The discipline of physical asset management is rapidly evolving as companies rush to understand the market implications of this newly released standard on asset management. Each business has their own particular reasons, but they tend to all arrive at the same question: will the commitment to establishing an asset management system provide a sustainable competitive advantage? If businesses use an asset management system to optimize cost, risk and performance across the asset lifecycle, will they achieve the necessary value from their assets?
Another question that needs to be asked is, “Can we afford not to do it?” In 2010, 11 people lost their lives in an explosion on an oil rig that sank to the bottom of the Gulf of Mexico and leaked an estimated 4.9 million barrels of oil. Two years later, a blast and fire in California, caused by faulty welds in a 54-year-old underground gas-transmission line, killed eight people, injured 66, and destroyed 38 houses.
To evaluate whether implementing a system is worth it, it’s necessary to understand the key components to an asset management system. From an ISO 55000 perspective, leadership, policy and strategy are overarching elements necessary for establishing the organization’s commitment to an effective asset management system. These elements define governing principles and describe how asset management will contribute toward meeting organizational goals and objectives.
Overview of the ISO 55000 Standard
The ISO 55000 series establishes a global standard for asset management systems. The overarching framework is defined within four documents of the asset management system described in ISO 55001:
- Asset management policy
- Asset management objectives
- Asset management strategy
- Asset management plans
This article presents a methodology for implementing all elements of the ISO 55000 standard, a methodology that is drawn from experienced reliability professionals who have implemented all of the elements of this standard for organizations in many industries around the globe. It is also important to understand that this is the first management system standard to use ISO/IEC Directives, Part 1, Consolidated ISO Supplement – Procedures Specific to ISO as its foundation. This “Annex SL”, as it is more commonly referred to, is the former ISO Guide 83. Standard components include Context, Leadership, Planning, Support, Operation, Performance Evaluation and Improvement. All future management standards, such as the ISO 9000 series due out next year, will follow this format.
Core themes of the British Standards Institute’s PAS 55 on asset management remain in ISO 55000: aligned objectives, transparent and consistent decision making, and the use of risk and consideration of long lifecycle issues in making decisions (see Figure 1).
Asset management: Overview
Asset management is the systematic and coordinated process through which an organization optimally and sustainably manages its assets and asset systems, performance, risks and expenditures over asset lifecycles.
Policy and strategy define the direction of an organization. The golden thread connecting organizational strategy to asset management policy, strategy and objectives justifies all asset management activities; shares understanding of critical goals; and sets and communicates direction.
There is evidence that the view of asset management has generally broadened to include the whole lifecycle, and has moved up to a portfolio view of asset systems. Coordinating, communicating, implementing and designing a management system for managing assets requires an integrated framework such as Life Cycle Engineering’s Asset Management System Implementation Framework (see Figure 2), which establishes the critical linkages between the important elements of an asset management system.
It is a requirement of the organization to define the scope of the asset management system, so start small and create a system that is scalable. There are different levels at which assets can be managed, ranging from discrete equipment items to complex functional systems, networks, sites or diverse portfolios. This hierarchy brings challenges at different levels. For example, discrete equipment items may have identifiable individual lifecycles that can be optimized whereas asset systems may have an indefinite horizon of required usage. A larger organization may have a diverse portfolio of asset systems presenting different performance challenges and risk.