Maintenance within physical asset management

Maintenance within physical asset management

Author: Kari Komonen

ContentGeneral instructions (in Finnish)IntroductionSummary1. ISO 5500X standards2. EN 16646 ‘Maintenance within physical asset management’3. Organizational context4. Physical asset management processes5. Life-cycle processes6. Performance monitoring7. Physical asset management competences

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General instructions

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Welcome to use this training material

• This educational material has been compiled by Kari Komonen according to assignment of SFS/METSTA. The material has been checked by METSTA. Kari Komonen was a convenor of CEN TC319 WG10 that was responsible for EN 16646 ’Maintenance within Physical Asset Management’ –standard. This material has been funded by SFS project support.

• The training material is targeted to the teachers and students of the universities and universities of applied science. This set of PowerPoints introduces the most significant standards for physical asset management, terminology and offers viewpoints on the utilization of these standards. The main focus, however, is on EN 16646 standard.

• The goal is to make it easier to include physical asset management in educational programmes and training courses. All the details of the standard will not be covered in this material, but the main points have been characterized.

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The use of the material and copyright notice

• The copyright of this training material rests with Finnish Standardization Institute SFS ry.

• Permission to use the material is granted to training purposes and the material can be modified. However, the reference to this original material should be mentioned.

• Permission to use is strictly restricted for non commercial purposes.

• This material is updated February 10, 2016. Verify that the material is up to date from the latest version of the standard.

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Application note and interpretation

• Each organization applies standards in a way that is suitable for them, following, however, the main purposes and requirements of the standards.

• This material does not interpret the standards. If this material is or seems to be in contradiction with the standard, the standard is valid. Questions regarding interpretation can be addressed to Maintenance Committee of METSTA.

• Because the power of PowerPoint presentations are limited regarding knowledge sharing we recommend a reader to get acquainted with the original standards, the other ISO, IEC, CEN and SFS publications and their web-pages and relevant literature in order to understand fundamentals of the standards.

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Instructions to a reader and an user

• This material covers the main ideas and content of the whole EN 16646 standard.

• However, it does not cover all the details and explanations of the standard.

• Generally used management terminology has not been defined.

• A teacher/lecturer should get acquainted with the original standard in order to understand which details and explanations are not covered with this material.

• To some extent, a teacher should also master ISO 55000 Asset Management – Overview, Principles and Terminology -standards and the main content of the most important maintenance standards.

• Examples of these standards are EN 13306 Terminology and EN 15341 standard for key performance indicators.

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Introduction

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Why do we, today, need physical asset management more than before

There are many reasons why physical asset management has today become the more essential part of management activities e.g.:• globalization and increasing competition,• growing financial, safety and environmental risks,• radical change in business strategy – long term vs. short term,• attitudes towards physical assets have changed – nowadays it is more common

that the length of the ownership is not the same as the length of the whole item life,

• growth of capital intensity in some areas of industry,• growing turbulence in the market,• pressure for higher profitability and return on assets,• aging of asset systems,• increased pressure to improve added value of maintenance,• more complicated and uncertain decision environment,• increased requirements from the safety and environmental point of view,• ‘silo’ behaviour which keeps maintenance and other life cycle processes

separated,9

Benefits of improved physical asset management activities

Improved physical asset management activities offer e.g.• Higher return on physical assets• Higher short and long term profitability• Better stakeholder satisfaction

– Such as customer satisfaction• Stronger trust on the management of the organizations• Lower safety and environmental risk• Improved products and services• Better demonstrated capabilities• Higher efficiency and effectiveness of operations

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Evidence about

The importance of the physical asset management can be seen e.g. as

• Increasing number of courses and conferences• Increasing number of books on physical asset management• Increasing number of new standards and guidelines• Increasing number of certified organizations• Increasing number of new positions in organizations such

as asset managers

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Improve asset management in order to avoid deterioration of assets

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Time

Profi

tabi

lity

and

sust

aina

bilit

yRe

turn

on

phys

ical

ass

ets

Low

High

Potential gap

Development without improved asset managementContinue as before

Development with improved, systematic and systemic asset management system

The impact of the maintenance activities

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The maintenance function has a strong impact on the short and long term profitability of theorganization. Therefore, its interaction with the other functions should be organized in a systematic and systemic way. This task is an important part of physical asset management.

