Introduction to Physical Asset and Maintenance Management by gpydde@solidconcepts.com - HTML preview

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Introduction to Physical Asset & Maintenance Management

A note from the author.

The earth is a physical asset that we as a human race are

responsible to manage and the manner in which this is

performed can affect us on a global scale. How we utilize

the natural resources and maintain the cleanliness of the

land, water and air directly affects the delicate balance

and quality of life for present and future generations.

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Contents

Preface ............................................................................. 6

Introduction ..................................................................... 8

Physical Assets ............................................................... 11

Physical Asset Lifecycle .................................................. 16

Physical Asset Management System .............................. 17

Policy .............................................................................. 19

Plan ................................................................................ 19

Objectives ...................................................................... 20

Physical Asset Support ................................................... 21

Leadership & Stakeholder Support ................................ 23

Communication .............................................................. 24

Risk Management .......................................................... 25

Project Management ..................................................... 26

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Planning ......................................................................... 27

Engineering .................................................................... 28

Commissioning ............................................................... 29

Energy & Utility Efficiency .............................................. 30

Disasters & Emergencies ................................................ 31

Safety ............................................................................. 32

Security .......................................................................... 34

Ergonomics .................................................................... 35

Quality ............................................................................ 36

Information Technology ................................................. 37

Hazardous Materials ...................................................... 38

Waste Disposal & Recycling ........................................... 40

Maintenance .................................................................. 41

Environmental Maintenance ......................................... 45

Maintenance Program ................................................... 47

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Maintenance Schedules ................................................. 54

Reactive Maintenance ................................................... 55

Computerized Maintenance Management .................... 57

CMMS Selection ............................................................. 58

CMMS Implementation .................................................. 59

CMMS Training............................................................... 62

Audits ............................................................................. 63

Internal or External Maintenance .................................. 64

Multi Divisional Maintenance ........................................ 69

Maintenance Skills ......................................................... 71

Budgeting for Maintenance ........................................... 72

Maintenance Costs ........................................................ 75

Maintenance Metrics ..................................................... 78

About The Author .......................................................... 80

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Introduction to Physical Asset & Maintenance Management

Preface

I have written this book in an attempt to convey the

general concepts, principles and importance of physical

asset and maintenance management. Both of these

functions are in many ways taken for granted only

because we don’t realize or acknowledge the fact that

the effects of how these functions are performed affect

our everyday lives. As with many things in life, when they

are operating smoothly and functioning properly, we

tend not to acknowledge or think about the associated

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tasks and costs that are required to maintain these

conditions.

This book identifies WHAT functions and programs a

physical asset management system is comprised of and

WHY they are needed. However, it does not dwell on

HOW these functions and programs are to be

implemented. The need for them and how they are

implemented will vary based on several factors such as

what types of products and services an organization

provides, the size of the organization and the existing

infrastructure and culture.

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Introduction to Physical Asset & Maintenance Management

Introduction

The majority of us perform physical asset management

related activities regularly and don’t even realize it. We

rely on the effective management of physical assets in

our daily lives that are utilized in industries such as

utilities, transportation, waste & water treatment, oil,

chemical,

automotive,

electronic,

construction,

pharmaceutical, health & nutrition, real-estate, medical,

food,

aerospace,

defense,

manufacturing

and

entertainment. We depend on the fact that physical

assets such as aircraft are managed and maintained

properly so that they will not fall from the sky or a

nuclear power plant reactor does not incur a meltdown.

The entire infrastructure in which we live depends on

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physical asset management and how effectively and

efficiently it is applied.

The simple fact is that just about every organization

performs physical asset related activities. The size of an

organization, quantity and complexity of physical assets

and type of products or services that an organization

provides directly affects the extent and complexity of a

physical asset management system. As with many things

in life, we can choose to ignore or even reject a

systematic approach as to how these activities are

performed or we can choose to embrace and organize

them. The organized implementation and management

of a physical asset management and how this is

implemented and maintained will directly and indirectly

affect the success of the organization.

This book will explain the different aspects of physical

asset

management

and

briefly

describe

the

implementation of maintenance management as well. It

addresses the importance of a reoccurring activity that

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significantly affects the life of many physical assets which

is known as maintenance.

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Introduction to Physical Asset & Maintenance Management

Physical Assets

Let’s begin with an analogy that the majority of us can

relate to. Many of us own, lease or rent an automobile

and a home within we live. These are both forms of

physical assets. The majority of us like our physical assets

to be clean, nice looking and well maintained. When we

entertain friends and relatives, we like to impress them

with our physical assets. A dirty home or automobile

does not leave a good impression. They can look, feel

and smell unpleasant or even offensive and affect issues

such as safety, health and performance. When we plan

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to acquire a physical asset, we usually think about

several factors such as initial cost, quality, appearance,

efficiency, reliability, performance, longevity and if you

are maintenance minded, maintainability.

