Insights from the ” Asset Management for the 21st Century – Getting Ready for ISO 55000″ Calgary Seminar , May 2013
This is part of an upcoming blog series brought to you by Norm Poynter firstname.lastname@example.org and Paul Kurchina email@example.com, designed to inspire and educate by sharing experiences with the SAP Enterprise Asset Management Community. This blog series will be based on a series of interviews with John Woodhouse from the Woodhouse Group, who delivered this well-received seminar. We will have 12 blogs that will start in September and will run for 12 weeks first on the SAP Community Network (scn.sap.com).
To kick things off prior to our September 2013 Blog Series, I asked one of the seminar attendees Mark Hutchison to share his perspectives on this workshop.
Here are some quotes from Mark on some of his insights from the seminar:
“ You may not need a lion tamer hat, but to be ready for ISO 55000, your C level executives will need to provide clear direction for asset management ”
“ Redefining your assets and their complete lifecycles will prepare your company to get the most out of ISO 55000 ”
“ ISO 55000 will be released by the end of 2013. Are you and your Asset Management System ready to be certified ? ”
“ ISO 55000 will be released before the end of this year. Is your CEO/COO ready for certification ? ”
Mark has done a great job of capturing the key takeaways and essence of this very well received two day seminar.
Asset Management for the 21st Century – Key Takeaways from ” Getting Ready for PAS 55 / ISO 55000 Seminar
Recently I attended a seminar on “Getting Ready for ISO 55000”, by The Woodhouse Partnership Ltd. To be honest, it wasn’t a subject that I was personally worried about. As an Information Management consultant though, I knew that companies that make up my client base should be. I knew that many would need assistance in implementing asset Management Systems that met ISO 55000 specifications. As it turned out, many owner/operator companies in fields of utilities, pulp and petrochemicals sent representatives from as far away as Trinidad to hear John Woodhouse speak about PAS 55 and ISO 55000.
The seminar dealt with many fundamentals of asset management, and pointed out where ISO 55000 provided direction. Many topics were punctuated with real world examples. Without giving you the entire seminar content, here are some of my thoughts on the topics discussed:
What are PAS 55 and ISO 55000 ?
Publicly Accessible Standard (PAS) 55 and International Standards Organization (ISO) 55000 both deal with management of a company’s assets (both physical and in the case of ISO, non-physical). PAS 55 came from British Standards and the Institute of Asset Management (IAM) as a checklist of good practices that considers the entire lifecycle of an asset. PAS 55 has been available for several years, and companies can be certified as being PAS 55 compliant. ISO 55000 uses PAS 55 as a starting point and broadens the scope to include non-physical assets and provide guidance and standards for leadership. ISO 55000 also uses the ISO format for ‘management system’ standards so it can integrate with other standardized systems such as quality, environment, safety and risk management.
The approved ISO 55000 is due to be released near the end of 2013.
What is a lifecycle ?
I have often heard the term “cradle to grave” to describe the lifecycle of an asset. This term might be too restricting though. John encouraged us to consider other terms like “lust to dust” or “desire to expire” to encompass a more thorough appreciation for the life of an asset that includes the up-front selection and determination of its ‘DNA’ in the first place. I found it interesting that we do not have a common knowledge of what is meant by “lifecycle”. The problem with this word alone is perspective. From the perspective of a purchaser, the lifecycle of a pump, for example, is from request to receipt. From the perspective of materials management, lifecycle might be from receipt to installation. However, corporations must consider all departments, including everyone who has an impact or is impacted by an asset. So, “lifecycle” will continue to be an important point of clarity for those responsible for management of assets. “Lifecycle” refers to the management of an asset from the time it is “specified” as a requirement, to the time after its destruction has ceased to have any impact on anyone. Understanding asset lifecycle in this way will change the way companies make decisions.
Lies, Damned Lies and Statistics !
Apparently the number of data points, or stats that an average person can deal with at a time is 6, maximum 10. I guess this is why I took detailed notes (now I just have to improve my handwriting so that I can read them). Did you also know that 13.46% of statistics are fictitious? In the seminar, John pointed out that we need to be presented with relevant facts (i.e. stats that are not fictitious) about our assets in order to provide us with the knowledge required to make good decisions. It could be that “the truth is out there”, but it’s buried in voluminous daily production statistics. When making decisions on assets, we need to be able to understand the asset, and its impact on our business. An effective asset management system needs to consider the means, frequency, content and context in which we communicate information about our assets.
Most companies don’t make decisions based on a consistent methodology. Performance and condition monitoring of equipment will provide data to make decisions, but cannot provide the whole picture (e.g. future consequences of action or inaction). Companies need to integrate data/information/knowledge into a business scorecard to drive better business decisions. Don’t just fix a problem with equipment. Root Cause Analysis is necessary to investigate why something happened. An auditor will also look for evidence that you are acting upon findings, that you are making better decisions.
