ENTERPRISE ASSET MANAGEMENT
Why does Asset
Management need
to be ‘Smarter’?
Deb Chakraborty, an Associate Partner in IBM’s Asset
Management Solutions group, and Robert Garratt, an
executive partner in IBM’s Operations and Supply Chain
practice, explain how the necessary link between the
organisational strategic plan and the asset management
function can be created.
INTRODUCTION
P
hysical asset management started with
breakdown response and planned
maintenance; it then crossed over
to preventive maintenance (PM),
condition-based maintenance (CBM), and d custom interfaces.
reliability-centred maintenance (RCM);
finally ending up as today’s enterprise
Deb Chakraborty asset management (EAM).
EAM brought corporate focus
to the asset management function.
It linked asset management to the
company’s income, profitability and
sustainability, and is now recognised
as an important catalyst to safety and
operational risk management. During this
development, processes around the asset
management function generated a large
Robert Garratt
volume of data.
THE NEXT STEP
We need to be smarter and use this data - directly
or indirectly linked to asset performance - to generate an
advance view of the future failure patterns of assets. We
have coined the term ‘smarter asset management’ (SAM)
as the next peak of excellence that generates actionable
insight from structured or unstructured asset data,
suggests interventions to prevent failure, avoids service
impact and helps build an optimised investment plan for
company assets. SAM has three layers:
1) Proactive reliability-centred maintenance (pro-RCM)
– where data generated by asset management and
associated systems are analysed to predict future
performance.
2) Smart intervention – where pro-RCM output is fed
through an FMECA based algorithm to determine
the optimised interventions for preventing asset
performance deterioration and unexpected service
impacts.
3) Lifecycle investment optimiser – where all possible
interventions of an asset’s lifecycle are analysed and
an optimised investment plan generated
PRO-RCM
Pro-RCM is the modern version of reliability-centred
maintenance. A sophisticated statistical tool, SPSS, is at
the heart of this part of the smarter asset management
solution. SPSS uses not only the transactional history data
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from the enterprise asset management systems but also
amasses information from all possible sources that could
influence asset performance. SPSS can generate useful
information from unstructured texts and, given the fact that
a vast amount of useful information is stored in this way, the
capability of squeezing out information from such sources
is very useful.
The solution follows CRISP-DM (Cross Industry
Standard Process for Data Mining) methodology to mine
asset management data from multiple sources. It allows
business analysts to upload data, organise, cleanse and,
where necessary, enrich it by inferring or deriving missing
data to create as complete a view of the asset deterioration
pattern as possible. Usually pro-RCM runs from a
custom table created in the corporate
c
asset management system’s
database. As necessary, data
ffrom other sources are
ffed to the table through
data loading tools or via
d
c
SPSS analytics
generate an
advanced view
of the failure
probability of
assets - where
ffailure is the inability
of an asset to operate
o
at an expected level.
a
If asset management
strategy remains
unchanged, pro-RCM
can produce a profile of
asset failure probabilities which
enables asset managers to make
Figure 1: CRISP-DM educated decisions on adjusting
maintenance strategy to enhance
asset reliability.
The base SPSS model is created assuming that
the company has a standard asset management plan.
Once SAM is implemented, asset managers can amend
maintenance schedules based on the improved visibility
of future asset behaviour. Being integrated with the asset
management system, the SPSS model can quickly respond
to any changes in the asset management plan, eg change
in PM schedule or amendment of PM job plan. At the same
time it can also respond to the transactional updates on the
asset, eg a major refurbishment of a turbine.
SMART INTERVENTION
This suggests actions to be taken to maintain the
reliability level of an asset. An FMECA model contains a
database of failure modes and effects based on industry
standards, but which can be refined based on specific
parameters. Future failures, based on the existing asset
management process and identified by pro-RCM, are fed
to the smart intervention analytics engine, which produces
a list of possible interventions and suggests the most
optimum ones. The analytics also model the potential
impacts of possible failures.
Continued on page 13 
 ENTERPRISE ASSET MANAGEMENT