Effective maintenance

Competitive maintenance cost

Effective productioncontrol

High availability, performance rate and yield (OEE)

Low productioncost

Trouble-free production

High reliability ofdeliveries

Low material andintermediate productstocks

Low reserve stocks and product stocks

High profit and high capital turnover

Low invested capital

High operating income

Lower investments

High return on physical assets

Getting help for the development of asset management

• In order to develop physical asset management activities and in order to establish improved modes of operations supporting tools are available

• Several new standards give help when developing management system for physical assets and

• For organization specific requirements for the assets• Standards also help to develop cooperation between

different organizational functions and life-cycles stages • And define clear roles for the maintenance function within

the organizations’ asset management processes

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Asset Management - standardsAt the moment there five(5) well known asset management standards:

• BSI PAS 55: Technical specification• ISO 55000: 2014 Asset Management – Overview, Principles and

Terminology• ISO 55001: 2014 ”Asset Management. Management Systems.

Requirements”• ISO 55002: 2014 ”Asset Management. Management Systems.

Guidelines for the Application of ISO 55001”• EN 16646: 2014 ”Maintenance within Physical Asset Management”

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The main purpose of the asset management standards

PAS 55

• The first well-known and adapted asset management system standard was PAS 55

• First published in 2004 and revised in 2008• BSI PAS 55 is a technical specification for British use, • It has been translated into many other languages and • Been used as a basis for certification in organizations in several

countries such as Finland, Netherlands etc.

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ISO 55000-ISO 55002

• ISO 55001 (supported by ISO 55000 and 55002) is a management system standard for asset management and it has been launched in 2014

• The first initiative was to transform PAS 55 to the global standard• However, the ISO framework-standard for all the management system

standards gave a new direction • It is also a basis for certification of the asset management system (compare

with e.g. Quality Management)• Standards include overview, principles and terminology on asset management,

requirements for asset management system and application notes • This standard is intended to be used for managing physical assets in particular,

but it can also be applied to other asset types • ISO 55002 Guidelines for the Application of ISO 55001 is under revision at the

moment

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EN 16646

• As described in the earlier figure, maintenance is the important part of asset management and asset management system

• However, its interaction with the other functions has not been clearly determined in the above mentioned standards

• EN16646 ”Maintenance within Physical Asset Management” is not a management system standard, but an informative one.

• It is a good starting point for the assessment of asset management practices and

• For development the modes of operation. • EN16646 gives support when establishing physical asset management

system for the organization• EN 16646 focus on the position of the maintenance function within the

management of the organization and specifically within physical asset management

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Summary

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Asset Management - standardsAt the moment there five(5) well known asset management standards:

• BSI PAS 55: Technical specification• ISO 55000: 2014 Asset Management – Overview, Principles and

Terminology• ISO 55001: 2014 ”Asset Management. Management Systems.

Requirements”• ISO 55002: 2014 ”Asset Management. Management Systems.

Guidelines for the Application of ISO 55001”• EN 16646: 2014 ”Maintenance within Physical Asset Management”

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Development of asset management system standards

• Although, the PAS 55 is a good asset management system standard and well-respected by the users, it has now been or will be in many cases replaced by ISO 55000, 55001 and 55002 standards.

• The structure of ISO 55001 follows the structure of ISO meta-standard which defines what kind of structure and content every ISO Management System –standard shall have.

• ISO-standards are globally applied standards, but are not in Europe as compulsory as European EN-standards.

