flaws in the
  manufacturing process meant they were of poor
  quality.

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What Factors are Raising the Profile of Asset
Management ?

• Asset Risks appearing on Boardroom Agenda
• Regulation/Legislation/Compliance
• Cost, Price Compression, Return on Investment
• Increasing value and complexity of Assets
• Lean raises the bar for Asset performance
• Customer expectations of Quality Service
• Connection of Assets with Climate Change

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Asset ManagementMotivation for Getting it Right

• Companies who recognise Asset Management as a
  Value Added Factor can achieve
• 30 to 50 Cost Reductions
• Doubling of Equipment Capability and OEE
• Delivery of High Reliability Environment for
  improved operating efficiency, quality and safety
• Assured and sustainable Environmental, Regulatory
  and Legal and Carbon Compliance Managing OE3
• Improved Image and relationships with Customers,
  Insurers, Regulators and other Stakeholders
• Improved Profitability and
• Return on Capital Investment

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Asset Management Getting it RightWhat Do we
need to Do ?

• Understand where you are now relative to World
  Class
• Manage the Whole Asset Lifecycle Not Just
  Maintenance and Continuously Challenge and
  Improve Practices
• Think in terms of Total Life Cycle Cost and Value
  Delivery
• Challenge and reduce time-based maintenance and
  replace with Condition, Value and Risk Based
  Thinking
• Build the Asset Management knowledge base
  Understand and target the tools and Engage the
  whole organisation
• Place AM accountability shop floor to top floor
  Create Motivational Performance Management
  (KPMs not KPIs)
• Adopt a truly Holistic Joined-up Approach for
  Success
• Implement EAM Solution as a central element of
  Overall Asset Management Vision and Strategy (PAS
  55 Guidelines)

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• Where are we now ? Benchmarking

You are Here
Start
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Organisational Benchmarking and ProfilingWhere
are we now ?

• If were going to improve..
• How do we know where we are now.. ?
• Complex Question
• Some areas strong
• Some areas weak
• Elements of Asset Management Best Practice
• Profile Organisation

Improve
Visualise
Analyse
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Progress To World Class Through Benchmarking
Assessments
First
Second
Third
Benchmark Score
World Class
European Manufacturing Sites
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Manage the Whole Asset Lifecycle Continuously
challenge and Improve Practices
Stakeholder Needs
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Organise around true Life Cycle Asset Management
processesEquipment Life Cycle Commitment And
Expenditure Trends
Projects Maintenance need to Work Together
100
Funds Committed
95
85
75
66
Of LCC
LCC Cost Reduction Opportunity
50
Funds Expended
25
0
System Design
Conceptual Design
Operations, Maintenance, Disposal
Engineering, Construction, Commissioning
Sustaining Cost
Acquisition Cost
Start Of Life
End Of Life
Life Cycle Span
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Challenge and reduce time-based work and replace
with Condition, Value and Risk Based Thinking
Comparative Direct Maintenance Costs
Traditional Reactive Maintenance
120
100
Conventional Time-Based Preventive Maintenance
80
60
40
20
0
Level 1
Level 3
Level 2

• EAM-Enabled Condition, Value Risk Based Approach

• Most companies are Here
• Large value locked up

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The Asset management Knowledge Base
First batch

• Buz-Phrases you will meet explained
• Reliability Centered (or Centred) Maintenance
• RCM, RCM II, RCM Turbo, RCM Blitz, PMO, REM (
  FMECA Based Reduced Cost improved effectiveness
  )
• Total Productive Maintenance/Management/Manufactur
  ing
• TPM (Operator involvement, Chronic Acute
  Problems, Early Equt Mgt, OAC )
• Total Quality Management
• TQM (zero defects, teams, cell production) ISO
  9000 PAS 55 for Asset Management
• Criticality/Vunerability
• CA/CS/VS/VA ( Qualitative Risk Assessment and
  Prioritisation )

Operators on Tools
Risk matrix
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The Asset management Knowledge Base
Second batch

• Buz-Phrases you will meet explained
• Condition Monitoring
• CM/PCM/PdM/CBM ( Data collect by Tech and Hu
  Senses for AM Decisions)
• Risk Based Maintenance
• RBM RBI (inspection) RBS (spares, stores,
  supplychain) ( Trend in Reg Inds )
• Supply Chain Management
• SCM/IM/WHM/JIT/JTL
• Root-cause Analysis Troubleshoooting
• RCA ( Problem solving - tools
• shared with TQM, Lean, Six Sigma etc )

