A World Class Approach

to Asset Maintenance
Rohit Banerji,
TATA Consultancy Services, (UK)
This document is divided into three parts. Part 1, discusses the evolution and the philosophy of World
Class Asset Management from the enterprise perspective. Part 2 will focus on the deployment of WCAM.
Part 3 dedicated to the standard measures of the effects of WCAM deployment. Some performance
measures are listed with indicative industry benchmarks. Parts 2 & 3 will appear in the October 2008
issue of the AMMJ.
PART 1:

AN APPROACH TO WORLD CLASS ASSET MANAGEMENT

The Evolution of Asset Management

The maintenance function was seen as a hygiene function until the 1990s, when globalisation triggered
a search for newer sources of competitive advantage. What emerged were opportunities in the indirect
value chain; releasing capital by using existing assets more efficiently. This challenged the traditional
direct value chain approach that gave managers just two ways to improve the bottom-line - by either
increasing revenues or by cutting costs.
Looking at maintenance as a possible source of competitive advantage was a major paradigm shift.
Managers realised that maintenance aimed at optimising business value involved trade-offs between
cost and asset health, and eventually led to the birth of asset management maintenance with a strong
business focus.
Besides global competition, the other driver that spurred on the evolution of traditional maintenance
to asset management was information technology. Affordable data storage, networking and analysis
capabilities made it easy for managers to apply business-oriented metrics such as Operating Equipment
Effectiveness (OEE) and Total Cost of Ownership. These capabilities though always desirable, were
just not practical without information technologies.
The Enterprise Asset Management Philosophy
Asset management improvement is more transformational than strategic, since the change involves
people, practices, organisational structure, information systems and work design. The lack of crossfunctional coordination, politics and individual resistance increases organisational inertia. Enterprise
asset managements basic philosophy encompasses cross-functional collaborative management of all
kinds of assets spanning their entire lifecycles.
Multiple Asset Classes
Organisations possess four broad categories of assets that are usually managed in silos; production
assets, facilities, fleet, and information technology (hardware and software). Synergies can be leveraged
if they are managed at an enterprise level. For instance, harmonised schedules for production,
preventive maintenance tasks, operator training, facility repair and software upgrades can improve plant
availability.
A Whole Lifecycle Perspective
The cost of creating and managing assets needs to be driven down to improve the return on capital

AMMJ

20th ANNIVERSARY YEAR

World Class Asset Maintenance

23

employed (ROCE). Costing on a lifecycle basis prevents the erosion of overall enterprise value that happens
when efforts are made to reduce cost in silos. Asset management takes a lifecycle perspective of assets, from
planning to retirement.
Data from varied sources of information must be analysed to optimize asset management. Vibration patterns
of a compressor can be used to arrive at SPC based proactive maintenance strategies. Similarly, knowledge of
the approximate total cost of ownership of a machine over its remnant life can help managers make informed
repair-or-replace decisions. Long term technology deployment plans can impact the strategy to maintain an
asset over its remnant life.
Collaborative Focus
Many agencies may get involved in planning, designing, creating, operating, maintaining and retiring of assets.
Internal participants like finance, engineering, procurement, maintenance, HR, logistics and operations,
and external ones like OEMs, EPC contractors, O&M agencies, financial institutions, regulatory authorities,
insurance agencies etc are players in this process. Seamless collaborative processes between these internal
and external stakeholders become a must for effective asset management. Collaborative asset management
concepts recognise common cross-functional interests guided by higher organisational objectives.
Shared maintenance responsibility is not just an emerging in-house approach between operators and mechanics
or various in-house agencies; it is also being adopted by alliances along the supply chain. Total life cycle
involvement, vendor maintenance contracts and subcontracted maintenance services are all blurring the lines
of contractual responsibility.
World Class Asset Management A Shared Vision
WCAM serves as a clear and credible vision of the new strategic orientation. It generates enthusiasm to achieve
difficult standards and pride when progress is made. World-class organisations stay ahead by institutionalising

24

World Class Asset Maintenance

a process of continuous improvement, while competitors try and catch up in spurts. Being a derivative
of business focussed asset management, World Class Asset Management, fundamentally, must
deliver the lowest whole lifecycle cost for the organisation (see Figure 1).

For every
pradigm shift,
the total cost
of
asset
management
reduces by
8-15%

World Class Asset Management

TPM, Reliability Centered Maintenance
Predictive/Condition Based Manatenance
Preventice Maintenance
Reactive Maintenance

