Risk-Based Asset Management David J. Mierau, PE, CMRP Director, Reliability Solutions Life Cycle Engineering 10-MAR-2015

Risk-Based Asset ManagementDavid J. Mierau, PE, CMRPDirector, Reliability SolutionsLife Cycle Engineering10-MAR-2015

2© Life Cycle Engineering 2012

Robust Quality System: Compliance with Asset Risk Control Strategies such as Preventive and Predictive Maintenance Plans

Business Continuity Planning: Integrating the supply chain network and having good governance systems

Graphic Source: ISPE Drug Shortages Prevention Plan Introductory Summary, ISPE, August 2014

Asset Management Risks


Impact of Manufacturing Disruptions

Graphic Source: Strategic Plan for Preventing and Mitigating Drug Shortages, Food and Drug Administration, October 2013

66% of disruptions resulted from:• Facility remediation efforts (35%)• Manufacturing issues (31%)

Drug Shortages by Primary Reason for Disruption in Supply in 2012


Recent Focus on Asset Management

• ISO 55000 (2014): Asset Management Standards

• BSI PAS 55 (2004, 2008): Optimized Management of Physical Assets Standards

• ASTM E2500: Pharma-specific Guidance


Risk-Based Asset Management in Other Regulated Industries

• Commercial Airline Industry• Nuclear Power Generation• US Military• Space Programs• Subsea Oil & Gas Drilling (emerging)

Many foundational asset management, reliability and maintenance standards written in 1970s-1980s


Asset Management System Implementation Framework

Graphic Source: Life Cycle Engineering, Copyright 2014

Leadership, Policy & Strategy

Asset Management Strategy

Physical Asset Portfolio

Business Case

Procure & Construct

Commission

Operate & Maintain

Asset Management System

Asset Management Capability

(Processes, Procedures& Knowledge)

Asset Management Objectives

Value DeliveryISO 55000 Compliance

Reliability Excellence

Process Safety Management

Mechanical Integrity

ISO 31000 Risk Management

Asset Management Plans

Asset Criticality

ASSETLIFECYCLE


Connection to Operational Excellence

Think about the necessary components to sustain manufacturing operations:• Safety• Quality • Productivity


Benefits of Risk Management

© American Society for Quality

FOUNDATION• Risk strategy,

tolerance• Roles and

responsibilities• Policies and

procedures • Risk definition and

categorization

INFORMATION• Expected Loss –

how much do I lose on average?

• Unexpected Loss – how much I could reasonably expect to lose in a bad year?

• Control Scores – how good are the controls I have in place?

DATA• Loss data collection • Risk indicator data

collection • Control self-

assessment• Risk assessment and

analysis• Automatic notification• Follow-up action

reports

MANAGEMENT• Awareness of real

exposures• Knowledge of

controls quality• Cost benefit analysis• Improved risk

mitigation and transfer strategy

Management & Control Quality

Eco

no

mic P

rofit


How can Risk-Based Asset Management impact Quality?

• Requires management of physical assets across the entire asset life cycle

• Provides focus on what assets are critical to the patient (quality & supply) and the business (safety & productivity)

• Provides a process for managing resources and priorities – applying most robust risk control strategies to highest risk assets

Concept Design Procure InstallCommissionQualificationValidation

Operate Sustain Decommission


Risk-Based Asset Management (RBAM) Model



RBAM: Classify Phase

• Process flow mapping• Value stream mapping• Relationship models (hierarchy)

Additional ReferencesHierarchy: ISO 14224

The RBAM Classify phase ensures that all assets are documented with parent-child relationships defined.

It also defines where value opportunities exist related to asset performance improvements.


Asset Functional Hierarchy

(1)BusinessCategory

(2)Installation/

Business Unit

(3)Cost Center/ Op Unit

(4)Function

(5)System

(6)Sub system/Asset

(7)Component/Maintainable Item

(8)Part/ BOM

Use

/ Lo

catio

n D

ata

Equ

ipm

ent

Su

bdiv

isio

n

Typical application of asset criticality is at these levels of the functional hierarchy – referenced in ISPE C&Q Baseline Guide

Graphic Source: ISO 14224


Functional Hierarchy Example

Benefits of an Optimized Functional Hierarchy:• Event tracking and

trending by various groupings: function, systems, etc.

• Appropriate system definitions for asset criticality analysis

• Comprehensive asset listing of all site components and parts along with associated systems


RBAM: Analyze Phase

• Equipment Criticality• Failure Analysis• Risk Analysis• Risk Ranking

The RBAM Analyze phase evaluates risks associated with potential asset failures, quantifies risks and provides a way to prioritize risk control activities.


Equipment Criticality

Holistic Equipment Criticality includes the following impact elements:

– Quality Impact– Business– Health, Safety & Environmental– Customer/Patient Supply

– Mean Time Between Failure (MTBF)

– Mean Time to Repair (MTTR)– Utilization– Single Point of Failure

Additional ReferencesCriticality: ISPE Baseline Guide for C&Q, Impact Assessments


Asset Criticality Thought Process

Determining function of equipment, system, item process, etc.Is it main equipment or an auxiliary item?Is it a unique item or common with others?

