ALM Whitepaper

A Key Element
Asset Lifecycle in Achieving

Management Sustainable
Operations
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Asset Lifecycle Management (ALM)
Asset Lifecycle Management

Background: How Do We Approach It?
Asset Lifecycle Management (ALM) is based on the fact that companies own assets because
they want to do something with them (perform functions) and not all assets are equal (criticality
Asset Integrity & Reliability
varies). Assets are placed in service and work together to create value. The value derived starts with is key to protecting a
the designed useful life of the asset and ends when the asset fails or is obsoleted and dismantled. company’s reputation by
It is important not only to understand the way in which assets fail but also what is required in the maximizing uptime and
operating context to ensure the designed value is safely achieved within a tolerable risk and with minimizing the risk of
minimum cost. In other words, what maintenance is required and when is it required to ensure the running equipment.
designed, intended value is achieved? How often should we inspect our equipment to ensure we
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achieve safe operation? How can we utilize reliability tocom extend the useful life of the equipment while
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optimizing our maintenance and inspection costs? Maintenance and inspection
©2019 Operational frequencies
Sustainability, LLC®.are derived from the technical characteristics of failure
mechanisms (or degradation mechanisms). Whether toAllconsider rights reserved.
an asset or system for maintenance and inspection is determined by the asset or
system criticality, i.e., how much does it hurt if it fails?
At a strategic level, failure consequences and associated risks are used to provide focus for the maintenance and inspection program and
personnel. At a component level, probable risk assessments may have to be performed to determine the real world likelihood of a particular
outcome. Our approach provides comprehensive risk management strategies to focus efforts where they matter most – maximizing the use of the
equipment (create an operating atmosphere of lowest risk and highest reliability) while containing costs.
Defining Asset Performance Management

Simply said, APM processes are what asset practitioners do (i.e. operators and mechanics) while Asset Integrity Management (AIM) is what the
organization does to manage its asset information.
Figure 1 – Asset Management Expanded View

Asset Management Overview
Corporate /
Organizational Strategic Goals Organization
Management
Capital, investment value,

Asset
performance and sustainability Management Assets Portfolio Management
System
Systems performance, cost

and risk optimization Management Assets Systems
Asset life cycle: Manage Individual Assets

Costs, risks and
performance Create / Renew /
Acquire Utilize Maintain Dispose
2 www.DrivingOE.com | www.OESuite.com | 713.355.2900 ©2019 Operational Sustainability, LLC®. All rights reserved.
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The OS methodologies and processes are designed to call for the right maintenance at the right time, thereby reducing costs by eliminating
unnecessary or non-productive work, avoiding incidents, and optimizing assets over time. This new approach to APM helps clients enhance
compliance activities, reduce business interruptions, increase asset utilization, prevent and minimize unwanted events, and protect their reputation.
com | 713.355.2900
©2019 Operational Sustainability, LLC®.
All rights reserved.
Figure 2 – Holistic APM
Next Generation Asset Performance Management (Next Gen APM) is OS’s improved approach to Asset Performance Management. It goes beyond
the traditional questions of maintenance, cost, safety systems, and condition. Next Gen APM coupled with Asset Strategy Optimization (ASO)
moves companies to the next level by embedding operational intelligence, improving worker performance and providing insights far beyond what
traditional APM approaches deliver.
Currently recommended practices such as RBI have limitations. For instance, Integrity Operating Windows (IOWs) can help identify new damage
mechanisms that might be introduced by running equipment outside of prescribed operating envelopes and limits. Predictive analytics and neural
network technologies can help determine the aggregate effect over time or identify unknown risks. But to take full advantage of the possible
information that can be gathered by neural networks and used to power predictive analytics, companies will need to modify their approach to
data acquisition from traditional technician and engineer intensive approaches such as condition monitoring to more machine learning-based
technologies capable of recognizing patterns and learning from trends – but that tend to have fewer false positives. Information will need to
be more consistent across applications. Relationships that cut across functional boundaries will need to be structured in ways that help people
understand the unintended risks and consequences of change.
When companies combine the OS Asset Lifecycle Management with holistic APM, they can optimize their asset care strategies over every stage of
the asset lifecycle. Equipment performance standards and user requirements may vary throughout the life of the equipment, and as these change,
the maintenance and inspection of your assets should adapt to accommodate the change in the operating context. Linking asset care strategies in
real time to Asset Performance Standards (APS), Integrity Operating Windows (IOWs), and the other core tenants present in holistic APM provides
proactive awareness and response to minimize or eliminate the risk associated with operating assets.
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Integrated APM
Recent developments driven by societal pressure for more transparency in process safety performance have led to API 754 as a suggested
practice. Suggested metrics include SIS activations, spurious trips, and relief device lifts as examples. To get this performance information,
companies need to integrate APM with process safety data.
In addition, mechanical integrity (MI) is a PSM element. Holisitic MI incorporates defect elimination into the picture. To achieve this, best in class
companies incorporate human performance into MI / QA. Conduct of Operations enables training and competency to also contribute to a reduction
in human error.
Asset Lifecycle Management Roadmap
Foundational Program Elements Defect Elimination Program Sustainability

