TAMP Production
This topic covers:
It is important that a Total Asset Management Plan is prepared in a structured way, to ensure that valid conclusions have been reached, and a clear direction and strategy is presented for future service delivery.
There are many variables impacting on the level of sophistication required in each of these areas. The key elements that need to be considered are:
Asset Related Issues
- Type
- Age
- Condition
- Function
- Criticality
- Probability of Failure
- Maintenance Needs
- Capital Needs.
Business Related Issues
- Consequences of Failure (Costs)
- Business Risks Exposure
- Performance Required
- Regulatory Compliance
- Business Viability.
All these items will impact on the level of asset management warranted for the business.
For utilities that provide services through mature networked infrastructure assets, advanced life cycle asset management is their core business activity.
To appropriately manage these infrastructure assets, organizations must be able to answer the key asset management questions, which are:
- What are the assets of the organization?
- What do they consist of (their physical details)?
- Their present replacement and written down value?
- The condition they are in and at what rate are they being consumed (decay)?
- What standard of service is required from them?
- How are they likely to fail to meet service standards?
- What will be the impact of these failures on the service delivery?
- The optimal strategy to counter these failures?
- Whether the assets are being operated cost effectively?
- The optimal maintenance required providing the necessary reliability or cost effective life within the business framework?
- Whether or not they should be rehabilitated or replaced and when this should take place?
- The cost of operations and these future maintenance, rehabilitation and replacement programs?
- How can these programs be financed, and the impact on customers and stakeholders?
- How would different levels of funding affect the level of service?
- How should conflicting requirements and restricted resources be rationalized?
The key change for asset owners is to shift from the past practice of looking at things historically and bringing them up to the present, to one in which we know exactly what is going on right now and have an accurate picture of what is likely to happen in the future.
Organizations need to develop a Total Asset Management Plan (TAMP), which will give a clear picture of future scenarios that will impact on their business activities.
The costs associated with developing a total asset management plan are quite significant.
Cost Drivers
The key cost drivers in developing an asset management plan is the development of the necessary components that make up the plan:
Asset Register
The detail of the asset register is dependent on the hierarchical level down to which we collect data. In asset management terms this is known as the maintenance managed item for the level at which we would normally raise work orders or carry out maintenance work on the asset.
Condition and Performance of Asset
The level of sophistication to which we carry out our condition assessments and the performance monitoring that is completed on the asset.
Predictive Modeling
The modeling of the different failure modes by which the assets are likely to fail to meet their service standards.
Risk Exposure
The assessment of the probability and consequences of the predicted failure modes, in direct and indirect costs.
Optimized Renewal Strategy
The identification of the most appropriate renewal strategy for the organization. It involves a blend of recurrent and capital expenditure in the form of maintenance, operation, rehabilitation, replacement and non asset (e.g. demand management) activities.
Optimized Maintenance
Within this optimized renewal strategy the organization will need to complete the most appropriate (optimal) day-to-day operations and maintenance activities related to the operation of the asset.
The key activities for any organization involved in completing asset management plans are the analysis of optimized renewal programs and detailed maintenance analysis to match.
To be able to complete these activities we need data or inputs from:
- Maintenance, histories, activities and costs in both direct and indirect terms
- Operational cost, breakdown
- Standards or qualities of service
- Current risk exposure assessments.
In completing the optimized renewal decision-making analysis (ORDM) we will need to identify benefits such as:
- Likely maintenance cost reductions
- Likely operational cost reductions
- Improved level of service or reliability of asset
- Increased value of asset
- Potential to increase income due to more reliable and efficient service
- Risk reduction opportunities including:
- Reduced business risk exposure (direct)
- Reduced impact on customers (indirect).
To be able to decide on the required level of sophistication of the TAMP, we need to have a reasonable assessment of the cost and benefits in achieving this aim.
By completing a simple needs analysis and rating the costs and benefits by either a point score or nominal economic value method, the organization can decide on the degree of sophistication that is warranted.
To ensure this work is carried out successfully there are several key success factors:
- The commitment by the organization for the need to improve our asset management and develop TAMPs of appropriate sophistication.
- The identification of an achievable program and appropriate timeframe with key deliverables.
This is shown below, where the organization has a future vision to reach best practice. However it is vitally important that we only “bite off as much as we can chew” and deliver the finished product that is at a level we can achieve, without restricting our ability to take it to a higher level or sophistication at a later date.
The key elements of any improvement strategy involves the following activities:
Initial Risk Assessment
By adopting a simple risk assessment technique, all system elements can be ranked in order of those that pose the greatest business risk.
This activity can be completed by applying nominal values to the various consequences of failure for different system elements.
The probability of failure can be estimated based on organizational knowledge, experience and the evidence of failure histories.
Secondary Risk Assessment
The secondary assessment should focus on those elements or components of the system that represent the greatest risk to the organization.
By using a more sophisticated risk assessment process the asset management team can then rank the individual facilities, assets or their components in terms of their current business risk exposure.
Detailed Renewal Strategies
Once the top risks have been identified, a detailed study program can then be developed identifying all the key tasks or inputs required. The effort required to complete this can be judged against the potential risk to the organization and by the benefits that will be derived.
The individual activities that make up the asset management improvement strategy can then be prioritized to suit the greatest benefit/costs to the organization, with the whole approach delivering an increasing quality of Total Asset Management Plan over an acceptable timeframe.
