How Do You Monitor the Performance of Your Asset Management System?

Brian Kaiser, Life Cycle Engineering

All reliability-centered continuous improvement programs must include a process that effectively assesses the condition of the plant’s capital assets and a monitoring process for how well the organization is managing those assets. The international standard for asset management, ISO 55000, states in Clause 9.1 that “the organization shall evaluate and report on the asset performance; the asset management performance; and the effectiveness of the asset management system.” Your Asset Management System (AMS) should leverage both reactive and proactive monitoring to meet this requirement.

Reactive Monitoring

A reactive monitoring process identifies past or existing nonconformities in the asset management system as well as any asset-related deterioration, failures or incidents. Sounds straightforward, but how do you cost-effectively monitor or measure nonconformities in either the management system or physical assets?

A comprehensive AMS approach covers the entire life cycle of the corporation’s physical assets (procurement, commissioning, operations, maintenance, and disposal). It consists of standardized processes and procedures that govern long-term planning, production scheduling, operations and maintenance of these assets. As the AMS scales to cover all of the organization’s assets, how do you effectively monitor compliance to standards across the enterprise?

Too often, new technologies and the technically-skilled people to support them are deployed to “fix” performance issues, at significant cost but with little consideration of the processes or metrics used to drive performance. The most cost-effective way to monitor compliance of the processes and procedures used across the enterprise is to design the processes with performance monitoring in mind. In some cases only minor changes to existing processes are needed, but in others complete re-engineering can be required.

An alternative and less-than-ideal approach to implementing performance monitoring is to create separate processes that periodically audit or sample the processes, procedures, and practices that are being used to plan, schedule, operate and maintain assets. While this can be effective, it necessitates additional personnel and creates the impression (if not the reality) of additional work burden to produce the evidence required for these audits or samples.

Proactive Monitoring

Proactive monitoring seeks assurance that the organization’s physical assets and AMS are operating as intended and will meet stakeholders’ needs into the future. In practice, this requirement is the same as reactive monitoring; the difference is timing. It’s similar to comparing Root Cause Analysis and Root Cause Failure Analysis. Both are analytical tools that resolve real or potential problems, but differ in when you perform the analysis. If you perform it after the failure or incident it is reactive; if you perform it before the failure, it’s proactive. 

Like with reactive monitoring, the best solution is to build monitoring and analysis into the standardized processes and proceduresthat are used to perform all tasks or activities that directly or indirectly affect asset performance and reliability. Use key performance indicators designed to measure true leading and lagging indicators of asset performance and condition, as well as the work processes or procedures used to plan, schedule, operate and maintain them. These KPIs must be measuring the right activities to be effective. For example, preventive maintenance compliance is only valid as a leading indicator when the right tasks are performed, at the right time, and on the right asset. Otherwise, these PMs may be non-value-added work.

Leading and Lagging Indicators

An AMS that depends on lagging indicators is, by definition, reactive. To be proactive and effective the AMS must also include leading indicators that foretell non-conformance or deficiencies that can be expected at some point in the future. The mistake that too many companies make is limiting their AMS indicators to maintenance or failure-centric deficiencies, limiting focus to things such as preventive maintenance compliance, wrench time, and maintenance planning effectiveness. While maintenance and failure or breakdown performance is important, there are many more aspects to asset management that must be considered and monitored for the AMS to be effective.

At a minimum, the leading and lagging indicators must include all of the performance indicators that define the operating effectiveness and efficiency of assets, both physical and human. Metrics such as labor hours per unit, cost of goods sold, energy usage per unit, etc. are effective leading and lagging indicators that provide the means to manage assets effectively. In addition to definitions and terminology, each metric must be tied to the decision-makers that can take action should that metric begin to stray.

The obstacle to overcome is how to monitor and evaluate the performance and condition of critical assets through the massive volume of data that must be acquired, manipulated, interpreted, and finally converted into actionable conclusions.

Many have tried to create systems, manual and automated, to extract the raw data from the myriad of data systems throughout the enterprise and massage it into useful information. Even the few organizations that have managed to fully integrate their enterprise information management systems and have automated most of the processes therein still need the data interpreted and corrective actions determined. 

Once structured performance monitoring is in place, the financial opportunities that lie within your asset management system will become apparent and mitigating and eliminating these limiting factors will lead to real performance gains and continuous improvement. The result is greater asset utilization and a higher return on net assets while driving to the lowest possible cost of ownership.