A physical asset has many stages that it passes through

which define its’ lifecycle. This lifecycle includes stages

such as acquisition, commissioning, maintenance and

disposal to name a few. The planning function is usually

performed during several stages of the lifecycle. Using

our current analogy, let us focus on the automobile. An

automobile is initially planned, designed, engineered and

manufactured by the automobile manufacturer before it

is sold to the public. This process includes quality control

activities to ensure that a reliable product is delivered to

the end user and will fulfill the defined requirements as

expected. This is typically a part of the commissioning

process.

The customer is the one that will purchase the

automobile and will be shopping around and evaluating

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factors such as price, appearance, quality, efficiency,

dependability, reliability and longevity. The fact is that

the initial cost or price alone should not be the only

influencing factor. There is a cost which is associated

with an automobile’s life which is known as physical

asset lifecycle cost. In many instances, the most

significant cost associated with a physical assets life

besides the initial investment is the cost of maintenance.

Maintenance includes activities such as cleaning, repairs,

inspections, servicing and periodic parts replacements. If

an automobile is not maintained properly at scheduled

intervals, the influencing factors which were initially

considered appealing prior to the purchase will

deteriorate thus affecting the value and reliability of the

automobile. In another example, the buyer might

purchase an automobile that has low quality ratings but

the lower initial cost is appealing. However, due to the

low quality rating, this type of automobile may

experience significantly more component failures which

affect the reliability of the automobile. In both cases, the

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lack of reliability will have a severe impact on the owner

such as reactive repairs, excessive costs and

inconvenience.

We have clearly defined some of the important factors

that influence physical assets. The analogy that we used

with automobiles and homes can be directly applied to

organization environments. The majority of organizations

are housed in some form of a building. Additionally,

organizations usually purchase, rent or lease physical

assets such as computers, printers, furniture, vehicles,

machinery and equipment. In many instances, there

seems to be a separation of how we view and treat our

personal physical assets compared to the physical assets

that are utilized by our organization. In reality, the

physical assets of an organization should be treated with

a higher level of respect and care than our own personal

physical assets. This is due to the fact that the physical

assets that are utilized by the organization contribute to

providing the organizations’ revenue, success and the

income that funds our personal physical assets. So why is

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it that in many organizations this is not recognized? This

may be due to the manner and the method in which

physical asset management and more specifically

maintenance management is viewed, understood and

implemented

within

an

organization

and

also

understanding the associated risks of not having a

system in place. The majority of organizations that

embrace physical asset management have a carefully

planned, defined and structured implementation of it

with the accompanying strategies, plans, policies,

procedures, functions, programs and supporting systems.

These organizations have learned that not having a

system in place affects the performance, success and

competitiveness of the organization and can actually

jeopardize their existence.

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Introduction to Physical Asset & Maintenance Management

Physical Asset Lifecycle

A physical asset is typically exposed to each of the

following activities throughout its’ life.

1. Plan

2. Design, Engineer

3. Purchase, Lease, Rent, Acquire

4. Construct, Build, Fabricate, Assemble

5. Commission

6. Maintain

7. Audit, Inspect, Evaluate

8. Rebuild, Dispose

9. Replace

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Introduction to Physical Asset & Maintenance Management

Physical Asset Management System

It is extremely important that a scalable Strategic Asset

Management Plan (SAMP) is developed that includes the

involvement of stakeholders. This plan should define

how physical assets are managed throughout the various

lifecycle stages. A physical asset and maintenance policy

must also be established that the stakeholders agree to

live by.

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A thorough physical asset management system should

include the following;

1. Policy

2. Objectives

3. Plan(s)

All three of these requirements should provide a

consistent tone that address all of the needs of physical

asset management, requirements of the organization

and expectations of the stakeholders. The system should

describe, define and include all of the necessary support

functions and how they are utilized and integrated. It

should also be periodically reviewed to ensure that it is

kept up to date and continues to meet the requirements

of the organization and the physical assets that are

utilized. When properly structured and implemented, a

physical asset management system will ensure that a

maximum return on investment is achieved.

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Policy

The physical asset management policy must be

documented and provide a framework for setting the

asset management objectives and should include

commitments by top management towards satisfying the

applicable requirements and the continual improvement

of the physical asset management system. This policy

should be consistent with the organizational plan and

other relevant policies.

Plan

The organization should develop and document a plan

that will assure that the physical asset management

system will achieve the original intentions of the policy

and prevent or reduce undesirable effects and integrate

continual improvement methods. This plan should also

be consistent with achieving the organizations objectives

and expectations of the stakeholders.

