EN 16646 Maintenance within physical assetLCC - approach New asset concepts Improve technical performance ket Dynamic Stable Technology Stable Dynamic Long life cycle Short life cycle

European Federation of National Maintenance Societies vzw

© EFNMS vzw

ISO 55001 Asset management — Management systems — Requirements andEN 16646 Maintenance within physical asset management

PSK seminar 8.5.2015, Järvenpää

Kari Komonen, Promaint

1

Expanded from presentation at Sector Forum

“Energy Management” (SFEM) –21th meeting, Brussels 17th March 2015


Background of importance

There are many reasons why physical asset management has become a more essential part of management activities and management science, e.g.:

aging of asset systems

integration of asset systems

increased quality requirements for infrastructure

increased requirements from the safety and environmental point of view

growing risks

growing turbulence in the market

globalization and increasing competition

pressure for higher profitability and return on assets

incentive systems of top management

rigid accounting principles

combinations of the above trends

2

Kari Komonen 2015


Root (principle) causes for events, challenges and problems

In order to understand which improvement measures are appropriate we should know the root causes for our challenges.

For example, Root Causes for Production Losses can be diverse

1. Related to basic maintenance activities

2. Connected to a change in production process

3. Related to an original investment

4. Related to operations

5. Related to external factors

A management system for physical assets should be established in order to manage these root causes

3

Kari Komonen 2015


Root (principle) causes for production losses PSK 7903

Related to basic maintenance activities

1. Not done

2. Not done according to the plan

3. Incorrect or deficient plan

Connected to a change in production process

1. Operating constraints too tight

2. Increased process load

3. Increased environmental load

Related to an investment

1. Process characteristic

2. Incorrect or deficient operating and maintenance instructions

3. Nonconformity with the requirements

4. Manufacturing fault

5. Incorrectly installed or commissioned Machine

Related to operations

1. Change in operating plan

2. Incorrect maintenance or cleaning performed by operators

3. Change in operating mode Inadequate misuse prevention

4. Misuse of the equipment

5. Insufficient process control

Related to external factors

1. Wrong raw material, energy or consumable

2. Switch to another process

3. Natural phenomenon

4. Scarcity

Kari Komonen 2015


Root (principle) causes for challenges within physical asset management

We can have a different view on challengesA root (principle) cause for a challenge can be e.g.

• Technical reasons e.g. new technology or old technology or wrong specification, equipment not according to specification, bad maintenance…

• Changes in the business environment after the acquisition of the asset

• Poor decision making procedures and methods

• Poor understanding of the requirements on the market

• Lack of competences

• A poorly defined and established management system for physical assets

5

Kari Komonen 2015

European Federation of National Maintenance Societies vzw 6

Future business drivers 1: EFNMS survey

Kari Komonen 2015

European Federation of National Maintenance Societies vzw 7


Kari Komonen 2015



Kari Komonen 2015



Kari Komonen 2015


The purpose of emerging standards

(1) Standards ISO 55000, 55001 and 55002 are management system standards for asset management and for the certification of the management system (compare with Quality Management).

(2) CEN EN16646 ‘Maintenance within Physical Asset Management’ is not a management system standard, but an informative one. However, it is a good starting point for the assessment of physical asset management practices and for development.

Kari Komonen 2015


General ISO structure for all management system standards

1. Organizational context2. Leadership3. Planning4. Support5. Operation6. Performance evaluation7. Improvement

ISO 55001 Requirements

Kari Komonen 2015


ISO 55001 Asset management system: requirements

Context of the organization• Understanding the organization and its context• Understanding the needs and expectations of

stakeholders• Determining the scope of the asset management

systemLeadership• Leadership and commitment • Policy • Organizational roles, responsibilities and

authorities Planning• Actions to address risks and opportunities for the

asset management system• Asset management objectives and planning to

achieve them

12

Support• Resources• Competence • Awareness• Communication• Information requirements• Documented informationOperation• Operational planning and control • Management of change• Outsourcing Performance evaluation• Monitoring, measurement, analysis and evaluation• Internal audit • Management review Improvement• Nonconformity and corrective action• Preventive actions• Continual improvement

Kari Komonen 2015


EN 16646 ‘Maintenance within physical asset management’

Overview of physical asset management

Physical asset management system (management system for physical asset)

Purpose of asset management system

Interaction between organizational context, physical asset management and maintenance management

The influence of organizational context at the different levels of physical assets

Physical asset management processes

Physical asset management processes and life cycle stages

Life-cycle management, asset management and maintenance management processes

Interrelationship between maintenance and other processes at asset and asset system level

