Prioritize Asset Management Interventions

Asset managers have an astronomical amount of assets under their watch. These include hundreds of tanks, pressure vessels, pumps, buildings, production line equipment, furnaces and dozens of kilometers of piping, to name just a few. It is worth noting that 80 to 90% of the equipment value on a site is attributed to static assets. Therefore, it is virtually impossible to monitor all assets simultaneously without sufficient and adequate resources.

To ensure the integrity, reliability, performance and security of assets, the responsible personnel employ inspectors and hire external firms to access specific expertise in asset evaluation. Field inspectors shoulder a significant responsibility in this regard. They must prepare inspections according to safety standards, negotiate with operations to shut down certain equipment, clean assets for inspection efficiency, inspect hundreds of assets following a rigorous inspection program, write comprehensive reports on asset health and report their findings to the chief inspector. This process consumes a substantial amount of time, which poses a challenge to the efficiency and timeliness of critical decision-making.

Managers receive inspection results through various PDF reports and some well-structured Excel data. This is an industry standard, a common practice. The task of cross-referencing the results obtained according to the different methodologies of inspection or engineering firms is cumbersome, challenging and complex. Most of the time, asset engineers must adhere to subcontractors’ practices, rather than enforcing a suitable work process tailored to their own needs and circumstances.

Consequently, it is not easy to identify incongruities in the reports in order to draw quick conclusions. Often, these reports lack a risk assessment or an intervention timeline. They consist solely of observations or raw data. It is not uncommon to come across statements such as: emergency brake improperly engaged on overhead crane. Is this a serious issue? Do we need to take action? If so, how urgently? If the asset manager is not an expert in overhead cranes, they will not have the knowledge to determine this. They will have to initiate time-consuming processes to verify.

Even worse, some observations are quite literally untraceable. There are instances when subcontractors are asked to return to the site to point out the exact locations of the observed defects. This proves to be needlessly expensive in terms of both time and money.

The asset integrity manager finds themselves perpetually behind schedule, as in addition to handling constant requests, they must sift through hundreds of pages of reports. Due to the lack of suitable tools, they have to manually structure an Excel file with priorities based on criteria specific to their practice. This is a routine, worthless activity. Moreover, a file like this is not dynamic. Updating an Excel file is a laborious and unproductive task, with a high likelihood of errors. It is unthinkable to manually keep track of everything that happens to an asset (inspections, repairs, accidents, expansions, assessments, shutdown, etc.).

In this context, integrity officers or asset managers prioritize the most significant concerns to address imminent risks. Lesser risks are as well assessed, especially when it concerns an asset categorized as moderate risk, with the recommendation being to reinspect it in several years. This asset and all related information may not be adequately assessed or tracked since the time required for the transcription into the Excel file is significant. In the heat of the moment, it was set aside to assess higher-priority issues targeted by the auditor and slowly forgotten.

Consequences of poor structure

The consequences of shortcomings like the one mentioned on prioritizing medium and long-term work are significant. Those in positions of authority cannot possibly be aware of all the oversights of the past. Naturally, they cannot be familiar with the details of inspections from the last 10, 15 or 20 years, nor can they keep track of all the events that have occurred throughout the life of each asset. Their visibility regarding priorities is thus shaped by what they are aware of or what has been documented.

Consequently, the budgets requested for asset management are closely tied to known priorities. Millions of dollars are allocated on maintenance, refurbishment or planned replacement of assets, without the awareness that emergencies caused by lack of organizational knowledge will deplete a significant portion of the allocated funds or force necessitate additional expenditures. These emergencies tend to monopolize teams and generally cost between 6 to 10 times the price of the same project if it had been planned and negotiated.

On average, this type of situation results in 10 to 30 shutdowns of varying magnitudes annually. In other words, investments are not allocated based on the right priorities, and these shutdowns lead to substantial financial losses due to reduced production capacity. Unplanned shutdown costs can amount to hundreds of thousands of dollars per hour in lost sales, depending on the industry.

Certainly, not everything can be magically fixed with an asset health management tool. It is estimated that 80% of breakdowns or failures are preventable through analysis. An APM+ like Stelar enables the implementation of an inspection and recommendation approval mechanism based on a logical and efficient workflow sequence. The asset manager can thus receive all completed inspections, assess the severity of observed defects according to a predetermined severity grid, and evaluate the asset using the organization's risk matrix. Additionally, they can evaluate and approve the recommendation made of risk reduction for each asset.

For the asset manager, it is thus much easier to track condition of an asset. They undoubtedly have better control over their site and will significantly reduce the number of errors. This allows them to assess the severity of observed defects as well as each recommended intervention and its timeline. Visualizing information according to the agreed-upon workflow sequence greatly simplifies information verification.

Client testimonials

We frequently receive similar feedback from our customers. Following the integration of historical inspection data into Stelar’s structure, asset managers easily identify past shortcomings and incongruities.

Certain poorly maintained assets had no associated interventions and no planned investment. The next inspections for these assets were scheduled several years beyond the minimal intervention timeframe. Emergency and unforeseen inspections, budgeted at short notice, revealed accelerated degradation of critical assets. Several situations turned out to be major due to a poor monitoring system: a leaking acid tank, a leaking roof, a split pipe, and so on. These were all preventable breakdowns that cost millions of dollars in replacement, emergency repairs, mobilized teams, re-commissioning, etc.

Customers are becoming aware of past financial losses. Indeed, managers can observe that investments in time and money have been allocated to lower-priority areas. This situation increases operating costs. Furthermore, by leaving high-risk assets without intervention to mitigate the risk, the deterioration accelerates, which will inevitably result in an increase in the number of maintenance and in ultimately premature replacement. For CFOs, this means net losses amounting to millions of dollars.

Prevention as a cost center

The manager responsible for asset integrity and reliability is typically seen as a cost center, an expense. This responsibility requires budgets for prevention, which can be quite expensive. We can draw a parallel with purchasing insurance when it is not mandatory. Ideally, we would prefer not to incur these costs, but they are highly beneficial in protecting the organization’s finances.

Certainly, leaders and their shareholders would prefer to invest in projects that would increase production capacity. Anything an organization can do to enhance asset integrity management should be undertaken to free up funds for reinvestment.

Many go to bed at night knowing that the entirety of the risks is not adequately managed. Stelar could enhance the sleep of many managers, allowing them to focus on improving the reliability and integrity of plant assets to make it more efficient!

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