MASTER OF BUSINESS & TECHNOLOGY PROGRAM www.mbt.unsw.edu.au

Asset Management GBAT9107

Course Overview Session 2 2005

17-May-05

Important Notice

The material contained in this study guide is in the nature of general comment only and is not advice on any particular matter. No one should act on the basis of anything contained in this guide without taking appropriate professional advice upon the particular circumstances. The Publisher, the Editors, and the Authors do not accept responsibility for the consequences of any action taken or omitted to be taken by any person, whether a subscriber to this guide or not, as a consequences of anything contained in or omitted from this guide.

© 2005 The University of New South Wales

Sydney 2052 Australia

Master of Business and Technology Tel: 61-2-9385 6660 Fax: 61-2-9385 6661

The original material prepared for this guide is covered by copyright. Apart from fair dealing for the purposes of private study, research, criticism or review, as permitted under the Copyright Act, no part may be reproduced by any process without written permission. Enquiries should be addressed to Master of Business & Technology, UNSW.

Course Overview

Contents

Session 2 2005 course schedule .......................................................... 2

Course staff ......................................................................................... 3 Course Coordinator ........................................................................... 3 Class Facilitator................................................................................. 4 Course authors................................................................................... 4

Course information............................................................................. 5 Units of credit.................................................................................... 5 MBT learning and teaching philosophy ............................................ 5 The MBT learning process ................................................................ 5 Readings and Unit exercises.............................................................. 6 Class interaction ................................................................................ 6 Parallel teaching ................................................................................ 7 About the course................................................................................ 7 Learning outcomes .......................................................................... 10

Assessment......................................................................................... 11 Your assessment tasks ..................................................................... 11 Satisfactory performance................................................................. 11 Extensions/penalties for late lodgement.......................................... 11 Further advice on assessment .......................................................... 12 Coversheets ..................................................................................... 12

Academic honesty and plagiarism................................................... 13

Resources for students...................................................................... 14 Other useful resources ..................................................................... 14

Continual course improvement ....................................................... 18

Administrative matters .................................................................... 19 Contact details ................................................................................. 20

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Session 2 2005 course schedule

Week 1 25 Jul 05 Introduction to Asset Management

Week 2 1 Aug 05 Asset Performance

Week 3 8 Aug 05 Maintenance Management

Week 4 15 Aug 05 Asset and Process Improvement

Week 5 22 Aug 05 Planning and Execution

Week 6 29 Aug 05 Risk Assessment and Forecasting

Week 7 5 Sep 05 Damage Mechanisms

Week 8 12 Sep 05 Asset Condition, Inspection and History

Week 9 19 Sep 05 Information and Decision-making Requirements

Session break: Friday 23 September – Monday 3 October 2005

Week 10 3 Oct 05 Computerised Asset and Maintenance Management Systems

Week 11 10 Oct 05 Managing Intangible Assets

Week 12 17 Oct 05 Organisational and Quality Issues

Week 13 24 Oct 05 Exam Week 1

Week 14 31 Oct 05 Exam Week 2

2 Asset Management

Course staff

Course Coordinator

Each course has a Course Coordinator who is responsible for the academic leadership and overall academic integrity of the course. The Course Coordinator selects content and sets assessment tasks, and takes responsibility for specific academic and administrative issues related to the course when it is being offered. Course Coordinators oversee Class Facilitators and ensure that the ongoing standard of facilitation in the course is consistent with the quality requirements of the program.

The Course Coordinator is:

Dr Erik van Voorthuysen BE, MS (Industrial Engineering), PhD UNSW

email: erikv@unsw.edu.au

Erik is a lecturer in the UNSW School of Mechanical and Manufacturing Engineering. He also teaches management courses on managing assets and is a consultant to industry. He co-founded Covaris Pty Ltd, a technology consulting and development company based in Sydney.

Erik has extensive industry experience in a number of disciplines including asset management, maintenance management, process reengineering, process improvement, strategy consulting and investment banking. He has worked on assignments in Australia, the United Kingdom, Germany, the Netherlands and the United States. He holds a BE in Industrial Engineering from UNSW, an MS in Industrial Engineering from Stanford University and a PhD from UNSW. The PhD dissertation was titled ‘Process (Machine) Capability Improvement using Large Volume Data Acquisition and Path Analysis’.