Performance monitoring

General asset management system requirements

Specific requirements

Organization and people enablers: organizational competences

Structure and procedures

Competences

13

Kari Komonen 2015


Eräitä käsitteitä

omaisuus, omaisuuseräkohteet, asiat tai kokonaisuudet, joilla on tai voi olla arvoa organisaatiolle

omaisuudenhallintaorganisaation koordinoitu toiminta, jolla hyödynnetään omaisuuden arvo

omaisuudenhallintasuunnitelma

dokumentoitu tieto, joka määrittelee yksittäiselle omaisuudelle tai omaisuusryhmälle edellytetyt toiminnot, resurssit ja aikataulut, jotta saavutetaan organisaation omaisuudenhallinnan tavoitteet

hallintajärjestelmä

joukko toisiinsa liittyviä tai vaikuttavia organisaation osia, joilla määritellään politiikat ja tavoitteet sekä prosessit, joilla nämä tavoitteet saavutetaan

14

Kari Komonen 2015


Some benefits of ISO 5500x

1. improved financial performance: improving the return on investments and reducing costs with the short or long-term realization of organizational objectives;

2. informed asset investment decisions: enabling the organization to improve its decision making

3. managed risk: reducing financial losses, improving health and safety, good will and reputation, minimizing environmental and social impact,

4. improved services and outputs

5. demonstrated social responsibility

6. demonstrated compliance: transparently conforming with legal, statutory and regulatory requirements

7. enhanced reputation: through improved customer satisfaction, stakeholder awareness and confidence

8. improved organizational sustainability: effectively managing short and long-term effects, expenditures and performance, can improve the sustainability of operations and the organization;

9. improved efficiency and effectiveness

15

Kari Komonen 2015


Mitä ihmeen hyötyä ?

• Terminologian selkiintyminen

• Aiheuttaa ulkoista painetta

• Hyvä peruste kehittämisprojektille

• Antaa neuvoja siitä, minkälainen omaisuudenhallintajärjestelmän pitää olla ja miksi

• Antaa ohjeita siitä, mitä asioita kannattaisi evaluoida organisaation toiminnassa

• Antaa ohjeita elinjaksoprosessien kehittämiseen

• Antaa suuntaviivoja, mitä asioita pitäisi huomioida päätöksenteko- ja seurantajärjestelmiä kehitettäessä

• Parantaa organisaation yhteistyökykyä ja käytäntöjä

• Selkeyttää vastuita ja valtuuksia

16

Kari Komonen 2015


Some important dimensions of the ISO 55001

• Asset hierarchy

• Organizational context

• Life cycle management

• Leadership– Such as organizational roles, responsibilities and authorities

• Planning

• Information management

• Performance evaluation

17

Kari Komonen 2015


Asset hierarchy (ISO and CEN)

18

Asset portfolio level:e.g. corporation

Asset system level:e.g. a plant or production line

Individual asset level: e.g. a turbine

Kari Komonen 2015

Omaisuusvalikoima

Omaisuuskokonaisuus

Yksittäinen omaisuuserä


Strategic asset management process

19

Strategic

analyzes

Company

Market and

communityTechnology

Requirements for physical assets

Maintenance management

strategy, objectives and plans

Asset management strategy,

objectives and plans

Metrics and

controls

Kari Komonen 2015


The influence of the organizational context on the maintenance function

Requirements for

• the maintenance function, • its modes of operations and • its performance

depend on external and internal influencing factors which result e.g. in

• operating conditions,

• operating constraints,

• operational modes,

• criticalities

• economic necessities,

• business environment and

which further affect greatly on key performance indicators

Kari Komonen 2015


Organizational context

25

Specific features e.g.

•Determine economic life time

•Short economic life -time

•LCP-approach required

•Increase flexibility

•New asset concepts


•Determine economic and

technical life time

•Short economic life -time

•Short pay-back time required

•LCP-approach required

•Manage dynamics



•Long economic life -time

•Long pay-back time

•Increase life time

•LCC-approach

•Continuous improvements


•Short technical life -time

•Determine technical life time

•LCC-approach


•Improve technical performance

Mark

et

Dynamic

Stable

Technology

Stable Dynamic

Long life cycle Short life cycle

Kari Komonen 2015


Life-cycle approach: a framework for physical asset management

22

Investment Use of investment

• Changing operational requirements

• Wear and aging

• Technical obsolescence

• Environmental obsolescence

• Changing demand

• Changing competitive environment

• Modified product

• Economic obsolescence

Asset management of new installations focuses

on the optimisation of the life cycle profits of the

equipment (LCP-models)

