1. Rethinking Asset Lifecycle Management Andy Chatha President ARC Advisory Group AChatha@ARCweb.com Technology People Information Processes

2. 2 © ARC Advisory Group Why Rethink Asset Lifecycle Management?  Bigger, More Complex Projects  Riskier Business Opportunities  Limited Capital, Tough Capital Markets  More Mandatory Investments  Global Projects, Global Project Teams  Escalating Labor and Material Costs  Poor Asset Utilization, High O&M Costs  Lack of Skilled Workers  Legacy IT Systems Constrain Improvement  Easy IT solutions can help

3. 3 © ARC Advisory Group A New Model for the Major ALM Processes ALM Processes Have Specific Responsibilities Project Performance Management (PPM) Asset Performance Management (APM)

4. 4 © ARC Advisory Group ALM begins with a proper view of the Asset Productive Assets are More Than Equipment Primary Facilities Equipment Remote Reference Data Functional Design Procedural Project-Centric Project Mgmt Engr/Design Procurement Construction Support IT HW/SW Mobile MRO Material Asset-Centric Operations Process Engr Maintenance Reliability Activity Records Commercial Status History The Three Asset Classes are Equally Important to Plant Success !

5. 5 © ARC Advisory Group Collaborative Devices are Emerging Device Users, Technical Support, and Service Technicians Can Interact via the Device’s Collaboration Workspace PM2009a1 pipeline mixer Interactive Chat: - Respond to status request - Run diagnostics - Upload error logs - etc. Planner Service Engineer Operator Technical Support Shift Supervisor

6. 6 © ARC Advisory Group A New Model for the Major ALM Processes ALM Processes Have Specific Responsibilities

7. 7 © ARC Advisory Group ALIM Improves ALM Performance Through Better Handover Processes and More Efficient Information Exchanges! An ALM Information Management Strategy A Blend of ALM Process and Corporate Strategies

8. 8 © ARC Advisory Group Performance Management Balancing Goals and Developing the Right Mix Goals Commitments Constraints

9. 9 © ARC Advisory Group ARC Level 1 Model for ALM The Major Processes, Goals and Information Mgmt INFORMATION PROCESSES PEOPLE TECHNOLOGY

10. 10 © ARC Advisory Group A Structured Set of ALM Models Structure Supports More Realistic Process Models Level 1 Level 2 Level 3

11. 11 © ARC Advisory Group A Typical Level 2 Model for APM APM for a Process Manufacturing Facility

12. 12 © ARC Advisory Group A Typical Level 2 Model for PPM PPM for a Process Manufacturing Facility SCHEDULE QUALITY BUDGET Fabricators Equipment & Systems Suppliers ShareholdersRegulators Constructors Project Management Services Strategic Suppliers Asset Management Engineering Services

13. 13 © ARC Advisory Group Asset & Project Portfolio Management APPM Processes and Stakeholders RISKS RESOURCES BENEFITS Allocate Resources Evaluate Solutions Identify Opportunities Manage Information

14. 14 © ARC Advisory Group A Level 3 APM Model People & Processes APM for a Process Manufacturing Facility Safety & CM Systems Production Planning Maintenance Planning Reliability Engr. Proc/Mfg Engr. Plant & Project Engineering Support Tactical Strategic Automatic Action Feedback Coordination Maint Staff Oper Staff Parts Mgmt Materials Mgmt Operate Strategy Maintain Strategy APM PPM Equipment Changes OperateMaintain

15. 15 © ARC Advisory Group Safety & CM Systems Production Planning Maintenance Planning Reliability Engr. Proc/Mfg Engr. Plant Engr (M/E/Auto, EH&S) Tactical Strategic Automatic Action Feedback Coordination Maint Staff Oper Staff Parts Mgmt Materials Mgmt Operate Strategy Maintain Strategy Automation Systems, LIMS, Historians, Alarm Systems, Safety Systems, SMT EAM/CMMS, Inspection, Mobile Devices, RFID ERP, CPM/MES, Mobile Devices RCM, Reliability Analysis & Simulation, RBI Process Models & Simulation Plant Design, 3D Models, Laser Scanning EH&S, Sustainability, HR A Level 3 APM Model for Technology APM for a Process Manufacturing Facility

16. 16 © ARC Advisory Group Safety & CM Systems Production Planning Maintenance Planning Reliability Engr. Proc/Mfg Engr. Plant Engr (M/E/Auto, EH&S) Tactical Strategic Automatic Action Feedback Coordination Maint Staff Oper Staff Parts Mgmt Materials Mgmt Operate Strategy Maintain Strategy Automation Systems, LIMS, Historians, Alarm Systems, Safety Systems, SMT EAM/CMMS, Inspection ERP, CPM/MES RCM, Reliability Analysis & Simulation, RBI Process Models & Simulation Plant Design, 3D Models, Project Mgmt EH&S, Sustainability AIM A Level 3 APM Model for AIM APM for a Process Manufacturing Facility

17. 17 © ARC Advisory Group Reference Data Activity Records A Level 3 APM Model for Information APM for a Process Manufacturing Facility

18. 18 © ARC Advisory Group A Structured Set of ALM Models Framework Enables Cross-Industry Benchmarking Production Manufacturing Energy..... Process Discrete T&D

19. 19 © ARC Advisory Group A Typical Level 2 Model for APM APM for Utility – Electrical T&D

20. 20 © ARC Advisory Group Key Takeaways  ARC has a long history of research around ALM  We have developed various models to help clients understand issues, develop strategies and select solutions  Our new ALM Model extends that research into more areas and more industries.  The structured nature of our new model: will enable ARC to provide you with more, valuable ALM research enable you to develop ALM strategies with more appropriate support for people, processes, technology and information needs analysis, and enable you to benchmark your ALM performance with peers and other industries and identify the Best Practices for your program

21. Thank You. For more information, contact the author at srsnitkin@arcweb.com or visit our web pages at www.arcweb.com

22. 22 © ARC Advisory Group ARC and Asset Lifecycle Management  Our Market Studies and End User reports cover all of the Key technologies, IT solutions and Best Practices in ALM PET, PSC, Laser Scanning PAM, Field Devices, Mobile Devices, SCADA, etc. EAM, FSM, MRO Materials Mgmt EIM, AIM, GIS  We have developed an ALM community, a website dedicated to ALM and publish a monthly ALM newsletter that is distributed to over 2500 ALM experts  We have also provided consulting services on ALM issues to many leading manufacturers