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Class Facilitator

The role of Class Facilitator is to support the learning process by encouraging interaction amongst participants, providing direction in understanding the course content, assessing participant progress through the course and providing feedback on work submitted. MBT Class Facilitators comprise both academics and practitioners with relevant academic backgrounds.

You will be notified of your Class Facilitator’s name and contact details in your class confirmation email four weeks prior to start of session. Details will also be available in the gallery section of your WebTeach class for both face-to-face and distance classes.

Course authors

The Course Coordinator, Erik van Voorthuysen, is the main author of this course.

Dr RA (Bob) Platfoot

An earlier version of this course was written by Dr Platfoot, Managing Director of Covaris Pty Ltd. Bob was a Senior Lecturer in the School of Mechanical and Manufacturing Engineering at UNSW where he researched and taught in the field of maintenance engineering and mechanical design. He gained his PhD degree with a thesis titled ‘Gas Flows in Coal Fired Boilers’.

Acknowledgment

This work was supported by a number of students, research colleagues and industry collaborators. Asset management issues were developed with many groups including the Maintenance Engineering Society of Australia, Battelle Memorial Institute (USA), personnel from companies in Australia and New Zealand and past students of this course.

4 Course Overview

Course information

Units of credit

This course is worth 6 units of credit (UOC). The expected workload for each MBT course is, on average, 10 hours per week, including attendance at a face-to-face class or interaction in an online class. Students are encouraged to actively participate in their class.

MBT learning and teaching philosophy

The MBT learning and teaching philosophy is to create an interactive learning experience where participants from a wide range of professional, academic and geographic backgrounds actively participate with their Class Facilitator and each other. The MBT embraces the concept of real world learning, which requires participants to leverage the professional experiences of all participants in the class to help understand, challenge and apply the course concepts. By sharing experiences with participants from different professional backgrounds across different organisational contexts, students are encouraged to broaden their frames of reference in relation to the course material.

The MBT learning process

In order to successfully complete each course in the MBT Program, participants need to:

work through the study guide and textbook (if prescribed), completing all readings and exercises in each unit

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participate regularly and actively in learning activities within your class each week, either online or face-to-face successfully complete all set assessment tasks, including the examination

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Readings and Unit exercises

Each Unit is designed to cover the core course concepts for the week. Additional readings are usually included at the end of the Unit. If the course has a prescribed textbook, this will be integrated into the Unit. You will be told when to read particular sections of the textbook.

Throughout the Units you’ll find exercises to complete as you study. These exercises aim to help you:

actively make sense of what you are reading • • apply what you are reading to your own working context and

experience

Without stopping every so often to process what you are reading it’s easy to lose concentration and miss the key learning points of the text. You’ll find your own best approach to the exercises – jotting down notes, discussing with fellow students and colleagues or maybe writing complete answers for later reference and revision. You’ll soon find the exercises a valuable way of assessing whether you’re understanding and developing the concepts and theories presented in the Units.

Class interaction

Your class, either online or face-to-face, is designed to be an interactive experience. If there have been any aspects of the Unit you have not understood, this should be raised in your class. Your Facilitator and other participants will be able to further clarify and explain the materials.

By interacting with your Class Facilitator and co-participants, you have the opportunity to develop your ideas and broaden your learning through a diversity of experiences and viewpoints. Discussing topics and issues in this way will help you understand the course more thoroughly and improve your ability to think critically.

Facilitators will use a range of strategies to encourage interaction amongst class participants and help students engage with the course materials and apply it to their workplaces.

All classes, online and face-to-face, have an online classroom. For face-to-face students, this is a place for informal interaction between classes. Your Facilitator may use the online class to post additional information. Distance participants undertake their weekly interaction via the online class. Online classes are accessed through the MBT student website.

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Parallel teaching

To ensure an interactive learning experience, classes are limited to a maximum of 30 students, but are usually 20-22 on average. All courses are offered in distance mode at least once each year, with many also available face-to-face.

