This two-day workshop was held in March 2011 at the Fluno Center for Executive Education on the University of Wisconsin-Madison Campus. This is one of two presentations devoted to developing and understanding of PAS 55 and how it is currently being implemented, with special attention to projects in the U.S. Costs, benefits, challenges and rewards were discussed, along with implementation strategies. The other presentation was a case study by Pfizer and examples. The second day of the workshop was devoted to a discussion on the implementation of PAS 55 / ISO 550000, with particular emphis on the commercial sector. This event was sponsored by the Department of Engineering Professional Development, which is a voting member of the U.S. Technical Advisory Group to ISO 55000.

1. Emerging International Standards for
Asset Management
Day One
Michael E. Poland, CMRP
Director, Asset Management Services
Life Cycle Engineering, Inc.

2. ISO 72:2001
• Six common elements of a MSS:
– policy
– planning
– implementation and operation
– performance assessment
– improvement
– management review
Guidelines for the justification and development of
Management System Standards (MSS)

3. PAS 99 – Illustration of Integration
Figure 1 of BSI PAS 99:2006

4. Table of Contents for ISO 55000
• Foreword; Introduction; Scope
• 2 Overview
• 2.1 What is asset management and why do we need it?
• 2.2 What characterises asset management?
• 2.3 What is an asset and to what types of assets are we referring?
• 2.4 What processes do we need for managing the life cycle of assets?2.5
What is an Asset Management System and why is it important?
• 2.6 What characterises an Asset Management System?
• 2.7 What are the key asset management challenges?
• 2.8 The ISO5500x family of asset management standards
• 2.9 The relationship of ISO5500x standards with other management
system approaches and other standards
• 3.0 Terms and Definitions
• 3.1 Concept diagram covering all terms
• 3.2 Terms relating to ‘context’
• 3.3 Terms related to ‘asset’
• 3.4 Terms related to ‘asset management’
• 3.5 Terms related to ‘Asset Management System’
•

5. PAS 55 Management System Structure
Figure 6 of BSI PAS 55-1:2008

6. Management of Physical Assets

7. Strategy ‐ Develop a robust program within strategic
framework.
Business Review ‐ Implement with respect to critical business
needs and without impact to scheduled operations.
Technology Review ‐ Implement technology that can support
processes at the business unit level but that can also be
supported at the enterprise level.
Implementation Planning ‐ Identify an implementation
schedule based on the program and corresponding costs.
Asset Management Strategy

8. Asset Management Strategy Content
Background and Objectives
• Interaction with other goals, procedures and
plans
• Planning period adopted
• Stakeholder interest
• Accountability and responsibilities for asset
management
• Details of asset management systems and
processes

9. Asset Management Strategy Content
Assets covered
• Description of asset configuration
• Identification of assets by category
• Justification for assets
• Age and condition of assets

10. Asset Management Strategy Content
Proposed levels of service
• Customer oriented performance targets
• Other asset performance targets
• Justification for target levels of service

11. Asset Management Strategy Content
Development and life cycle plans
• Description of planning criteria and assumptions
• Total cost of ownership
• Details of demand forecast

12. Total Cost of Ownership

13. Asset Management Plan
Asset
Operations Plan
Operating Parameters
Planned Utilization
Staffing Requirements
Raw/WIP Materials Requirements
Materials Handling Requirements
Energy/Utilities Requirements
Continuous Operating Hours
Production Schedule Variation
Incoming Materials Specifications
Finished Products Specifications
Production Minimum Lot Size
Planned Capital Life
Performance Variables (KPIs)
Performance Tracking Process
Business Risk Assessment
Maintenance Parameters
Asset Hierarchy
Criticality Ranking Index
Failure Modes and Effects
Maximum Continuous Operation
Mean-time-between-repair
Mean-time-between-maintenance
Mean-time-to –repair
Mean-time-to-rebuild
PM/PdM Requirements
Overhaul/Rebuild Requirements
Skills/Staffing Requirements
Anticipated Useful Life
Performance Variables (KPIs)
Reliability Risk Assessment
Standard Work
Asset
Maintenance Plan
Asset
Risk Plan
Risk Parameters
Risk strategy, tolerance
Risk definition and categorization
Loss data collection
Risk indicator data collection
Control self-assessment
Risk assessment and analysis
Expected/Unexpected
Loss Control Scores
Real exposures
Controls quality
Cost benefit analysis
Risk mitigation and transfer
strategy