Stage 1: Stage 2: www.DrivingOE.com Stage |3: www.OESuite. Stage 4: Stage 5:
Preparation Asset Reliability com | 713.355.2900
Risk Based and Predictive Equipment Lifecycle Management People and Conduct of Operations
Leadership Assets
Inspection Plan Procurement Define Job Roles
Find the champion Build master asset listAll rights reserved. Design, purchase, QA for life Create Maps
Form steering committee Units / functions
Safe Operating Limits
Stores / Inventory Competency
Assessment Criticality Organized, efficient, clean Assessment
Risk tolerance Asset criticality ranking
Time Based Inspection
Lifecycle cost Time based inspection
Asset replacement value Planning / Scheduling Training Matrix
Production capacity Prioritized, organized Training
Integrity Operating Windows
Remaining facility life Failure Modes
RBI / RCM revalidation
Facility uptime Asset risk
Capacity increase value Practical FMECA Precision Skills Procedures
Form strategy RBI Aligned, balanced, tight Operating Limits
Condition based maintenance
Vision and Plan Corrosion study and
Create a plan rule based inspection Damage Mechanisms (Operator) Care Safety Lifecycle
Set targets Revalidation Operate, lubricate, report, Abnormal Situation Management
Management system mobility
Governance Develop Equipment Strategies
Metrics Preventive maintenance Risk Level Distribution Audit
Prioritize tasks Predictive maintenance Area Practical RCFA Gap Closure
Financial Investigate and improve
Safety
People Risk Based Inspection Environmental Management of Change
Human error Lifecycle Cost Sustainment
Communications Design, operate, maintain
Competency Reliability Study Equipment Health
MTBF Anomaly detection
Block diagrams Pattern recognition Performance Management
Action items Cost-Benefit Decision Support Benchmarking
Training
Senior management
Program management MOC
CM and precision skills
Plant floor toolbox talks
Track KPIs / Promote Programs / FRACAS / Continuous Improvement

Measure program success, communicate progress, continually improve program
Feedback, Auditing, and Continuous Improvement Loop
Figure 3 – OS Asset Lifecycle Management Road Map
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The OS Project Lifecycle