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Framework of concepts

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Managing the Organisation

Asset Management

Asset management

system

Asset portfolio

Coordinated activity of an organization to realize value from assets

Set of interrelated or interacting elements to establish AM policy, AM

objectives and processes to achieve those

objectives

Assets that are within the scope of the asset management system

Asset portfolio

Asset system

Individual asset

(ISO 55000)

(ISO 55001 (ISO 55002)

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EN 16646 ‘Maintenance within physical asset management’Overview of physical asset managementPhysical asset management system 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 assetsPhysical asset management processes Physical asset management processes and life cycle stages Life-cycle management, asset and maintenance management processes Interrelationship between maintenance and other processes Performance

monitoring General asset management system requirements Specific requirementsOrganization and people enablers: organizational competences Structure and procedures Competences

Kari Komonen 2015

Holistic view of EN 16646

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Asset portfolio

Asset system

Individual assets

Acquisition, Operation, Maintenance, Modernization, Disposal




Required competences

Performance monitoring and control

Requirements for physical assets:

Asset management policy, strategy and objectives

Physical asset management plans (incl. maintenance)

Organizational context (strategic physical asset management process)

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TECHNOLOGY COMPANY CHARACTERISTICS

MARKETS AND COMMUNITY

STRATEGIC ANALYSES


ASSET MANAGEMENT POLICY, STRATEGY AND OBJECTIVES

PHYSICAL ASSET MANAGEMENT PLANS

MAINTENANCE MANAGEMENT STRATEGY,

OBJECTIVES AND PLANS

Metrics for requirements

Metrics for Physical Asset Management

Metrics for Maintenance Management

Requirements for assets and asset management are the function of fourgroups of determinants:• technology in use• market• community and • characteristics of the organization

They further determine asset and maintenance management objectives, strategies and plans which should be monitored and controlled

The content of EN 16646: Strategic physical asset management process

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STRATEGIC ANALYSES









The role of the maintenance function depends on the stage of the process and asset hierarchy (portfolio level, asset system level or asset level). The following extract covers the asset system level.

What is the role of the maintenance function in this planning process? See next slides, section 4 and EN 16646.

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The role of maintenance at asset system levelA simplified presentation, for details, see EN 16646

Contribution of maintenance

No. Task or process of the asset system The role and tasks of the maintenance function

1 Organization's business and asset strategy and physical asset strategy

Informative and consultative role

4 Key success factors for the asset system. Requirements and constrains for the asset system

Consultative role

6 Determination of asset solution for asset system, criticality analysis etc.

Active participation

7 Design of the asset system Active participation

9 Creation and maintenance of physical asset management system


10 Creation and revision of maintenance management system

Responsible for the task

11 Definition of maintenance strategy and maintenance plan Responsible for the task

13 Preparation of support activities Active participation or responsible

14 Performance evaluation, benchmarking and improvement Responsible for the task

16 Decision for disposal; economic and environmental management of disposal

Consultative role

Life-cycle processes and their interaction with the maintenance process

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Relationship between acquisition process and maintenance process:

an extract as an example

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For example• The costs of the assets at each indenture level• The characteristics of the assets in terms of materials, technology, geometry, weight• Mechanical drawings• A functional analysis: the required functions and operating conditions • For more information, see the following slides and EN 16646

For example• Maintenance strategy • Availability of tools, infrastructures and qualified personnel• Requested operational reliability of the components of the assets• Requested levels of maintainability

General performance indicators

In addition to requirements for physical assets presented above, e.g. the following risks could be avoided by using KPIs (Key Performance Indicators) which support cooperation between the different functions. In EN 16646, these KPIs are called general performance indicators:• ‘silo’ behaviour of individual functional departments (sub-optimization of

activities of separate organizational functions);• lack of holistic picture of success of physical 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 and

maintenance;• uncertainty in decision making.

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Asset portfolio

Asset system

Individual assets










In order to successfully manage physical assets and maintenance within physical asset management the management of the organization should master the content of the above system and contributions from one sub-system to the others, the requirements of separate organizational functions, interaction between them and specific features of different asset levels.

Section 1

ISO 5500x standards

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ISO 55001: Requirements

• This International Standard specifies requirements for an asset management system within the context of the organization. This International Standard can be applied to all types of assets and by all types and sizes of organizations.

• NOTE 1 This International Standard is intended to be used for

managing physical assets in particular, but it can also be applied to other asset types.

• NOTE 2 This International Standard does not specify financial, accounting or technical requirements for managing specific asset types.

• NOTE 3 For the purposes of ISO 55000, ISO 55002 and this International Standard, the term “asset management system” is used to refer to a management system for asset management.