14. The Asset Operation Plan
• Standard operating procedures
• Start‐up / Shut–down procedures
• Materials procedures
• Operator care procedures

15. The Risk Plan
• Risk identification
• Risk analysis
• Risk mitigation
• Communication plan
• Risk management table

16. The Asset Maintenance Plan
The Infrastructure:
• Database development
• Asset definitions
• Required attributes
• Functional/Reliability block diagrams
• Hierarchy development
• Criticality analysis
• Failure mode and effect analysis

17. The Asset Maintenance Plan
Task Module Creation
• Mapping failure modes to failure detection
methods
• Rebuild / Refurbishment criteria
• Assigning crafts and trades
• Determining frequency
• Establishing durations
• Level loading tasks

18. MATERIALS
MANAGEMENT
PREVENTIVE /
PREDICTIVE
MAINTENANCE
SCHEDULING &
COORDINATION
WORK
CONTROL
PROCESSES
FACILITIES &
EQUIPMENT
WORK
MEASUREMENT
WORK
PLANNING
TRAINING
ORGANIZATIONAL
STRUCTURE
SUPERVISION
CMMS/
EAM
OPTIMIZATION
MANAGEMENT
REPORTING
BUDGETING & COST
CONTROL
CONFIGURATION
MANAGEMENT
EQUIPMENT
HISTORY
AUDITS
RELIABILITY
ENGINEERING
SUSTAINABILITY
OPERATOR
CARE
PROCUREMENT
EQUIPMENT & PROCESS
DESIGN
MANAGEMENT COMMITMENTFACILITY PARTNERSHIPS
PRINCIPLES
ORGANIZATIONAL
BEHAVIOR
MASTER PLANOBJECTIVES & GOALS
GOVERNING
PRINCIPLES
STATUS
ASSESSMENT
CULTURE
PERFORMANCE
MANAGEMENT
LOSS
ELIMINATION
Excellence Model

19. EDUCATION AND CHANGE
Phase 1
19

20. Recommended Approach
Strategic
Planning
Define
Business
Opportunities
Tactical
Improvements
Short-term
Profits
Implement
Change
Develop
Processes
Sustainable
Performance

21. Implementing Optimized Asset Management
21
Phase One:
• Education
• Change Management
Phase Two:
• Assessment
• Master Planning
• Business Case
Phase Three:
• Executive Sponsorship
• Leadership Team
• Focus Teams
• Project Execution
• Timeline
• Resources
• Toolbox
Phase Four:
• Benefits Tracking
• Return on Investment
• Reassessment

22. 3 Wave Implementation Process
L;
Education and Change Management
Assessment
Master Planning and Business Case Development
Implementation
Measurement & Follow‐up
Wave 1
Wave 2
Wave 3
22

23. +27%
Improved Bottom
Line Performance
Lack of System Support
+75%
Significantly Improved
Bottom Line Performance
Processes and System
Alignment
Baseline
Informal Manual Planning
Processes
Below Average
Business Performance
‐7%
Systems are not
Complemented by
Effective Work Processes
Significant Inefficiencies
Work Processes and
Culture Maturity
High
Low
Low Technology Maturity High
Source: Brynjolfsson (MIT)
Processes and Technology

24. Executive
Preparation
Manager
Education
Employee
Awareness
Coaching
Change Management Approach
Use: Business Transformation, Management System Implementation, Technology
Upgrades, Process Redesign, Restructuring, Acquisition, Merger and Job Redesign.
Tools: Communication Plan, Risk Plan, Training, Coaching and Resistance Management.
24

