The Discipline of Asset Management

and ISO 55000

Boardroom to Breakroom

Sustaining organisational performance

through leveraging physical assets and human capital

Karl NepgenPartner Consultant, Pragma Africa (Pty) Ltd

Sustaining organisational performance

through leveraging physical assets and human capital

• Where are the Lines-of-Sight between organisational (business) performance and operational assets?

• What mechanisms are available to assure the asset owner/operator of such performance?

• Can formalised Asset Management a la ISO 55000 provide solutions to above challenges?

Optimised Decision-Making

The objective of asset management is to maximise the performance of the assets, while minimising risks and doing this within existing resource and cost constraints

CASE STUDY

• Three Round 1 REIPPPP Projects

• Jeffreys Bay Wind Farm (138MW)

• De Aar Solar Power (50MW)

• Droogfontein Solar Power (50MW)

• More than 48 months in operation

CASE STUDY – PV PLANT

CASE STUDY – PV PLANT

Discussion

Refer to the “balancing act” to the left.

Describe examples of the following situations from your experience, and possibilities with reference to the case study (PV Plant):

• Improving the performance of assets, but increasing costs in order to do so

• Reducing asset management costs, but increasing asset-related risks in the process

• Improving asset performance, but increasing asset-related risks

AM is “the coordinated activity of an organisation to realise value from assets over its life cycle”

ACTIVITY

Approach, planning,

plans, implementation

REALISE VALUE

BALANCING costs, risks,

performance

ASSET

Something with ACTUAL or POTENTIAL

value

LIFE CYCLE

STAGES involved in the management

of an asset

Asset Management definitions according to ISO 55000

PAM Life Cycle

Create / Acquire

Operate

Maintain

Renew / Dispose

Org

anis

atio

nal

entr

op

y

20+ years

Commercial Operation

End of Warranty

Life Cycle Value Realisation

Levels of Assets and Asset Management

Application Example

Utility Power generation, Financial management, HR management, IT

Plant, Infrastructure Generation, transmission, distribution assets

Services, Spare parts administration

Services, logistics assets

Plant PV Field, Inverters, Sub-station, Control &Monitoring

Complex asset PV Array, Inverter, Power Transformer

Individual assets PV Module, Junction Box

Asset Management system according ISO 55 000 -Relationship between Key Elements

Elements of the ISO 55001 AMS – another view

Getting technical …

MonthBudget

MonthYTD

Net Generation (GWh) 6.6 7.2 46.0

Availability (EAF %) 99.9 98.7 99.8

12 Month Rolling Average

Availability (%)99.5

Net Capacity Factor (%) 19.5 22.9 23.1

Performance ratio (%) 83.4 78.9 80.9

Revenue/Income (ZAR m)

Typical plant performance KPIs

-

,1.0

,2.0

,3.0

,4.0

,5.0

,6.0

,7.0

,8.0

,9.0

,10.0

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Pro

du

ctio

n G

Wh

De Aar - Actual vs. Forecast Monthly Production

Plant Life Cycle

Create /Acquire

Operate

Maintain

Renew /Dispose

Org

anis

atio

nal

entr

op

y

20+ years

Commercial Operation

End of Warranty

Major refurb, replacement

Life Cycle Management Model -Asset Acquisition focus

Capital project

management

Asset investment

management

Asset value

optimisation

Life cycle costing

Installation and commissioning

Capex budgeting

Decommis-sioning and disposal

Asset portfolio management

Systems engineering

Asset creation and acquisition

New requests

Transactional information Handover

Capital investment decisions

Operation and maintenance

Demand analysis

Funded projects

Asset management plan

Replacement requests

Pro

ble

mA

pp

roac

h t

o s

olv

e

The Problems of Technical Complexity

Source: Ad Sparrius – System Engineering

Increased complexity of new systems

Many alternative implementation methods exist

System performance is constrained by human performance

Give detailed attention to requirements to ensure they are completely satisfied

Consider functionality independently of its implementation

• Structured design process -> allowing design decisions to be made in context of overall requirements

• Detailed design responsibility decisions -> diffused and decentralised

• Characterise human capabilities and limitations

• Consider the human as integral part of the system

• Carefully select, train, qualify and motivate operators, maintainers and other personnel

Increasing specialisation of designers and larger design teams. Increasing interaction between items.

AM Landscape Subject Definition

AM Landscape: 2014

An interdisciplinary, collaborative approach to derive, evolve and verify a

life cycle balanced system solution which satisfies customer expectations

and meets public acceptability.