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Some benefits of ISO 55000-55002 standards

1. improved financial performance2. informed asset investment decisions3. managed risk 4. improved services and outputs5. demonstrated social responsibility6. demonstrated compliance7. enhanced reputation8. improved organizational sustainability9. improved efficiency and effectiveness

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Basic terminology

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Managing the Organisation

Asset Management

Asset management

system

Asset portfolio

Coordinated activity of an organization to realize value from assets

Set of interrelated or interacting elements to establish AM policy, AM

objectives and processes to achieve those

objectives

Assets that are within the scope of the asset management system

Asset portfolio

Asset system

Individual asset

assetitem, thing or entity that has potential or actual value to an organization

asset management plan (an outcome from asset management system)documented information that specifies the activities, resources and timescales required for an individual asset, or a grouping of assets, to achieve the organization’s asset management objectives

The Structure of Requirements

The structure of ISO 55001 (Asset management. Management system. Requirements)

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

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Some important issues in ISO 55000-55002 standards

• The need for asset management system• Organizational context: the purpose and characteristics of the

organization, business and community environment, economic constraints and requirements from the authorities, needs and expectations of stakeholders

• The three levels of asset management: portfolio level, asset system level and individual asset level

• Cross-organizational co-operation: avoiding silo-behaviour, the role of top management, information sharing

• Information management

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Section 2

EN 16646-Maintenance within Physical Asset Management

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The scope of the standard

• This European Standard introduces physical asset management as a framework for maintenance activities.

• It also introduces the relationship between organizational strategic plan and maintenance management system and describes the interrelations between maintenance process and all the other physical asset management processes.

• It addresses the role and importance of maintenance within physical asset management system during the whole life cycle of an item.

• This European Standard can be applied to production organizations of all sizes. However, if specific standards exist for a particular application or field of industry, those documents should also be considered.

• This European Standard consists of guidance and recommendations and is not intended to be used for certification, regulatory, or contractual use.

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Some definitions

physical asset• item that has potential or actual value to an organization

– Note 1 to entry: Examples of physical assets are components, machines, plants, construction works, buildings.

physical asset management• coordinated activities of an organization to realize value from physical assets

– Note 1 to entry: Realization of value will normally involve a balancing of costs, risks, opportunities and benefits.

– Note 2 to entry: In the life cycle context, physical asset management is the optimal life cycle management of physical assets to sustainably achieve the stated business objectives.

life cycle of a physical asset• period of value realization from a physical asset by an organization including needs

identification, creation or acquisition, utilization, maintenance, modernization and disposal– Note 1 to entry: Life cycle of an item may contain several life cycles of a physical asset. An

item can have several sequential owners during its life cycle.

life cycle of an item• series of stages through which an item goes, from its conception to disposal

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Life-cycle of an asset versus item

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Life cycle of an item/_____________________________________________________________________________// 1st life cycle of an asset / 2nd life cycle of an asset / 3rd life cycle of an /

Life-cycle stages or phases

1. needs and feasibility assessments for assets2. concept definition3. determination of asset solutions4. design of assets5. manufacturing or acquisition of assets6. installation and commencing7. utilization of assets8. maintenance of assets9. modernization10. decommissioning, retirement, and/or disposal of assets

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Some important issues in EN 16646 standard

• Organizational context: the purpose and characteristics of the organization, business and community environment, economic constraints and requirements from the authorities, needs and expectations of stakeholders

• Determination of requirements for physical assets • The three levels of asset management:

– portfolio level, asset system level and individual asset level• Life-cycle processes• Cross-organizational co-operation:

– avoiding silo-behaviour, the role of top management, information sharing

• Performance management• Competences

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Section 3

Organizational context

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Organizational context

• In this standard organizational context has been examined from the requirements for physical assets point of view.

• Organizational strategic plan and influencing factors originated from the characteristics of the organization, market, surrounding community and used technology determine requirements for physical assets and asset management.

• These requirements determine further physical asset management policies, strategies, objectives and plans.

• And further, these policies, strategies, objectives and plans determine maintenance management strategies, objectives and plans.

