DECLARATION 2- PUBLICATIONS
2.3 Scope of the AM
This section begins by giving the scope and context of AM. Then, it examines the application of AM technologies, strategies and models as well as their impact on the life cycle, risk and performance.
AM has been defined as a set of disciplines, methods, procedures and tools to optimize the whole-life business impact of costs, performance and risk exposure (associated with the availability, efficiency, quality, longevity and regulatory/safety/environmental compliance) of the company’s physical assets [24]. The British Standard Publicly Available Standard 55 defines AM as systematic and coordinated activities and practices through which an organization optimally and
sustainably manages its assets and asset systems, their associated performance, risks and expenditures over their life cycles for the purpose of achieving its organizational strategic plan [1].
The scope of AM is huge, but it can be summarized by the following key words in the two definitions above: optimization of impact of costs, risk and performance throughout the life cycle of physical assets.
In the process of decision making, AM encompasses the principles of Six Sigma from Total Quality Management (TQM), the Balanced Score Card (BSC), Reliability-centered maintenance (RCM), Reactive Maintenance, Preventive Maintenance (PM), Condition-based Maintenance (CBM), Proactive Maintenance and financial prioritization [25]. Analysis of NPV, IRR and Payback are the most common methods employed by the power utilities in determining financial risks associated with their investment strategies [5], [8]. The weakness of these methods is that they tend to ignore the effects of the AM strategies and their associated technologies on the assets [8].
Publicly Available Standard (PAS) provides a platform (model) for the implementation of best practice AM. It advances that legal and stakeholder requirements and customer expectations are the primary inputs to any best practice AM system [1]. This view is supported by the EPRI [10]. This means, physical assets, as well as their management systems, must be aligned to the organizational strategic plan and stakeholder expectations, but the alignment process presents the major challenge to asset managers in the deregulated electricity market [2]. This is the imperative for the development of models that link the application of AM strategies to the asset failure risk. Figure 2- 2 demonstrates how the AM systems should be linked to the strategic plan and to legal and stakeholder expectations.
With respect to Figure 2-2, AM, strategies, technologies and techniques, maintenance, renewal, performance, and condition monitoring belong to the same group called processes (also see, for example, Figure 2-3). In addition, at the bottom of Figure 2-2, there are AM enablers and controls.
These refer to decision support tools, techniques and philosophies that must be applied to assets or during the application of technologies. In most cases, it is very difficult to separate the enablers and controls from the AM technologies because these tend to complement each other. Strictly speaking, technologies refer to the equipment or machines that are utilized in condition monitoring, diagnostics and maintenance; whereas techniques generally refer to procedures and processes.
However, some techniques can as well be regarded as technologies as is the case of chromatography, furans (2-furaldehyde) analysis of oil in power transformers.
Legal and stakeholder requirements and expectations (customers, shareholders, regulators, employees, suppliers, society)
Other organizational
requirements and systems Organizational strategic plan
Asset management policy ______________________
Asset management strategy Asset management objectives
Asset management plans
Organizational values, functional standards,
required processes
Acquire/create Utilize Maintain Renew/dispose
Portfolio of asset systems and assets (diversity of
types, criticalities, condition and performance)
Continual improvement
Performance and condition monitoring
Asset management enablers and controls PAS 55 Asset
management system
Figure 2-2: Overview of the AM system [1]
The PAS 55 model provides a solid basis for optimization of physical AM systems because it encompasses all the key elements affecting organizations whose survival depends on long term sustainability of the assets [1]. These are legal, regulatory, policy, strategy, objectives, AM plans, values, standards, processes, and the actual assets. The major weakness of the PAS 55 model is that it leaves continual improvement open-ended. Continual improvement is ineffective unless it is benchmarked [26]. The continuous improvement works if an organization is already a star performer; otherwise it is a dreadful and catastrophic idea, that is, if it is trailing behind the world standard by a wide margin [25]. Therefore, the continuous improvement process must be carried out relative to the best-of-the-best in the industry. Despite the weakness, the PAS 55 standard provides a systemic approach to AM, which is the core characteristic of an integrated or optimized AM system.
The best practice AM should be multi-dimensional (that is, it should incorporate AM tools, lifecycle models and risk-evaluation models); and it should employ an integrated approach [1]. The integrated approach to AM is characterized by six key principles and attributes, namely: holistic, systematic, systemic, risk-based, optimal, and sustainable [1], [26]. The following proposition suggests that authoritative bodies in the power utility AM have embraced the systems (holistic) approach when managing their assets [3]: a holistic, multi-dimensional AM approach aids in
revealing synergies and overlaps between asset improvements in the same or different portfolios or levels, and is instrumental to ensuring that favorable, tangible benefits are obtained.
In the context of a power distribution utility, AM can be defined as a systematic process of cost-effectively operating, maintaining and upgrading of electrical assets by combining engineering practices and economic analysis with acceptable business practice [8]. AM technologies are technologies that are employed in the utilization, maintenance, renewal and any other action that promotes the integrity of the asset or asset system. Electric power assets fall into two categories, namely: primary and secondary equipment. Primary equipment includes overhead lines, power and instrument transformers, switchgear, lines and cables; whereas secondary plant consists of telecommunications, power system protection relays, metering and control infrastructure [8].
The structure of the AM system is hierarchical. Business or mission objectives form hierarchical level 1, strategy and processes constitute level 2, whereas reliability (service delivery) forms level 3 of the AM system [26]. Figure 2-3 outlines these AM hierarchies.
Stage 2 Strategy
Resources Technology Organization Systems/
Strategies Stage 3 Application of
processes Benchmarked continuous
improvement process
(Application of metrics) Feedback
Feedback
Hierarchical level 1
Stage 1 Business/
Mission objectives
Hierarchical level 2
Hierarchical level 3 Stage 4 Reliability/
Predictable Capacity Key/Notations:
Main flow (feed forward) Feedback
Hierarchical level boundary
Figure 2-3: Hierarchical levels of AM systems
Viewed in terms of Figure 2-3, the risk models developed in the current work fall within level 2 and under stage 3.
The business or mission objectives must be set and stipulated in the firm’s strategic objective to provide the direction for the firm. The strategy consists of strategic, tactical and operational plans that the organization must pursue in order to align the processes (systems, organization, technologies or strategies and resources) with its business objectives [2], [27].
Section 2.4 gives an overview of systems thinking, its relevance and application to the current work. It is worth mentioning that from this point onwards, systems thinking will be used interchangeably with systems theory or systems science.