 Continued from page 10

LIFECYCLE INVESTMENT OPTIMISER ENABLED BY EFFECTIVE TOOLS AND PROCESSES

The next step is to optimise the total cost of ownership. The SAM does not require a fundamental restructuring of the
investment required for the whole-life of an asset is determined way organisations plan and schedule their maintenance activities,
by extending all interventions identified over an asset’s life. A but it does require change, which is best achieved through a
pre-configured unit cost database, or actual data from integrated combination of:
back office systems, is used for estimating the cost of intervention.  Decision support information - resulting from advanced
Similarly, the cost of doing nothing is calculated based on the FMECA analytics, but presented to the maintenance planner simply
model’s ‘unit cost of impact’ table. The cost of intervention and the from within their familiar planning systems.
cost of ‘doing nothing’, together generates a cost-benefit business  New governance processes - through which strategic
case for each proposed intervention. All such interventions are then ambitions can be translated into planning parameters and, in
analysed for creating the best project pack and an ILOG optimiser turn, achieved levels of asset performance can be reviewed
engine is used for creating an optimised (or prioritised) lifecycle asset against strategic intent.
investment profile.  Training and adjustments to working practices - which help
For example, the solution can help the UK’s regulated utility maintenance planners make best use of the guidance
companies develop price review proposals much quicker, with presented to them.
complete adherence to The smarter approach to asset
requirements like RIIO management is driven by its simplicity. Asset
or common framework. Organisational Strategic Plan (OSP) managers or planners can run the predictive
Investment proposals Planning model from within their corporate asset
can be prepared from management system. Decision support for
asset data analysis, not Asset Management Policy maintenance planners can be viewed from
just from SME opinion. within their familiar asset management system.
As the analysis is run Asset Management Strategy This integration assures that maintenance
on corporate asset decisions are being made against the latest
management data, Asset Management Objectives technical and operational data.
investment proposals The translation of organisational
are easily supported Asset Management Plan(s) strategic plans into asset management
by asset performance objectives is typically managed through a
trends. Overall, it helps Implementation governance process which demands clear
create the necessary and specific statements of intent from those
link between the
Lifecycle Activities Assets accountable for asset performance. Reference
organisational strategic may be made to standards such as PAS55
plan and the asset Functional Acquire / create as a means of benchmarking the company’s
management function. policies, approach against other industries.
Utilise
The same strategies,
benefits are applicable standards, Maintain GETTING STARTED
to other asset intensive processes and The effectiveness of this smarter
procedures Renew/dispose
sectors, eg oil and gas. approach and the solution elements that
An advanced view of will deliver most benefit are dependent on
asset deterioration an organisation’s current working practices,
helps planners (FromPAS55) attitude to change and – critically – availability
create the correct of data. These are best assessed through
asset schedule, a proof-of-concept project which forms the
Figure 2 – Linking organisational strategic plan to asset management
better turnaround initial ‘appraisal’ phase of a full implementation
management and more project. Key components of the appraisal,
efficient asset disposal decisions. The safety and operational risk which typically takes 2-6 months, are:
management functions benefit from advance warning of safety critical  Selection of trial location and equipment type.
equipment failure.  Investigation of current maintenance planning processes,
approach and performance -including a quantified measure
RESPONSIVENESS of uptime achieved versus cost incurred.
Failure patterns can change as maintenance strategy changes  Sourcing of data, including historical maintenance information
and SAM gives planners the capability to simulate the impact this has and engineering data such as equipment characteristics.
on asset reliability. This approach balances asset operating costs by  Building of technology to perform the proof of concept within
optimising maintenance activities and reducing the working capital the environment of a company’s chosen architecture.
associated with spare parts.  Running proof-of-concept trials and performing statistical
An oil major might spend $1bn/year on maintenance related analysis of outcomes.
parts and services: shifting to a smarter strategy can result in  Performing a change management evaluation, including
handsome savings. At the same time, improved visibility of asset engagement of line staff (planners) to assess appetite and
performance can help the organisation to significantly increase asset identify obstacles; also assessing how people’s roles would
uptime, enhance safety compliance, and improve operational risk change from the adoption of new maintenance planning
management. procedures.
This smarter approach can help companies save more than  Assessing outcomes to estimate how much improved
13% of the total operating cost. For a fully developed production performance and/or reduced cost would have been achieved
field, producing 20,000 barrels of oil and 20mmcf of gas a day, this if the approach had been applied to real operations.
can generate around $42million of additional revenue.
deb.chakraborty@uk.ibm.com robert.garratt@uk.ibm.com

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Source: CERA PAS55 is a publicly available asset management specification. In 2014 this is will become ME | Mar/Apr 2013 | 13
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Source: CERA international standards ISO55000 (overview), ISO55001 (requirements) and ISO55002 (guidance