physical asset management
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APPLICATION OF THE PHYSICAL ASSET MANAGEMENT IN THE
CITY OF CAPE TOWN WATER SERVICES
THABANI MHLONGO
Research report presented in partial fulfilment of the
requirements for the Degree of Masters in Business
Administration at the University of Stellenbosch
Supervisor: Dr. J Smith
Degree of Confidentiality: A Graduation December 2010
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Declaration
By submitting this research report electronically, I Thabani Shadrack Mhlongo, declare that the
entirety of the work contained therein is my own, original work and I am the owner of the copyright
thereof (unless to the extent explicitly otherwise stated) and that I have not previously in its entirety
or in part submitted it for obtaining any qualification.
7207075613087
Thabani Mhlongo 13 October 2009
Copyright 2009 Stellenbosch University All rights reserved
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Acknowledgements
I would like to thank my family, Mayibongwe, Ndumiso and Langelihle for their understanding,
patience and support throughout my studies. I also like to thank Victoria, Charity and Zama who
provided me with technical support and assistance during my research. I also wish to thank the
people from the City of Cape Town who contributed a lot of information towards this report. Lastly, I
would like to thank Dr Johan Smith for his willingness to accept me as his student for this research
report.
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Abstract
The City of Cape Town water services is currently operating on the reactive mode and their
maintenance system is not effectively and efficiently utilized. The lack of proper utilization of
Physical Asset Management (PAM) has resulted in the technical department failure to meet the
departmental objectives of providing planned and scheduled maintenance activities, reducing
equipment downtime and ensuring planned delivery of quality spares at the appropriate time.
The aim of the report is to provide guidance in the implementation of physical assets management.
The report looks at different maintenance strategies available and evaluates the current operating
scenarios for the department and further recommends the relevant strategy that will suit the
department. Physical asset management as a maintenance program provides an effective planned
and scheduled maintenance system to reduce labor and downtime. This ensures that the correct
materials and parts are utilized and that the workmanship is of a high quality. A Maintenance Plan
provides documented and sequenced tasks with labour and types of material required to execute
the plan.
Infrastructure assets are systems that serve defined operational needs, where the intention is to
maintain the asset for continual use on a certain level. One of the main aspects in infrastructure
network is the degree of interdependency not only within a particular asset network but also among
networks. The failure of one component within a network may undermine the performance of other
networks. One of the major objectives in an infrastructure network is to maintain the necessary
service level through continuous maintenance while ensuring cost effectiveness
The initial step is to choose certain maintenance tactics and then decide how often these tactics
will be performed. The frequency of maintenance, its actions or tactics depends on the current
condition of the equipment which is linked within the technical characteristics of failure and specific
monitoring technique.
Regardless of the system you select, you must start from where you are and then develop an orderly series
of steps to get where you want to end up, so start by assessing your current situation. The most essential
ingredient in your maintenance management system is the people. An excellent system run by poorly trained
or unmotivated people will be adequate at best but well trained people with positive attitudes can make an
excellent system world class.-Thomas Westerkamp
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TABLE OF CONTENTS Declaration.. ii Acknowledgements... iii Abstract... iv Table of contents....... v List of figures...... x List of tables................................................................................................................. xi List of appendices........................................................................................................... xi List of acronyms.............................................................................................................. xii CHAPTER 1- Introduction and background................ 1 1.1 Introduction... 1 1.2 Statement of the problem........... 2 1.3 The research objectives...... 2 1.4 Assumptions and delimitations.. 4 1.5 Plan of study......... 4 1.6 Research design and methodology...... 