What are the steps to Asset Lifecycle Management?
Step 1: Leadership Commitment to Asset Performance Management
Commitment to APM must be felt on the shop floor (Asset Integrity, Reliability and overall Safety go together, and are managed most holistically in a
new APM framework.) Senior leadership must establish a vision / mission that incorporates the APM initiative. An APM champion must be identified
along with formation of a steering committee. Senior leadership creates a project charter for the committee that includes goals and objectives,
critical success factors, clear deliverables, milestones, key metrics, and targets the committee is expected to achieve.
Once the committee has been chartered, it must create a detailed road map that describes the project plan. Benchmarking and financial benefits
should be analyzed as part of the assessment.
Step 2: Management Systems com | 713.355.2900 KPI Performance
MX / RAV
Identify and assess management systems needed to accomplish the
plan to determine which systems need creation and/or enhancement. Availability % MRO / RAV
This gap assessment should yield a set of policies and procedures to
reinforce the overall APM program. As processes are developed, OS
works with the client to socialize the deliverables, implement systems,
and develop a performance management framework that includes a
risk registry.
% OA EHS %
Step 3: Culture Change
A cultural gap assessment should be conducted to ensure that the
shop floor is aligned with management and the overall organizational
objectives. OS offers a reliability excellence gap assessment tool
along with a cultural assessment tool to determine which aspects
of the culture need to be addressed, including getting buy-in to % IR % Planned
overcome internal barriers. OS provides coaches and has significant
expertise in dealing with managing cultural change and organizational % VA
transformation.
Figure 4 – Key Performance Metrics
Step 4: Management of Change
OS will help establish a Management of Change framework early on to properly address changes to equipment and ensure the sustainability of
the overall information stream that needs to be managed along with the accuracy of engineering information (i.e. process safety information). The
sheer volume of information required for APM can defeat organizations if MOC is not properly understood as a core part of the overall system
framework. In addition to physical changes to equipment and facilities, Organizational Change and Personnel Change must be addressed. Without
identification of proper job roles and succession planning, lack of clear accountability often causes execution issues.
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Step 5: Competency
Once an MOC framework is in place that includes job role maps, the next step is performing a competency assessment to identify skills gaps,
serving as the basis for individual training plans to close any gaps or improve skills as needed. Training can be done in the classroom, on-the-job,
or via computer-based training. Overall competency needs to be verified to demonstrate knowledge, and a sign-off should be done. Competency
verification at the operational level should include written testing, hands on skill demonstrations, and a supervisory evaluation. Training needs to be
facility and equipment specific to ensure competency at the operational level.
Step 6: Standards and Work Instructions
Companies need to develop robust standards (polices and procedures) to reinforce the execution of the organization (i.e. PSM, MI). In addition,
robust operations and maintenance procedures need to be developed including safe operating limits and consequences of deviation. Ideally, these
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can be made available at the point of work using a mobile-enabled solution |reflecting
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the current equipment context.
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Step 7: Managing Equipment Information ©2019 Operational Sustainability, LLC®.
A taxonomy or asset hierarchy needs to be created (i.e. Company, Plant, Unit, Equipment, Component, Loop) to form the basis for how equipment
information will be managed. As part of this, a foundation for engineering information needs to be established. Process Hazards, Heat and Material
Balances, Process Flow Diagrams, P&IDs, Materials of Construction, and Isometric Drawings are all examples of engineering information that is
