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Pragmatic Implementation

of

PAS 55
(Asset Management with tangible benefits)

Grahame Fogel
Pragma Acuity
Grahame.Fogel@pragmaworld.net

Introduction
By now most of us in the asset management world are aware of the content and intent of PAS 55. If
we review the technical media, conference proceedings, online forums and general conversations,
there appears to be a growing consensus that PAS 55 is an extremely useful foundation for those
wishing to manage physical assets sustainably over the entire life cycle.
Most of us are looking over our shoulders watching who is adopting the specification, who is
recommending its use, who is accruing benefits and generally gathering awareness before we take
the next step of adopting a position for our organisations.
We know it is going to be a hard sell, and if we dont show management short-term as well as longterm benefits, in this quicker, faster, stressed world slowly recovering from a recession we are not
going to get more than a peremptory hearing.
The purpose of this paper is to take full consideration of PAS 55 and attempt to frame it within a
logical argument for consideration within the business environment we find ourselves. In essence it is
a pragmatic guide for the implementation of PAS 55.
It is my argument that PAS 55 can be an ally and an enabler, perhaps rewarding the early adopters.
Conversely, for those who wait too long and dont attempt to place PAS 55 into a sensible
management framework, it may become yet another onerous consideration when the insurance
companies, licensing bodies, regulators, and senior management begin to impose it.
Note: For the purposes of this article PAS 55 refers to PAS 55 Part 1 Specification for the optimised management
of Physical assets together with PAS 55 Part 2 Guidelines for the Application of PAS 55 Part 1

Tactical considerations around the benefits of implementing PAS 55


Most asset-dependent organisations around the world have a working maintenance/asset
management programme. To a lesser or greater extent the lessons of technology and processenabling tools have been learned. In a disjointed manner organisations have implemented condition
monitoring, RCM, TPM, 5S, Six Sigma, continuous improvement, risk management and a variety of
other initiatives.
What is common, generally across industries and geographies, is that these initiatives have often
been implemented from an under-resourced vantage point (skills, investment, personnel and
management support). The focus has mostly been on short-term show me the money cost savings,
and many programmes have run out of the necessary critical mass to sustain them over the long
term. In addition it is only the rare organisations that have allowed these enabling processes and
technologies to be applied cross-functionally affecting maintenance, production, and other natural
boundaries within an organisation. Consequently the enabling processes and technologies have very
limited visibility (with some exceptions) as strategic enablers within the top levels of management.
This results in many a reliable professional or team performing in a vacuum of sponsorship, limiting
effectiveness and reach, which in turn limits credibility.
There are three key elements to PAS 55 which provide huge tactical leverage to address the above
state of affairs. They are as follows:
1. PAS 55 places responsibility for asset management firmly in the hands of executive
management.
2. PAS 55 is broad in reach, driving a cross-functional approach.

3. PAS 55 addresses the key issues of risk (more specifically portfolio, system and asset risk),
whole life costing, and knowledge management together with sustainability and
accountability.
Lets look at these one by one.
1. PAS 55 places responsibility for asset management firmly in the hands of executive
management. PAS 55 places the sign-off authority for policy, strategy and

Figure 1 - Levels of asset management (PAS 55)

management review in the hands of what it refers to as top management (defined as an appointed
and authorised person or group of people, who direct and control an organisation at the highest level).
In addition, PAS as a point of departure requires the entire asset management system to be closely
aligned with the overall company strategy, making it strategic in intent, reinforcing the fundamental
aspects of business success, and key to the way an organisation arranges and projects itself.

Figure 2 Business context of asset management (PAS 55)

2. PAS 55 is broad in reach considering the interactive nature of asset performance, where physical
assets are at the core of consideration, with the surrounding asset classes such as knowledge
skills, human assets, technology, etc in support of the performance of physical assets. By nature
this calls for a broader cross-functional approach across the organisation, dismissing the
limited reach of a limited initiative buried deep within the maintenance department.
3. PAS 55 is firm on a number of core issues which as reliability professionals we have talked about
but havent had the reach to be effective in implementing. These are the key issues of risk (more
specifically portfolio, system and asset risk), whole life costing, and knowledge management
together with sustainability and accountability. These are all firmly entrenched within PAS 55.

Balancing conflicting drivers

Risk/
Conformance

Performance
Sustainability

Figure 3 - Interpretation of PAS 55 in a single diagram

What are we targeting with PAS 55?