5 CHAPTER 2 Literature and physical asset management strategy perspectives. 7 2.1 Introduction....... 7 2.2 Defining physical asset management . 7 2.3 Different physical asset models.................9 2.3.1 Campbell uptime strategy.......... 9 2.3.2 Pragma asset management improvement plan strategy 11 2.3.3 International infrastructure management manual strategy........ 12 2.3.4 Worley international......... 15 2.3.5 Why is physical asset management economically important?............................... 17 CHAPTER 3 General asset management plan framework... 18 3.1 Introduction.. 18 3.2 Maintenance management framework ..... 18 3.3 Developing an asset management plan 20 3.4 Strategy development 21 3.4.3 Status analysis........... 21 3.4.4 Asset management objectives................ 21 3.4.5 Asset data classification. 22 3.4.6 Data prioritization. 23 3.5 Asset register.. 23 3.5.1 Asset register set up. 23 3.5.2 Managing asset register 24 3.5.3 Data capturing. 24 3.5.4 Replacement program and costing. 24 3.5.5 Provisional asset management plans. 24 3.6 Physical asset management development..... 25 3.6.1 Attributes 25 3.6.2 Basic condition assessments... 26 3.6.3 Prioritization based on condition. 26
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3.6.4 Critical asset identification.. 26 3.6.5 Maintenance history data collection....... 26 3.6.6 The next generation maintenance plans 27 3.6.7 Documentation for decision making. 27 3.6.8 Determining the target level of service.. 27 3.7 Physical asset management implementation and monitoring.. 27 3.7.1 Maintenance Procedures.... 27 3.7.2 Work order system.. 30 3.7.3 Creating a job card. 31 3.7.4 Planning and scheduling tools.. 33 3.7.5 Materials management 34 3.8 Maintenance tactics.. 35 3.8.1 Condition based maintenance 37 3.8.1.1 Vibration.. 38 3.8.1.2 Lubricants 38 3.8.1.3 Temperature.. 38 3.8.2 Preventative maintenance.. 39 3.8.3 Expected cost of maintenance. 39 CHAPTER 4 Measuring maintenance performance.. 41 4.1 Introduction 41 4.2 Measuring maintenance productivity...... 41 4.3 Equipment performance measurement.... 41 4.4. Process performance measurement.. 42 4.5. Information management system... 43 4.6 The balanced score card... 44 4.6.1 Financial perspective.. 44 4.6.1.1 Direct financial benefits.. 45 4.6.2 Customer perspective. 47 4.6.3 Internal business process.. 47 4.6.4 Learning and growth 49 CHAPTER 5 Assessment of the maintenance strategy for water and sanitation services .. 51 5.1 Introduction.. 51 5.2 Organizational climate and culture.. 53 5.3 Expertise and competence... 55 5.4 Maintenance management systems and procedures... 56 5.5 Fixed asset register.................. 61 5.6 Computerized maintenance management system 62 5.7 Maintenance planning, scheduling and control............................... 65 5.8 Reliability maintenance management................... 68 5.9 Material management............. 70 5.10 Fleet management........ 74 5.11 Contracts........ 77 5.12 Conclusion...... 80
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CHAPTER 6 Proposed strategy for technical services within water and sanitation.83 6.1 Introduction.... 83 6.2 Implementation approach. 84 6.2.1 Phase 1: Assessing the current asset management status and framework 84 6.2.2 Phase 2: Condition assessment and performance monitoring. 86 6.2.3 Phase 3: Reliability and monitoring 90 6.3 The maintenance management planning........ ... 93 6.3.1 Important elements of maintenance planning.. 93 6.3.2 Maintenance categories 94 6.3.3 Process of maintenance analysis 95 6.3.4 Creation of the maintenance plan.. 97 6.3.5 Maintenance system. 98 6.4 Conclusion..........99 CHAPTER 7 Summary, conclusion and recommendations................... 100 7.1 Chapter introduction... 100 7.2 Summary of research results... 100 7.3 Conclusions.. 102 7.4 Recommendations. 105 List of sources.....109
Appendices..........................................................................................................................111
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List of Figures
Figure 2.1: Uptime maintenance strategy model..10
Figure 2.2: Asset management process14
Figure 3.1: Asset life cycle18
Figure 3.2: The relationship between maintenance and operations.....28
Figure 3.3: Maintenance analysis process....29
Figure 3.4: The required information on a job card..31
Figure 3.5: The space where the required task or work required is entered33
Figure 3.6 Material management process.34
Figure 3.7: Probability of failure...37
Figure 3.8: Relationship between different maintenance related cost..40
Figure 4.1: Cost strategies...46
Figure 4.2: Measures to benchmark performance...49
Figure 5.1: Maintenance backlog per section...59
Figure 5.2 Backlog of job cards per month60
Figure 5.3: Average reactive versus proactive work percentage for 2008...61
Figure 5.4: Maturity Graph...64
