Decision Making in Asset Management (Or...beyond criticality matrices)

Making decisions in physical asset management is an incredibly complex task, and one that carries with it substantial risks, penalties and rewards.

Yet for an area with so much importance there is surprisingly little information out there on how to make high confidence decisions. Decisions that will progress the organization and support present goals and objectives.

These could include decisions on operational budget spending, CAPEX spending, where to start with a reliability / improvement initiative, how many assets a company should have (fleet management being a gigantic issues here), and many other areas. IN fact, the list is as long as your imagination is...

My experience is that there are four very different ways that asset intensive organizations can make decisions.

Yet they normally all gravitate to one method, that of criticality.

A method that is severely questionable both in terms of application and in terms of results.

This is a short list of methods I have used, their applications and their limitations.

1) Criticality (Of course)

Overused, misunderstood, and often the cause of reliability program failures. However - criticality does have very good uses, and can be deployed for great effect where certain criteria have been met.

Namely:

1. It must be applied at the failure mode level. Meaning all functions and all failure modes must be identified first.
2. Best used where assets/systems have relatively few functions. Such as instrumentation systems or "simple assets". (Pipes, tanks, vessel structures etcetera)
3. It should not be used in any way that aggregates the consequences, nor tries to place numeric dollar values on issues such as human life. This is an inherently dangerous practice as you can often find high cost operational failures coming in as more critical than failure that can kill people. An unacceptable situation. 
4. Very useful for managing the work order backlog as the corrective / reactive tasks therein are already at the failure mode level.

As indicated above criticality approaches need to be conducted based on a "first past the post" approach. If it is intolerable in the safety area then you do not need to assign any further consequences to it. (At all, ever)

Safety wins...

One of the most puzzling issues surrounding criticality is that it is a term that is used so widely in industry, without any real consistency.

But normally it is a process used to determine the most important assets. This is where the problem actually starts.

Most important does not mean most beneficial, nor does it mean worst performing, highest cost, or largest impact on the companies bottom line. Just the most important. (More on that in another post)

2) Prioritization (Analytical Hierarchical Process)

I discovered AHP when I was working int he UK and it has proven its value to me time and time again. I really like this method as a quick way of prioritizing work and / or spending.

The heart of the approach is to first find out what is really important tot he organization. (Not just what they say is important) And then use this as a guideline to prioritize the work/spending that is under consideration.

This is of course a simplification. The process is a bit involved, but it is rapid, accurate, and delivers superior results in my views.

The reason for this is that it supports the current views and thinking of the organization at large. Particularly if it has been well applied. So instead of the most important assets, we immediately shift to thinking about the highest impact assets.

Variations of this approach have been adopted by rail and infrastructure organizations throughout the world.

3) RAM Modelling

Another favorite of mine. Availability modelling of process plants, heavy equipment fleets, conveying systems, water networks and so on is probably the most accurate and rapid way of highlighting weak points in the existing asset base.

The overall approach falls under de-bottlenecking and is another excellent proactive means of deciding where to place resources and funds for future performance requirements.

4) Bad Actor Analysis

Easy, simple and abundantly available. Production loss accounting is probably the most widely used prioritization method globally and for good reason.

It enables maintenance / reliability managers to pinpoint where the money is draining from the organization (in terms of lost profit opportunities) and provides short term results that are normally of a very high magnitude.

I hope this is of some use, and I hope it stops you reaching for the criticality matrix first next time you need to make decisions related to how your maintenance is carried out.

Taking decisions is a very complex area, and one that needs to be addressed using a range of sophisticated solutions.