Sustainable Operations through Better Asset Lifecycle Management

Sustainable Operations Through Better Asset Lifecycle Management

Sustainable Operations Through Better Asset Lifecycle ManagementAsset Lifecycle ManagementAsset Lifecycle Management

Sid SnitkinVice-President & GM

Enterprise Advisory ServicesARC Advisory Group

[email protected]

Agenda Agenda

What is Sustainability?

What Makes a Sustainable Mfg Operation?

How Does This Relate to Asset Lifecycle Management (ALM)?

How Can You Use this to Develop a Strategy for Sustainable Operations?Sustainable Operations?

2© ARC Advisory Group

What is Sustainability?Many Perspectives, Many ChallengesWhat is Sustainability?Many Perspectives, Many Challenges

Focus on the Environment – Planet’s Survival

• Use of Natural Resources – Renewable Rational Use etc• Use of Natural Resources Renewable, Rational Use, etc.

• Product Footprint - Recyclable, Decomposable, etc

• Process Footprint – CO2, Water, Other effluentsp , ,

Focus on the Business - Corporate Survival

• Satisfying Customer – Features, Cost, Delivery, Service, etc.y g , , y, ,

• Satisfying Shareholders – Profit, RONA, etc.

• Satisfying Regulators – Product Safety, OSHA, etc.

Focus on Everything – “Green to Gold”

• Aligning Corporate and Human Survival Goals


What Does Sustainability Mean to Mfgrs? Operations That Meet all Sustainability GoalsWhat Does Sustainability Mean to Mfgrs? Operations That Meet all Sustainability Goals

A Sustainable Manufacturing Operation Has:• The Right Set of Assets for the Job• The Right Set of Assets for the Job

• Fast, bumpless response to changing requirements• Minimum use of energy, labor and materials

Th Ri ht P ti t O ti i U f All A t• The Right Practices to Optimize Use of All Assets• Strategically - to satisfy the most important demand• Tactically - in the most efficient manner• Balanced to maximize returns x lifetime

• The Right Programs to Ensure High Availability• Assets that are reliable and ready when neededy• Assets that maintain peak performance over the long run


Sustainability = Excellent ALM PerformanceALM Provides a Good Basis for Sustainability EffortsSustainability = Excellent ALM PerformanceALM Provides a Good Basis for Sustainability Efforts

The Right Capability

High Availability

Optimal Utilization

Optimum PerformanceX X =

Design MaintainOperate Win!

DOM E ll i h f

Capability AvailabilityUtilization Performance

ARC’s DOM Model for Asset Performance

DOM Excellence is the outcome of a proper Asset Lifecycle Management (ALM) Strategy …

» Establishing a Good ALM Strategy will satisfy many» Establishing a Good ALM Strategy will satisfy many of your Sustainability Goals

» Investments in ALM can be justified on the basis of S t i bl O timore Sustainable Operations

» Making the Right Investments requires a solid understanding of ALM!


ALM begins with a proper view of the AssetProductive Assets are More Than EquipmentALM begins with a proper view of the AssetProductive Assets are More Than Equipment

PrimaryF iliti

Project-CentricP j t M t

HumanPhysical

FacilitiesEquipment

Remote

Project MgmtEngr/DesignProcurementConstruction

SupportIT HW/SW

MobileMRO Material

Asset-CentricOperations

Process EngrMaintenance

Virtual

R f D t

MRO Material MaintenanceReliability

A ti it R dReference DataFunctional

DesignProcedural

Activity RecordsCommercial

StatusHistory


The Three Asset Classes are Equally Important to Plant Success !

Add a proper definition of an Asset LifecycleStages in the Life of a Real Physical AssetAdd a proper definition of an Asset LifecycleStages in the Life of a Real Physical Asset

Time

Ass

etRamp

UpOperRdy

FuncAsset

ts f

or

the ARdy

PeakPerf

AssmAsset

Asset

eld

Pro

ject

ModsSpec

of

Bro

wn

fieMods

P j

Spec

fe C

ycl

es

o

Liab

CashDes

ProjPlan


LifCash

IdeaBasis

And, the processes that must be managedALM is the Management of Several Key ProcessesAnd, the processes that must be managedALM is the Management of Several Key Processes

Time

Ass

etRamp

UpOperRdy

FuncAsset

ts f

or

the ARdy

PeakPerf

AssmAsset

Asset

Operate & Optimize

eld

Pro

ject

ModsSpec

p

of

Bro

wn

fieMods

P j

Spec

Design &Build

Maintain &Improve

fe C

ycl

es

o

Liab

CashDes

ProjPlanBuild Improve


LifCash

IdeaBasis

And, the Many Parties Involved in ALMALM Requires Extensive CollaborationAnd, the Many Parties Involved in ALMALM Requires Extensive Collaboration

Engr & Project Mgmt Services

(EPC/AEC)

Owner/Operator

(EPC/AEC)

Fabricators & Constructors

O&M Service Providers Operate

& Optimize

MROMaterial

IT ServicesProviders

Design &

Build

Maintain &

Improve

Virtual

SuppliersProviders


Shareholders Regulators

Results in Some Level of Asset PerformanceALM Performance = Project & Plant PerformanceResults in Some Level of Asset PerformanceALM Performance = Project & Plant Performancejj