A Total Asset Management Plan (TAMP) should contain a number of key elements:
- A total life cycle approach from needs identification to asset disposal
- Comprehensive planning, from long term strategic planning through to short term operations and maintenance plans
- The total aspects of asset management involving effectiveness, efficiency and economic viability (in a full business sense) of delivering the level of service required for the lowest possible cost
- Appropriate processes being used in managing the life cycle of the assets
- Appropriate information and support systems
- Appropriate data or information on which decisions are made
- Staff productivity
- The use of the most efficient tactics, techniques and procedures
- The efficiency with which these tactics are supported by equipment
- The process of evaluating tenders
- The appropriateness of design standards
- The effectiveness of procedures used in maintenance activities.
As a TAMP endeavors to present the current status and future direction of an organization or facility, it will be subjected to close scrutiny at a variety of levels. This issue cannot be under-estimated when preparing TAMPs.
The first step is to assess the standards of service or target service levels upon which the asset management plan is to be based.
These are the current standards of service. They are the targets by which short term goals will be set, however, at a later stage the organization will need to check for changing expectations for these standards of service, and amend the TAMP accordingly.
Consideration also needs to be given to:
- The level of service that has been notified to customers
- The internal procedures, activities and policies that are used to try to obtain the published levels of service
- The accuracy and sensitivity of the organization's ability to predict future demands for the service.
The TAMP should reflect the extent of knowledge the organization has on its operational assets, including accuracy and level of detail. The relevance and usefulness of the TAMP will be directly related to these issues. In particular, the following are critical:
- The physical details of the assets and whether this is contained in hardcopy, electronic asset registers or on plan and records. Consideration should also be given to the degree or detail of this information in a hierarchical asset level sense. The greater the level of detail (down to but not beyond maintainable component level), the greater the relevance of the TAMP
- The general condition of each asset and its key components
- The current capacity or potential to deliver service and existing levels of utilization
- The current performance of the asset to ensure that the necessary reliability or availability is being achieved.
Current utilization figures will indicate the usage of each asset, however it is important to predict the future demands for service in terms of:
- Basic increases in the demand for the service, for example:
- Growth in population
- Growth in unit demand
- Growth in traffic
- Variation in traffic type etc.
- Any expected change in unit demand, for example:
- Electricity demand per head of population
- Water supply demand per head of population
- Average number of vehicle trips increasing, etc.
- Projected changes in customer expectations that are likely to impact on standards of service, for example:
- Higher water quality standards
- Better sewerage discharge standards
- Fewer fluctuations in voltage in the electrical distribution system etc.
To analyze the typical modes of failure, consider:
- Capacity - Where the demand for the service exceeds the capacity of the existing asset or network of assets
- Performance - A maintenance issue where the asset is unable to perform reliably and deliver the level of service required
- Physical Mortality (Age) - The asset has reached the end of its physical life and cannot be expected to deliver the level of service required. This is primarily related to passive infrastructure type assets.
- Cost of Service Delivery - In this instance the cost of the asset far exceeds the return derived and therefore consideration should be given to either the disposal of the asset or the reduction in cost.
A key element of the TAMP is the accuracy of the failure prediction, especially its timing or probability.
The TAMP needs to reflect the activities that ensure the continued provision of the required level of service.
Care must be taken to ensure the appropriateness of the options chosen, and of the processes undertaken in that evaluation.
This may involve the disposal or rationalization of assets to reduce costs to a level which customers can afford, or choosing the lowest possible life cycle cost option to continue to provide the required level of service at the lowest possible cost. Organizations with temporary cash flow problems may need to defer expenditure for a short term.
It is important that the organization considers all types of activities or ways in which the level of service can be continued, including non-asset related activities, such as Demand Management Plans to reduce the demand for the asset.
In particular, the organization should consider the following options:
- Do Nothing
- Do nothing - the zero budget option - drop all maintenance and renewal.
- Status Quo
- Complete only emergency repairs
- Continue with the current operations and maintenance plans.
- Create New Asset
- Replace Existing Asset
- Augment/Enhance Existing Asset
- Rehabilitate (overhaul) Existing Asset
- Operate Differently
- Maintain Differently (More or Less or None)
- Dispose/Rationalize of Asset
- Non Asset Related Options
- Manage the Predicted Failures.
In assessing each of these options the organization should assess the following key financial benefits:
- Reduced operational costs
- Reduced maintenance costs
- Increased effective life or value of the asset
- Increased level of service provided to customers
- Increased income through improved production or reduced loss of production
- Reduced business risk exposure, with current business risk being expressed as the consequences of the failure, in both direct and indirect terms multiplied by the probability of that failure.
The key elements for the accuracy of the plan are:
- Consideration of all relevant options
- Assessment of all potential benefits
- Determination of realistic time frames
- Acceptable objectivity of all cost factors, especially:
- Maintenance costs
- Operational costs
- The consequences of failure expressed in economic terms for both the direct costs of repair and the indirect costs of ancillary aspects of the failure (societal cost)
- The costs of the renewal options being evaluated and the accuracy of these costs
- The accuracy of the cost estimates for both new works and major rehabilitation or replacement
- The discounted cash flow used to assess the various options and timeframes and the accuracy with which the optimal strategy was determined.
Armed with this information the executive can look at appropriate strategies for the system or the organization as a whole and develop the corporate plan.
This may result in a facility being renewed (replaced) or even disposed of as part of the overall corporate strategy.
This information "feed up" or "feed forward" and strategy "feedback" process works at all levels in an organization, as shown below: