Asset Replacement Value as a benchmark

Benchmarking yourself against the leading companies in asset management globally is a tricky business. it is very easy to adopt something you read in a book without really understanding what the measure is actually showing. 

For example, take the very common Asset Replacement Value (ARV) measure. This is a measure of all maintenance costs as a percentage of the ARV.

My own measures of this metric are:

Best in class - 1.75%

Average - 2.3 %

Worst in Class - 5.3%

But on further analysis... is this measure really of any use?

The advantage of leading practices

No matter which company I work with they all have the crushing pressure of reduced operational budgets. Sometimes caused through competitive necessity  new taxes reducing bottom line earnings, or even the need to just stay in business. 

In fact, recent studies have shown that this is overwhelmingly the case for most organizations, closely followed by the need to maximise the return on assets and reduced capital budgets.

Pressures driving asset management

When confronted with these pressures most organisations fumble around in the dark trying hard to find something that sticks. Something that is able to turn unplanned downtime into planned stoppages and reduced the overall costs of ownership. 

How are they performing in relation to other asset intensive companies in their sector? How far is the gap that they need to close, which areas represent the greatest value for money, and how can they do all of this rapidly?

The good news is that this is not philosophy, this is a physical science. There are companies that are achieving best in class performance, there are methods and techniques that do deliver results, and there is a roadmap that suits their economic drivers, suits their operating environment, and doesn't come in shrink wrapped disks.

Changing the way we measure performance - Planning and Scheduling (Pt1)

Planning and scheduling is the most common set of metrics within the maintenance department, yet like many other we find ourselves stuck in the same cycle of measuring things that either provide us low value, or are easily manipulated. 

As with every other type of indicator, the goal is not to produce outstanding measures every time. This is how scheduling metrics generally end up figuring in company dashboards. 

The real goal is to be able to highlight areas of poor performance that we can improve, or to measure parts of our process to see how we are managing our workload. Unfortunately, nobody has informed the army of SAP consultants circling the globe forcing un-workable systems on companies... but that's another story. 

The metrics included in this post are not the run of the mill, and are designed to produce a specific result. 

Changing the way we measure maintenance - Mobile Assets

Recently we spoke about how our current approach to KPI's and performance reporting leaves a lot to be desired. In particular the fact that we still represent performance as one point in time (one figure), we often misuse the metrics we do have, and we do not take advantage of advances in technology. 

Although there were a range of suggested metrics included in this post, I wanted to post some actual (Anonymous) data to try to show how powerful it is to use modern technologies for asset improvement. 

The graph presented in this post is called a Motion Graph and it is developed using Google Drive. 

Failure reduction - Targeting Analysis

I became disillusioned with Root Cause Analysis many years ago when I first bumped into Mr Bob latino from the Reliability Centre in Virginia. (Real class character and all round nice guy)

Since then I have worked a lot in this area and my continued work has sharpened my appreciation of the problems in this field.

Initiatives end up being long lists of redesigns waiting for capital/approval/time/labour and all the while the problem persists. Or we dedicate so much of our time working on things that are going to take weeks to analyse correctly. Or worse still, we end up blaming the fallible human and sending them off for unneeded retraining.

This post is the first in a series of posts on ReflexRCA. A method of to embed root cause analysis across the organization using straightforward principles and methods, and based on tools you probably have at your disposal today. 

The series will include:

• Targeting Analysis
• Causal Analysis (Depth of analysis)
• Fixing failure (Resolving problems)
• Case Studies (From a range of different industries)

We won't be talking here about issues such as implementation or justification of these programs. I am pretty sure that most companies see this as self evident. 

Asset Condition Assessment for Infrastructure and Utilities industries

Over the past couple of weeks I have been working on an article and case study focusing on Asset Condition Assessment for the utility and infrastructure industries.

ACA programs are part of the renewals planning for these industries, and therefore part of the Capital maintenance forecasts they develop. 

When done well these programs can inform renewals spending with confidence for up to 5 years, when done poorly the organisation often finds itself at the mercy of current events with no confident view of replacements and refurbishments. 

In work from 2005 to today it is my opinion that the majority of programs of this nature are misdirected, and often spend large sums of money on information that is misleading or totally useless. 

Changing the way we measure performance

A few years ago I became very disillusioned with the prevailing views on metrics, performance measurement and KPI's. 

Sure, I had all sorts of issues relating to the type of metrics being used and how they were being built. But it went further than that. 

I started to question what value could we possibly get from figures representing a fixed point in time, and exactly how much opportunities were we missing by doing so?

Not only that, but with the technology available why are we settling for second best in relation to how we view our metrics and how we display them?

The measures below are different. They take full advantage of existing technology, and allow us to see a fuller picture of asset performance, all with the goals of eliminating waste and improving performance.