Figure 5.5: Planning and review process..67
Figure 5.6: Staff utilization due to lack of planning..68
Figure 5.7: Maintenance management tactics..79
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Figure 6.1: Condition monitoring process.88
Figure 6.2: Decision matrix..89
Figure 6.3: Computerized Maintenance Management System objectives......91
Figure 6.4: Reliability Centered Maintenance implementation..92
Figure 6.5: Turning cost centre into profit centre.....96
List of Tables
Table 3.1: Development of an asset management plan...................................................................20
Table 3.2: Implementation and Monitoring phase............................................................................21
Table 3.3.Classification of an asset on the system for horizontal and vertical identification.........23
List of Appendices
Appendix A: Maintenance and Equipment Audits.111
Appendix B: Maintenance Strategy Overview.......116
Appendix C: Maintenance Strategy tree........................................................................................117
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List of Acronyms
AM Asset Management
AMP Asset Management Plan
AMiP Asset Management improvement Plan (Pragma)
CMMS Computerized Maintenance Management System
DCF Discounted Cash Flow
EAMS Enterprise Asset Management System
ELEC Electrical
ECSA Engineering Council of South Africa
IIMM International Infrastructure Management Manual
JIT Just In Time
KPA Key Performance Areas
MRP Material Requirement Planning
M &O Maintenance and Operation
MM Material Management
MTTR Mean time to repair
MIS Management Information System
NPV Net Present Value
NIMS National Infrastructure Management Strategy
OEE Overall Equipment Effectiveness
PAM Physical Asset Management
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PCS Process Control Systems
PM Plant Maintenance
RCM Reliability Centered Maintenance
ROI Return on Investment
SMAM Strategic Municipal Asset Management
SOP Safe Operating Procedure
SWP Safe Working Procedure
TQM Total Quality Management
USA United States of America
WSDP Water Services Development Plan
WSP Workplace Skills Plan
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CHAPTER 1
INTRODUCTION AND BACKGROUND
1.1 Introduction
The National Infrastructure Management Strategy (NIMS) was adopted and approved by the
Parliament of South Africa in August 2006. The primary objective of the strategy was to strengthen
the regulatory framework in governing, planning and maintenance in the public infrastructure and
more importantly to assist in the process of continuous improvement. The key process of NIMS is
to create an emphasis beyond operational issues of infrastructure including reliability and
sustainability within the industry.
Production capacity is a function of engineering design, physical constraints and established
managerial practices. Production results from the application of physical assets. The effective
output of the operating environment can be increased through a systematic analysis and alteration
of the physical asset. The responsibilities for such effectiveness are held by management,
operations and the maintenance system. The desired effect of this analysis is an increase in
production capacity, without the requirement for additional capital asset investments.
Maintaining an asset cannot reduce the inherent probability of failure produced by the interaction of
physical limiting factors. However, the incorporation of dependability oriented innovations centered
in engineering produces a mechanism for systematic analysis that improves the reliability of
operating within the environment. Furthermore, the implementation of resulting programmes
reduces the inherent probability of failure, increases the availability of production capacity and
optimizes asset performance (Bleazard & Khu, 2001:36).
The inefficient use of resources for infrastructure has placed a major burden on public finances,
diverting resources that could be used for social upliftment in the form of education, healthcare and
other social development initiatives. Most organizations tries to meet the infrastructure needs
through investment in infrastructure creation without recognizing the long term life-cycle costs
associated with the on-going operations, maintenance and renewal of infrastructure (Urquhart &
Bush, 2000:3)
Understanding which assets are mission-critical to a plan will ensure the need to focus and assist
in prioritizing the allocation of limited resources. Asset managers need to understand the failures of
each asset because this directly influences the type of maintenance required. An advanced and
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co-operative partnership between production and maintenance will produce a better planning
schedule. With the help of a skilled planner, the plan can be implemented and developed.
