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ISO 55000 for Leaders:
Developing an Asset Management Policy
© Life Cycle Engineering
Speaker Bio
• Mark A. Ruby, SVP Reliability Consulting, Life Cycle Engineering
• SVP Finance and General Manager, Robert Bosch Corporation
• A 30-year career dedicated to excellence in manufacturing
Speaker Bio
• Bill Wilder, M.Ed – Director, Life Cycle Institute, Life Cycle Engineering
• District Manager, product management and workforce development, AT&T
• A 30-year career dedicated to excellence in learning and change management
ISO 55000 for Leaders: Developing the Asset Management Policy
Mark A. Ruby, SVP, Life Cycle Engineering
Bill Wilder, Director, Life Cycle Institute
Learning Objectives
1. Describe the four key documents and the
benefits of the ISO 55000 standard
2. Develop an Asset Management Policy and
associated communication plan
3. Identify the value of stakeholder analysis and
leadership alignment
4. Explain the critical foundational concepts in
asset management systems
The Need for Standards
Stability
Level differences in how business around the world is grown and managed
Increased concern over risk awareness
Industrial disasters, financial instability, civil unrest and economic duress of certain nations
Balancing force for international trade
ISO 55000 Primary Documents
A set of three standards issues by the International Organization for Standardization
ISO 55000 – Terms and Definitions
ISO 55001 – Requirements
ISO 55002 – Guidance
Will be harmonized at a high level with other managing systems like
ISO 9001 (quality)
ISO 14001 (environmental)
ISO 50000 (energy sustainability)
Important Themes: ISO 55000
Value recognition
Risk-based
Optimization of cost, risk & performance
Aligned objectives
Transparent decision making
Recognize impact of long life cycle issues
Asset Management Expanded View
Corporate/OrganizationManagement
AssetManagement
System
Management Asset Portfolio
Management Asset Systems
Manage Individual Assets
Organizational Strategic Goals
Capital investment value,Performance and sustainability
Systems performance, cost & risk optimization
Asset life cycle costs, risks & performance
.Adapted from Figure 1 – Asset Management – an anatomy Ver .1.1 - TheIAM
Create/Acquire Utilize Maintain
Renew/Dispose
Fundamentals of Asset Management
• Assets exist to provide value to the organization and its stakeholders
Value
• Asset management translates the organizational objectives into technical and financial decisions and plans
Alignment
• Leadership and workplace culture are determinants of realization of value
Leadership
• Asset management gives assurance that assets will fulfill their required purpose
Assurance
Answer: Benefits of Asset Management
Improved financial performance
Informed asset investment decisions
Managed risk
Improved services and outputs
Demonstrated social responsibility
Demonstrated compliance
Enhanced reputation
Improved organizational sustainability
Improved efficiency and effectiveness
THE FINANCIAL BENEFITS OF
ASSET MANAGEMENT
Financial Benefits of Asset Management
• Revenue
• Profit
• Expenses
• Quality
• Delivery
• Operating efficiencies
• Cash
• Inventory
• Spare parts
• Investment
• Depreciation
• Fixed Assets
• Working capital
Selecting What to Measure
Class Discussion:
What KPIs does you company use?
Financial Benefits of Asset Management
Ratio Analysis – The Language Of Business
Fixed Capital
• Optimize lifecycle costs• Increase asset life• Defer asset replacement
Working Capital
• Leaner manufacturing• Reduce work in process• Reduce spare parts
inventory
Revenue or Output
• Increase asset availability• Increase throughput• Improve quality
Operating Costs
• Reduce unscheduled downtime
• Reduce maintenance cost• Reduce operations Cost
Value Delivered for Capital Employed
Asset portfolio
Managing theorganization
Asset management
Assetmanagement
system
Coordinated activity to realize valuefrom assets
Set of interrelated or interacting elements to establish asset management policy, objectives and processes to achieve objectives
Assets within the scope ofthe asset management system
Benefit: Provides risk control and gives assurance to meet objectivesWhat elements behind a working system are NOT seen in the model?