If you are enrolled in face-to-face mode and are unable to attend your class on a particular evening, you may attend an alternate class if available. Consult the MBT timetable at www.student.mbt.unsw.edu.au. If you find you are unable to continue attending face-to-face classes once session has begun, you may request to transfer to a distance class by contacting the MBT office.

About the course

Welcome to Asset Management. The discipline of Asset Management is a relatively new concept that is becoming increasingly important in government and non-government organisations alike. The NSW Government, for instance, employs an initiative it calls its ‘Total Asset Management Plan’. The purpose of such a plan is to ensure that important, in this case, public assets such as hospitals are capable of being managed and operated in the most effective and efficient way possible throughout the period they are designated to be in active service. For the organisation that owns these assets, this means that the cost of ownership, maintenance as well as future capital expenditure requirements are carefully managed and optimised.

The challenge for Asset Management practitioners is to develop the most effective and at the same time efficient strategy for managing the performance, capability and condition of assets so as to meet or exceed commercial and operational requirements. Commercial requirements may include earnings and profit projections, return on assets, service standards or indeed, especially in the case of property investments, the value of the asset itself.

Asset Management, by definition, is a collection of tools and methodologies to achieve these aims. Which tools and methodologies are used and how they are used will depend on the needs of the organisation and the type of assets it employs. This course will deal with a number of key Asset Management tools. One of the main foundations of Asset Management is that it is a top-down, bottom-up driven strategy, regardless of the specific management or maintenance philosophy adopted.

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This course introduces high-level Asset Management topics such as asset management strategy and establishing the asset management business case, defining asset performance, improvement methodologies and implementing Asset Management.

The course deals with different types of assets, including public assets and intangible assets such as intellectual property. It is anticipated that this course will appeal to students from a broad cross-section of industry and interests, including government and non-profit organisations as well as from the services and information technology sectors.

The course has no formal pre-requisites, however, it would be advantageous if students have undertaken prior studies in Accounting, Business Studies, Statistics and/or the Engineering Sciences.

Course structure

Unit 1, Introduction to Asset Management. Asset Management is a relatively new concept that is becoming increasingly important in government and non-government organisations alike. The purpose of Asset Management is to ensure that important assets are capable of being managed and operated in the most effective and efficient way possible for the period that they are designated to be in active service. In this Unit a general Asset Management framework is put forward that serves as a model or template for use in most organisations.

Unit 2, Asset Performance. One of the cornerstones of Asset Management is the measurement and assessment of asset performance. If we can understand how an asset performs, then we can also make informed decisions about how to manage, maintain and improve that asset. This Unit will introduce a framework for specifying KPIs and some of the later Units in this course will deal with some of these in greater detail.

Unit 3, Maintenance Management, presents a background of current methodologies in relation to asset maintenance methodologies. These include Reliability Centered Maintenance and its derivatives, Total Productive Maintenance, Business-centred Maintenance and Planned Maintenance Optimisation.

Unit 4, Asset and Process Improvement. Over time as we continue to operate and maintain an asset we also expect commercial and operational requirements to change. This Unit presents a background of current methodologies in relation to asset and process improvement methodologies. These can range from improving only a part of an existing asset to radically reengineering an entire manufacturing or utility process.

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Unit 5, Planning and Execution, examines the steps involved in planning and implementing an asset management strategy. The key elements of an asset management plan and the key processes that support Asset Management goals and objectives are described. Continuous improvement as it applies to Asset Management is discussed. Finally we look at the use of contract maintenance.

Unit 6, Risk Assessment and Forecasting, links plant assessment and maintenance planning and provides guidance in using the approaches and techniques presented in earlier Units for the forward planning of allocating resources and anticipating future work. In particular the Unit looks at Failure Patterns, Risk Assessment, Probabilistic Forecasting, Weibull Analysis and Life Monitoring Systems

Unit 7, Damage Mechanisms, addresses plant life management. Maintenance is presented as both a response to plant condition and as a pre-emptive effort to avoid future problems. The latter approach is obviously more cost effective but requires an understanding of how plant operations lead to deterioration and eventual failure. This understanding is based on a knowledge of what damage mechanisms are present and the governing inputs which control the rate at which damage progresses.