Valuable and precious resources are lost when not enough time is allocated for maintenance.
Having proper information and a management system with strong supporting systems can help to
plan and control a business ensuring that accurate information, analytical capabilities and skills are
in place for value-added improvement (Coetzee, 2009:2).
1.2 Statement of the problem
This research aims to establish the relationships between physical asset management strategies
and business objectives. The study will analyze current models used in the industry, especially in
the water department within the City of Cape Town that maintains, operates and manages the
physical assets. The analysis will aim to establish the gaps within the current asset management
strategy and the best practices which should be followed.
The research questions are as follows:
Can physical asset management models that are established and recognized
internationally be used in the water and sanitation companies and organizations in
South Africa?
What are the fundamental requirements for the implementation of sustainable asset
management practices?
Are the applications of physical asset management models beneficial to organizations
and companies?
1.3 The research objectives
This research will review the literature in the field of physical asset management which includes
different models developed for this purpose and maintenance management philosophies. The
studys aim is to provide a clearer understanding of the role of physical asset management in
medium or large organizations and how this impacts and influences the quality of management in
their operational asset base.
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The key elements of physical asset management are:
A well defined service level and performance standard which are linked to strategic
goals and objectives
Equipment condition and life cycle approach
Investment objectives (IIMM 2006 Version 3: 1.6)
These key elements provide the platforms to develop the basic design and techniques to manage
and provide replacement programmes as well as project financial outlays. The next approach
involves the collection and analysis of detailed information concerning the asset condition,
performance, life cycle cost and any management options. The highlighted challenges faced by
waste water and water treatment plants in water utilities provide an opportunity for the
development of an asset management plan (AMP) which will enable water utilities and
municipalities to manage and maintain the infrastructure as well as develop an infrastructure life
cycle programme.
AMP is a long term tactic for managing infrastructure to achieve the organizations strategic goals.
The plan provides mechanisms for long term strategic planning and capital budgeting. The plan
also includes the following:
Organizational strategic goals;
Level of service delivery and performance standards to be used for measurement;
Growth and demand projections;
Asset management strategies/tactics;
Financial projections including cash flow forecast; monitoring, control and review mechanisms
for an asset improvement plan.
The objective of physical asset management (PAM) is to develop and maintain the infrastructure to
ensure that asset requirements and asset management strategies are driven by defined service
levels and performance standards. Scarce financial resources must be properly allocated and
managed to optimize investments in the infrastructure. The life cycle of an asset is considered
when determining asset operations, maintenance, renewal and development strategies (Schneider,
2000:2)
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The requirements to fund depreciation and corroding of waste water infrastructure have resulted in
an intensive drive to focus on both valuations of infrastructure and improvement of physical asset
inventories and skills. The life span of waste water infrastructure is far below that of any other
water or electricity infrastructure due to the corrosive nature of waste water and the operating
conditions. Most plants contain outdated infrastructure built over 30 years ago and the
unavailability of compatible spares for most of the equipments poses a serious danger to human
life and the environment.
The average life span of a wastewater treatment plant according to the sanitation department of
the City is about 20 years whereas some of the current operational plants are currently over 30
years old. In most waste water organizations there is no standard equipment list, especially those
of vital sewer networks. The inventory and spares become obsolete creating a major problem
when, for example, pumps need to be repaired or replaced.
The responsibility and challenges faced by the company are to develop a sustainable infrastructure
asset management. This system must provide planning and have an appropriate improvement
programme for applying and delivering the best practices while moving towards a reliable asset
management system. The strategy aims to address the most difficult challenges faced by the
company, with the main challenge being the successful identification of gaps and how to
implement action plans within the current system.
1.4 Assumptions and delimitations
The study focuses on water and wastewater treatment plants that are operated and maintained by
the City of Cape Town. The focus will be on the operations and maintenance systems in the water
and sanitation departments.
1.5 Plan of study
The research will develop systems and mechanisms to be used for maintenance planning,
measuring performance, productivity and resource utilization to ensure equipment and resource
reliability.
The study will develop the following three research propositions that aim to model the requirement
of an integrated asset management framework in an organization.
