Why ISO 55000 matters to plant managers

New international standard drives value in asset management.

By Sheila Kennedy, contributing editor

You might have heard the whispers about ISO 55000 during its development in recent years. More than likely, that awareness was fleeting since it was still a concept and not a business priority. The standard was published in January, and now that it’s a concrete entity, your board of directors and C-level executives will surely catch wind of it and start asking questions.

In brief, the ISO 55000 family is the first set of international standards for asset management. Developed by International Standards Organization Project Committee 251 (ISO/PC 251), it draws on the successful British PAS 55 standard and encourages good management practices for assets of any type, by organizations of any type or size. It is comprised of: 

  • ISO 55000-2014: Overview, principles, and terminology for asset management
  • ISO 55001-2014: Requirements for a “management system” for asset management
  • ISO 55002-2014: Guidelines for the application of such an asset management system

“Those of us who have long encouraged organizations to become best in class in asset maintenance and reliability welcome the new ISO 55000 standard,” says Brian Heinsius, maintenance and reliability manager at Iluka Resources, an Australian mineral sands mining and processing company. “Now we can say that it’s not just our idea; it’s an internationally recognized standard for how we should handle our physical assets.”

Plant managers and anyone with responsibility for asset reliability need a sound understanding of ISO 55000 and its goals, so that they’ll be prepared to answer whether, and to what extent its recommendations are in effect, and what, if any, steps are being taken to comply.

Don’t be surprised if OEM service organizations and reliability-oriented software vendors raise the questions, as well. They, too, have a vested interest in your organization’s asset reliability and in mitigating operational risks. They are working to spread the word about how ISO 55000 drives value in asset management.

Value-centric objectives

Sheila Kennedy is a professional freelance writer specializing in industrial and technical topics.Sheila Kennedy is a professional freelance writer specializing in industrial and technical topics. She established Additive Communications in 2003 to serve software, technology, and service providers in industries such as manufacturing and utilities, and became a contributing editor and Technology Toolbox columnist for Plant Services in 2004. Prior to Additive Communications, she had 11 years of experience implementing industrial information systems. Kennedy earned her B.S. at Purdue University and her MBA at the University of Phoenix. She can be reached at sheila@addcomm.com.

“ISO 55000 is all about creating value and managing risk by protecting a company’s assets and even its reputation,” says Kris Goly, technical services manager for Siemens Industry Lifecycle Services. Goly is a strong proponent of ISO 55000 and its British predecessor, PAS 55. He is an active member of the U.S. Technical Advisory Group (TAG) to ISO/PC 251, which was instrumental in developing the ISO 55000 Asset Management Standard. He is also vice-chair of the Society for Maintenance and Reliability Professionals (SMRP) Certified Maintenance and Reliability Professional Benchmarking Committee.

Goly was one of several U.S. representatives on the ISO 55000 standards development committee. For a little more than two years, they met regularly both in person and by phone to review drafts and comments and to make changes. They also attended annual delegations where the entire ISO development committee from around the world met face-to-face to update the standard.

“ISO 55000 looks at assets with a holistic point of view, from inception to disposal. It’s asking the asset owners to have a process in place — not necessarily software-based, but software definitely helps — that will measure and manage the assets in an effective way and make sure the assets bring value to the company,” says Goly. “It’s about creating value for the asset owner, and value can be derived in many forms, not just money. It can be shareholder value, intellectual property protection, optimizing the condition of the assets, or any number of performance indicators.”

Getting the word out

With ISO 55000 still in its infancy, the buzz is just beginning. “Plant management does not seem to be aware of the ISO standard, and they don’t currently have a reason to care. But, they will care when corporate management or the board of directors requires that they comply,” says Forrest Pardue, president of 24/7 Systems.

“For many, ISO 55000 will not hit the radar until government regulators such as the Mine Safety and Health Administration say to comply, or large insurance underwriters such as FM Global offer preferential insurance rates for compliance,” says Iluka’s Heinsius. “I definitely think that will happen at some point.”

In Goly’s current role, providing global support for Siemens mining equipment services, he encourages companies to adopt asset management standards. “I’m interested in helping our customers to become compliant with ISO 55000 as I believe that it will help them to better manage their assets,” he explains. “I think the big issue with standards like ISO 55000 is that the development is mostly spearheaded and debated by individuals who have interest in that particular field. They are really at the forefront of the standards on a personal basis.”

However, organizations as a whole usually don’t care about standards, at least not at first, continues Goly. “When talk of a new standard begins, some will say it’s a good idea,” he explains. “Managers will attend conferences or read papers about it and decide that it’s worth pursuing further. That’s how it usually happens. I’ll ask mining companies if they’ve heard of the asset management standards. Some have heard of PAS 55, but few have heard about ISO 55000, except perhaps the largest and most progressive mining companies like those in South Africa or Australia. But, the others quickly become intrigued because they are very asset-intensive industries.”

A small mining expansion project can cost $1 billion. “You can see why it is important to manage assets in the right way,” says Goly. “We’re talking about really big money.”