13. Systems Engineering

Asset management cannot be successfully conducted based on individual assets, but must take

into consideration the whole asset system that considers the interrelationship and

interdependencies between key assets. Systems Engineering in an AM context is the

practice of ensuring effective planning, optimal design, performance, operation and

maintenance at an asset system level.

AM – An Anatomy V3: 2015

The Systems Engineering Process

Operational or User Requirements

Source: Ad Sparrius – System Engineering

• List all necessary requirements, but not nice-to-haves

• State functional requirements, not solutions (leave options for design)

• Be clear and non-ambiguous (eg ranges of performance)

• Be realistic – requirements must be achievable

• All requirements must be verifiable (if possible, quantify)

• It must be complete, yet concise

Example of User Requirements

• NASA defined an operational requirement for a ‘zero gravity ballpoint pen’

• Developed by Fisher at considerable cost, using pressurised nitrogen to feed the ink

• The pen costs US$50

Writing in space (USA)

• The Russians stated their operational requirement as ‘write in zero gravity’

• Solution was to use a pencil …

Writing in space (Russia)

Do not forget the Human element – define Competencies

Example of Operational Requirements –Plant level

Source: Hooks, Wheatcraft; Scope—Magic, Compliance Automation, 2001

• Power generation: 50 MW• Energy delivery per annum: 120 GWh• Availability: 99.5%• PR: 80%

Plant Life Cycle

Create /Acquire

Operate

Maintain

Renew /Dispose

Org

anis

atio

nal

entr

op

y

20+ years

Major refurb, replacement

Life Cycle Management Model -O&M focus

Capital project

management

Asset investment

management

Asset value

optimisation

Life cycle costing

Installation and commissioning

Capex budgeting

Decommis-sioning and disposal

Asset portfolio management

Systems engineering

Asset creation and acquisition

New requests

Transactional information Handover

Capital investment decisions

Operation and maintenance

Demand analysis

Funded projects

Asset management plan

Replacement requests

Asset Management

Plan(AMP)

So, what to look for in this AMP …

• Information and data specific to a designated asset type or closely related group (e.g Inverters)

• Reference information (not which leads to actions that must be planned)

– Not generally known to the Asset Owner, Asset Manager and O&M Contractor from as-built project documentation sources

– Specific extracts from as-built project documentation, that provides background for asset management decision-making

• Guidance and rationale for asset management decision-making

• Asset management action planning information, resulting from triggers

– Risk-based actions, required to mitigate potential or realised risks

– Opportunity-based actions, required to exploit options with adequate business justification

• NB - The AMP is a live document, to be continuously improved, and approved at regular milestones

Criteria for a good AMP … in practice

Using the ISO 55001 AMP

Dedicated AMP for each major asset

type/group

Using the ISO 55001 AMP

Using the ISO 55001 AMP

Technical details in native format in folder hierarchy

Using the ISO 55001 AMP

Performance levels stated per

major asset system

Using the ISO 55001 AMP

Condition per major asset

systemdrives LCM

actions

0%

20%

40%

60%

80%

100%L1C1

L1C2

L1C3

L1C4

L1C5

L1C6

L2C1

L2C2

L2C3L2C4L2C5

L2C6

L2C7

L3C1

L3C2

L3C3

L3C4

L3C5

L3C6

DA Inverter EC Score

Condition Rating Description Action requiredPoor 0 - 20% The items have deteriorated

beyond repair. Replace unit as soon as possible

Bad 21 - 40% The items have suffered serious deterioration and failure is very likely.

Urgent specialised refurbishment

Fair 41 – 60% The items show abnormal wear and require some repair. Maintenance backlog is evident.

Perform maintenance catch-up

Good 61 – 80% The items show normal wear and tear due to ageing, maintenance appears to be effective.

Continue at existing level of O&M

Excellent 81 – 100% The items are as good as new. None

Using the ISO 55001 AMP

Resources to enable and

sustain asset performance

• Methods and mechanisms exist to provide assurance thatstakeholder requirements are sustainably delivered on byphysical assets

• ISO 55000 and the discipline of asset management providethe structure to assure value extraction over extendedlifetimes.

Sustainable management

of asset performance and value creation

CASE STUDY: CONCLUSION

ISO 55001 Certifications – global, by industry

The BIG asset management

picture

Build a stable baseline for improvement(strategies, plans, information, measuring)

Asset performance improvement, cost reduction and risk mitigation

(availability, reliability, continuous improvement)

Sustainable operation

The AM journey starts here