Extends from design, procurement, and installation through operation and maintenance. Requires a results oriented profit centered mentality rather than cost center operation. Connects and aligns operations, maintenance, technical, financial and support functions. Begins from where you are (current conditions) building from strengths, correcting weaknesses,
taking maximum advantage of opportunities to achieve greatest value in the shortest amount of time.
Demands optimized reliability achieved by defect elimination as the only way to achieve
sustainable, optimized operation.
Assembles the different maintenance processes with mission-based financial prioritization for
greatest effectiveness.
Provides processes, techniques, and measures of performance that gain ownership, compel
broader responsibility for the value and return generated by capital assets.
Requires sustainable, continuous improvement.
The Process
The asset optimization process is represented by the circular process illustrated in Figure 4.2 following. It is exceptionally important to recognize that Asset Optimization is a business improvement process and imperative that demands Maintenance, Production partnership, full alignment and support throughout the organization from the very beginning of the initiative. History has demonstrated that internal maintenance organizational and process improvements can only go so far — a solid, constructive Production, Maintenance relationship is crucial for success.
Figure 4.2 illustrates the progression of identifying and prioritizing opportunities; constructing a strategy and tactical action plans to address opportunities; injecting processes, systems, technology and resources; measuring results; and closing the loop with assessment of results and continuous improvement. It is important to repeat that the asset optimization program is opportunity driven from prevailing conditions to gain the highest return in the least time. It is not a linear progression that begins with a process or processes that may or may not produce greatest value for internal conditions and opportunities.
This type of circular process is not new. It probably began with the Shewhart or Deming PDCA cycle utilized by the famed W. Edwards Deming. The PDCA cycle consists of four actions: Plan (what to accomplish), Do (initiate the strategy or plan), Check (evaluate the outcome), Act (on what has been accomplished). The idea has been borrowed and modified by many since. DMAIC: Define, Measure, Analyze, Improve, Control is utilized within Six Sigma; explained in detail in Chapter V. Observe, Analyze, Prioritize, Do, Measure (results) and Improve is another variation. There is even a military variant called OODA — Observe, Orient, Do, Adjust. All emphasize thinking and planning before doing. Thinking and planning are much less costly than doing!
The basic asset optimization process illustrated in Figure 4.2 draws on all the preceding processes in the following five primary stages:
1. Define — Establish Requirements, Formulate Strategy.
2. Plan — Identify, Prioritize and Plan Opportunities for Improvement. 3. Do — Develop and Implement Improvement Action Plans.
4. Check — Measure Results.
(need to do)
Plan
(going to do)
Do
Check
(what you did)
Improve
Institute Continuous
Improvement Develop Strategy
Measure Results Deploy People,
Practices, Technology Define, Need to Do Plan, Going to Do Do Check, What you Did
Improve (need to do)
Plan
(going to do)
Do
Check
(what you did)
Improve
Institute Continuous
Improvement Develop Strategy
Measure Results Deploy People,
Practices, Technology Define, Need to Do Plan, Going to Do Do Check, What you Did Improve
Figure 4.2 The Physical Asset Optimization Process Process Stages
The asset optimization process builds on plant specific strengths and opportunities to achieve business objectives as quickly and effectively as possible. Proven practices and technology are introduced to capitalize on opportunities and implement a plan developed by site personnel.
Define — Formulate Strategy
The overall strategy for asset optimization will be developed to gain corporate and site business objectives — typically improved availability, reduced spending (cost) and greater capital effectiveness. If specific numerical objectives have not been defined, performance benchmarks for availability, cost and other top-level program objectives should be published and made readily available. Targets must include both numerical and qualitative performance objectives as well as time to achieve the objectives — for example, achieve an asset care cost objective of 2.3 percent of RAV in three years, improve employee work environment within a year, etc.
When establishing top-level strategic objectives the gap between current and objective performance must be taken into account. For example, it probably isn’t possible for a facility spending 3.5 percent or greater of RAV on asset care to accomplish a sustainable reduction to a world-class value of 2.3 percent in three years while simultaneously increasing availability by 5 to 10 percent. It is better to establish an ambitious, but achievable, stretch objective that will gain enthusiastic support from all stakeholders.
During this stage a mission statement is written describing objectives as concisely as possible (the elements of a mission statement are discussed in Chapter XVIII). Along with the mission statement, a procedure for assessing performance improvements must be devised and approved. It could be a financial model similar to that discussed in Chapter VII, or specific metrics. All this should be rolled into the structure of a formal business plan. The business plan will be completed during the planning and implementation steps to fully define the improvement process.
The overall business strategy might state in general terms how the objectives will be met — improve reliability, minimize unexpected major events (failures). The amplifying program may delve deeper identifying organizational and other specific areas for improvement. Again, top-level objectives might include examples such as 85 percent of all work accomplished will be planned (one week in advance of work) rather than reactive, and 65 percent of work accomplished originated by Preventive and Condition Based activities. Here again gaps to best practice benchmarks drive the process, Figure 4.3, see also Chapters IX and XVII.
Practices Practices
GAP GAP
Metrics
Metrics PracticesPractices Metrics Metrics Opportunity Opportunity Strategies Strategies Action plans Action plans Implementation Implementation Results Results Best in Class Us What are we doing? What are
we doing? How well areHow well arewe doing?we doing?
Prioritization Prioritization What are they doing? What are they doing? How well are
they doing? How well are they doing? Practices Practices GAP GAP Metrics
Metrics PracticesPractices Metrics Metrics Opportunity Opportunity Strategies Strategies Action plans Action plans Implementation Implementation Results Results Best in Class Us What are we doing? What are
we doing? How well areHow well arewe doing?we doing?