Relationship of Asset Management to the Asset Management System
Asset Management System
A Strategic Decision
An asset management system provides a structured approach
for the development, coordination and control of
asset-related activities across their life cycle.
Benefits of an Asset Management System
New perspectives, learning, quick wins and continuous improvement
Improvements to management model, integration of standards and best practices
Integration with financial functions improves transparency, incorporates risk and creates tools for capital allocation
Cross-functional knowledge-sharing and collaboration improves the quality of decision making
Overview of the Key Documents for an Asset Management System
1
2
3
4
Asset management policy
Asset management strategy (SAMP)
Asset management objectives
Asset management plan
Dependent upon organizational objectives and organizational plan
Elements of an Asset Management System
A Common Model
1. Context of the organization2. Leadership3. Planning4. Improvement5. Support6. Operation7. Performance EvaluationPolicy
StrategyObjectives
Asset Management Plans
AM Policy, Strategy & Objectives
• Short statement outlining principles describing how AM will contribute toward meeting organizational objectives
Policy
• Defines how organizational objectives are to be converted into the asset management objectives.
• Asset requirements and asset management capabilities
Strategy
• Performance targets
• AM system, activities, performance and condition
Objectives
AMS Critical Concept #1: Line of Sight
The golden thread connecting organizational strategy to asset management policy, strategy & objectives
Justifies all asset
management activities
Shares understanding of critical goals
Sets and communicates
direction
Customer
Expectations
QualityCustomer
Satisfaction
Reduce
Failure Rates
Reduce Internal
DefectsDefects
Best in Class
Quality
Critical Concept #1 - Line of Sight
Corporate
Strategic
Goals
Plant
Goals
Dept/:Product
Goals
Workshop
Goals
Improvement
Projects
Critical Concept #1 - Line of Sight
Independent
Units
(Silos)
Focus Clear
Business
Direction
OrganizationAlignment
(Catch Ball)
Systematic Implementation
Not Just Results,
Planned Results
Focus Alignment Quick
Response
Policy Overview
Policy documents can contain:
1. Purpose statement2. Applicability and scope
3. Effective date4. Responsibilities5. Policy statements
Requirements for AM Policy
1 Consistency
2 Appropriateness
3 Compliance
4 Principles and framework**
5 Continual improvement
Leadership Considerations
• Leadership and commitment
• Roles and responsibilities
• Change management competency
CHANGE MANAGEMENT IN
ASSET MANAGEMENT
Change!
Where you are today
Where you want to be
Process of change
Current
state
Transition
state
Future
state
Change often fails to meet objectives
• Failure
• Why?
• Resistance!
• Sponsorship and planning mitigate resistance
What is Change Management?
“The application of a structured process and set of tools for leading the people side of change to achieve a desired outcome.”
1st communication or
1st rumor
Incre
asin
g r
esis
tance
Decre
asin
g p
rod
uctivity
Time
Dept. A
Dept. B
Dept. C
Dept. D
Prosci®
Flight Risk Model
The top success factors to achieving sustained behavior change
1. Active and visible executive sponsorship
2. Structured approach to change management
3. Dedicated resources/funding for change management
4. Engagement and integration with project management
5. Frequent and open communication about the change
6. Middle management engagement and support
7. Employee engagement and participation
*Prosci 2014 Best Practices in Change Management Benchmark Report
Prosci’s Structured Change Management Process
Awareness
Desire
Knowledge
Ability
Reinforcement
The ADKAR Model
Prosci’s change management process integrates individual and organizational change management
NEXT STEPS
Asset Management System Implementation Framework
Leadership, Policy & Strategy
Asset Management
Strategy
Physical Asset Portfolio
Business
Case
Procure &
ConstructCommission
Operate &
Maintain
Asset Management System
Asset Management
Capability(Processes, Procedures
& Knowledge)
Asset Management
Objectives
Value Delivery
ISO 55000 Compliance
Reliability Excellence
Process Safety Management
Mechanical Integrity
ISO 31000 Risk Management
Asset Management Plans
Asset Criticality
ASSETLIFECYCLE
Thank You
Contact InformationBill Wilder: [email protected]
Mark Ruby: [email protected]
www.LCE.com