25. ASSESS AND PLAN
Phase 2
25

26. Reactive Emerging Proactive Excellence
0 - 399 400 ‐ 549 550 ‐ 749 750 ‐ 1000
Regressive
State
Reactive
State
Planned
State
Proactive
State
Lean
State
Maintenance Driven
Operations Led
PerformanceLevels
Staged Decay
Fix it After It Breaks
Fix it Before It Breaks
Loss Elimination
Asset Availability
Operations Ownership
Lean Manufacturing
The 8 Wastes
Vision
Leadership
Long Term Commitment
The Journey

27. The Assessment Process
Includes all functions, processes, procedures, practices and
infrastructure that comprise the plant or facility. It is designed to
identify and quantify all financial, performance and infrastructure
factors that limit performance. Reliability Excellence is a holistic
evaluation and encompasses all stakeholders.
Scope
Financial and Performance
The assessment include a comprehensive analysis of the
company’s financial and performance history. This analysis is
designed to quantity the company’s ability to compete in the
world market, as well as identify opportunities for tangible,
sustainable improvements.
27

28. Financial Evaluation
Financial evaluation is focused on Cost of Goods Sold (COGS), Return on
Net Assets (RoNA), Operating Profit and standard accounting measures of
plant, company or corporate performance
It also compares current and historical cost distribution and amounts to
similar best‐in‐class plants. This benchmark comparison is based either
on Replacement Asset Value (RAV) or annual Revenue, as well as
industrial classification to assure a valid benchmark .
Special attention is given to current cost in the following categories:
• Engineering
• Production
• Supply chain costs and inventories
• Finished goods inventories
• Maintenance
28

29. Performance Evaluation Includes:
Asset Utilization is the measure asset use based on theoretical optimum or full‐
time operations. Asset utilization or AU is the best measure of how well a plant
or company manages its capital assets and capital procurement processes.
Operational Effectiveness, like asset utilization, OE is a measure of actual use of
installed capacity and is the primary indicator of actual plant performance. It is a
true measure of how well the installed capacity is managed.
Overall Equipment Effectiveness measures the performance of individual
production areas, lines or assets and includes runtime, rate and quality in its
calculation. It is a true measure of how well individual business units are
managing their installed capacity.
29

30. Example Assessment Report
• Executive Summary
– 1 – 2 page report summary
• Performance Evaluation
– Detailed evaluation of the plant’s operating
performance compared to best‐in‐class
• Financial Evaluation
– Detailed evaluation of the plant’s financial
performance compared to best‐in‐class
• Excellence Model Assessment
– Detailed assessment of the facilities' performance
based on the 29‐elements
• Recommendations
– Specific tactical recommendations that will yield
short‐term, measurable benefits and fund the
strategic, sustaining benefits of Rx
– Specific strategic recommendations the will resolve
the limiting factors identified by the excellence
model assessment and performance analyses
• Next Steps
– Detailed recommendations for implementing change
and improving facility performance
30

31. Reliability
Waste
Energy
Losses
Production
Scheduling
Master Plan
Innovations
Planning
Asset Utilization
Performance
Management
Empowerment
Change Management
Reliability
Engineering
Master Planning
31

32. •Master Plan
• Development
•1 Week
Master Plan
A detailed master plan is the
roadmap to success
• Includes:
– Tasks
– Resources
– Schedule
– Deliverables
• Implementation Cost
– Internal, incremental cost
– External resources and support
• Benefits Tracking
– Key measurements and methods
– Comparative scales
32