Prioritization Prioritization What are they doing? What are they doing? How well are
they doing? How well are they doing?
Figure 4.3 Gaps to Best Practice Drive the Asset Optimization Process
The demarcation between the strategy and tactical planning stages is a narrow one. In general, it is better to leave specific details of process, organizational and technical details of what is to be accomplished to meet the overall objectives to those who will be developing tactical action plans. That gains ownership and commitment for the improvement initiatives.
Plan — Identify, Prioritize and Plan Opportunities for Improvement
The planning stage converts strategic objectives to implementable improvement action plans. The planning stage has three identifiable steps:
1. Identify gaps between current and objective performance within asset related processes. How are assets, processes and people performing compared to benchmarks? Performance includes areas such as availability, reliability (MTBF), cost, work effectiveness and management, materials (spares levels, procurement, storage and issue). Chapter IX provides guidance.
2. Establish preliminary performance objectives for each gap. Determine the value improvement available from each gap closure opportunity in terms of its contribution to the strategic objective. 3. Prioritize opportunities by value potential (value of the gap), risk (probability of successful
accomplishment), time and cost to achieve required performance. Select improvement
opportunities that cumulatively total approximately 120 percent of the overall strategic objective. It must be noted that prioritization is extremely important. Getting off to a fast start with quick results, demonstrated financial return and real examples of what can be accomplished is absolutely essential to create the climate of ownership, enthusiasm, cultural acceptance and support that are needed for sustainable success.
The new organizational infrastructure is typically formed during the planning step. This consists of steering teams, improvement champions and improvement teams. Training is commenced to acquaint the improvement teams with the latest practice and technology that can be applied to reach industry best performance.
Details of how this and all stages of the asset optimization process are accomplished are contained in Chapter XVIII.
Action planning begins by identifying, in detail, strengths to build on, barriers to success and the desired end state — including interim objectives for long-term improvements. The latter might include annual objectives for spending as a percentage of RAV over a three to five year period.
This step is best accomplished in a facilitated workshop composed of management and crafts from all applicable disciplines — production / operations, maintenance, engineering; perhaps stores, finance, IT and HR. The action plan will designate a champion, list resources, best practices and training necessary for the implementation as well as coordination / co-operation, such as HR assistance for training, certification and resolution of any contractual issues, IT for information entry, management and access.
Corporations leading the application of the principles of asset optimization state that work groups are the biggest motivator and contribution to success — when the need is understood and accepted, buy-in, commitment, and ownership follow.(129)
Quite often workshops will conclude that changes to the organization, communications and reporting structure are high priority improvements that must be implemented before process and reliability improvements can occur. Added training for operators and crafts, more specific operating instructions and greater ownership are other frequently mentioned organizational improvements, Chapter XVII.
In addition to overall objectives, it is wise to establish leading metrics to provide confidence that the improvement process is moving in the correct direction, Chapter IX. Leading indicators might include percentage of training completed, new practices and procedures installed and in use, percentage of PM and CBM routines developed and implemented and lower level compliance metrics such as percentage of total work (hours) covered by work requests.
Do — Implement Action Plans
Improvement action plans are implemented as soon as possible following completion and approval. Deploying improved practice and technology is the first step in the implementation process. This typically begins with training in areas such as reliability improvement, planning and scheduling, lubrication, vibration and failure analysis. Actual implementation is accomplished by teams, ideally on a small-scale pilot basis to work out any minor deficiencies, prior to full deployment, see Chapter XVIII for more detail about pilot implementation.
One final point: asset optimization requires lots of data to identify and formulate objective improvement initiatives. Many facilities are data poor at the beginning of the initiative. As a result, it is imperative to implement a robust procedure for data capture as part of the initial improvement action plan. This will build the base of data needed to evaluate results and progress as well as form the objective basis for identifying the next round of improvements. In effect the improvement program builds its own history. The necessity for this step cannot be overemphasized.
Check — Measure Results
With improvement initiatives implemented and moving forward it is necessary to measure results periodically and compare actual performance to expectations. Did the improvements produce the expected results?
The entire purpose of this step is to ensure satisfactory progress, increase ownership, support and enthusiasm for the improvement initiative, identify and resolve any barriers to success and initiate modifications to action plans where necessary.
Implementation teams must have specific objectives with performance (numerical results and time) reviewed monthly as the improvement program lifts off. Production, Maintenance and Engineering Superintendents as well as members of the improvement program steering team (Chapter XVIII) should participate in review meetings. Human Resources (HR) should participate where organizational, cultural and / or contractual issues are involved in the improvement process. Others such as finance and engineering should be represented where improvement activities overlap with their responsibilities. On large sites with multiple areas / units, individual area / unit meetings should be considered for detailed discussion with a second level combined meeting for all units and the steering team. The second level meeting is directed to reviewing overall performance, identifying potential barriers and any mid course corrections that may be required.
Participation by the plant manager and corporate executives is a powerful demonstration of commitment that goes a long way toward driving the initiative to success.
Improve — Institutionalize, Refine and Improve Results
Asset optimization must be a living program, continuously reviewed, refined and improved. Each successful improvement shifts opportunities and prioritization for additional improvements. Overall reviews should occur every six months or so depending on the state of improvements. The improvement program business plan should be reviewed annually and revised as required.
In the longer term, improvements must be institutionalized such that results are permanently sustained. This takes time — as much as five to seven years for the major organization cultural shift required to go
from reactive to reliability driven, planned maintenance with most activities originated by Preventive and Condition Based tasks.