Physical Asset Management as a Profit Driver- A Back to Basics by trevorbowman


									AMEU 60th Convention – Phezu Komkhono

Physical Asset Management as a Profit DriverA Back to Basics Approach

Dean Griffin
Divisional Manager – Utilities & Facilities
17th October 2007 – Durban ICC

Overview Introduction The Challenges at Hand Lack of Maintenance Effective Utilisation of Resources Asset Management as a profit driver? The Way forward

 Asset Provision – making sure that the most appropriate asset is acquired for a specific application and also making sure that the asset is effectively disposed of (in a responsible manner) at the end of its useful life.
 Asset Operation – making sure that assets are operated in the most appropriate way that allows the asset to perform to its maximum capacity.  Asset Care – making sure that assets are looked after in the most appropriate way that will ensure continued performance at its originally intended design capacity.

The Challenge at hand

Visible - Direct

Labour, Materials, Operation, & Contracts
Poor asset reliability and performance Waste through inefficient processes Poor teamwork Lack of Communication Between Groups Incidents, Reputation Damage, Recovery Costs

Hidden - Indirect

Current Challenges
Backlog Maintenance estimated at R 5 Billion Labour Shortage / high turnover Most organisations have organisational gaps at all levels Poor Asset Reliability Low Public Perception of service Lack of Asset information Inaccurate Asset information Under estimation of Asset Value Quality of Work 3-4 years of capacity problems ahead Complexity of solutions employed

Lack of Maintenance
There are 2 types of Maintenance
What we say we are going to do What we actually do
Maintain the Maintenance Program
New Tasks

Maintenance Program Maintains the Assets

Tactic creation performed by consultants or by in house staff
RCM, OMM, BCM etc Technical ability is high Developed tactics are comprehensive

Current Breakdown and Ad hoc items

Proactive tasks are scheduled weekly Schedule attainment is often low due to reactive interruptions Comprehensive IT management systems are in place
Maximo, On Key, SAP, Ellipse, GIS, MIS, Reporting tools, Scheduling tools

Good Tasks Managed Failures

No Effect

Refurbishment programs exist

Tasks in place

Failure Modes

Lack of Maintenance cont
Preventative tasks are established with the best intentions However!! Organisational Culture invariably rewards reactive actions when problems arise
‘You worked through the night to get the supply back’ well done! ‘My team know how to pull out all the stops when the chips are down!’

When did you last hear this sentence?
Well done for that inspection, we haven’t had a failure in the last 6 months!

BP/KPI Maturity Matrix



Can’t go the distance




Back of the pack




ENABLING Best Practice

Barrier removal

World Class contenders

Lack of Resources
Most organisations have gaps in their resource structures There is a country wide shortage of skilled labour across all industries Refurbishment funding has been made available in a number of cases There are no quick fixes to plug the organisational gaps As Engineers we compensate
Over engineer and / or automate Implement complex technical solutions Outsource

Lack of detailed planning, Scheduling and Execution management People are asked to perform tasks that they should not (Planning, expediting etc) The level of actual job supervision is often low
Mainly due to constraints on supervisors to perform administrative duties, chasing tools, materials, labour Not enough time in the day to inspect work which results in artisan acceptable quality

Lack of Resources

Available Workforce

Simple WP&C in Context
Asset Register
Planned History WP&C

Condition-based Feedback

Scheduled Work Orders

Execution Resources Data Collection

Work to be done

Resources available

Lack of resources or low utilisation?
Wrench time is the measure of productivity within the workforce Average wrench time for industry is between 25 -35%
For a 10 hour day the person is productive for 3½ hours. Non-productive activities account for 6½ hours. • Necessary break times • Job delays
• • • • Waiting for spares Waiting for instruction Travel Waiting for Tools

World class wrench time is between 55 - 60% Implement a fundamental planning & scheduling system – 45% Keep records and learn from previous mistakes – 50% Detailed Asset register & CMMS – 55%

What does it mean?
Being busy is not necessarily being productive or effective Labour is invariably busy

Lets put in terms of people and cost If we can take the productivity of a person from 35% to 55% by adding a planner then a planner increases productivity by 1.57 Breakeven point = take 1 of every 3 workers and make them a planner
Without Planner = 3 x 35% With Planner = 2 x 55% & 1 x 0% = 105% productivity = 110% productivity

Experiences states that a planner can plan for between 20 & 30 people Therefore for a 30 man workforce 1 planner adds 17 extra workers making an effective total of 47 workers without adding heads.

What does it mean?
If you take 90 workers the you get an effective headcount of 141. That’s 51 extra people!! If the organisation is predominantly reactive in nature then the workforce can be split into a proactive team and a reactive team. The majority of the people reside on the fire fighting side initially The ratio of the split can be adjusted as the organisation moves from reactive to proactive. In a more proactive organisation the extra pople can be used to perform tactical tasks ensuring fires don’t occur. In world class organisations where reactive and proactive work is well in hand then the extra resources are used for training and development of processes or projects to further improve the performance of the assets.

AM as a profit driver
Indirect benefits
If we have an effective support or care function then we should be performing the right task at the right time to the right quality at the right frequency. Reliability will be high as will availability Customer perception will change Impact on industry and business will be reduced

Direct benefits
Maintenance backlog is reduced Capital investment can be deferred Saving in cost to perform maintenance due to planning & scheduling More engaged work force Lower turnover

Example - Jacksonville Electric Authority
In the late 90’s at Jacksonville Electric Authority in the USA the following was found For their 1000Mw steam system 1% increase in availability equated to $300 000/yr power transaction capability Each 100 Btu/KWH improvement in efficiency equated to $400 000/yr 1% increase in availability for 1000Mw system means 10Mw of future power plant that does not have to be built. At $1200/KW construction prices that equates to $12 Million

Reference - The Leverage effect of Work order Planning – R.D. (Doc) Palmer, Jacksonville Electric Authority

The way forward - Asset Care Centre

Performance Improvement


People Asset Base

The way forward - Asset Care Centre
Methodology Performance Improvement Reactive Urgent work Technology Asset Base



Planning & Scheduling


Execution Control (Supervisor)

Execution (External)

Execution (In-House)

…..and finally

Thanks & Questions?

Can you do it again?

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