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The requirement for an appropriate linking mechanism in considering asset
management for business decisions is by encouraging discussions between planners,
operators and maintenance personnel.
The requirement for management processes to monitor the relevance of physical asset
management requirements and monitoring their performance.
The requirement for appropriate skills and competencies within organizations to monitor
and continuously review procurement or management strategies and take advantage of
advances in technology development. The analysis will look at the organizational
structure, communication processes, work flow and resources available against the
work load for different teams. Issues of management will also be examined. The
responses from all relevant stakeholders will be analyzed and information will be
gathered from operations and maintenance manuals.
The information on the status of the equipment will be prioritized and categorized once all data on
the current status conditions of the equipment/maintenance system have been assessed. The next
step would be to select a maintenance option for the particular plant and machinery and then enter
the option into a maintenance system.
1.6 Research design and methodology This research made use of structured interviews, discussion forums and system analyses to
determine the current practices used by the water and sanitation department within the City of
Cape Town.
The literature review traced the evolving role of physical asset management and management
practices against a background of rapid technological change and changing emphasis in
management thinking about how best to manage business resources in fulfilling corporate
objectives.
The research will be structured into three parts:
Literature review: The first part will provide an historical overview of (i) the role of physical asset
management by water and sanitation organizations and, (ii) a review of the economics of
operational asset management with regards to resource management and asset life cycle.
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Models for physical asset management: The second part is an overview of developments in
business management that affects the practice of physical asset management. In this section the
research will also examine the various models and variables and current options of asset
management. Currently, practices are not in line with internationally recognized procedures. The
researcher will use qualitative data that will be collected through interviews and interactions with
the relevant stakeholders within the City of Cape Town.
Physical asset management: The last section will identify the gaps and recommend ways of
implementing the best practices in the water and sanitation organizations.
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CHAPTER 2
LITERATURE AND PAM STRATEGY PERSPECTIVES
2.1 Introduction
The benefits of maintaining physical assets correctly includes financial and capability gains. An
asset is meant to provide a required service on a continual basis. The cost of maintaining physical
assets vary, depending on the life stage and usage. Several different strategies are employed by
various experts to ensure that the equipment is reliable.
2.2 Defining PAM
An asset management system represents the latest evolution in the traditional facility management
approach and focuses on maintenance services and reliability. The services concentrate on
achieving long term maintenance cost reduction based on applying innovative maintenance
strategies in a total cost approach. (Heinemann, 2002:1)
Rather than relying on the bidding process in its requests for proposals, asset management relies
on a more strategic and long term asset management system with cost control in mind. This can
help municipalities to standardize their systems and reduce the inefficiencies of managing multiple
systems, components and technologies from a variety of vendors which immediately reduces
process cost (Garibay & Ronsivalli, 2008:36).
Computerized maintenance management systems (CMMS) and enterprise asset management
systems (EAMS) have changed little conceptually in the past 25 years. Unlike their operational
counterparts, enterprise resource planning packages which have undergone several significant
changes continue to receive a lot of attention. Insufficient attention is given to extending the core
functionality to take real advantage of EAM systems potential, not only for maintenance functions
within organizations but also for the entire business. Developing such a strategy requires the
correct data and monitoring equipment. It also requires a departure from the breakfix
maintenance strategies (Dunks, 2007:17).
An issue related to operational excellence that frequently arises is that of physical asset
management. A number of articles covering this topic have developed excellent ideas. But these
articles are typically related to maintenance management rather than true asset management.
Calling the process described asset management does not lend it greater business credibility and
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is therefore an important shift in thinking. For one to excel in asset management, it is essential to
ensure that business expectations for the assets are operational in the short and long term.
Furthermore it is vital to understand the assets current condition and capacity relative to the
business requirements now and in the future (Moore, 2006:35).
The majority of asset management software applications focus only on the maintenance and
availability of plant equipment especially instrument assets. Although instrument maintenance is
the key element of plant asset maintenance strategy, maintenance improvements by themselves
do not maximize the performance of the overall manufacturing asset base. Demands to optimize
plant operations with this limited asset management focus may result in a degradation of
performance. Optimizing plant assets to meet business objectives requires a holistic approach to
asset management that goes well beyond the traditional focus of asset management software and
contemporary means (Fitzgerald, 2005:34).