essential to effectively manage for process safety and AI&R programs. Ultimately, this results in the creation of a master asset list (also known as
an asset or equipment register). The asset register contains all of the critical properties of each asset in addition to other information.
Step 8: Determining Equipment Criticality
Once the taxonomy is built, the client can move on to establishing the criticality of the asset (i.e. safety, production, cost, quality), forming
the foundation for process safety, inspection intervals, spares optimization, and other key operational integrity components. All Safety Critical
Equipment (SCE) needs an equipment strategy. In addition, all SCE needs to be flagged to demonstrate compliance to the regulators to show the
equipment is being maintained as required. Detectability drives Safety Critical Equipment, as hidden failures are a concern.
Step 9: Determining Failure Modes
A Failure Modes Effects and Criticality Analysis (FMECA) can be performed on 5-20% of the most critical assets. It is necessary to assess the
failure modes of equipment so that you can assess the consequences, likelihood, and detectability of the failure, along with the lead time to the
failure. Your team may also choose to perform a reliability study (often referred to as an “availability simulation” using Monte Carlo simulation
algorithms) to provide availability and reliability parameters, lifecycle costs, importance rankings, etc. You may also optimize spare holdings and
planned maintenance intervals as an extra benefit. A reliability block diagram or “fault tree” may be used to model failure and success, or levels of
throughput in the system.
Another option for assessing the condition of the asset is to leverage a condition assessment. For each asset type, an assessment team of cross
discipline people will develop a list of criteria specific to the assets’ characteristics and failure mechanisms. The condition assessment allows for
a systematic approach to estimating safe remaining asset useful life and is a way of predicting when an asset may need to be redesigned, rebuilt,
refurbished, repaired, or replaced – or whether the entire process should be re-rated. It also provides information for determining obsolescence
and whether an asset or system can be operated as run-to-failure (consequence-based decision).
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Step 10: Develop Equipment Strategies
The level of effort required for equipment strategy development specific to each asset depends on the risk the asset imposes. Regardless of which
lifecycle phase an asset is in, the OS APM approach will allow organizations to determine the best strategies. Our focus is on the consequence and
associated risk an asset poses to achieving business objectives and the function it has to perform.
Figure 5 shows how complexity and impact can be evaluated to determine the strategy warranted for each piece of equipment for its useful life.
Activities that need to be carried out throughout the life of the equipment include inspection (visual, time-based, risk-based, condition-based),
repair, and monitoring (if onset of failure is detected).
If we can’t detect or prevent the failure, but we can’t afford to allow the asset to fail without warning, then we need to consider reengineering the
equipment or replacing it with something that is more maintainable and reliable. If we have enough redundancy (e.g. spare pump), then monitoring
and inspection activities may become less important. com | 713.355.2900
Reliability Centered Maintenance (RCM) is often our best optionreserved.
All rights on rotating equipment if we don’t have enough instrumentation and data points via
Equipment Health Monitoring (EHM) to enable prescriptive maintenance, which can detect the onset of failure earlier in the performance curve than
traditional RCM and Condition Based Monitoring (CBM). In addition to being prescriptive, modern EHM is also “Predictive,” generating a precision
forecast of the future health of the equipment.
The new generation of EHM software, including OESuite™, incorporates neural networks and agents, anomaly detection and pattern recognition,
and contains self-learning models – enabling true predictive analytics based upon machine learning. The integrated risk-based prescriptive
maintenance model offered by OS provides more insight for asset owners and more options for effective decision support.
HIGH
• Generic FMEA • Full RCM