Unit 8, Asset Condition, Inspection and History. This Unit addresses the need for maintenance staff to understand the integrity and condition of the equipment under their care. This understanding may only come about by effective surveys and monitoring strategies. The effort associated with surveys may be optimised by appreciating the likelihood of problems based on a knowledge of the equipment’s design and how the processes will give rise to the damage mechanisms previously discussed.

Unit 9, Information and Decision-making Requirements. This Unit highlights the importance of measuring not only asset performance but also maintenance process effectiveness and efficiency. It examines a arrange of KPIs and explains the importance of an analysis and fact-driven Asset Management Plan. The unique importance of managing historical plant condition and survey data is discussed. Some major databases or registries which support Asset Management are also described.

Unit 10, Computerised Asset & Maintenance Management Systems, describes the key elements of a computerised maintenance management system (CMMS). The principal modules present in one form or another in commercial systems are analysed. These include data libraries, work processing modules and reporting.

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Unit 11, Managing Intangible Assets, deals with Intangible Assets – entities that are either not physically present, such as knowledge, or entities that we cannot actually ‘own’ such as human resources. Both types of entities are nevertheless instrumental in conducting business and managing an organisation and are therefore classified as assets. It may even be said that today, both knowledge and human resources are the key assets that will drive an organisation’s continued survival. As is the case with conventional assets, intangible assets also need to be ‘managed’.

Unit 12, Organisational and Quality Issues, relates the modern theories of quality management to maintenance and the management of the maintenance function as compared to production management issues. The underlying principles are explored, with some emphasis placed on the relevance of these general guidelines and objectives to the maintenance function. Particular attention is paid to the perceived advantages of having a quality system in place and why an organisation should invest time and resources in setting one up.

Learning outcomes

After studying this course you should be able to:

define the scope of Asset Management including both tangible and intangible assets

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discuss the features of effective Asset Management and how it contributes to efficiency of capital, economy of resources, productivity and quality discuss the key management strategies and processes involved in Asset Management explain how effective Asset Management can increase ‘value add’ and therefore competitive advantage contribute in an informed way to strategic decision making about Asset Management in your organisation

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Assessment

Your assessment tasks

There are two assignments and an examination for this course.

Participation Throughout 10%

Assignment 1 Thursday 1 September 2005 (Week 6) 25%

Assignment 2 Thursday 20 October 2005 (Week 12) 30%

Examination* Wednesday 2 November 2005 35%

Satisfactory performance

In order to pass this course, you must:

achieve a composite mark of at least 50 and • • achieve a satisfactory level of performance in all assessment tasks

Extensions/penalties for late lodgement

Extensions to assignment deadlines will only be granted in exceptional circumstances, and where adequate documentation can be provided. While your Class Facilitator will be sensitive to problems that you may encounter, it is only fair that all students submit their work at the same time.

In the case of late lodgement without an approved extension, ten per cent of the assignment weighting will be deducted for each day late.

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*Examination is open book; duration is 2 hours

Further advice on assessment

Please refer to the Participant Information booklet and the MBT Learning Guide Studying Successfully in the MBT to find out about:

learning resources and support services • • • • • •

how to prepare for and write your assignments presentation, format and referencing guidelines how to submit your assignments what to do if your assignment may be late examinations

Both these guides are available for downloading from the MBT student website: http://www.student.mbt.unsw.edu.au.

Coversheets

It is essential that you attach a coversheet to the front of each of your assignments, and include your name, class number and assignment number in the footer.

Remember to keep a copy of your assignment in case your work is lost or mislaid.

Coversheets are provided at the end of this section and can also be downloaded at: http://www.student.mbt.unsw.edu.au/forms.html.

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Academic honesty and plagiarism

Plagiarism is the presentation of the thoughts or work of another as one’s own. Examples include:

Direct duplication of the thoughts or work of another, including by copying work, or knowingly permitting it to be copied. This includes copying material, ideas or concepts from a book, article, report or other written document (whether published or unpublished), composition, artwork, design, drawing, circuitry, computer program or software, web site, Internet, other electronic resource, or another person’s assignment without appropriate acknowledgement.