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Objectives

The asset management objectives should be consistent

with

organizational

objectives

and

the

asset

management policy. They should also be measurable,

monitored, reviewed and updated as needed. The

organization will need to establish an infrastructure with

assigned responsibilities and appropriate authorities that

will accomplish, support, review and update the

objectives.

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Introduction to Physical Asset & Maintenance Management

Physical Asset Support

Depending on the size and business nature of an

organization, there are several support functions and

programs that may need to be put into place to ensure

that the physical asset management system is complete.

These include the following;

 Disaster & Emergency Preparedness and

Recovery

 Energy Efficiency

 Engineering

 Ergonomics

 Hazardous Materials

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 Information Technology

 Maintenance

 Planning

 Quality

 Risk

 Safety

 Security

 Waste Disposal & Recycling

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Introduction to Physical Asset & Maintenance Management

Leadership & Stakeholder Support

The majority of systems and programs that are put into

place within an organization require the support of the

organizations leadership and stakeholders. This is an

absolute necessity. There should be an open

acknowledgement and expressed interest by top

management as to the need and support of these

systems. It is extremely difficult and in some cases

impossible for a system to exist without this support. As

is the case with many systems and programs, without

continual support, the system is destined to deteriorate

and eventually may fail completely.

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Introduction to Physical Asset & Maintenance Management

Stakeholders need to be involved in the establishment,

review and refinement of the physical asset management

system as a whole. This is what provides input as to how

this system will be formed and helps to ensure that

important functions and requirements are addressed and

included.

Communication

Physical assets are utilized for many different purposes

and by many different people within organizations.

Related activities should be communicated with the

individuals that rely on these physical assets to

accomplish their tasks and goals. In some cases these

activities require negotiations or alternative solutions to

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be put into place. Nevertheless, it should never be

assumed that the related activity does not require some

type of planning, scheduling and notification to be

performed. People tend to become much more receptive

and cooperative when they are included in the decision

making process and in many cases provide invaluable

input. Communication usually affects the success of the

required activity.

Risk Management

Identifying and addressing potential risks is a critical part

of any physical asset and maintenance management

system. The type of risk and the extent of the associated

effects will influence the manner in which it is addressed.

The cost of some physical asset failures pose such a

significant risk due to the associated costs that they must

be mitigated because failure is not an option. For

example, many physical assets rely on electricity to

function. Some of these physical assets provide life

sustaining services or information and technological

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services that will cause unacceptable conditions without

their continued functionality. This associated risk may be

addressed by implementing a backup generator that

automatically continues to provide the electricity when

the main service fails. Another example is determining

which components of a continually used physical asset

are prone to failure and that may be very difficult to

acquire. In this case spares are usually kept readily

available and additional alternative solutions are

carefully evaluated and may be put in place. These are

both forms of risk mitigation.

Project Management

In many cases, physical asset and maintenance

management require the use of project management

skills or even a dedicated project management entity or

group. Many types of projects are encountered and must

be managed such as physical asset relocation, expansion,

setup, design, engineering, construction, fabrication,

assembly and installation to name just a few. These

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Introduction to Physical Asset & Maintenance Management

projects require careful planning, coordination and

execution to be successful.

Planning

One of the most important activities that is sometimes

overlooked in physical asset management is the

continual need for effective planning. Planning should

occur throughout the lifecycle of many physical assets.

The planning process should include the stakeholders

which are involved directly and in some cases indirectly

with the physical assets. It is typically performed prior to

and in many cases during each stage of physical asset

management. Contributing factors such as end use,

utility, space and performance requirements, costs,

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Introduction to Physical Asset & Maintenance Management

maintenance requirements and expected longevity

should be considered. The lack of planning can cause

unnecessary delays with additional costs and can

jeopardize the effective implementation, commissioning

and use of a physical asset.

Engineering

Many organizations utilize one or more forms of

engineering regularly as it applies to physical asset

management. Reliability engineering is a skill that is used

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in many organizations to ensure that physical assets will

live up to their expectations and in many cases helps to

optimize physical asset performance. Engineering

functions are also utilized to comply with mandated

physical asset requirements. These requirements can

include fire, security, safety and health. Planned activities

such

as

expansions,

relocations,

construction,

fabrication,

refurbishment,

remodels,

rebuilds,

maintenance and upgrades also utilize engineering skills.

Required engineering skills include but are not limited to

mechanical, electrical, civil, architectural, maintenance,

reliability and structural to name a few.

Commissioning

The commissioning process involves ensuring that the

physical asset is ready for use. This is typically a quality

and compliance related activity that involves inspections

to ensure that the physical asset meets the defined

requirements,

standards

and

expectations.

The

inspections can include factors such as quality, health,

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safety, performance, reliability, efficiency as well as

meeting mandated federal, state and local requirements.