COMPLEXITY
• Apply generic
• Generic FMEA
FMEA / FMECA
• Run-to-Failure
• Review intervals
LOW IMPACT HIGH
Figure 5 – Equipment Life Plan
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Figure 6 – Will we have

Determine a potential Upstream
OS Risk-Based Prescriptive Assess potential Spares Profitability emissions equipment
Maintenance Model criticality downtime available? impact? problem? impact?
Failure Potential Equipment not Equipment

New Starts Failure performing broken
intended function
P-F Interval
New Definition Previous

of Failure Definition
Condition
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P-F Interval: the time | www.OESuite.
from when a potential failure (P) is first
detected on an asset
com or |component using a selected predictive
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maintenance task, until the asset or component has failed (F) ®
©2019 Operational Sustainability, LLC .
Proactive Predictive Protective

(Delay Onset of Failure)
Step 11: Strategy Optimization
Next, a lifecycle cost analysis can be calculated for the entire system from asset inception to disposal, including maintenance and inspection
activities, to provide a time-dependent analysis of a system’s whole lifecycle cost process. The goal of the analysis is to determine how much
makes sense to spend to repair equipment (at any given point in its designed life) or to determine when it should be replaced or modified.
Step 12: Develop Defect Elimination Methodologies
Then, move to improve the care operators take in their work. Operator Was it
Failure Event expected per
care focuses on detection of issues and proper corrective action to help RCFA
(Work Order) FMEA / RCM
reduce equipment failure, leading to extended asset life and minimizing
defects. Create and enforce a comprehensive QA / QC process.
Maintainability and reliability must remain a core focus at every level of
the organization to prevent backward movement because procurement All Good Yes Upgrade
Equipment
was forced (or elected) to buy the least expensive components and Strategy
spares. Implement an incident investigation and reporting structure (FMEA / RCM)
and Root Cause Failure Analysis (RCFA) along with Weibull analysis
Apply to All
programs to analyze historical failure information. When equipment fails, Like Equipment
understanding the root causes can prevent recurrence. As equipment
fails, we need a closed loop process to learn from the failures.
Figure 7 – Learning Loop
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Step 13: Risk Registry
OS helps clients assemble the risk contributors while prioritizing controls and defining control themes. As threats are detected, actions can be
taken to mitigate them in real-time.
Step 14: Performance Management System
Companies need to develop a reporting system for corrective action management (i.e. FRACAS). In addition, companies need to develop KPIs to
measure progress against goals. Finally, implementing an audit function is key to sustaining gains made. The OESuite™ framework creates audit
criteria to measure the health of the management systems along with measuring adherence.
Step 15: Sustainability / Performance Assurance
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Once the project is completed, post deployment support | www.OESuite.
takes effect. OS then meets with the company periodically to monitor the health of the
com | 713.355.2900
systems and to leverage benchmarking information. A ©2019
robust Operational
audit program is key to assess adherence to standards.
Sustainability, LLC®.
Step 16: Continuous Improvement
Allows your organization to validate strategy and manage changes to equipment as they occur (see the attached APM / ASO white paper for more
information). Management of Change (Step 4) is critical for addressing change to ensure relevant information is evergreen.
By implementing this strategy, companies can ensure that the right work is done, at the right
time, using the right information, allowing organizations to focus on efficient execution - all while
capturing institutional knowledge and adjusting strategies based on current failure data.
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Workforce Assets Operations Compliance
Operational Sustainability, LLC® makes operational excellence simple.

Succeeding in today’s complex, highly-regulated industries depends on how well your company manages operational risk. Our world-class
advisory services and our industry-leading cloud-based, mobile-enabled software work together to enable your company to realize operational
excellence and sustained operational integrity. We identify and help you solve any issues to move to a real-time, mobilized risk-aware
culture. With an average of more than 25 years of industry experience each, our advisors can design a solution tailored to your company’s
culture and needs.
Learn how Operational Sustainability can advise, train, and guide your workforce with the most comprehensive and effective operational
excellence software and consulting services available today. See our full slate of free webinars, white papers, detailed module information,
and scheduled workshops online at www.DrivingOE.com.
Schedule your free consultation and demo today.
DISCLAIMER
This document is protected under the copyright laws of the United States and other countries. This proposal contains information that is proprietary and confidential to Operational Sustainability, LLC®, and shall not be
disclosed outside the recipient’s company or duplicated, used or disclosed in whole or in part by the recipient for any purpose other than to evaluate this proposal. Any other use or disclosure in whole or in part of this
information without the express written permission of Operational Sustainability, LLC® is prohibited.
Operational Sustainability, LLC® is a Delaware limited liability corporation.
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A Key Element

Asset Lifecycle in Achieving

Asset Lifecycle Management

Defining Asset Performance Management

Figure 1 – Asset Management Expanded View

Capital, investment value,

Systems performance, cost

Asset life cycle: Manage Individual Assets

Figure 2 – Holistic APM

Foundational Program Elements Defect Elimination Program Sustainability

Track KPIs / Promote Programs / FRACAS / Continuous Improvement

Figure 3 – OS Asset Lifecycle Management Road Map

The OS Project Lifecycle

Step 9: Determining Failure Modes

Step 10: Develop Equipment Strategies

• Generic FMEA • Full RCM

LOW IMPACT HIGH

Figure 5 – Equipment Life Plan

Figure 6 – Will we have

Failure Potential Equipment not Equipment

New Definition Previous

Proactive Predictive Protective

Step 11: Strategy Optimization

Step 12: Develop Defect Elimination Methodologies

Step 13: Risk Registry

Operational Sustainability, LLC® makes operational excellence simple.

Schedule your free consultation and demo today.

11490 Westheimer | Suite 280 | Houston, TX 77077 | info@DrivingOE.com

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