33. OPPORTUNITY BUSINESS IMPACT
Financial Value
• This savings number includes a reduction in maintenance costs and savings from other
business areas. Business benefits may include:
 lower capital requirement
 lower energy cost
 capacity availability
 increased yield
Strategic Fit
• Long-term benefit To be a partner of choice
• Cultural change:
 process-honoring organization
 effective process governance
 engaged employees
 effective talent management
Customer Focus
Competitive Advantage
Connectivity
• Connects Asset Management leading practices across like segments and regions
• Connect to resources in larger operations that can support smaller organizations
• Talent transfer
- improved customer
experience
Improved asset health - better quality
- more and consistent fill rates
 improved customer service
 less changeover times
 increased equipment utilization
 less overtime
 higher customer satisfaction
 improved safety
 Improved food safety
 less unplanned downtime
- options to grow revenue
- decrease production and capital
costs
- more customer-focused solutions
- increased product quality
- improved yields
- lower working capital
- increased available capacity
Improved asset health
Business Case
33

34. IMPLEMENTATION
Phase 3
34

35. Reliability
Material
Management
Supply Chain
Management
MRO Materials
Management
Infrastructure
Preparation
Tactical
Improvements
Risk Management
Work
Management
Production Work
Management
Maintenance Work
Management
Leadership Team
Executive
Sponsor(s)
Facilitator
Planning &
Scheduling
Business Planning
Production Planning
Maintenance
Planning
Typical Implementation Team
35

36. Executive Sponsor
36
Prosci © 2010
Prosci © 2010

37. Union
Leader(s)
Production
Manager
Engineering
Manager
Finance &
Accounting
Procurement
Manager
MPS Coach /
Coordinator
Material
Manager
Maintenance
Manager
Facilitator
Program Champion
Executive Sponsor
Leadership Team Model
37

38. Focus Team Activities
• Kick‐off – Teams attend Focus Team and Best Practices overview
training. They then develop a team charter and present it to the
Leadership Team for approval.
• Brown Paper – Teams process map the current state of business per the
team’s scope. This process includes interviewing peers for process
validation and to foster employee participation
• White Paper – Teams process map the target business process along
with defining the associated Roles and Responsibilities.
• Pilot Planning – Upon target process approval, teams develop/acquire
and implement the supporting target process resources (technical/non‐
technical).
38

39. Focus Team Activities
• Training – Teams develop training plans including materials, equipment,
dates, time and audiences. Once defined, training is provided to pilot
area employees.
• Pilot Implementation – Teams provide technical and tactical support to
the pilot area personnel. Data and feedback is collected from pilot area
personnel and process systems to assist in the pilot area analysis phase.
• Optimization – Teams review information collected during the pilot
area implementation phase and begin the continuous
improvement/sustainability process.
39

40. •Learning to See
Process Flow Diagram
Value Stream Mapping
Relationship Models
Equipment Criticality
Failure Analysis
Risk Analysis
Risk Ranking
Standard Work
Operating Procedures
Preventive
Predictive
Condition Monitoring
Remote Monitoring
Operator Care
Critical Spares
OEE
TCO
Asset Utilization
MTBF
MTTR
Implementation Model
OPERATIONAL STABILITY
MeasureControlAnalyzeClassify
© 2011 Life Cycle Engineering
Continuous Improvement
Plan Do Check Act
40

41. Taxonomy
(1)
Business
Category
(2)
Installation/
Business Unit
(3)
Cost Center/ Op Unit
(4)
Function
(5)
System
(8)
Part/ BOM
Use/ Location DataEquipment Subdivision
Taxonomy per ISO 14224:2006
(7)
Component/Maintainable Item
41

42. Structuring Fixed Assets
SAP AG 2010

43. Managing Information of Assets
SAP AG 2010

44. Functional Block Diagram
In Feed Assembly Out feed AssemblyFill Table
Shaker
VFD
Drive Unit
PLC
Asset / Sub Assembly / Technical Object
Objects / Components
44