At the very least, the inspection process should involve a

checklist of items that need to be inspected and verified

prior to the release of the physical asset.

Energy & Utility Efficiency

Physical assets typically utilize one or more forms of

energy and utilities to perform their intended function.

Electricity, water and natural gas are commonly utilized.

All of these have their own associated costs. New

technologies and products continue to emerge that can

provide significant cost savings to organizations due to

increased energy efficiency. The manner in which utilities

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Introduction to Physical Asset & Maintenance Management

are distributed and utilized affect several different

physical asset factors such as operating and maintenance

costs, performance and longevity.

Disasters & Emergencies

A commonly overlooked and underestimated factor that

may cause a significant financial impact to an

organization is disasters and emergencies. The continued

success of an organization can be dramatically affected

by not being prepared for mishaps. Proper planning and

implementation of the related programs provides a

significant form of risk mitigation. Disasters such as fires,

tornados, hurricanes and earthquakes can devastate an

organizations ability to operate and provide their

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intended services and products. All mission critical

systems should be evaluated and alternative solutions

need to be implemented that address how a disaster or

emergency will be handled and how the organization will

recover. Building and property maps that show locations

and waypoints are extremely useful for visitors and

employees. These maps should include evacuation

locations and routes.

Safety

The personnel that utilize physical assets are directly

affected by the way that these physical assets are

designed, implemented, maintained and used. Safety

should be of major concern. Our environment can

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subject us to many hazards that are usually

unintentional. People should not be subjected to an

unsafe environment and conditions that could cause

injury or death. An organization that has environmental

dangers should ensure that appropriate measures such

as personnel protective equipment, showers, eyewash

stations, fire extinguishers, first aid stations, procedures,

signs and work instructions have been put in place, are

enforced and monitored. Organizations within the United

States may also need to comply with Occupational Safety

and Health Administration (OSHA) standards as they

apply. This includes safety programs for operating

vehicles and using hand and power tools and procedures

such as Lockout/Tagout.

A relatively simple concept that we should remember is

the fact that people are the reason why our business

succeeds and every effort should be made to keep them

safe. Safety related incidences can be extremely costly

and should be perceived and treated as unacceptable.

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Introduction to Physical Asset & Maintenance Management

Security

Many physical assets require that security related

measures, procedures, methods and infrastructure be

developed and put into place to help monitor and

protect the investments. These systems may include the

use of alarm, surveillance, access control and people.

These measures aid in controlling activities such as

vandalism, damage, theft and unauthorized access.

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Introduction to Physical Asset & Maintenance Management

Ergonomics

The manner in which physical assets are designed and

implemented can have a significant impact on the user in

a physical way. Repetitive motions, actions and

uncomfortable positions that the user is subjected to can

cause impairments that can affect the users’ attitude,

health and ability to perform and function properly. The

physical environment that the user is exposed to should

be carefully analyzed and considered.

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Introduction to Physical Asset & Maintenance Management

Quality

The quality of the individual components and the

construction, fabrication, assembly methods and

workmanship that are utilized when creating, producing

and maintaining a physical asset will directly affect

factors such as reliability, dependability and longevity.

Continual physical asset failures will amount to excessive

costs. Poor quality will affect the success of an

organization and could eventually cause it to fail. The

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majority of people have high expectations when it comes

to quality. This is evident based on the success of

particular product sales compared to the price and

quality of similar products.

Information Technology

Computers, tablets, servers, telephones and networked

systems are all forms of physical assets and are used in

almost every organization in some way shape or form.

The majority of organizations cannot function properly

without the use of some or all of these. Data storage and

retrieval is of vital importance for organizations. Many

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Introduction to Physical Asset & Maintenance Management

types of physical assets employ the use of computer and

software technologies to function. These technologies

are also used to acquire physical asset performance and

utilization data.

Hazardous Materials

Some physical assets utilize, produce and are comprised

of hazardous materials. These materials can create

extremely dangerous situations that affect the

environment and health of all living things. The

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organization should employ similar principles as was

described in the safety section to protect people.

Additionally, procedures and methods need to be

implemented that address the safe handling and disposal

of these materials as required by federal, state and local

agencies. The organization may also need to establish

Material Safety Data Sheet (MSDS) stations. These data

sheets provide important information about material

characteristics for handling and first aid purposes. The

majority of hazardous materials require the involvement

of specialized services for proper disposal.

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Introduction to Physical Asset & Maintenance Management

Waste Disposal & Recycling

The majority of organizations produce waste on a daily

basis. Portions of this waste such as paper, metal, plastic

and organic can be recycled. Recycling makes a lot of

sense. It conserves our natural resources and puts less in

the landfills. Organizations should have recycling

programs in place and provide the appropriate

containers in designated areas for collection purposes.

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Maintenance