• Financial • Cost, Cash Flow

• Functional• Work Quality• Design Compliance

• Design Accuracy• Release Mgmt• C/N Mgmt• Equip Selection

• Const Planning• Material Mgmt• Site Mgmt• Labor Efficiency

Timely, Right X

DesignOptimalBuild

• Design Compliance• Personal EH&S

• Schedule

Equip Selection• Material Specs

y• EH&S

Timely, Right Projecte y, gInformation

MaximumOptimal

X

MaintainOperate

Execution

ALMPerformance

e y, gInformation

The Right

jPerformance

A tMaximum Availability

Optimal Utilization XX

• Product Range• Throughput

• Product Mix• Prod Planning

• Maint Strategy Mgmt• Maint Planning

• Financial • Profit, Ratios (ROA)

The Right Capability

AssetPerformance

oug pu• Quality• Product Unit Cost• EH&S Capability

od a g• Prime %• Material Cost• Labor Cost• EH&S

a a g• Maint Efficiency• MRO Material Mgmt• Labor Cost• EH&S

o , a o ( O )• Functional

• Process EH&S• Personal EH&S

• Product/Service• Cost, Quality, Delivery


Optimal Performance Occurs When all DOM Processes Are “Jointly” Optimized Across All Lifecycle Stages!

Developing an ALM StrategyPerformance Depends Upon Several FactorsDeveloping an ALM StrategyPerformance Depends Upon Several Factors


ALM Requires Strategies for Design, Operate & Maintain!

ALM Performance is Challenging ALM Needs Interoperability Across ALM ProcessesALM Performance is Challenging ALM Needs Interoperability Across ALM Processes

Consistent

Shared GoalsStrategyOperate

Compatible Tools

Consistent ProcessesPeople | Processes

TechnologyOptimumPerformance

Complementary Data Models

Information

Design Maintain Design Operate Maintain

Maximizing Performance requires Teamwork … AIM helps Teamwork “Work” !


AIM helps Teamwork Work !

Developing an ALM Strategy ALM is a Collection of Interdependent StrategiesDeveloping an ALM Strategy ALM is a Collection of Interdependent Strategies

Asset Lifecycle ManagementA Collection of Interdependent Business Strategies

Capital Projects Management (Design & Build)

Capital Assets Management(Maintenance & Reliability)

Human

Virtual

Physical Human

Virtual

Physical

Asset Information Management Time

etRamp

Functional• Process

Specs • Process

Models• Process Calcs• Flow Diags• Equip Calcs

Design• Process

Design • P&ID• Equip Layout,

Design, BOMs

• System

Procedures• Project Mgmt• Install/Test • Descriptions

of Operation• Operating • Insp & Maint• Certification

Commercial• Financial Analysis• CAPEX• Depreciation• OPEX• Purchasing

Records• Warranty &

Status• Project & Site • Procurement• Operational

Status• MRO

Inventory• Training

History• Source &

Build History• Operating

History• Maint History• Inspection

Records Bro

wn

fie

ld P

roje

cts

for

the

Ass

eUpOperRdy

PeakPerf

ModsSpec

AssmAsset

FuncAsset


Equip Calcs• Equip Specs• Func Designs

yDetail Design

• MRO BOMs

• Certification Reqs

• Lockout & Safety Reqs

• Warranty & Repair Records

• O&M Service Agreements

Training• Incident

Reports• People

Certifications

Reference Data Activity Records

Lif

e C

ycl

es

of

Liab

Cash

Idea

DesBasis

ProjPlan

Where Can ALM Help with SustainabilityMany Opportunities, Many VictoriesWhere Can ALM Help with SustainabilityMany Opportunities, Many Victories

Focus on the Environment – Planet’s Survival

• Use of Natural Resources – Renewable Rational Use etc• Use of Natural Resources Renewable, Rational Use, etc.

• Product Footprint - Recyclable, Decomposable, etc

• Process Footprint – CO2, Water, Other effluentsp , ,

Focus on the Business - Corporate Survival

• Satisfying Customer – Features, Cost, Delivery, Service, etc.y g , , y, ,

• Satisfying Shareholders – Profit, RONA, etc.

• Satisfying Regulators – Product Safety, OSHA, etc.

Focus on Everything – “Green to Gold”

• Aligning Corporate and Human Survival Goals?


?

Conclusions & RecommendationsConclusions & Recommendations

Asset Lifecycle Management (ALM) programs address many of the issues that are now being identified as Sustainability Goals

» Consider ALM as the foundation for your own Sustainability ProgramProgram

Effective ALM strategies are based upon a proper understanding of assets, asset lifecycles, p p g , y ,ALM processes and ALM Stakeholders

» ARC’s ALM research addresses these issues and may be helpful in your efforts to achieve various Sustainability goalshelpful in your efforts to achieve various Sustainability goals

» Learn more about ALM through ARC’s ALM newsletter, research reports, workshops and events.


For a free copy of a full ARC report on this topic please contact the author at srsnitkin@arcweb com

Thank YouThank You

contact the author at [email protected]

For more information about Asset Lifecycle Management please visit our web site at www.arcweb.com and look


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Sustainable Operations through Better Asset Lifecycle Management

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