PAS is wordy, and as with any document created by multiple inputs, coordinated through a
committee, it lacks specificity and pragmatism. Any strategic effort with asset performance or asset
contribution as its focus has three key areas of engagement. These are:
I.
II.

Performance of the assets (by definition all the asset classes: physical, human, knowledge,
capital, etc)
Risk (compliance) management (how does one create optimal performance while managing
the risk?)Sustainability of the programme over the medium and long term.

Figure 4 - Illustrating the conflicting drivers which PAS has to satisfy

At times these drivers are contradictory and PAS 55 provides a strong and well-defined framework to
contain, balance and manage the conflicting requirements of these three pulls. Overemphasis (or
underemphasis) of any of these primary concerns leads to system imbalance in the medium to long
term.
Making sense of the apparently contradictory challenges of performance versus conformance is the
first challenge for successful implementation. This presents issues of prudence and mindfulness as
each has a different set of rationalisation and judgment which reinforces the objectives. This is
illustrated in Figure 5. Events like the BP offshore oil rig disaster and the Toyota brake failure recall
have served to illustrate the absolute need to balance the performance with conformance, and where
necessary have dynamic asset-related risk management processes which determine outcomes.

Requirement against a
standard
Preventing value from
slipping
Passive activity
Doesnt enforce
improvement
Implies at times a
minimum requirement
Mandated

Conformance

Performance

A recognised
accomplishment
Implies an advance
Exceeded a standard
Implies achievement

Creating and enhancing


value

Driven by a quest for


improvement/getting
better/ excellence

Figure 5 Illustrating the contradictory nature of performance vs conformance

Very specifically cost cutting has not been recognised as a target for implementation. There is a
significant body of evidence (Moore ref 5) which clearly indicates that cost cutting has a very poor
chance of sustained improvement for a companys success. For example, in a review of 50
companies engaged in cost cutting, 43 suffered a significant downturn in earnings within three years.
The single-minded pursuit of cost cutting within the asset management environment is particularly
hazardous, where, unless there is a particularly scientific approach that is applied, there is an
inevitable significant increase in risk associated with cost cutting. Cost cutting within the assetintensive industries leads to increased failure, loss of reliability and associated cost increases. Moore
concludes in his analysis that putting the right processes in place, getting people engaged with a
sense of ownership, and creating an environment of pride and trust will result in costs coming down
as a consequence.
The basis of our approach to PAS 55 is to create an implementation methodology which yields
benefits. We conclude that operating capital assets in the optimal way will provide for minimum costs.
It has been clearly shown by Moores research that cost cutting is unsustainable and more often than
not leads to cost increases.
The core challenge now faced is how to balance the opposing forces of conformance versus
performance, or are we correct in assuming that risk management is simply a cost? Current research
(Aberdeen report 2010) suggests the opposite, where they have evidence-based conclusions which
clearly indicate that corporations that are leaders in risk management obtain higher returns than
middle of the pack, or laggards. This is illustrated in Figure 6. Of particular interest is the differential
in revenue loss between the best in class (3%) and the industry average of 12% versus the laggards
of 18%.

Figure 6 - Illustrating the benefits of good risk management (Source: Aberdeen Group Report ref 1)

The PPC group, who can be considered as progressive leaders in asset management, conclude that
the benefits of an asset management programme are accrued in the ratio of 8:5:3 where 8 is
improved risk management, 5 improved performance, and 3 reduced costs. (ref 2)
However, we cannot fail to live in the real world with all the pressures of short termism being the
dominant driver for both.
We therefore conclude that in any PAS 55 implementation there has to be a specific implementation
strategy that makes the driving out of tangible benefits the dominant consideration, followed by the
stabilising influences of conformance and sustainability. This is illustrated in Figure 7.

Figure 7 Illustrating that a performance orientation should lead the PAS 55 implementation

Passive Documentation versus Active Implementation


Many of us have been through the experience of implementing the ISO 9000 Quality Management
System. In many cases this has become a paper exercise aimed at compliance, with very little
contribution in terms of benefits, beyond being a license to operate in many industries.
It is imperative for PAS 55 not to fall into the same trap of being yet another onerous paper exercise.
We therefore adopt the more positive approach of really closely aligning the implementation with the
strategic need, and focusing primarily in the short term on returning benefits, while securing the
longer-term sustainability.
While developing the supporting documentation, business processes, and protocols we should ensure
that all documentation:

has a reason for existence


complies with PAS 55
is brief, to the point and clearly understood in terms of language and intent
has the combined intent of being in place and in use
be measured for use.