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The Asset management Knowledge Base

• Buz-Phrases you will meet explained
• Lifecyle Costing
• PLM (product), ALM (Asset), LCC (Life), WLC
  (Whole), TLC (Through), TCO (Total Cost of
  Ownership)
• Value Driven Maintenance
• VDM Asset Management Decisions Based on NPV
  (Net Pres Value) Assessment
• Asset Management Decisions Support AMDS
• Cost-Risk based Decisions for Spares,
  Maintenance, Inspection, Replacement etc

Third batch
There are more emerging all the time Challenge to
Keep up to Date !
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Build the Asset Management knowledge base
Understand and target the tools and Engage the
whole organisation
RCM/FMECA/CBM
Which Sector are our Problems in ?
EAM
D4R/EEM
Transient
Acute
MTBF
Terminal
Chronic
MTTR
TPM/OAC/RCFA
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Place AM specific accountability shop floor to
top floor Create Motivational Performance
Management (KPMs not KPIs)
Case Study Chemicals Company
Improving Mean to H Plant Performance Level
Saves Company 255 Million
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Adopt a truly Holistic Approach for Success Close
The Gaps
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Effective Training
Message Training is Key But get the timing right
Implement EAM Solution as a central element of
Overall Asset Management Vision and Strategy (PAS
55 Guidelines) Users who had recently implemented
EAM were asked What would you concentrate more
on next time ?
Choosing the right Solution
Message Dont believe the IT system is the
solution
Big Message Concentrating only on the IT System
is not enough Users need to focus on Soft
Issues Training BPR Change Mgt
What would you concentrate more on next time ?
Effective Change Management
Effective BPR Business Process Re-Engineering
Message Focus on aligning the organisation with
the new processes and empowering and engaging the
people
Message Get processes right first before
implementation
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• PAS 55 British Standards Institution
  Specification for the optimized management of
  physical infrastructure assets

• Part 1 (PAS 55-1) The Specification (21
  requirements)
• Part 2 (PAS 55-2) Guidelines for application
  of PAS 55-1

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PAS 55 Maturity Levels
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UK Central Government and PAS 55
UK Govt Asset Mgt Strategy Based on PAS 55
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Asset Management Getting it RightWhat Do we
need to Do ?

• Understand where you are now relative to World
  Class
• Manage the Whole Asset Lifecycle Not Just
  Maintenance and Continuously Challenge and
  Improve Practices
• Think in terms of Total Life Cycle Cost and Value
  Delivery
• Challenge and reduce time-based maintenance and
  replace with Condition, Value and Risk Based
  Thinking
• Build the Asset Management knowledge base
  Understand and target the tools and Engage the
  whole organisation
• Place AM accountability shop floor to top floor
  Create Motivational Performance Management
  (KPMs not KPIs)
• Adopt a truly Holistic Joined-up Approach for
  Success
• Implement EAM Solution as a central element of
  Overall Asset Management Vision and Strategy (PAS
  55 Guidelines)

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Asset ManagementMotivation for Getting it Right

• Companies who recognise Asset Management as a
  Value Added Factor can achieve
• 30 to 50 Cost Reductions
• Doubling of Equipment Capability and OEE
• Delivery of High Reliability Environment for
  improved operating efficiency, quality and safety
• Assured and sustainable Environmental, Regulatory
  and Legal and Carbon Compliance Managing OE3
• Improved Image and relationships with Customers,
  Insurers, Regulators and other Stakeholders
• Improved Profitability and
• Return on Capital Investment

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Future directions for Asset Management

• SCADA/CBM/RFID/EAM evolution leads to increased
  participation of Assets in their own health care
• Mobile working greatly extended bringing data
  quality, productivity alignment/integration of
  in-house Resources and the Extended Enterprise
• Asset Management becomes Recognised Profession
  with Chief Asset Officer (CAO) role on the main
  board
• Companies connect and integrate Organisational,
  Financial and Asset Management Strategies
• Companies truly take control of the Asset Life
  Cycle and use Asset Management to buy the right
  things

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The Onset of the CAO Chief Asset
OfficeraMajor trends in the field of asset
management.
Vetasi - Gleneagles
Thank you
Thursday, 5th November 2008

• Noel Grinsted
• Founder Member Institute of Asset Management UK
• Noel.Grinsted_at_noelgrinsted.com