Redundancy – Duplication – AlternativeDo you have a standby backup? Do you have alternative means to continue normal operation?

What is the likelihood of a failure mode occurring? (High/low)Consider history of failures for equipmentConsider possibility and frequency of failures

What are the consequences of failure?Any production losses as a result of failure? How much?Any safety, environmental, or business losses as a result of failure?

What is the likely period out of operation?Can the repair be done onsite?Are spare parts available? How long to get parts if not in stock?What is the longest time for repairing the failure?


Typical Asset Criticality Considerations

Asset Criticality

Quality/Reg.

EH&S

Business

Reliability

Maintenance

Supply Chain

Decom.

Asset Recap. Value

• Failure Rate (MTBF)• Utilization• Single Point of Failure

• Mean Time to Repair (MTTR)• Maintenance Cost

• Inventory• Logistics

• Downtime Impact• Yield/Discard Losses

• Environmental, Health & Safety Impact


Asset Criticality Criteria Example


Criticality & Risk Control Strategies

Top 15%

Top 35 to 15%

A

Asset Criticality

Tier Criticality

B

Additional Analysis

Asset Specific FMEA

Asset Type FMEA

Risk Control Strategy

PdM, PM, NDE/MI, OC, Redundancy

PdM, PM, NDE/MI, OC

Top 65 to 35% C Simplified Maint. Review

PdM, PM

Top 85 to 65% D OEM Maintenance Minimal PM - Contractor

Lowest 15% E None RTF – Run to Failure


Analyzing Criticality Data Look for quality and safety “outliers” – High quality and safety

scores in lower tiers (low overall criticality value scores)


Additional Analysis: FMEA

Failure Mode & Effects Analysis• Evaluation of asset (system) risk• Dual focus: functions & components• Evaluate each potential failure mode & cause• Establish risk ranking scales to calculate risk

Risk = Severity x Occurrence x Detection• Establish risk thresholds for taking mitigating actions• Quantify risk reduction

Additional ReferencesIEC 60812

MIL-STD-1629A


FMEA Risk Categories

FMEA Risk Calculation

Risk Priority Number (RPN) = Severity x Occurrence x Detection


FMEA Risk Categories

FMEA Risk Calculation

Risk Priority Number (RPN) = Severity x Occurrence x Detection


FMEA Risk Evaluation for All Failure Modes & Causes


Risk Reduction Summaries


RBAM: Control Phase• Standard Work• Operating Procedures • Preventive• Predictive• Condition Monitoring• Remote Monitoring• Operator Care• Critical Spares

The RBAM Control phase is the application of risk control strategies recommended from the Analyze phase


Asset Risk Control Strategies• Based upon recommendations from the FMEA

and analysis of the “to-be” RPNs– New or updated maintenance plans– Replacement or upgrade projects– New setup or operating instructions

• Risk reduction will not be realized until recommendations have been implemented

PdM: Infrared Thermography


RBAM: Measure Phase

• OEE• TCO• Asset Utilization• MTBF• MTTR

The RBAM Measure phase ensures compliance with documented risk control strategies and provides data for continuous improvement


Key Performance Indicators

Trending Equipment Quality Events/Deviations


Recognized Industry Standards for KPIs/Metrics

• SMRP Best Practice Metrics Guide• BSI Standard EN 15341 – Maintenance Key

Performance Indicators• ISPE Good Practice Guide: Maintenance

Understand Leading/Lagging Indicators:• Low compliance to maintenance schedule

(overdue maintenance work orders) is a leading indicator for asset reliability


Risk-Based Asset Management (RBAM) Model Review



Other Elements of Asset Management to Consider

• Asset-Related Capital Delivery• MRO Stores & Materials Management• CMMS & Data Historian Support• Organizational Design• Maintenance Work Execution• Maintenance Planning & Scheduling• Reliability Engineering Processes

– Loss Elimination, Root Cause Analysis, Critical Spares, etc.


Create Your Risk-Based Asset Management Program

• Establish a Corporate Asset Management Policy and require risk-based processes

• Your Drug Shortage Prevention Program should reference the Asset Management Policy as one element of the Prevention Program

• Establish or update procedures and processes for the phases and processes of RBAM

• Begin with the Classify phase (field data gathering, value stream mapping, relationship models) & Asset Criticality in Analyze phase


Take Action and Measure Results

• Consider a pilot area/plant to implement and demonstrate improvement

• Build & implement new risk control strategies for asset operation and maintenance

• These activities reduce risk and improve operational stability!


Exhibit Table #541

Questions & Discussion

Risk-Based Asset ManagementDavid J. Mierau, PE, CMRPDirector, Reliability SolutionsLife Cycle [email protected]

mailto:[email protected]

http://www.lce.com/

Documents

Risk-Based Asset Management David J. Mierau, PE, CMRP Director, Reliability Solutions Life Cycle Engineering 10-MAR-2015