Asset management is an evolving process that improves in condition, performance and operational
cost requirements which can then become better understood. To ensure that supporting activities
are improved and incorporated into asset management plans, an improvement plan is required to
accomplish this in a planned and progressive manner. A typical methodology for preparing an
asset management improvement programme is to review its current status and level of
sophistication within the organization and the implementation of asset management activities,
asset data and knowledge, reliability and accessibility, information systems to support asset
management process and plans to identify the optimum life cycle of management tactics and
resources (Worley International, 2000:9).
Initially asset management begins by asking why the asset is required and how it relates to the
business plan. Subsequently a closer examination sets the purpose, function(s) and standards of
performance. It is then justified by comparing costs to benefits and ranked as an investment option
by the company. After company approval, a detailed design and the specifications are described,
after which the asset is constructed or procured, installed, and finally operated and maintained.
Physical Asset Management (PAM) can be described as a set of processes, tools, performance
measures, cross functional collaboration and teamwork to optimize the complete life cycle impact
of the physical asset on the business performance (Campbell, 1995:13).
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The reliability centered maintenance (RCM) is the method for determining the most appropriate
policy for any given asset in its present operating context. (Campbell 2006: 224).
The benefits of reliability centered maintenance (RCM) is that it can work for any type of utility
including electric, gas, water and waste water. It can increase efficiency and cut costs while
providing regulated utilities with the evidence they need to prove compliance with stringent
guidelines covering basic quality of service and service delivery (Geraghty, 2001:37).
2.3 Different PAM models
PAM focuses on performance-based maintenance systems. The two major benefits derived from
PAM models are reliability and quality of service. The type of maintenance focuses on two
strategies: reliability centred maintenance and quality management. The following section looks at
various strategies recommended by asset management specialists.
2.3.1 Campbell uptime strategy
Maintenance improvement fails when there is little or no understanding of the situation at hand.
There may be a strong inclination in the department to retain the status quo or this could lead to
friction between production and maintenance. Technically, it may imply a lack of knowledge about
automation or how to predict probable failures (Campbell 1995:13)
Campbell (1995:12) described the maintenance strategy as shown in Fig. 2.1. The foremost
requirements in any business plan are the needs of the customers, shareholders and other
stakeholders. The key objective for each function and element in the business strategy is drafted
with those elements in mind. Maintenance is likely to have the following targets:
Maximise the production rate of a particular product
Phase out the operation of a plant or product line
Add productive capability (assets) for another plant
Eliminate stores inventories through vendor collaborating.
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Campbell (2006:21) described the following four objectives as the foundation of the maintenance
vision as it would shape the annual plans and budgets of the department.
To re-engineer the entire maintenance management process with particular emphasis
onpreventative and planned work
To select and implement a computerized maintenance and inventory management system
To introduce a multi-skilling pilot project in conjunction with the local union
To augment the short, medium and long range maintenance planning capabilities
Fig. 2.1 Uptime Maintenance Strategy Model (Source: Campbell, 1995:12)
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2.3.2 PRAGMA AMIP Strategy
Pragma is an asset management specialist organization that have developed various strategies to
deal with asset management challenges, one of the strategy they have developed is called asset
management improvement plan (AMIP) strategy (2005) is based on a set of comprehensive
framework pillars. Pillars are the areas in which the asset management function must excel in
order to achieve their goals of optimising asset effectiveness and performance. The four pillars are
based on the original thirteen (13) pillars or the building blocks of the PAM model. The model is
divided into different phases or focus areas. Each phase has its own objective and key
performance areas that need to be achieved within the phase.
Phase 1- Strategy alignment- the aim of this phase is to develop and align the maintenance and
business strategies.
Phase 2- Framework selection- once the strategies have been aligned the next step is to select
the correct framework. This works as a guide towards the implementation of the strategy and takes
place within the assessment, development and planning of the asset improvement plan.
Phase 3- Asset management maturity mapping- the maturity growth process is a mapping of the
maturity of the asset in relation to industry standards. The aim is to establish a common
understanding of the field of asset management, the AMIP framework to be used and what is each
of the key Performance Areas (KPA).