Compliance within reach

Organizations that have already invested time and financial resources in asset management best practices and software tools will be best positioned for compliance.

“No clients have asked me about the ISO standard yet, and, when I ask them about it, they seem like it’s a distant concept that they are not going to worry about,” says 24/7’s Pardue. “However, we have several clients that already have best practice asset reliability programs. They are already following certain ISO 55000 recommendations and profiting from the operational advantages; they just don’t know it yet.”

Siemens’ Goly agrees. “Although the standard is brand new, I believe that some companies are almost ready to be certified,” he says. “For example, those that use ISO 9000 and other management standards and good practices will find it relatively easy to implement and become compliant with ISO 55000. It could take them just a few months, maybe six or 12 months, to be fully compliant.”

On the other hand, if a large corporation is in its infancy stage in terms of implementing any asset management practices, then it will take a long time. “I’ve seen some companies take 18 months to two years to implement PAS 55,” says Goly.

Software as facilitator

Asset management, condition-based maintenance, and enterprise resource planning systems are among the targets of ISO 55000 because they facilitate compliance (Figure 1). “The software provides the basic tools for standardization, integration, communication, accountability, and metrics in an operating facility,” says 24/7’s Pardue. “A plant cannot do asset management without addressing these basic concerns. Once they have these basics, the plant can implement programs such as condition-based maintenance, serialized tracking, repair tracking, and critical spares management.”

ISO 550001
Figure 1. Asset Fitness Summary measures the percentage of assets  known to be “fit for service” out of the population of assets expected to monitored by one or more predictive maintenance (PdM) technologies. (Source: 24/7 Systems) CLICK TO ENLARGE IMAGE

Well-developed asset management systems support key standards criteria, such as the ability to:

  • capture consistent and traceable electronic records of an organization’s equipment and facility assets throughout their lifecycles
  • provide ready visibility into an asset’s current condition, maintenance history, warranties, and other supporting documents
  • streamline the performance and tracking of inspections, tests, and predictive, preventive, and corrective maintenance
  • enable the monitoring and measurement of key performance indicators
  • support root cause failure analysis and opportunities for continuous improvement.

“Software systems complement the ISO 55000 standard and create value for the organization and its shareholders,” says Iluka’s Heinsius. “For example, we use SAP’s enterprise asset management (EAM) system and the Tango reliability information management system. We can see the health of our assets at any point in time. In fact, everything our operators and field technicians need to know about our most critical assets is available from a smartphone. They can identify trends that lead to failure, drill into the root causes of the failure, take steps to eliminate those issues enterprise-wide, and benefit from less unplanned and break-in work.”

By improving asset reliability, maintenance productivity, and operational performance, the software tools enable an organization’s risk avoidance and value objectives (Figures 2-4). “Gathering, tracking, and leveraging asset information with EAM/CMMS software or reliability information management software enables less emergency work, longer mean times between failure, and improved vendor management,” adds Pardue.

ISO 550002
Figure 2. Asset Health shows the most recent condition monitoring status, by PDM technology, for each asset component. (Source 24/7 Systems) CLICK TO ENLARGE IMAGE
ISO 550003
Figure 3. Fault Distribution spots which faults occur most often and on which assets. (Source: 24/7 Systems) CLICK TO ENLARGE IMAGE
ISO 550004
Figure 4. Roundslogging Adherence measures the percentage of routes and route points that have been completed on schedule for tasks such as basic operator care, lube routes, or physical inspections. (Source: 24/7 Systems) CLICK TO ENLARGE IMAGE


Compliance vs. certification

Some companies will become compliant with the standard and reap its benefits, and yet not follow through with actual certification. Other companies may achieve compliance in certain areas of the organization and not others.

“I would encourage every asset-intensive company to implement ISO 55000 processes, but I don’t think that you have to have certification,” says Siemens’ Goly. “I would say that certification is the icing on the cake, but from my perspective the most important thing is to implement ISO 55000-based processes and follow them.”

Siemens is a good example. “Siemens is compliant with some PAS 55 processes, and yet there was never any intention of becoming certified compliant,” says Goly. “Certain parts of Siemens, particularly the production facilities, may become compliant or even certified with ISO 55000’s recommendations, but otherwise I do not believe that most of the offices will seek to do so.”

Top-down pressure could ultimately lead to an organization’s certification, and being already compliant will simplify the task. “The demand for certification may grow stronger when Wall Street and the shareholders get involved,” explains Goly. “At that point, you’ll need to prove that you follow ISO 55000, which means you’ll need to be audited and certified.”

For those who are new to ISO 55000 and prone to the eventual queries, Goly believes you must first read and become familiar with the ISO 55000 standard, all three parts, and think about the ways that you can benefit from the standard. What value will it deliver? How will it help you to manage operational risks? Because the standard is specifically designed to create value, the learning process will fuel the motivation to justify, seek, and achieve compliance.

The three-standard package is currently available from the American National Standards Institute (ANSI). Further background on the standard can be found at www.assetmanagementstandards.com.