Asset Management of plants in operation: the

focus is on upkeep of plants’ productivity and

profit making capability and improvements in

changing business environment

Design of

process and

equipment

Installation

and

commencing

Concept

designOperation and maintenance DisposalManufacturing

Komonen et al. 2005

Kari Komonen 2015


Physical asset management processes and life cycle management (EN 16646 with modifications)

23

Organizational strategic

plan

Physical asset

management policy,

objectives, strategy and

plans

• Acquisition incl. design,

manufacturing, installation

• Operation

• Maintenance

• Modernization

• Disposal

Asset Management Support

Asset systems

1-N

Asset portfolio

Continuous

improvementand

performance

monitoring

Life cycle stages

Kari Komonen 2015


Contributions between asset management processes 1 (Antoine Despujols EDF, France)

Kari Komonen 2015


Contributions between asset management processes 2(Antoine Despujols EDF, France)

Kari Komonen 2015


Need for new key performance indicators

In addition to requirements for physical assets presented above, e.g. thefollowing risks could be avoided by using KPIs (in this standard, these KPIs arecalled general performance indicators):

• ‘silo‘ behavior of individual functional departments;• lack of holistic picture of success of asset management activities;• wrong allocation of resources to various functions of an organization;• wrong decisions regarding replacements and improvements;• decisions based on investment cost (purchasing cost) instead of life cycle

cost or profit;• incorrectly estimated length of asset's useful life in financial calculations;• improper financial decision making criteria for investment decisions;• uncertainty in decision making

Kari Komonen 2015


Examples of asset system level key performance indicators

• Return on physical assets

• Turnover of physical assets (sales/physical assets)

• Quality index (quality cost related to physical assets)

• HSE index (related to physical assets)

• Life cycle costs of physical assets (estimated and actual)

• Life cycle profit related to physical assets (estimated and actual)

• Aggregate annual costs related to physical assets (e.g. unavailability costs, replacement investments, maintenance costs, other costs related to physical assets)

• Comparison of annual investments and annual technical depreciation (which might give indication of degradation of the production equipment) / Physical assets

• OEE (Overall equipment effectiveness: availability x performance x quality rate)

• External criticality of production assets and Internal criticality of equipment

• Availability of the production system (production process)

• Reliability of the production system (production process) and Reliability of deliveries

• Maintenance costs regarding organizational context


EFNMS survey 1

Kari Komonen 2015

European Federation of National Maintenance Societies vzwKari Komonen 2014

EFNMS survey 2

Kari Komonen 2015


EFNMS survey 3

Kari Komonen 2015


EFNMS survey 4

Kari Komonen 2015


EFNMS survey 5

Kari Komonen 2015


EFNMS survey 6

Kari Komonen 2015


EFNMS survey 7

Kari Komonen 2015


EFNMS survey 8

Kari Komonen 2015


Key performance indicators for various

root causes of physical asset eventsFrom PSK7903 standard with modifications

Root causes for unavailability safety and asset costs

Unavailability due to maintenance

Technical un-availability

Overall equipment effectiveness (OEE)

Operational equipment effectiveness(OPEE)

Caused by maintenance

X X X X

Caused by change in production process

X X X

Caused by an investment

X X X

Caused by operation

X X

Caused by external factors

X

Kari Komonen 2015


ISO 5500x standards

- Can be used as the quality management standards

- Focus on physical assets, but can also be used for some other asset types

- Standard follows the principles and structure set for all the ISO management system standard

- Organisation may be lead to think over how the asset management standards should be integrated with other management system standards

- ISO 55001 can be applied for certification purposes

37

Kari Komonen 2015


Need for other standards and tools 1

• ISO 55001 tells us, what issues asset management system should contain

• But it doesn’t say how asset management and life cycle processes should be organized at the different hierarchy levels

• What key performance indicators should one use within asset management system

• What kind of decision making methods and tools should be used

• How should organizational factors be taken into account within asset management plans

• How should cooperation between various functions of the organization be arranged

38

Kari Komonen 2015


Need for other standards and tools 2

• ISO 55001 standard describes, what issues asset management system should contain

• Deployment ISO 55001 standard can be facilitated by utilizing other standards

• The other standards could be e.g. other asset management standards, other management system standards, standards for life cycle management, maintenance standards etc.

• The development of life-cycle processes and related methods and procedures supports strongly the establishment of ISO 55001 standard.

39

Kari Komonen 2015


Thank you!

40

Kari Komonen 2015

Documents

EN 16646 Maintenance within physical assetLCC - approach New asset concepts Improve technical performance ket Dynamic Stable Technology Stable Dynamic Long life cycle Short life cycle