• In order to manage effectively these issues, performance management, performance indicators are needed.

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Strategic physical asset management process

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STRATEGIC ANALYSES









Carefully determined requirementsfor physical assets guarantee appropriate assets, asset management strategies and plans, which further • create higher profitability, • better competitiveness, • sustainability and • in the case of performance monitoring timely improvements.

Company: Organizational influencing factors

• Corporate strategic plan• Capital intensity• Core business• Competences• Financial statement• Competitive position• Organizational structure• Location / locations• Product strategy• Stakeholders• Operating rate

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STRATEGIC ANALYSES









Markets: Influencing factors

• Demand• Competition• Life-cycle phase (product)• Logistics• Regulations

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STRATEGIC ANALYSES









Community: Influencing factors

• Infrastructure• Regulations• Political, economic, social,

cultural factors• Stakeholders

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STRATEGIC ANALYSES









Technology: Influencing factors

• Technology to be used• Structure of the production system• Flexibility of the production system• Inherent dependability characteristics• Economic lifecycle phase (equipment)• Technical lifecycle phase (equipment)• Knowhow-gap

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STRATEGIC ANALYSES









Requirements for physical assets

Examples:• Capacity• Capacity flexibility• Competences• Capability• Reliability, durability• Environment and safety • Product quality requirements• Efficiency• Availability• Future market value of assets• Integrity• Sustainability

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STRATEGIC ANALYSES









Section 4

Physical Asset Management processes

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The role and tasks of the maintenance function within asset management processes

• Organizational strategic plans influence greatly on maintenance activities.

• Maintenance activities has also a great impact on organizational strategic plans.

• Therefore, interaction between organizational plans and maintenance function is bidirectional.

• The role of maintenance has very often been neglected in organizational planning processes.

• EN 16646 defines this interaction at every step of the asset management process.

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Physical asset management processes

• EN 16646 defines physical asset management processes for the three levels of assets: – portfolio level, – asset system level and – individual assets.

• The role and tasks of the maintenance function have been determined at the every stage of these processes.

• Finally, the life cycle stage of each step has been indicated.

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The optional roles of the maintenance function within asset management processes

In this standard four categories of roles have been used

• Informative• Consultative• Active• Responsible

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Portfolio level asset management processA shortened version, for more information see EN 16646

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Process stage Role of maintenance

1. Organization's business strategy Informative & consultative

2. Key success factors Informative

3. Requirements for physical assets Informative

4. Asset policy and strategy Consultative

5. Allocation of the task roles to the asset systems Consultative

6. Determination of physical asset solution Consultative

7. Design of the asset systems within portfolio Consultative

8. Creation of physical asset management system Active participation

9. Creation of maintenance management system Active participation

10. Planning of maintenance support resources Active participation

11. Maintenance planning at the portfolio level Responsible for task

12. Performance evaluation and improvement Responsible for task

13. Disposal and acquisition of asset systems Consultative

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The role of maintenance at asset system levelA simplified presentation, for details, see EN 16646

Contribution of maintenance

No. Task or process of the asset system The role and tasks of the maintenance function

1 Organization's business and asset strategy and physical asset strategy

Informative and consultative role

4 Key success factors for the asset system. Requirements and constrains for the asset system

Consultative role

6 Determination of asset solution for asset system, criticality analysis etc.


7 Design of the asset system Active participation

9 Creation and maintenance of physical asset management system


10 Creation and revision of maintenance management system

Responsible for the task

11 Definition of maintenance strategy and maintenance plan Responsible for the task

13 Preparation of support activities Active participation or responsible

14 Performance evaluation, benchmarking and improvement Responsible for the task

16 Decision for disposal; economic and environmental management of disposal

Consultative role

Individual asset level process A shortened version, for more information see EN 16646

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Process stage Role of maintenance

1. Criticality analysis and determination of useful life Active participation

2. Required reliability, maintainability, and testability Active participation

3. Load analysis Active participation

4. Concept definition and life cycle cost analysis Active when needed

5. Design of the asset in question if needed Active when needed

6. Manufacturing, installation and commencing Active when needed

7. Management of documentation Active or responsible

8. Definition of maintenance environment, strategy and tasks Responsible

9. Maintenance support, training, spare parts, tools, information… Responsible

10.Maintenance task preparation and execution Responsible

11.Performance evaluation for maintenance improvement Responsible

12.Maintenance improvements / modifications Active or responsible

13.Replacement / disposal Active or responsible

14.Maintenance activities related to disposal Responsible

Section 5

Life-cycle processes

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Physical asset management processes and life cycle stages

• Physical asset management processes produce sustainable value to organizations following the requirements of the organization.

