CMMS can rank your critical assets

Aug. 10, 2007
Reliability-Centered Maintenance (RCM), Condition-based Monitoring (CBM) and Root Cause Analysis (RCA) can be overwhelming. David Berger offers some tips on how to get the most out of these advanced techniques.

This is for those of you who are overwhelmed by the complexity of such advanced tools as Reliability-Centered Maintenance (RCM), Condition-based Maintenance (CBM) and Root Cause Analysis (RCA).

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There’s a way to ease into the huge workload that some of these techniques represent, but still reap significant benefits in the process. Focus first on your critical assets to maximize the return on any effort expended, regardless of which technique you select. This is true because critical assets, if selected properly, represent the greatest opportunity for furthering an organization’s goals and objectives such as meeting customer needs, as well as mitigating risks such as ensuring regulatory compliance.

This column looks at how to determine asset criticality, and the differences in how they are handled. Additionally, various CMMS features and functions that can help you through the process will be discussed.

Asset criticality

Determining which assets are critical can be a subjective exercise. One way of thinking about asset criticality in a somewhat more objective way is to calculate the effect of failure for each asset and determine which piece of hardware has the greatest consequences. The subjectivity of this kind of analysis lies in trying to compare the various consequences. For example, see if you can rank the relative severity of each of the following consequences:

  • A minor delivery to an important customer might be a day late
  • A relatively large delivery to a number of small customers might be a week late
  • A person might be injured, resulting in at least one day lost time
  • Minor quantities of a toxic substance might leak into the municipal wastewater system

Perhaps it might be argued that these are equal in criticality, and with unlimited dollars to spend on maintenance, ranking them is probably a non-issue. However, most companies don’t have unlimited funds or resources on hand, thus calculating asset criticality helps to prioritize the use of scarce resources. Although these four consequences can be considered somewhat critical, as opposed to catastrophic or negligible, one must judge their relative criticality on a case-by-case basis. For example, how important is the “important customer,” and how minor is the “minor delivery?” Similarly, what is a “small” customer and how important are they and their “large delivery” relative to the important customer? Finally, which has a higher priority – customer impact versus health, safety or environmental problems?

Another analysis tool for determining criticality is bottleneck analysis. This technique identifies dependencies throughout your operations. Typically, a critical path is mapped for each process flow to highlight interdependencies. Higher criticality assets are those that need to be fully operational if the operating department is to avoid a bottleneck that slows production. For example, the presses in a printing operation are critical assets. When they’re not running at full capacity, the quality, cost of goods produced and delivery schedules for the entire production line are affected.

In general, asset criticality covers a spectrum. High criticality means the effect of failure is catastrophic health, safety, environmental, customer-related or financial consequences; bottleneck analysis reveals that the process is highly dependent on this asset. Low criticality means effect of failure is low or negligible; bottleneck analysis reveals that the process isn’t particularly dependent on this asset.

Critical versus non-critical

Once you identify critical assets, treat them differently than non-critical ones. Just as you classify spare parts using the ABC or XYZ classification system to identify high-volume or high-dollar-value parts, so should you classify asset criticality. This ensures you’ll expend precious resources, time and money on the more important assets. Examples of procedures and techniques that should favor critical assets are as follows:

Scheduling for assets with a higher criticality should be given priority. Assign the better resources, sooner in the queue, and with more careful follow-up.

Repair/replace decisions depend on criticality. The greater the criticality, the easier it should be to get funding for replacing parts or the overall asset. This is because it’s generally more important to bring critical assets closer to the “as new” condition compared to non-critical assets to minimize the risk of catastrophic failure.

Life-cycle costing is another consideration. When assets are replaced, they’re typically justified on the basis of the initial capital outlay. By tracking the total cost of ownership or life-cycle cost, you’ll get a more accurate asset costing that includes the cost to maintain the asset over its lifetime and its salvage value.

This might not be worth the effort for non-critical assets, but life-cycle costing might reveal differences of millions of dollars for critical assets because of wide variations in the cost of maintaining them.

Maintenance programs that deal with a given failure mode for a given asset are of three types. These are failure-based (run to failure), use-based (maintenance at regular intervals of time or usage) or condition-based (predictive maintenance). CBM usually is the most expensive program of the three but is more likely to be cost-justified for your critical assets.

Failure analysis is important. A number of time-consuming and expensive techniques can analyze how assets have failed in the past or might fail in the future, and what can or should be done about it. Failure mode and effects analysis (FMEA), reliability-centered maintenance (RCM) and root cause analysis (RCA) were discussed in my April 2007 column. Clearly, it pays to concentrate your efforts on critical assets first because of the high cost of employing these techniques.

CMMS and critical assets

Most CMMS packages have multiple priority fields to help you prioritize maintenance work. Almost every vendor includes a field for asset criticality (urgent, level 1 priority, level 2 priority, etc.) on the asset master file, as well as a time-based priority on the work order. Some vendors have added a check box or a numeric field for jobs that have a health, safety or environmental impact. Many vendors also provide one or more additional user-definable priority fields that give even greater flexibility to define criticality.

Vendors have a variety of ways to manipulate and present them to help you make best use of these priority fields.

The simplest approach is to allow users to sort and filter work orders based on one or more of these priority fields. The more comprehensive packages allow you to combine priority fields in simple ways, such as multiplying them together. The most sophisticated packages allow building a priority ranking scale by weighting factors such as asset criticality, time-based priority and the like as well as non-priority fields such as location and cost center. Some even have a user-defined algorithm for determining a scheduling priority.

One of the most sophisticated features available on a select few CMMS packages is the ability to develop a comprehensive scoring system for ranking the criticality of assets, allowing users to:

  • Set up multiple user-definable questions for progressively scoring the severity of asset failure in terms of quality of output, asset performance, health, safety, environmental impact and more
  • Define the criteria, severities and scoring algorithms
  • Use Boolean logic to determine final equipment criticality based on impact severities
  • Calculate the probability of failure and relative risk
  • Schedule or filter alarms based on asset criticality ranking or relative risk.

E-mail Contributing Editor David Berger, P.Eng., partner, Western Management Consultants, at [email protected].

About the Author

David Berger | P.Eng. (AB), MBA, president of The Lamus Group Inc.

David Berger, P.Eng. (AB), MBA, is president of The Lamus Group Inc., a consulting firm that provides advice and training to extract maximum performance, quality and value from your physical assets, processes, information systems and organizational design. Based in Toronto, Berger has held senior positions in industry, including for two large manufacturers, and senior roles in consulting. He has written more than 450 articles on a variety of topics such as asset management, operations management, information technology, e-commerce, organizational design, and strategy. Contact him at [email protected].

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