Risk-modeling in Asset ManagementMaintenance Strategies

Rui Jorge AlmeidaBISS InstituteTowards Future Proof Asset ManagementSystems

Asset Management

• Asset management is a systematic approach of developing,operating, maintaining, upgrading, and disposing of assets

• Objective of providing the best value level of service for thecosts involved;

• Optimization of costs, risks, service/performance andsustainability.

• In Finance, models are backbone of asset management:• models are used in investment, portfolio management, risk

management, and finance functions.

Asset Management

• Asset management is a systematic approach of developing,operating, maintaining, upgrading, and disposing of assets

• Objective of providing the best value level of service for thecosts involved;

• Optimization of costs, risks, service/performance andsustainability.

• In Finance, models are backbone of asset management:• models are used in investment, portfolio management, risk

management, and finance functions.

Maintenance

• Maintenance is defined as a set of activities or tasks used torestore an item to a state in which it can perform itsdesignated functions.

• Downtime reduces production, increases operating costs andinterferes with customer services.

• Nowadays, effects of downtime are being aggravated by themove towards just-in-time systems.

• Small, unmanaged breakdowns, can potentially stop a wholeplant.

Maintenance

• Maintenance is defined as a set of activities or tasks used torestore an item to a state in which it can perform itsdesignated functions.

• Downtime reduces production, increases operating costs andinterferes with customer services.

• Nowadays, effects of downtime are being aggravated by themove towards just-in-time systems.

• Small, unmanaged breakdowns, can potentially stop a wholeplant.

Maintenance

• Maintenance is defined as a set of activities or tasks used torestore an item to a state in which it can perform itsdesignated functions.

• Downtime reduces production, increases operating costs andinterferes with customer services.

• Nowadays, effects of downtime are being aggravated by themove towards just-in-time systems.

• Small, unmanaged breakdowns, can potentially stop a wholeplant.

Maintenance Strategies

Source: [Cooke, 2003, Arunraj and Maiti, 2007]

Maintenance Strategies

Source: [Cooke, 2003, Arunraj and Maiti, 2007]

Maintenance Strategies

Source: [Cooke, 2003, Arunraj and Maiti, 2007]

Maintenance Strategies

Source: [Cooke, 2003, Arunraj and Maiti, 2007]

Maintenance Strategies

Source: [Cooke, 2003, Arunraj and Maiti, 2007]

Risk - Definition

• The risk for an asset i at time t , combines the failureprobability Pi in any instant tf ≤ t and consequence losses Li

Ri(t) = Pi(tf ≤ t)Li

Risk - Definition

• The risk for an asset i at time t , combines the failureprobability Pi in any instant tf ≤ t and consequence losses Li

Ri(t) = Pi(tf ≤ t)Li

• The probability of failure is related to the age of the asset:

Risk - Definition

• The risk for an asset i at time t , combines the failureprobability Pi in any instant tf ≤ t and consequence losses Li

Ri(t) = Pi(tf ≤ t)Li

• The consequence losses should take into account differentfactors:

• Repair costs;

• Downtime costs and slowdown costs (production loss);

• Safety hazards and possible accidents.

Risk-Based Maintenance

• Risk-based maintenance (RBM) is used for determining thepriority of maintenance using risk which integrates both safetyand failure,

• find the critical/problem assets and dedicate your maintenanceresources to them while diverting resources from noncriticalassets.

• In offshore steel structures, the application of RBM translatedin savings over 80% on total repair costs! [Lei et al., 2015]

Risk-Based Maintenance

• Risk-based maintenance (RBM) is used for determining thepriority of maintenance using risk which integrates both safetyand failure,

• find the critical/problem assets and dedicate your maintenanceresources to them while diverting resources from noncriticalassets.

• In offshore steel structures, the application of RBM translatedin savings over 80% on total repair costs! [Lei et al., 2015]

Risk-Based Approach

Source: [Arunraj and Maiti, 2010]

Risk-Assessment

Risk Maintenance Planning

Choosing the Correct Maintenance

Source: [Bertolini and Bevilacqua, 2006]

Application: Power-generating unit

• Focus in a power-generating unit in an operating steam powerplant [Krishnasamy et al., 2005].

• A steam power plant is a means for converting the potentialchemical energy of fuel into electrical energy.

• In its simplest form, it consists of a boiler and a turbine drivingan electrical generator.

Application: Methodology

Application: Unit 3 scope

Application: Risk assessment

• Fault tree analysis

Application: Risk and rank analysis

• The risk index is the actual risk divided by the acceptable risk(historically $2,000,000).

Application: Risk and rank analysis

• The risk index is the actual risk divided by the acceptable risk(historically $2,000,000).

Application: Risk analysis subsystems

... ... ... ... ...

Application: Risk reduction results

• Preventive maintenance: Model based approach to reducerisk.

Risk-modeling in asset management

Thank you for listening

Looking forward to discuss this topic on

11 June

Risk-modeling in asset management

Thank you for listening

Looking forward to discuss this topic on

11 June

References I

Arunraj, N. and Maiti, J. (2007).Risk-based maintenance-techniques and applications.Journal of hazardous materials, 142(3):653–661.

Arunraj, N. and Maiti, J. (2010).Risk-based maintenance policy selection using ahp and goal programming.Safety science, 48(2):238–247.

Bertolini, M. and Bevilacqua, M. (2006).A combined goal programming-ahp approach to maintenance selectionproblem.Reliability Engineering & System Safety, 91(7):839–848.

References IICooke, F. L. (2003).Plant maintenance strategy: evidence from four british manufacturing firms.Journal of Quality in Maintenance Engineering.

Krishnasamy, L., Khan, F., and Haddara, M. (2005).Development of a risk-based maintenance (rbm) strategy for apower-generating plant.Journal of Loss Prevention in the process industries, 18(2):69–81.

Lei, X., Sandborn, P., Bakhshi, R., Kashani-Pour, A., and Goudarzi, N.(2015).Phm based predictive maintenance optimization for offshore wind farms.In 2015 IEEE Conference on Prognostics and Health Management (PHM),pages 1–8. IEEE.