A Satisfactory Strategic Asset Management Planning

All asset managers, regardless of their industries, experience essentially the same challenges and frustrations when it comes to defining their asset management strategic plan. The hurdles of this process are frequent and significant.

One of the primary difficulties in producing an asset management strategic plan is gathering all available data to understand the state of assets, actions taken, budgets expended, remaining assets lifespan and other pertinent information.

To accomplish this, it is necessary to locate and read through all the extensive PDF inspection reports, retrieve asset data from various software systems, verify maintenance work orders in the CMMS and review work completed over the course of the year. These data are scattered across multiple locations, some more accessible than others, and lack uniformity. Crucial information is not always digitized and sometimes reside in the minds of experts, equipment operators or maintenance personnel. Therefore, conducting interviews is required to embark on this investigation.

Even though asset managers retrieve a substantial portion of reports and known information, the analytical work remain far from straightforward. Stitching together the gathered data is a laborious task. The methods employed to generate inspection reports vary, and the collected data can sometimes be incomparable from one year to the next. It is not certain that the accumulated data is accurate. Furthermore, these reports provide an observation of a situation without any guidance for adequately planning the end-of-life of assets.

This process can take several weeks. This is a routine and meaningless activity that consumes asset managers’ time for over 200 hours per year, yet it adds no value to the plan. The majority of the time spent is on classifying, centralizing, digitizing and structuring documents rather than finding cost-effective and sustainable solutions for the organization. Strategic asset management planning is demanding, complex and tedious. What is more surprising is that the exercise repeats itself every year at the same time and the feeling upon completion is often the same: dissatisfaction with the work delivered due to lack of time, frustration due to a lack of justification for decisions, and demotivation, knowing well that the plan will not hold for the year.

In the end the difference between good and bad strategic planning lies in the adherence to the plan at the end of the year. All too often, companies devise a plan for capital projects that does not last 12 months due to emergencies that consume the entire budget. Should we be reminded that an emergency costs between 6 to 10 times more than planned work?

The aim of effective asset management is to intervene appropriately with an asset before it causes an unexpected production shutdown. Emergency management cannot be considered asset management.

Risk-Based Prioritization

During the course of a year, the attention and energy of maintenance teams are primarily focused on production equipment. This is entirely normal, as these assets are critical to the manufacturing process, they generate revenue and require more frequent maintenance. However, understanding the condition of infrastructure or auxiliary assets related to production, as some refer to them, is just as important as knowing the state of production equipment. Without buildings, roads, electrical installations, reservoirs, pressure vessels, pipelines, chimneys, concentrators, etc., production would be impossible. Events such as silo leaks contaminating water and soil, aqueduct failures, collapsing roofs and conveyor belts fires occur quite frequently. Breakdowns are certainly less common with infrastructure, but when they do occur, downtime is generally much longer and more expensive.

It is important to have visibility on the entire asset portfolio in order to prioritize interventions based on the actual risks to the organization.

Lack of Asset Health Knowledge

Emergencies are undeniably very problematic for organizations. They incur significant costs. Here is an example in which we have altered certain aspects to ensure that individuals cannot be identified. Regrettably, this story is not an isolated incident.

Like all organizations, every year, asset managers and plant engineering directors gather at the New York headquarters. This is an opportunity to present three-year projects and budgetary priorities for the upcoming year. Everything is proceeding smoothly.

Upon his return, the director of one of the plants receives the unfortunate news that the most critical reservoir of the site is leaking. Following an analysis by an external specialized firm, the verdict is grim: the reservoir is at the end of its life and must be replaced.

This reservoir was not part of the CAPEX projects for the year, nor was it included in the medium-term plans. An emergency arose, causing production delays and incurring unexpected costs exceeding $6 million. The senior executives’ inquiries were harsh and unpleasant, especially given that the expert report indicated that the breakdown could have been prevented. Those in charge and responsible for asset integrity faced a tough time. These are events that leave a lasting mark on one’s career.

Everything was in the various reports of over 400 pages. The authorities could have seen it coming. The last inspection was nearly five years ago. At that time, the asset did not pose a major risk. The inspection firm had deemed it compliant. Since the responsible individuals have changed since that inspection, the information about observed defects and analysis data has been poorly transmitted due to an inadequate tracking system. The new integrity professionals would have had to read all past reports and assess the asset’s deterioration curve to prevent what would happen. However, this study time is impossible to allocate in the reality of the metallurgical industry.

This serves as an excellent example of the lack of centralization and structuring of asset data based on risk.

Enhancing Strategic Planning with Stelar

The process of designing a strategic asset management plan should not be as challenging with the right methods and tools. We asked some of our clients how they are using Stelar to streamline their strategic planning now that they have the tool.

Here are the main points of interest we gathered:

- The tool allows me to standardize inspections both internally and externally. Too often, inspection reports often vary from one individual or firm to another. It was sometimes impossible to compare data. It was so frustrating!

- Every day, there are new observations on various elements. Relevant information accumulates daily through the mobile application forms to inform my next planning.

- I ask engineering firms to construct structured intervention plans in Stelar so that inspection subcontractors can collect comparable data according to our working methodology.

- I can now assess the health of assets based on our risk matrix and see the severity details of all identified defects.

- I can access all information and documents centralized by asset.

- Since the recommended interventions by our team and external firms are all consolidated by project on the platform, I am now able to calculate their cost.

- I can track the progress of inspections and repairs on a daily basis.

- The tool allows me to get an overview of the company’s risks at a glance and delve into my analysis down to individual asset components.

- I can easily assess where my assets are in their lifecycle.

- I evaluate my alerts to anticipate potential unpleasant surprises in the coming months or years.

- I save time, allowing me to focus on finding solutions. I am much more motivated by this part of my work.

- It is much easier for me to justify my requests to superiors due to the dashboard that easily presents the indicators.

- I would have saved a tremendous amount of time and would have added significantly more quality to my strategic planning with this tool.

Does this resonate with you?

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