Alignment and Leadership are keys to success
Often companies announce that they are going to initiate an ASSET MANAGEMENT SYSTEM. (Shout these three words with a loud, boomy, authoritative, but somewhat naïve sounding voice). This is usually followed by a search for a Technology Program Manager to deliver a massive information management or data cleansing project to support the new ASSET MANAGEMENT SYSTEM. (I’ll discuss the tail wagging the dog more fully later). Asset Management endeavours like these are seldom successful by themselves. John shared the following fact: “Big gains are achieved by thousands of small but aligned improvements”. Corporate leaders must make and communicate clear goals that everyone in the company can understand and associate their work to. When people know that the work they do is significant to the goals of the company, everyone’s contributions create huge gains for the company. Perhaps this is one of the reasons that ISO 55000 also incorporates standards and requirements for corporate leadership.
Where do I get the Free Brains ?
John encouraged us to consider the corporate asset knowledge that exists within the collective departments and employees who work with the assets. When managing assets, ensure that you consider input from everyone – such as Purchasing, Operations, Maintenance, and Engineering. Anyone who has specified, designed, purchased, constructed, operated, maintained or maybe even swept up by an asset will have an opinion and some knowledge about it. “Every pair of hands you hire, you get a brain for free”. Harness workforce engagement and creativity. This is more effective than declaring a particular individual or department as ‘responsible’ for asset management.
How do you like your Assets ? Sunny side up ?
What is an asset? Maybe I should have covered this earlier, so you’d know if this article was really of interest to you. Many of us would be quick to provide “a pump” as an example of an operating asset. It’s easy to visualize, serialize, segregate and FLOC – ulate. However, while it’s clear that we manage and maintain such discrete equipment, it is difficult to define or measure what business benefit is obtained from a particular pump, or motor, or piece of pipework. John encouraged us to consider groups of equipment, production processes, with dedicated people and operating systems as our ‘business unit’ assets. This provides better insight into performance, sustainability and business value. If you consider a system such as a generation plant as an asset, it is likely that an ownership organization already exists for that asset (e.g. plant manager). Furthermore, there is likely a support organization (e.g. accounting) that helps to manage that asset. John drew diagrams of these systems, representing the asset systems as the yolk of an egg, with support coming from the white of the egg.
During a group exercise, we were asked to discuss 1. What are considered a primary asset, 2. Who owns them, 3. Who controls spending on them, 4. Who is accountable for their performance, and 5. How do these latter two come together to make value-for-money decisions. When you consider the suggested definition of an asset versus the idea of a pump as an asset, it isn’t difficult to imagine that there might be some gaps in the way companies organize to make decisions about assets. Indeed the results of the group discussions proved these gaps were pretty much universal across the companies represented.
But it’s Policy !
In many organizations that I have worked with, there is ambiguity about the role of governance documents – Policies, Standards, Procedures, and Work Instructions. Indeed, it is not uncommon to have process imbedded within a Standard, or even specific tools mentioned in a Policy. As tempting as it is to dismiss these documents as bureaucratic overhead, it is critical (and an ISO 55000 requirement) that an organization defines an Asset Management Policy. The Asset Management Policy sets the rules and framework for how the organization views and manages assets. As with any Policy, it should be brief, authoritative, and should align the goals of the organization with the policy’s scope. Even if all of your other Policies don’t make sense, ensure that you anchor your asset Management System with a solid Asset Management Policy. Furthermore, Asset Management Strategies, Objectives and Plans will be governed by and expand upon the direction provided by the Asset Management Policy.
Step up to the plate CEO
Recently I told a colleague about an Enterprise Asset Management project I was working on. Not knowing the context of specific terms though, he didn’t really know what the project was about. He said “That’s nice. Who wouldn’t want to manage their assets in an enterprising way?” Indeed. Who wouldn’t? In fact you would think it would be pretty fundamental to every business’ ongoing success. And yet, there are many companies whose CEO doesn’t even know there is a corporate asset Management System. ISO 55000 provides seven areas of requirement for a corporation’s management responsibilities in asset management: sections 4.Context of Organization, 5.Leadership, 6.Planning, 7.Support, 8.Operation, 9.Performance Evaluation and 10.Improvement. Senior management awareness, knowledge and leadership are critical to the success of an asset Management System.
Does your dog bite ?