Phase 4- Setting targets- after consideration of the specific operating environment and strategic
focus, improvement targets can be set for prioritised pillars. This requires a careful analysis and
understanding of asset management audits.
Phase5- AMIP Master plan- this is a facilitated process where a customised asset management
and improvement programme is developed. The phase takes into consideration the resource
constraints that might hamper the process. Here the required actions and targets are determined,
documentation developed, responsibilities allocated and target dates set.
Phase 6-Implementation of the master plan- the execution phase: this phase ensures that all the
required actions that have been developed during the master plan are completed. All the
constraints and bottlenecks must be removed to ensure success of the master plan.
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Pragma has identified a number of areas that leads to inefficient and ineffective operation:
Reactive maintenance i.e. time and effort spent fixing breakdowns, rather than investing in
the preventive tasks.
Over maintenance i.e. running maintenance schedules too frequently
Lack of good planning and scheduling which causes ineffective utilisation of resources
Not measuring the correct performance indicators to support strategic direction
Incorrectly devised maintenance tactics (preventive maintenance plans)
Repetitive mistakes i.e. the absence of failure analysis in order to learn how to prevent
similar future events
Inadequate skills levels
2.3.3 International Infrastructure Management Manual strategy
Infrastructure assets are stationary systems that serve defined communities where the system as a
whole is intended to be maintained indefinitely to a specified level of service by the continuing
replacement and refurbishment of its components.
The international infrastructure management manual (IIMM) (2006 Version 3:1.3) refers to the
following as infrastructure assets:
Transportation networks (roads, rail, ports, airports)
Energy supply systems( gas, electricity, oil production, transmission and distribution)
Parks and recreation facilities
Water utilities (water supply, wastewater and storm water systems)
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Flood protection and land drainage systems
Solid waste
Education and health sector
Manufacturing and process plants
Telecommunications
The IIMM provides the most comprehensive coverage of asset management practices. Section 2
of the manual provides a detail process for producing asset management plans whilst section 1
provides the asset management plan and the process of structuring the maintenance plan. It
provides the step by step process of developing an asset management plan by providing a guiding
framework; the initial sections concentrate on writing an asset management plan, developing an
asset improvement plan with information systems, and data management strategy.
The overall structure reflects the asset management philosophy and framework, setting the
direction and plans for implementation of asset management (section 2), the optimal programme of
capital or asset renewal, operational, maintenance and management activities.
Section 3 of the IIMM reflects the enabling process of asset management and supporting systems
as well as data analysis applied to identify needs or levels of service demand and optimal
programme design (section 4).
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The figure 2.2 shows the IIMM framework, the pillar that drives the maintenance philosophy:
Fig. 2.2 Steps in the Asset Management Process( IIMM 2006 Version 3:1.3)
The tactical asset management plan needs to identify strategic outcomes that the plan specifically
supports and focuses on. It also needs to have performance measurement and monitoring
systems. The key elements of the asset management approach for ensuring effective and
integrated planning include:
Providing a robust process and corporate strategic plan to which an asset management is
linked. This is achievable through a process of formalising the desired customer outcome
and identifying the strategic plan, the adopted outcomes and the specific asset
management plans, associated budgets and actions which support them. The assessment
of the progress and monitoring is accomplished through performance management
systems.
Development and implementation of a performance development process to complement
and support both the strategic plans and asset management plans. A hierarchy of
performance measures decentralized from the strategic outcome statement is developed
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for use at different levels of decision-making. The process requires managers to link annual
work programmes back to specific strategic plans outcomes via a business plan.
Ensuring the process of strategic monitoring and review provides flexibility to advance
identified changes in the asset management plans into strategic plans.
Reviewing of the existing asset plans includes a discussion on how asset plans contribute
to desired strategic outcomes, linking the asset management service to the managers
business plans and a focus on improving AM practices that influence the quality of strategic
decision making.
