MANF4430 Week 8 Introduction

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Learning Outcomes
Define the scope and purpose of asset management,
maintenance and process improvement
Identify and define a unique business case for asset
management strategies
Understand the reason for data acquisition, analysis
and process knowledge as a foundation for AM
Define key terms including failure, reliability,
availability, maintainability, life
Explain the functionality of asset management using
the framework presented in this unit
2

Asset Management The Big Picture

systems /
processes

process
plant /
assets

strategy

goal

innovation /
knowledge

structure

people /
skills

A Detailed Asset Management Process

Asset Management
There are five main objectives of asset management:
1. Investment minimize funds invested to achieve
business objectives
2. Ownership cost - minimize cost to ensure a required
level of performance / life
3. Commercial return maximize the value that the assets
add to the business
4. Strategic value optimize the market value and
flexibility of the asset base
5. Risk manage commercial, health and environmental
risk
5

Linking Business Drivers to KPIs

Shareholder value

Reliability + Risk

Risks of Major
Events

Safety & Health

Operating
Efficiency

System
Availability

Environmental
Return on Capital
Regulatory
Compliance

Customer
Satisfaction

Volume
efficiency
Unit Production
Costs

Standards
performance

Quality

Asset Values
Reportable
Incidents
Stoppages

ABC cost driver

Asset Management Goal

Return on investment:
Earnings (e.g. operating margin, EBT)
Assets (capital base book vs market)

Increase Earnings
Reduce cost, losses, increase utilization, productivity, value added

Reduce capital base

expenditure, optimized life (acquire dispose), financing decisions

Process Life Cycle

New process is matched to 5 years growth in demand

Installation / debugging / learning - 3 months - 1 year
Utilization below capacity for first 2-3 years
Full capacity reached in year 4, maintenance suffers
Machine unavailable, breakdowns / wear increase
Year 5 - demand outstrips capacity - process often
discarded
Year 5 - process capability no longer matches market
expectations
8

Why do we need to plan for a process

Process deteriorates over time - eg wear,
malfunction
Inputs change - eg raw material, tooling, designs
Markets become more demanding - eg quality
Increasing cost pressures - waste
Commercial drivers change - demand, batch size
Maximize return on assets - ROA
Process improvement is complex
9

Why is planning rarely done effectively

1. Lack of process
knowledge &
understanding
2. Management
preoccupied with
financials
3. Aversion to risk

Insufficient cause-effect
Lack of process data
Wrong focus
Insufficient detail
Lack of commercial goals
Lack of internal resources

10

Definitions of Maintenance

The combination of all technical and administrative actions,

including supervision actions, intended to retain an item in or restore
it to a state in which it can perform a required function.
British standards BS 3811

Maintenance is all actions taken to retain material in or restore it to

a specified condition or to restore it to serviceability. It includes
inspection, condition monitoring, servicing, repair, overhaul, testing,
calibration, rebuilding, reclamation, upgrades, modification, recovery,
classification and salvage of technical equipment.
Royal Australian Air Force

to preserve plant and machinery in a condition in which it can

Neale
operate, and can do so safely and economically.

11

History of Maintenance Strategies

Moubray J, Reliability-centered Maintenance, 2nd

edition, 1997, Butterworth Heineman

12

Timeline of Maintenance Strategies

Run to fail

< 1945

Scheduled maintenance programs & complete overhauls

(preventive maintenance PMs/MSTs)

> 1945

TPM (Total Productive Maintenance Japan)

> 1950

MSG1 (FAA + airlines)

1967

MSG2

Predictive maintenance / Condition Monitoring

> 1975

RCM (based on MSG2 DoD, SAE, airlines) Nowlan & Heap

1974 - 78

MSG3 (ATA, based on N&H report)

1978

PMO (Planned Maintenance Optimisation EPRI)

1987

RCM2 (Moubray RCM + environmental impact)

1988

BCM (A.Kelly Business-centered Maintenance)

1997

Boeing 747

Lockheed L1011, A300, Concorde

1969/70

13

What these Strategies Achieved

Moubray J, Reliability-centered Maintenance, 2nd

edition, 1997, Butterworth Heineman

14

What do we mean by Failure?

RCM: The way in which an asset or component fails to
meet its functional requirements
Total failure e.g. Breakdown
Partial failure e.g. State of reduced or impaired function
Primary and secondary functions

Alternative: when a certain condition is reached prior to

breakdown or impaired function that may be indicative of
impending breakdown, reduced function or a threshold of
wear
Must be defined relative to the function(s) performed by
the system (primary and secondary)
Must be unambiguous
Units of time and performance must be identified
15

Operating Context
Commercial goals
Operational requirements
Use of Asset: how, when and for what over time
The purpose for which the asset is to be used
Physical environment in which the asset is operating
The manner or way in which the asset is used
Operating Mode: e.g. taxiing, take off, landing

Specific performance specifications

What routes, flights, distances, loads, number of passengers, runway
conditions, docking facilities, worst-case weather conditions, refueling and
maintenance facilities at destinations, regulatory constraints