Does your tail wag your dog? By dog, I mean the owner of the asset. The tail is the supporting tools and organization, such as I/T. So, in a healthy implementation of an asset Management System, the asset owner (e.g. Production Manager) sets strategy, objectives and plans to improve business benefits from an asset. The asset owner requests assistance from supporting organizations in this endeavour. In this scenario, the dog is happily wagging its tail. However, there are some pretty sexy tools out there for measuring an asset’s performance, for displaying business measurements, and for capturing asset data. Often a compelling presentation is given to the supporting organizations, and they think “wow, that’s cool. I bet the Business will love this”. Further presentations occur, budgets are approved, project charters are written, go-live schedules are communicated. The next thing you know, the supporting organizations are telling the asset owners that data must be cleansed before go-live, that asset information has to be formatted in a certain way, that assets should be grouped together differently to work with tools. In this scenario, the tail is now wagging the dog. In an effort to stay on-time and on-budget for the tool implementation, focus on business objectives is lost. Often, asset ownership suffers as well, which dilutes the long term commitment to asset management. Be cautious how you embark upon improvements to your IT and other ‘enablers’ to an asset Management System. Ensure that you maintain clear lines of asset ownership, and that your tail isn’t wagging the dog.
GO BIG DATA !
For years, we’ve talked about mining the huge stores of data that we collect for hidden “knowledge”. Indeed there have been many success stories. John provided an example in which a company embarked upon a Big Data analysis project – of 120 ‘patterns’ found in 108 work orders, and only four of which were found to be non-random. Fortunately, one of these four was significant enough to pay for the project. Be cautious with your own Big Data project – you might not be so fortunate. And you may draw attention away from your Asset Management strategies, rather than supporting them.
How relevant is your formal training ? Or have you got a lion tamer hat ?
When questioned how relevant their formal training is to the work they do each day, the attendees answered somewhere between 5-50%. I was trained as an Engineer. I practiced “pure” Engineering in the six months after I graduated. After that, I branched out. My Engineering training had really provided a foundation for learning. Many of the participants had a similar experience.
As with any change in corporate culture, training and awareness (and competency) can be the biggest enablers, but also the biggest challenges for an asset Management System. John shared an example of a company that needed to renovate the building that housed the Engineering group. For a period of time, the Engineers had to share quarters with Operations. Management noticed that more problems were solved during the period that these two groups shared quarters, and were more aware of the issues. Though there was no new training provided, awareness and communication enabled more effective problem solving.
Buddy can you spare some change ?
Implementing an asset Management System will require most organizations to undergo substantial change. There are two main types of people that resist change. “Dinosaurs” are set in their ways, but if you can point them in a direction where they don’t feel threatened, you can move them forward. “Saboteurs” are much more difficult to identify. They work “below the radar” against your cause. They are driven by personal agendas and conflicting interests. So, the best way to manage saboteurs is to get them to put some skin in the game. Create a vested interest in your cause. “The best champions are converted saboteurs!”
Pass me that Stick! I mean Carrot. Pass me that Carrot !
ISO 55000 certification requires closed loop auditing and evidence of change. From my own experience as an ISO 9000 coordinator in the 90’s, I know that it is difficult to introduce new standards and behaviour to an organization. Rewards (carrots) can be given to individuals or departments with the most “compliance” during audits. Conversely, “compliance” can be made “mandatory for employment” (comply or fry – the stick). Companies need to consider how they will encourage departments and employees to accept the initial change of the introduction of an Asset Management System. However, because continuous improvement is also a part of ISO 55000, companies must systematize change within the corporate culture to ensure continuous compliance.
So, was it worth it ?
I and the other twenty-odd participants spent two days listening to lectures on standards about asset management. Hmm… when I put it that way, it doesn’t sound very enticing does it? But John Woodhouse is a very engaging speaker. His experience, knowledge and wisdom come through in every presentation, graph, and slide. Every topic was embellished with amusing anecdotes that brought real world learning to the discussions of proposed standards. I think too, that the discussions were greatly enhanced by the enthusiasm of the attendees. It was clear during the introductions at the beginning of the session that there were many passionate attendees. Either these individuals chose to attend this seminar despite their boss’ interest in managing assets, or they were encouraged to attend by a supportive organization.
If you have an opportunity to attend one of John Woodhouse’s courses or seminars, you won’t be disappointed. If you or your company has an interest in PAS 55 or ISO 55000, you’ll be in good company. Many organizations are looking at standardized ways of managing their assets. You can learn more about the Woodhouse Partnership at www.twpl.com , more about PAS 55 at www.PAS55.net and the Institute for Asset Management at www.theiam.org .
About Mark Hutchison
Mark Hutchison is a management consultant based out of Calgary, Alberta where he has been practicing with his company Albius Consulting for over 10 years. He is often hired to manage technology programs in the area of Engineering and Asset Information. He enjoys sharing the fine art of British humour brought to us by the likes of Monty Python and Douglas Adams. Mark can be reached at firstname.lastname@example.org