by Glenn Pallesen, Asset Management Advisory – Principal, Select Solutions
Recently, there has been much discussion about ISO 55001. Having just successfully completed certification to this standard, Select Solutions and AusNet Services provide some thoughts and tips for the application of Strategic Asset Management in the utilities sector.
Those experienced in asset management will know that strategic asset management is not a new concept, and elements of strategic asset management have been reflected in international standards for many years. ISO 9000, released in 1987, describes a quality system detailing some of the elements of strategic asset management. Reflecting on the content of ISO 55001, the concepts of strategic asset management have been around in some form for the past 40 years.
ISO 55001 represents a step-change of international proportions which provides a published guide to those without an inherent ‘systems’ skill set. As with all standards, the clear benefits of ISO 55001 include the ability to create consistent approaches across similar organisations and providing external recognition to help build stakeholder credibility; be that internally to executive committees and boards, or externally to clients, partners, shareholders and regulators.
At its core, ISO 55001 is fundamentally about good business management. The success of any business relies on how well it manages its assets; be those assets physical, human or financial.
AusNet Services accreditation journey
Across its multi-billion dollar portfolio of electricity and gas distribution and transmission assets, AusNet Services (formerly SP AusNet) has been accredited certification to PAS55 and subsequently ISO 55001, achieving certification for the latter in April 2014.
The process, led by the late John Allen, was driven to transform the business rather than simply achieving certification, with an objective to ensure that as an asset owner, AusNet Services fulfilled its obligation to stakeholders to manage its assets effectively. Even as the business was entering the final steps of achieving certification, the team was already looking beyond the scope of ISO 55001 to introduce further asset management initiatives using advanced benchmarks, such as those in practice in the UK, to continue the drive of continuous improvement.
Through the journey of implementing this enterprise wide management system, AusNet Services identified a number of enablers for successful implementation of the system.
The following steps are recommended for organisations seeking to implement a strategic asset management system:
- Complete your own internal self-assessment to the standard. There are some great tools available on the web. The Institute of Asset Management has a Self-Assessment Tool to get you started.
- Develop an improvement plan using the results. This will be specific to your organisation. Don’t underestimate the opportunity to start communicating to your organisation about the ‘change journey’ you are commencing. A dedicated project manager is required and ideally you will want someone that inherently understands a systems approach to management. The implementation can take 6 to 18 months.
- When you feel you are ready, get an external pre-certification review. Choose your qualified certifier carefully. Added value can come if the certifier has experience in your industry. A good certifier will develop a partnership with you. This is much more than an academic ‘tick in the box’. It is completed on the basis of positive input and improvement – if your certifier can’t find areas of improvement (even if you can be certified), then find another one.
- Update the improvement plan after the pre-certification review. At this stage there should be limited actions to complete prior to the certification process. Allow around four weeks for final preparations.
- Arrange and conduct a certification audit. Remember this is a partnership; you’re likely to keep this improvement and certification cycle going for many years. Know your certifier and ensure they are adding value to the process. This is all about improving the organisation, not just gaining the certification.
Tip 1 – Establish an asset management committee early. This provides an executive level of governance and will help with communication, reinforcing intent and removing road blocks
Tip 2 – Ensure you have a ‘champion’. Preferably at general manager level.
Tip 3 – This is a large scale change management exercise. At all stages take the opportunity to involve others and communicate, communicate, communicate!
There are a number of benefits that AusNet Services has realised over the eight years since implementing a strategic asset management system across the business, including:
- External validation which gives stakeholders, both internal and external, confidence that our assets are being managed effectively.
- Assessment of the maturity of the different asset management functions allows the business to understand areas of improvement and development.
- A focus on driving change across the business.
- Improved company understanding of, and commitment to, the broader requirements of a sound asset management system.
- Assists with developing credibility with industry regulators.
Implementing a strategic asset management system requires significant investment, resources and stakeholder support. The objective is to develop a system that delivers a return on that investment through a multi-layered understanding of the whole of life asset risks and costs. The value of assets is maximised where the system extends beyond the technical regime of an organisation and into other areas of support including business development, human resources, risk, finance, treasury, quality, safety, and environment.
For this reason, when considering asset life cycle optimisation an organisation needs to address each stage of the asset life:
- Acquisition: Apply effort at the front end of an asset’s life in the definition and design phase. That is, get it right, be specific, know what you want and why.
- Operations and maintenance: Shift from being reactive, to planned, and eventually to proactive. This will entail effort in defining and investing in appropriate condition monitoring programs and management / interpretation of asset data. A mature organisation will be shifting from deterministic planning to probabilistic planning. In other words, moving from applying the same operation and maintenance plan to all of the same assets types, to applying an operation and maintenance plan on a risk-based approach where the organisation understands the risk profile of each of its assets in the context of likelihood and consequence of failure. Under probabilistic planning the same asset type may have a vastly different operation and maintenance plan.
- Life extension/disposal: Asset life in the utility industry for different assets can range from 15 years to 80 years. Learn from the operations and maintenance phase and the asset information gathered. Add to this the overarching corporate objectives to determine the optimum course of action to retire an asset or extend its life or renew the asset and start the cycle again.
Strategic asset management and safety
It would be remiss of me not to draw attention to the safety aspects of best practice asset management and the benefits of implementing good asset management practices. If assets are managed successfully and information is captured in a format that can be analysed and shared with others, we can learn about our assets and understand how they are likely to perform in the future (i.e. they become predictable). If assets are predictable then we are able to foresee and reduce or eliminate the chance of a safety event occurring.
What better reason could there be than ensuring that at the end of each day, you can enjoy, either directly or indirectly, contributing to the optimal management of your organisation’s assets and go home safely, ready and confident to return tomorrow.