Primary function(s): The primary output or product from a functional

group/system/equipment item/component.
Secondary functions: Not a primary function but needed for safe and
reliable functioning of the system or component

Equipment must fulfill its functions within the operating context

MANF3430 WK2 Functional Specifications

16

Functional Failures

Complete or partial failure w.r.t. primary and secondary

functions
Primary, secondary functional failures and parametric failures

Failure mode: how equipment can fail and potentially result in a

functional failure an event
Can be described in terms of an equipment failure cause (e.g.,
pump bearing seizes), but is typically described in terms of an
observed effect of the equipment failure (e.g., pump fails) (ref: ABS:
Guidance Notes on Reliability Centered Maintenance, July 2004, NY)

Failure mechanism: the physical phenomenon responsible for

the functional (primary or secondary) failure
E.g. wear, corrosion, impact, fatigue etc

Failure root cause: first event that triggered (directly or indirectly) the
failure mechanism

MANF3430 WK2 Functional Specifications

17

Failure Rate Patterns

Reliability-centered Maintenance, F. Stanley Nowlan and Howard F. Heap,

MANF3430 WK2 Functional Specifications December 29, 1978, U.S. Department of Commerce, National Technical

Information Service

18

Failure Patterns
Useful life

Wear-out

Failure Rate

Burn-in

Random failure
Age / usage
related wear

Early-life
failure

Life (time in service, cycles etc)

Repetitive versus one-off failures
C. Ebeling, An Introduction to Reliability and Maintainability Engineering,
International Edition, 1997, McGraw-Hill, Singapore

19

Objectives of Maintenance Management

Integrity
all elements functioning as specified
original perfect condition
design performance, design capability

Reliability
Integrity of the asset and its components over its operating life
Average time that an asset will operate without failure
Definition: the probability that a system or component will
perform a required function for a given period of time when used
under specified operating conditions. (Ebeling)
R(t) = P { TF > t }
F(t) = 1 R(t) = P { TF < t }
20

10

Objectives . continued
Availability
Definition 1: the percentage of time that an asset is in an
operational state and available for use as demanded by the
operational or functional schedule
Definition 2: the probability that a component or system is
performing its required function at a given point in time when used
under specified operating conditions. (Ebeling)

Maintainability
Average time taken to repair and re-commission an asset after
failure
Definition: the probability that a failed component or system will
be restoredor repaired to a specified condition within a period of
time when maintenance is performed in accordance with
prescribed procedures. (Ebeling)
21

Availability
Calendar Time = 365 days x 24 hours / day
No
requirement

Operating Time e.g. 6 days/week x 16 hours/day

Scheduled Time = 100% availability required

Required Up-time

Load / unload etc

Load/unActual Up-time breakdown load etc

Availability =

Not
scheduled

Breakdown

Actual (up time + loading / unloading etc)

Required (up time + Loading / unloading etc)

x 100%

22

11

Availability, Reliability and Maintainability

100

Availability

80
60
40
20
0
1

10

Maintainability

Reliability

50 100

500 1000

Average running time to failure

Average time to repair

Neale, MJ, Component Failures, Maintenance and Repair, 1995, Butterworth Heinemann, Oxford

23

Objectives . continued
Quality
The performance and integrity of an asset at a specific point in
time
Conformance to design specifications
Affects reliability

Safety
Ensure inherent safety levels are realized

Continuous Improvement
Knowledge leading to design improvement for components with
inadequate inherent reliability

24

12

Concept of Component Life

Moubray J, Reliability-centered Maintenance, 2nd

edition, 1997, Butterworth Heineman

25

Useful Life is less than Average Life

Design, quality average life, spread

Statistically homogeneous?
Moubray J, Reliability-centered Maintenance, 2nd
edition, 1997, Butterworth Heineman

26

13

System & Component Life

Design life
The time to failure tR that corresponds to a specified reliability R.

Useful life
Time span between the end of the Burn-in phase and the start of
the Wear-out phase (if a design life has not been specified). Can
be modified based on the condition of the part or component.
The age at which there is a sharp rise in the probability of failure.

Average life
Mean time to failure (MTTF) if the system or component is not
overhauled or repaired (e.g. a light-bulb).

Economic life
Based on economic grounds such as maintenance cost (a function
of Mean time between failure (MTBF)), capability of generating
revenue, replacement cost etc. (e.g. a complex system with
exchangeable modules and components gas turbine).
27

Life Limited
A program whereby a component has a definite and
identifiable design life and cannot be used or operated
beyond its life, regardless of condition.
Hard time
A program, that when the hard time is reached (in hours, cycles
etc) the system (e.G. Engine) is taken out of operation and that
specific component or module must be replaced.
E.g. turbine shafts, low-pressure compressor, fan discs

Soft time
A program, where a part with a certain specified soft time is
replaced at the earliest opportunity when the system (e.G.
Engine) is overhauled and the soft time of that part has passed
E.g. combustion chambers, intermediate-pressure compressor

