Please use the following two slides as a template for your presentation at NES. “Beyond the Lifecycle: The Three Disciplines of Asset Management” Jim Dieter, CPPM CF Sunflower Systems NPMA Executive Vice President

Brief Description This presentation will offer for your consideration a model based on three asset management disciplines observed in organizations around the world: –asset performance management, –asset assurance management and –asset portfolio management.

Learning Outcomes 1. Gain new insight into the asset lifecycle and its use. 2. Broaden and reframe your understanding of asset management based on insights from other sectors and other counties. 3. Enable you to better help your organizations manage their assets.

ISO Definitions Asset – something with potential value to an organization and for which the organization has a responsibility Asset System - group of assets that interact and/or are interrelated so as to deliver a required business function or service –An asset system, through the replacement, modification or maintenance of component assets, may even have an indefinite life Asset = Asset System

Asset Management Asset management enables the realization of value from assets Value realization is achieved through the use of analytical approaches and implementation processes that have similar core characteristics, no matter what the industry

Lifecycle For decades or longer, the asset/property lifecycle has been in use, and has become ingrained in our regulations, our policies and procedures, our certification and training materials and in our thinking. Is there a better conceptual model we can use to portray the contributions assets and asset management professionals make to their organizations?

NPMA/ASTM E53 Lifecycle Acquire Use Dispose

SMRP Lifecycle (Society of Maintenance and Reliability Professionals) Acquire Utilize Maintain Dispose

Lifecycle But what is missing from this lifecycle? If “lifecycle” is birth to death, what about… –“Birth” to “acquisition”? –“Disposition” to “end of life?

Asset Life "Asset life" is the period from an asset's conception to its end of life Extraction, sale, use and disposal “Birth” to “end of life” of the asset

Asset Life or Whole Life

Asset Life or Whole Life – includes every phase in the life of an asset with the focus on asset performance Phases may include resource extraction, manufacture, distribution, installation, performance, de-installation, redistribution, remanufacture, de-manufacture, resource reclamation, recycle, and waste.

Asset Life or Whole Life During an entire asset life, an asset may be held by a single organization or it may be reutilized by others to achieve the full period of performance. Industry specific variants to these phases are expected.

Asset Lifecycle Substituting “acquisition” for birth and “disposition” for death has obscured the organizations responsibilities and liabilities that are part of the life of the asset.

Asset Management Lifecycle Lifecycle of asset management related to an asset or group of assets The phases of the assets’ lives that are the responsibility of the organization

Asset Management Lifecycle

Responsibility Periods Asset Management Lifecycle for Organization 2 Asset Management Lifecycle for Organization 1

Responsibility Period The “responsibility period” is the period of time over which an organization has accountability for an asset and can be within one or many of the assets life stages The role of asset management is to maximize value from assets across each of the asset life stages that fall within or in some instances beyond the "responsibility period" of the organization

Asset Management Lifecycle An asset holds continuing value potential to one or more organizations over its life Asset life does not necessarily coincide with the period over which any one organization holds responsibility for the asset

Functional Requirement The “functional requirement” is the need an organization has for an asset. This can be fulfilled by an existing asset (brought into the organization), or drive the conception (“birth”) of a new asset.

Functional Requirement The functional requirement can exist for longer than the asset life Multiple assets can be used to fulfill a functional requirement In cases where the functional requirement is less than the asset life, then the asset may be utilized by another internal or external organization

The Three Disciplines of Asset Management asset performance management, asset assurance management and asset portfolio management

Asset Management System A management system is set of interrelated or interacting elements of an organization to establish policies and objectives and processes to achieve those objectives –ISO Management System Standards specification

Asset Management  Coordinated activities of an organisation to realise value from assets in delivery of its objectives  From the draft ISO 55000

Asset Management  Organizational management of the interrelated and interlocking functions of  Asset Portfolio Management,  Asset Assurance Management, and  Asset Performance Management,  with the common goal of supporting organizational objectives through optimal asset performance

Portfolio Asset Portfolio - group or sub-group of assets required and assets available for use by an organization Asset Portfolio Management - organizational management of –identified requirements for assets –currently available assets

Portfolio Required Assets - assets and asset systems required by an organization to achieve organizational objectives Asset Requirement Period – The time from organizational identification of an asset requirement to the end of that requirement Required Asset Portfolio - group or sub-group of assets and asset systems required by an organization to achieve organizational objectives

Portfolio Available Asset – asset available to achieve organizational objectives Asset Availability Period - The time from the start of an assets availability to the organizational to the end of the asset’s availability to the organization Available Asset Portfolio - group or sub-group of assets and asset systems available to an organization to achieve organizational objectives

Asset Portfolio Management Asset Portfolio Required Asset Portfolio Available Asset Portfolio

Asset Portfolio

Asset Assurance Management Asset Assurance Management – management of the responsibilities of an organization for its assets

Asset Assurance Management Knowledge of laws and regulations Developing policies Implementing processes and procedures Audits and self assessments Coordinating with asset holding internal entities Assuring compliance

Asset Performance Performance is the whole point of the asset and the asset lifecycle – the reason an organization has an asset This has been the donut hole of “property/asset management ”

Performance The terms “Use”, “Utilization”, Control” and “Maintenance” have been used in stead of this concept before Performance takes all of that into account, but specifically includes the user/operator and the work performed by the asset into the concept

Performance Asset Performance – asset operation and contribution of value to the organization Asset Performance Period – the time period during which an asset is operational and contributing value to the organization

Asset Performance Management Asset Performance Management – organizational management of the operation of the asset and contribution of value to the organization –The operational performance of the asset or asset system

Performance Performance is the primary asset management line-of-sight mechanism, from –top management, through –functional requirements, through –asset portfolio management, and –asset assurance management to –asset performance management

Learning Outcomes 1. Gain new insight into the asset lifecycle and its use. 2. Broaden and reframe your understanding of asset management based on insights from other sectors and other counties. 3. Enable you to better help your organizations manage their assets.

Thank you! 39 Jim Dieter