We should also have a supporting organisational change activity if the new protocols differ from
previous practice, and understand that the establishment is a lifestyle change and not just a seasonal
adjustment in practices.

Beginning at the Beginning


"If you don't know where you're going, any road will get you there."
As a guide for implementation PAS 55 can be an arcane and complex document. Take for example
the following figure from PAS 55. There is an apparent logical flow, and there is some kind of
semblance of logical groupings. However, it is non-intuitive, doesnt provide much of an
implementation guide or map, and on analysis it provides more questions and answers (for example,
why is condition and performance monitoring 4.6.1 not an enabler or control 4.4?). Compare
this to Figure 3 which is our interpretation of how to synthesise a more holistic logical flow for
implementation and communication of intent.

7. Management review
6. Performance Assessment and Improvement

Performance and condition


monitoring
Investigation of asset related failures,
incidents and nonconformities
Evaluation of compliance
Audit
Improvement actions
Records

2. Asset Management Policy


Act

Plan
3. Asset management strategy,
objectives and plans

1. General requirements

Asset management Strategy


Asset management objectives
Asset management Plan(s)
Contingency planning

Do

Check

4. Asset management enablers and controls


5. Implementation of asset
management plans

Life cycle activities


Tools, facilities and equipment

Structure authority and responsibilities


Outsourcing of AM activities
Training, awareness and competence
Communication, participation and consultation
AM system documentation
Information management
Legal and other requirements
Management of change

Figure 8 Referred to by PAS 55 as the Management System Structure

The generality and density of PAS 55 has left many wondering where to begin and what kind of road
map to follow which will both yield compliance and performance. This can be a recipe for frustration
and loss of credibility, making the implementation appear more of a barrier than an enabler. PAS 55
has drafted the specification in such a manner that it is broad enough for individual interpretation for a
specific organisations needs, and creates the ability within this breadth to become industry specific
(for example, power generation versus urban infrastructure management). This means that provided
an organisation addresses the individual elements within the specification, it is not going to be
prescriptive how one implements, where the priorities are, or what areas an organisation needs to
emphasise for individual benefit.
Using the generality and specificity of structural requirements, we suggest 11 points for pragmatic
consideration for implementation, which deals both with the practical and structural issues of PAS 55
implementation. These are as follows:

Stepping Stone 1: Sponsorship


Ensure you have meaningful buy-in and organisational alignment at the executive level to progress
with the implementation of PAS 55. Having a budget and vague generalities is not enough to provide
the sustainability and momentum required for success. Even if it slows down the effort, make sure
that executive management understand the intent, the specific benefit contribution, the roles and
responsibilities and the road map for implementation, and moreover, are involved.

Stepping Stone 2: Alignment


Work with the executive team to tightly align the organisational strategy to the asset management
strategy, where specific strategic goals are identified as value contributors and prioritised in terms of
gaining completion and accomplishment. Simplify this into something simple and visible and test this
across the organisation. Ensure the ongoing involvement of the executive team (or top management
as PAS refers to this group), as PAS has very specific requirements of them. Make them visible and
engaged in their sponsorship as well as informed and knowledgeable. Without this most important
element the ship will not have a rudder.

Stepping Stone 3: Pragmatism


Establish the policy (4.1) and strategy (4.2 & 4.3) together with the priority issues that need to be
addressed (enablers and controls 4.4). Keep the policy and strategy simple, user friendly, graphical
where possible, and drawn up in language accessible to all readers.

Figure 9 Asset Strategy Management

Stepping Stone 4: Communication


Create a supporting plan to communicate this across the organisation vertically and horizontally, with
specific roles and responsibilities detailed. Make sure in this communication that there is discussion
and consensus about the priority areas together with the benefits and value attributable to the
outcome. Ensure all discussions are aligned to the basic structure of PAS 55 (4.4.9). We refer to this
important step as creating levels of awareness (LOA).

Stepping Stone 5: Organisation and Development


Develop a training plan which ensures the skills necessary to both support the execution and ongoing
sustainability of PAS 55 (4.4.3). Ensure the organisational structure is capable of implementing and
sustaining the requirements of PAS 55. PAS 55 is non-specific as to the nature of what exactly is
required within this element, so specific thought and conceptualisation of what exactly will be effective
is necessary. We refer to this as organisation and development which encompasses all that will allow
for structural sustainability through implementation, and enables what is referred to as the Golden
Thread from policy and strategy through to asset management plans.