If not life limited: maintain on condition

E.g. high pressure turbine and compressor
28

14

Maintenance Program
Operational or line maintenance
Major overhaul / heavy maintenance
Comply with standards, regulations, OEM requirements,
warranty
Based on appropriate strategies and levels of service
depending on asset types
Mix of PMs, inspections, condition monitoring, scheduled
corrective work, unscheduled breakdown work
Efficient, productive, quality, and effective (e.g.) maximize
availability of aircraft, minimizing downtime

29

Cost of Maintenance
Online monitoring (predictive maintenance)
Visual inspection (level 1 - operator inspection)
Advanced inspections (level 2 maintenance
department and level 3 specialised expert)
Preventive maintenance
Scheduled breakdown / corrective maintenance
Emergency breakdown maintenance
Fault diagnosis
Wait on parts
The asset is unable to generate revenue

30

15

Issues and Problems

Maintenance as an overhead costs to be minimized

Cost of breakdown and unplanned maintenance work
Estimating reliability and tracking performance
Establishing the condition of critical modules
Choosing appropriate maintenance strategies
Designing maintenance plans for different classes of assets
Overspending on planned and time-based work
Continuous improvement and feedback
Predicting and analyzing life cycle costs, total cost of ownership
and through-life costs
Risk assessment
When to replace an asset
Frequency of inspections
31

Asset and Maintenance Management

32

16

Management of Risk
Asset Life
Maintenance
Standard
Tasks

PM, CM, CBM,

OH&S Predictive
Schedule

Residual BD
Risk

Hidden
mechanisms
Limited resources
Historical analysis

Process
Improvement

Performance
Capability
Separate
projects

Residual
Commercial
Risk

Process byproducts
Sub-optimal
performance

33

Definitions of Asset Management

Asset management is that process by which the strategy for a
particular property [asset] is developed and implemented in
coordination with the goal of the client, either directly or indirectly
as resulting from the goals of the portfolio of which the asset is
part.
(Ballard et al 1990, p. 171)

Asset management dictates linking a propertys [or assets] three

components, its physical, marketing [customer value added], and
financial aspects. The asset manager must consider the
perceptions that characterize a property [asset] within these
aspects. The asset manager must consistently think in new and
creative ways about the asset and its potential and to develop and
implement clear market-driven strategies.
(Soens & Brown 1994 p. 5)
34

17

Definitions . continued
Asset Management is a set of business processes, disciplines and
professional practices. It is an integrated, holistic, performance
focused, whole life costed, data-based, people-inclusive and risk
managed spectrum of modern methods.
(Woodhouse 2001)

Asset Management ... is an evolving discipline which in recent

years has become the focus of leading-edge organisations looking
for a sustainable competitive advantage. An Asset Management
plan is a means of taking control of your assets and understanding
the What, When and How. The consequences of not keeping track
of assets and understanding their behaviour means relying on
intuition and hit or miss management.
(Sultan 2000)

35

Life Cycle Cost Drivers

36

18

Critical Assets
Consequences of it failing are significant
Performance is critical to successful operation
of the business unit or organisation
Accounts for or contributes a significant
percentage of earnings or benefits
Represents a safety hazard
Represents in some other way an item of
high value to the organisation and this value
needs to be maintained or increased
37

Asset Management Process

38

19

ISO 9001:2000
Quality management system (section 4)
Documented procedures

Responsibilities of management (section 5)

Duty and responsibility customer, statutory, staff, suppliers, shareholders
Establishment of quality targets, control + management, continuous improvement

Resources management (section 6)

Staff competency
Facility buildings, plant, processes specific focus on maintenance
Work environment

Product realization (section 7)

Quality and performance targets customer focus
Maintenance focus condition monitoring, appropriate tasks, calibrations
Continuous improvement

Measuring, analysis and improvement (section 8)

Validation and verification of process process monitoring + analysis, methods /
procedures

39

Asset Management Savings Strategy

ECONOMY

PRODUCTIVITY

QUALITY

EFFICIENCY

(of resources)

(of production system)

(of product)

(of capital)

Reduce cost

Improve throughput

Reduce waste

Reduce capital
investment

Maintenance management implications

Maintenance cost
Reduce noncritical work
Optimum mix of
internal and
external service
providers

Process
availability +
capacity
Reduce cost of loss
production due to
breakdowns
Optimum mix of
- preventive
- predictive
- condition based
- monitoring

Process capability
Ensure
specifications are
met
Continuous process
improvement

Capital replacement
+ expenditure
Optimize life cycle
costing
Delay of capital
expenditure

40

20

Asset Management Savings Strategy

continued
ECONOMY

PRODUCTIVITY

QUALITY

EFFICIENCY

(of resources)

(of production system)

(of product)

(of capital)

Reduce cost

Improve throughput

Reduce waste

Reduce capital
investment

Key processes that support business requirements

Improved work
order process
Improved
planning +
scheduling
process
Budgeting
process including
stores

Design of
appropriate PM
tasks - reliability
Emergency
breakdown
procedures
Statutory
compliance

Continuous
improvement
process capability
Improved process
monitoring + data
analysis
Safety audits and
improvement

Life cycle costing

Budgeting

41

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