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Paraphrasing another person’s work with very minor changes keeping the meaning, form and/or progression of ideas of the original. Piecing together sections of the work of others into a new whole. Presenting an assessment item as independent work when it has been produced in whole or part in collusion with other people, for example, another student or a tutor. Claiming credit for a proportion a work contributed to a group assessment item that is greater than that actually contributed.

Submitting an assessment item that has already been submitted for academic credit elsewhere may also be considered plagiarism.

The inclusion of the thoughts or work of another with attribution appropriate to the academic discipline does not amount to plagiarism.

Students are reminded of their rights and responsibilities in respect of plagiarism, as set out in the University Undergraduate and Postgraduate Handbooks, and are encouraged to seek advice from academic staff whenever necessary to ensure they avoid plagiarism in all its forms.

The Learning Centre website is the central University online resource for staff and student information on plagiarism and academic honesty. It can be located at www.lc.unsw.edu.au/plagiarism. The Learning Centre also provides substantial educational written materials, workshops and tutorials to aid students in, for example:

correct referencing practices; paraphrasing, summarising, essay writing, and time management; appropriate use of, and attribution for, a range of materials including text, images, formulae and concepts

Individual assistance is available on request from The Learning Centre. Students are also reminded that careful time management is an important part of study and one of the identified causes of plagiarism is poor time management. Students should allow sufficient time for research, drafting, and the proper referencing of sources in preparing all assessment items.

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Resources for students

To successfully undertake this course you will need:

this study guide • • •

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this year’s MBT Participant Information booklet Internet access so you can interact with your online class and access reference material located on the Internet access to further reading resources as required

Other useful resources

Recommended texts

Blanchard BS, Verma D & Peterson EL, 1995, Maintainability - A Key to Effective Serviceability and Maintenance Management, Wiley & Sons.

Lamb RG, 1995, Availability Engineering & Management for Manufacturing Plant Performance, Prentice Hall.

Reiche H, 1994, Maintenance Minimization for Competitive Advantage, Gordon & Breach Science Publishers.

Google Scholar

The new Google Scholar search engine allows you to search for scholarly literature across the web. You can specifically search against just academic material, including peer-reviewed papers, theses, books, preprints, abstracts and technical reports from all broad areas of research. Google Scholar also automatically analyzes and extracts citations and presents them as separate results, even if the documents they refer to are not online. This means your search results may include citations of older works and seminal articles that appear only in books or other offline publications.

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MBT Learning Guide ‘Studying successfully in the MBT’

This guide is a detailed reference on academic issues associated with studying in the MBT, including tips and strategies on studying successfully at Masters level, advice on structuring and writing essays, reports etc. and information on UNSW resources such as the Educational Development Unit, UNSW Learning Centre and UNSW Library.

MBT online library tutorial

To assist you in accessing the resources of the UNSW library, the MBT has developed an online library tutorial. The tutorial is an excellent tool to help you become familiar with how to access material held in either hard copy or electronic format. http://librarytutorial.mbt.unsw.edu.au/index.htm

Library MBT subject guide

The UNSW Library has developed a Master of Business and Technology Subject Guide to assist participants to locate resources directly related to MBT courses. The Subject Guide can be found at http://www.library.unsw.edu.au/~sshl/guides/mbt/mbtlinks.htm. A copy of the MBT subject guide follows.

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Master of Business and Technology Subject Guide This page brings together selected resources from the UNSW Library web site

UNSW Library Web Delivered Resources

UNSW Library Resources Database LRD Reference Tools

SIRIUS Research & Study Skills

Electronic Journals using SIRIUS Search Engines

Library online tutorial

UNSW Library Subject Guides

Subject Guides identify subject specific material from the UNSW Library & the Internet. Accounting Information Systems

Australian Bureau of Statistics at UNSW Intellectual Property

Industrial Relations and Organisational Behaviour

Australian Politics Intellectual Property

Banking and Finance International Business

Company Information International Relations

Computer Science and Engineering Labour Law

Corporations Law Marketing

Economics Occupational Health

Electrical Engineering & Telecommunications Safety Science

Mechanical & Manufacturing Engineering

Energy Technology Management

Environmental Engineering

Environmental Law

Environmental Management

To access all UNSW Library Subject Guides and other resources use SIRIUS. Library Staff will be of assistance if your area of research is not covered.