45. Building Master Data
Code
Component
Description In
feed
Fill
Table
Out
Feed
Shak
er
Drive
Unit
VFD PLC
1001 Rail Misalignment X X
1002 Failed Bearing X X
1003 Worn Gear X X X X
1004 Air Leak X
1005
Failed Electrical
Circuit X X X
1006 Failed Belt X X
1007 Programming Error
1008 Failed Belt X
1009 Failed Chain X
1010 Failed eye X X
Cause Code Catalog
Code
Component
Description In
feed
Fill
Table
Out
Feed
Shak
er
Drive
Unit
VFD PLC
2001 Process Stopped X X X X X X
2002 Process Slow X X X X X X
2003 Process Fast X X
2004 Over fill X X X X X
2005 Under fill X X
Damage Code Catalog
Rotary Filler Cause Code Group
Rotary Filler Task Code Group
Rotary Filler Damage Code Group
Maintenance Plan
45

46. Criticality AnalysisEH&S Impact
• Risk of injury or death
• Risk of environmental pollutants
Production Impact
• Risk of lost production capacity
• Risk of defects
Financial Impact
• Risk of exceeding acceptable Total Life Cycle Cost
Reliability, Availability, Maintainability Impact
• Risk of failure repeating (R)
• Risk of lost availability to Operations (A)
• Risk of extended maintenance downtime (M)

47. STEP 1 Identify scope of process – definition, process owner, start & end points
STEP 2 Recruit Focus Team - people involved in the process
Construct the Process
STEP 4 Validate and obtain comments - from others involved in the process
STEP 5 Identify opportunities - determine where areas for improvement exist
STEP 6 Present back to management and other key people for their input
STEP 3
Developing a Process Map
47

48. Develop the RASI
RASI Chart for: Configuration Management
ContractHolder
CorpOpsVP
CorpTechServicesVP
AreaManager
CorpTechServicesDir
RigManager
OIM/Captain
ToolPusher
BargeEngineer
SafetySupervisor
MaintenanceSupervisor
RigCraft
OEM/VendorRep
Step Number Step Description
CM-1
Step by Step tasks from CM Business Process
I I I A S R S S S S S S S
CM-2 I I I A S R S S S S S S S
CM-3 I I I A S R S S S S S S S
CM-4 I I I A S R S S S S S S S
CM-5 I I I A S R S S S S S S S
CM-6 I I I A S R S S S S S S S
CM-7 I I I A S R S S S S S S S
CM-8 I I I A S R S S S S S S S
CM-9 I I I A S R S S S S S S S
CM-10 I I I A S R S S S S S S S
CM-11 I I I A S R S S S S S S S
CM-12 I I I A S R S S S S S S S
CM-13 I I I A S R S S S S S S S
CM-14 I I I A S R S S S S S S S
CM-15 I I I A S R S S S S S S S
R = Responsible "The Buck Stops Here"
A = Accountable "The Doer"
S = Support "Provides Support"
I = Inform "Keep in the Loop"
48

49. REALIZING THE BENEFIT
Phase 4
49

50. Key Performance Indicators
50

51. Reassessment
A 400 point increase in assessment score potentially yields a 16% reduction in material costs
and a 26% reduction in labor costs.
Labor Cost
Reduction
(26%)Material Cost
Reduction
(16%)
Reactive Proactive ExcellenceEmerging
%ImprovementPotential
Assessment Score:
Initial Final
0
10
20
30
40
50
60
0 100 200 300 400 500 600 700 800 900 1000
Labor
Material
51

52. Return on Investment
• Reduced Planned and Unplanned Outages
• Increased/reliable capacity sales
Increased Availability
• OT reduction
• Contractor reduction
Reduced Labor Costs
• Reduced usage
• Reduced Inventory
Reduced Material Costs
• Planned & scheduled work
• Fewer emergencies
Reduced Injuries
• Safety and Environmental
Improved Regulatory
Compliance
• Extended Life Cycle
• Less replacements
Capital Project Avoidance
• InvolvementEngaged Work Force
• Operations owned reliability
• Institutionalized
Sustainable Culture Change
52