Figure 10 Elements of organisational development

Stepping Stone 6: Execution Management


Execute the identified improvement projects with passion and vigour in alignment with the strategy
and PAS 55. Never forget to ensure that an accountability structure is in place to measure the gains
(4.4 Enablers and Controls). We refer to these as the focused improvement opportunities and they
are the currency with which PAS 55 pays back investments. As such they need to be very carefully
managed and require a specific strategy and management plan of their own.

Figure 11 Focused improvement

Stepping Stone 7: Risk Management


Effective management of risk (asset related) is a key enabler as referenced in Figure 6. Ensure that
your organisation clearly understands and quantifies asset-related risk and creates the usage of risk
in all areas from purchasing decisions to maintenance activities, and outage prioritisation to deferred
tasks. There is sufficient evidence and direct experience that in the asset-intensive industries good
risk management will be rewarded and poor risk management has the risk of huge penalties and
consequences.

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Figure 12 Levels of risk in asset management

Stepping Stone 8: Knowledge and Information Management


Knowledge is defined as the full utilisation of information and data coupled with the potential of
peoples skills, competencies, ideas, motivations, intuition and commitment, and creates the ability of
an organisation to respond to the myriad of challenges that it faces. PAS 55 facilitates the ability to
create a supporting knowledge management strategy, so use the opportunity to create something
meaningful and powerful as this is both an enabling and sustaining element of PAS. (4.4.3, 4.4.5,
4.4.6). In summary PAS 55 drives an organisation to become a learning organisation.

Figure 13 Knowledge Management

Stepping Stone 9: Use a Proven Framework


Make life easier and simpler by using an effective proven framework for establishing a comprehensive
implementation plan. This will enable a clear and integrated approach to fulfilling the needs of PAS
55. A typical framework is shown in Figure 14 below. However, sustainable asset management is
achieved through a lifestyle change rather than a system implementation.

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17 Asset management key performance areas


in support of PAS 55
Strategic planning
Enablers and controls
Technical Information
Organisation and Development
Contractor Management
Financial Management
Risk Management
Environment, Health and Safety
Performance Measurement
Focused Improvement

Strategy Management
Information Management

Execution
Asset Care Plans
Work Planning and Control
Operator Asset Care
Material Management
Support Facilities and Tools
Life Cycle Management
Project and Shutdown Management

Assess and improve

Figure 14 Illustrating the Pragma AMIP Framework which creates a logical structure for PAS 55
implementation

Stepping Stone 10: Specialised Assistance


Consider the use of external assistance to accelerate your rate and accuracy of implementation and
the preparation for audit.

Stepping Stone 11: PAS 55 with Benefits


Create the primary focus on rewarding the organisational investment through gaining benefits in the
desired areas of concern followed by the following elements which create conformance and
sustainability. In the quicker faster cheaper world, failing to yield benefits may have damaging
consequences.

Concluding Remarks
As PAS 55 gains global acceptance and forms the basis of a future ISO Standard on Asset
Management, it is going to become an integral part of managing physical asset portfolios. This paper
argues that through careful consideration of the implementation strategy and overall goals, there can
be a well-supported and beneficial implementation path towards sustainable asset management.
These considerations include the following criteria.

Gain the necessary organisational support and executive sponsorship prior to


implementation.
Create an informed executive as to both the benefits and responsibilities of implementing
PAS 55.

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Make benefit contribution the leading criteria for implementation followed by conformance
management and long-term sustainability.
Learn from others by using a proven framework, and consider accelerating down the
implementation curve by using experienced specialists.
Early adopters of PAS 55 will be better positioned to align to the ISO 55000 standard on
Asset Management when it is published in the coming years. They will also benefit from the
specification in the meantime with the resulting financial returns.

References
1.
2.
3.
4.
5.

Managing Risk in Asset Intensive Operations March 2009. Special Report Aberdeen Group
Joe Naude, PPC Group (Reliability Week SA November 2010)
PAS 55 Part 1 Specification for the optimised management of physical assets
PAS 55 Part 2 Guidelines for the Application of PAS 55 Part 1
The Perils of Cost Cutting: Ron Moore, The RM Group.

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