• These processes are managed according to physical asset management policy, strategy and plans.

• They need support to be operated. Therefore, much information is exchanged between the different parts of the physical asset management system.

• The purpose of this clause is to list the interrelationships between the maintenance process and the other parts of the system and to explain why they are important and how they are used.

• Especially, various life-cycle processes of organizations are depicted. • Additionally, necessary two-way contributions between life-cycle processes

have been determined

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Life-cycle stages

Core life-cycle processes are:• Acquire appropriate physical assets, if they exist in the market,

or create the physical assets if they do not exist in the market at acceptable economic conditions.

• Operate the assets to optimize the value created for the organizations.

• Maintain the assets to optimize the value created for the organizations.

• Modernize (upgrade) the assets to obtain the greater value over the life cycle of the global asset.– NOTE. Modernization process contains all the same phases of life cycle as

the whole asset system.• Decommissioning and/or disposal of the assets when the end of

useful life is reached.

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Life-cycle processes and their interaction with the maintenance process

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Contributions between life-cycle processes

• Presented contributions are short lists.• They mainly list the key words.• In order to fully understand the content of the contributions

there is a need to get acquainted with the standard itself.• In this presentation and in the standard the term ‘process’ is

used instead of department or function in order to emphasize activities instead of organizational units.

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Some definitions

Operating conditions• physical loads and environmental conditions as experienced by

the asset during the entire life cycle– Note 1 to entry: Operating conditions can vary during the asset's life

cycle.Operating constraints• characteristics of the asset, which set limits for the use of the

asset and may determine requirements for maintenance activities– Note 1 to entry: These characteristics are the results of design and

construction of the assets and are influenced by the operational mode and operation conditions.

Operational mode• a way physical assets are operated and utilized during the entire

life cycle determined by the number of units of use (hours, starts/stops, transients)– Note 1 to entry: Operational mode determines the frequency, load,

continuity and performance rate of utilization.

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Relationship between acquisition process and maintenance process:

An extract as an example, for more information, see EN 16646

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For example

For example• Maintenance strategy, availability of tools, qualified personnel etc.• Requested operational reliability• Requested levels of maintainability• Maintenance costs, ability to standardize, modularity.

• List of assets, • Costs of assets, • Characteristics of assets, documentation, • Functional analysis, specified operating profiles, • Risk analysis, • Expected reliability, expected maintainability

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Relationship between operation and maintenance processes


• Expected operating profiles for plants, • Environmental conditions, • Operator responsibilities (monitoring and maintenance), • Degraded operating profiles, emergency procedures

For example

• Operating constraints of items,• Times to restoration, • Preventive maintenance schedules• Operators’ monitoring tasks• Safety procedure for maintenance execution

For example

• Preventive and corrective maintenance costs• Number of degradations and failures• Unavailability due to maintenance• Assessment of degradation states and remaining useful life• List of obsolescent components• Plus the same as for ‘acquire assets’

Relationship between ‘modernize assets’ and maintenance processes


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• Dates of modernization• Modernization procedure• New requirements • Plus the same as for ‘acquire assets’

For example

For example

Relationship between disposal and maintenance processes


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•Disposal schedule. •Disposal procedure •Spare parts not to be disposed

For example

For example

•Expected maintenance costs before the disposal •Information having impact on health and safety during disposal•Information about degradation and failures•Assessment remaining useful life•Information concerning reuse of components

Relationship between asset management support and maintenance process


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•Qualified staff according requirements,•List of subcontractors, •Provision of training, communication support,•Support for documentation, information systems,•Maintenance facilities

For example

For example

•Qualification profiles of personnel,•Specification of maintenance to be outsourced•Skills and knowledge necessary for maintenance activities•Information from the maintenance process•Requirements for information system

Relationship between the process ‘manage assets’ and maintenance process


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•Asset management and maintenance organization structure, •Objectives, policy, strategy and physical asset management plans,•Methods, procedures or control systems for different life cycle stages

For example

For example•Dependability characteristics of assets,•Life cycle cost characteristics of assets,•Impact of maintenance strategies on assets•Impact of maintenance strategies and activities on asset management policy, strategy and plans.