Enterprise wide impact

WCAM is an enterprise-wide endeavour, spanning areas from strategy to operations, processes to
activities, senior management to the junior most operators and from finance to HR. Over 40% of
improvement initiatives fall short of meeting expectations, primarily because there is insufficient buy
in from all stakeholders. Getting a buy-in needs careful planning based on a thorough analysis of the
impact of change. WCAM institutionalises the mechanism required to facilitate change continuously
and at every stage.
Organisational Change Imperatives
The change process affects processes, technology as well as work culture. The main challenges
facing maintenance managers today according to John Moubray are:
To select the most appropriate techniques to deal with each type of failure in order to satisfy the
owners of assets, users and society as a whole.
In the most cost-effective and enduring way
With the active support and cooperation of all those involved.
A balanced approach that adequately addresses all three facets of change can make the difference
between success and failure. An organisation has to be aligned towards identifying opportunities for
improvement and innovation in order to sustain evolution.
A well-designed organisational structure can eliminate potential conflicts of interest and foster crossfunctional collaboration. Organisational flexibility makes it responsive to change. The ability to install
and modify assets is the key to create new value streams identified based on changing customer
requirements.
Organisations are inherently configured to maximise efficiency, which conflicts with the requirements
of a learning organisation. Managers rarely find time over and above their operational responsibilities
to focus on planning and analysis. Large companies now have dedicated analysts to monitor KPIs,
strategise and plan.
Progress Measurement
As the maxim goes What is not measured does not get done. The essence of attaining nirvana in
asset management lies in developing a clear roadmap to the target in a manner that the distance
covered can be measured at all times. The roadmap should articulate the areas of asset management
to be improved and performance measures to assess progress in each.

AMMJ

20th ANNIVERSARY YEAR

World Class Asset Maintenance

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World Class Asset Maintenance

Strategic Planning

XC

Technology

Process

Culture

Performance
Measurement Model

Technology
Management

Benchmarks

KPIs

Asset technology
management
Business
goals

IT deployment
strategy

EAM
Policies

Crossfunctional
collaboration

Regulations

Performance
management

Asset Management Policies, Objectives

and Targets

Inventory Maintenance
Procurement

Open O&M
Standards
Asset information
management
Collaborative
technologies
Asset upgrade

Identify areas for

improvement

Capital projects
Maintenance programs
Process redesign
HR management
Safety measures

Collaboration

Identication

Technology Selection

Stakeholder
Involvement

Change
management

Inventory: Action control groups,

exception management

SCADA, GIS,
RFID, Mobile, IT
solutions
Condition
monitoring, PLM

Procurement: Vendor management,

Supplier collaboration

Control & Feedback

Execution

Maintenance: Work management,

Reliability centred maintenance,
predictive maintenance, TPM, TQM,
asset performance management,
resource management

Management
Information
Systems

Project progress assessment

Asset management audits
Employee feedback

Performance Measurement Model:

EAM maturity level

Figure 3

AMMJ

20th ANNIVERSARY YEAR

Portfolic Approach

EAM technologies

Organisational
Structure Model

Skill
Management
Performance
Measurement

Resource
allocation

Escalation management

Self-directed
teams
Safety
Compliance
Performance
reviews

27

World Class Asset Maintenance

Sustained Cost Reduction

The march towards attaining excellence represented by WCAM is a long one. Progress in fits and starts can
impose unnecessary stress on an organisation. An institutionalised working model designed to incubate new
ideas, facilitate improvement programs, measure progress and analyse current practices can form the foundation
for long term improvement.
From a business perspective, managers must choose between acceptable levels of asset reliability and the
resources required to attain them. The key to cost-effective asset management lies in finding the lowest overall
cost point in the resource-reliability equilibrium (See figure 2), achievable within the maintenance budget.
The WCAM Model
The model divides the process of planning to execution, into four stages; Strategic planning, identification,
execution and control. Each stage addresses all three areas of change - Technology, processes and culture
(See figure 3).
Strategic Planning
Organisational goals drive the policies, objectives and targets that need to be defined upfront and cascaded
to the businesses. Good asset management strategies can then be developed within the framework of asset
management policies. The end result of the planning process is a clear set of objectives and targets.
At the same time, a well-defined process of periodic evaluation and policy review keeps the asset management
model alert and responsive to business requirements. It is a best practice for asset intensive industries to
plan for different horizons. Horizon 1 planning can address the next years requirements, while Horizon 2 and
Horizon 3 plans can be made for 5 and 25 years respectively.
Identification
The efforts to achieve asset management objectives in the planning stage are distilled in to work packages in
the Identification stage. The work packages can be capital projects, maintenance programs, process redesign,
HR programs or safety measures. New technologies are evaluated and selected at this stage. Involvement of
all stakeholders; workers, supervisors, the finance department,
HR managers etc. will have a positive impact on work package identification, prioritisation and design. Moreover,
every change in processes or technology will have to be matched by an appropriate change in culture, be
it altering the reporting structure, rationalising roles and responsibilities, skill development or redesigning
performance measurement parameters.
Execution
The work packages usually involve both processes and technology. The work is executed in parallel with
managed cultural change. A clearly communicated vision and an early buy-in through stakeholder involvement
at the planning and identification stages will go a long way in ensuring a successful execution.
Control & Feedback
Measurement involves the systematic collection and analysis of huge amounts of data. An EAM performance
measurement model is the backbone of the control mechanism. The model is designed to track asset
management excellence over the long term and on several critical parameters.
Current and expected project KPIs form part of the work package definitions. Audits are used to feed information
to the measurement system. The results are fed in to the planning process for the next period. A management
information system can improve the scope and accuracy of the measurement model.
PARTS 2 and 3 will be published in the October 08 issue of the AMMJ.
(First published in the Maintenance and Asset Management Journal, UK)

Vol 21 No 3
2

AMMJ