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How Do I? The Library has produced a number of web based guides which should answer most of your questions about using Library resources.

The Library Information Skills Guide will show you how to effectively: use the Library catalogue; search the databases; access electronic journals; search the Internet; reference or cite your work.

The Information Skills Guide FAQ will answer many common questions about databases, the catalogue, borrowing, interlibrary loans, passwords etc.

The External Student Services Guide provides assistance for external students with: accessing the catalogue and databases; borrowing from UNSW and other Libraries and document delivery services. The Library contact for MBT external students is m.gordon@unsw.edu.au

See also the External Student Services FAQ. Both guides provide information on access to UNSW Library databases and electronic journals for off-campus users, including the use of student/staff number with UniPass or direct access via UDUS (University Dial-Up Service provided by DIS><Connect.)

If you are planning to use the Library in person you may also wish to consult: Borrowing from UNSW Library and Photocopying/printing at UNSW Library.

UNSW Library Resource Guides

The UNSW Library also produces a number of guides to particular types of resources. The following guides have been chosen for you.

Australian Bureau of Statistics at UNSW Library

Patents: Links to Web Sites

Statistics: A General Guide

Standards Information Guide

Need to ask a Librarian?

HelpOnline Mon-Fri 9-5 Contact the Social Sciences & Humanities Library Phone: 61 2 9385 2677 Fax: 61 2 9662 6309 or Email your question/suggestion Research Help You may find your answer here. RAPID Services is the 'fee-for-service' information search and document supply unit of the UNSW Library.

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Continual course improvement

Each session the MBT Program undertakes an end of session evaluation, seeking anonymous feedback from students on the quality of the course, materials, facilitation, support services and the course and MBT Program in general. These evaluations are collated and feedback provided to program management and Course Coordinators and Class Facilitators.

This feedback is used in establishing priorities for future program improvements, and feeds into regular professional development workshops for facilitators.

MBT courses are reprinted each session they are offered. In addition they are reviewed with updated readings being added on an annual basis, with more significant revisions happening on a regular basis.

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Administrative matters

The MBT Program provides a wide range of information and support for students. This information is available to students via the MBT student website – www.student.mbt.unsw.edu.au – which also contains important links to other UNSW resources.

The program also produces an annual Participant Information booklet which is sent to all new students in the program. The current edition of the PI booklet is available for download from the student website. To receive a hard copy, contact MBT student support. It is each student’s responsibility to be familiar with the policies and procedures detailed in this booklet.

UNSW provides a wide range of support services, including:

learning and study support • • • •

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counselling support library training and support services disability support services

In addition, it is important that all students are familiar with university policies in relation to issues such as:

examination procedures and advice concerning misadventure and illness academic standing and probation program upgrades and graduation occupational health and safety policies and expectations equity and diversity

For any further information or general enquires regarding the MBT Program or your enrolment contact MBT student support.

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Contact details

MBT Program mailing address:

Master of Business & Technology Level 3 Newton Building The University of New South Wales UNSW Sydney 2052 AUSTRALIA Telephone +612 9385-6660 Fax +612 9385-6661 Email mbt.student.support@unsw.edu.au

Location:

Level 3 Newton Building The University of New South Wales Anzac Parade Kensington NSW 2033

The Newton Building is located on the eastern side of the sports oval at campus grid J12. Vehicular access to the MBT office is via Barker Street Gate 14. Couriers should be instructed accordingly.

Pedestrian access is best gained via the main UNSW entrance on Anzac Parade. For more detailed location instructions refer to http://www.student.mbt.unsw.edu.au/location.html.

Websites

MBT student website http://www.student.mbt.unsw.edu.au Resources for participants enrolled in the MBT Program

MBT Program website http://www.mbt.unsw.edu.au Information for prospective participants

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