Section 6

Performance monitoring

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General performance indicators

The following risks could be avoided by using KPIs (Key Performance Indicators) which support cooperation between the different functions. In EN 16646, these KPIs are called general performance indicators:• ‘silo’ behaviour of individual functional departments (sub-optimization of

activities of separate organizational functions);• lack of holistic picture of success of physical 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 and

maintenance;• uncertainty in decision making.

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Examples of general KPIsFor more examples, see EN 16646

• Return on physical assets. • External criticality of production assets (e.g. from customer satisfaction

or competition point of view). • Internal criticality of equipment (e.g. bottlenecks). • OEE (overall equipment effectiveness).• Total dependability costs of ownership (unavailability costs +

replacement costs (technical depreciation) + maintenance costs + other losses during the life cycle of equipment such as energy costs).

• TCO or life cycle costs of production equipment.

Of course, these key performance indicators are also used for performance management (monitoring and control). These indicators support the organization when it aims to develop its economic performance in a sustainable way.

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Performance monitoring: specific indicators

• As it was stated earlier in this material, the management of the organization shall determine performance indicators – for the defined requirements for the assets– for the physical asset management strategies, objectives and – for physical asset management plans– for the maintenance management strategies, objectives and plans

• The management shall also monitor these performance indicators. • And carry out corrective, preventive and improvement actions whenever

needed. • It is important to notice that certain performance indicators can be used

for several purposes and at the different levels of the organization.

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STRATEGIC ANALYSES









Specific indicators are needed to monitor and control the requirements for physical assets and implementation of strategies objectives and plans

The use of organization specific performance indicators

• In order to plan and implement physical asset management activities according to the identified requirements for physical assets the organization should define KPIs which are needed to manage and improve the performance of asset portfolio, asset systems or individual assets.

• The exact form of KPIs (equation) for each requirement and effective combination and trade-offs of various indicators depend on the industrial sector, used technology, on the life cycle phase of the production equipment and even the life cycle of the business sector in question.

• After the requirements for physical asset have been determined the next step is to define appropriate alternative KPIs for each requirement (listed in Clause 3).

• The same applies to the physical asset management objectives and plans, and maintenance objectives and plans .

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Section 7

Physical asset management competences

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Competences

• Based on the content of the standard, EN 16646 gives general statement on the specific competences required by effective physical asset management

• These competences have been defined for – (1) asset portfolio and asset system levels and– (2) individual asset level

• In this presentation only the category (1) is demonstrated.

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Required competences at portfolio and asset system levels

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Asset portfolio

Asset system

Individual assets










In order to successfully manage physical assets and maintenance within physical asset management the management of the organization should master the content of the above system and contributions from one sub-system to the others, the requirements of separate organizational functions, interaction between them and specific features of different asset levels.

Portfolio level and asset system level competences: an exampleFor more information see EN 16646

Portfolio and asset system level top management and functional management and asset management teams should possess competence

• to understand the requirements set for the physical assets.• to transform requirements into asset solutions.• to determine KPIs to support the implementation of these requirements.• to plan, build up and implement physical asset management and maintenance

management system for asset portfolio and asset system level.• to understand the impact of different asset solutions on the business strategies.• to use internal cross-functional cooperation and information sharing to govern

the divergent objectives of various functions.• to understand asset system level impacts on the portfolio level physical asset

management processes and the impact of individual asset level impacts on the asset system level.

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Thank you!

02.05.2023 Maintenance within physical asset management / Kari Komonen

Maintenance within physical asset management

Education

Transcript of Maintenance within physical asset management