2.3.4 Worley international
Circa 2000, the World Bank introduced new urban and local government strategies. The strategy
was in response to the increased demand for World Bank assistance from the level of local
government as well as an understanding that effective urban development is directly linked to the
raising of living standards and promotion of equity (Circa 2000:2).
The four objectives for urban and local government strategy based on sustainable cities are:
Liveable: committed to ensuring that the poor achieve a healthy and designed living
standard that provides a system for housing, secure land tenure, credit and transportation.
Competitive: providing a supportive framework for productive firms, to promote buoyant,
broad based growth of employment, incomes and investment.
Well governed and managed: with representation and inclusion of all groups in the urban
society, with accountability, integrity and transparency of government actions in pursuit of
shared goals and with strong capacity of local government to fulfil public responsibilities
based on knowledge, skills, resources and procedures that draw on partnerships.
Bankable: financially sound and credit worthy, financial health of municipalities requires the
adoption of clear and internally consistent systems of local revenues and expenditures,
transparent and predictable inter-governmental transfers, general acceptable accounting
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procedures, asset management and procurement practices and prudent conditions for
municipal borrowing.
Improving the management of municipal infrastructure can bring major benefits by ensuring that
scarce resources are used in the most cost effective manner, thereby enhancing economic growth,
improving living standards and improving environmental sustainability. Inefficient use of resources
and infrastructure can place a major burden on public finances, diverting resources that might
otherwise go to the most critical areas of meeting social objectives.
Strategic municipal asset management (SMAM) is an approach to develop and maintain
municipally owned infrastructure assets to ensure that:
Asset requirements and the management of municipal assets is driven by defined service
level and performance standards linked to strategic planning.
Scarce financial resources are properly allocated and managed to optimise investment in
infrastructure.
A long term approach is taken when determining asset operation, maintenance, renewal
and development strategies.
Water services and water boards are responsible for management of water a commodity used in
many different processes including fabrications, processing, washing and cooling, industries in
power generation, steel mining, manufacturing and high technology. Agriculture and tourism are
important beneficiaries of clean water supplies throughout the country.
The maintenance sector forms an integral part of South Africas total construction delivery capacity;
its activities are on-going and substantially local in nature. The adoption of asset management
practices will lead to the growth of the maintenance sector which, together with its inherent labour
intensity will stimulate sustained job creation, skills development and broad-base black economic
empowerment. Poor operation and maintenance practices can increase the demand of limited
water resources and further alter water quality which in extreme cases can deprive natural
environments of its water requirement; which leads to changes in habitats and occasionally a loss
of habitats.
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The application of asset management practices is aimed at improving the quality, integrity and
operational efficiency of water supply systems. Infrastructure within the water sector is not being
managed due to the lack of political will, management systems, knowledge, resources and
appropriate skills.
2.3.5 Why is PAM economically important?
When a business is not doing well, especially in the midst of an economic downturn, most business
organizations have a tendency of cutting back on non essentials. In most cases those expenses
represent the current expenditure for which the benefits are realised later. The question that arises
is how a business can cut PAM costs without undermining the long-term prospects of the business.
The following actions are extremely important to consider when ensuring that correct decisions are
taken that will have the long-term benefits for the business:
Extend the Asset life to delay capital expenditure or cost of replacement.
Reduce the risk of failures that result in catastrophic effects.
Managing and minimising risk that have financial implications for the business.
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CHAPTER 3
GENERAL AMP FRAMEWORK
3.1 Introduction
It is important to describe the creation of a practical vision for maintenance and development of an
asset management plan (AMP) that can be integrated into the business plan. This chapter looks at
effective leadership for gaining control of the maintenance functions and advancing to continuous
improvement activity, which translates to asset productivities. The chapter also looks at the
procedural aspects of ensuring equipment life cycle productivity including processes of planning,
scheduling, determining the level of maintenance and deciding which types of maintenance best
ensures equipment performance and productivity.
3.2 Maintenance management framework
Maintenance forms one part of the asset life cycle; it is one step in a nine step asset management
process described in Fig. 3.1. Asset management begins by asking why the asset is required and
how it relates to the business plan. The business plan includes the purpose, function and
standards of performance. The life cycle involves comparing cost to benefit and can be listed as an
investment option by most companies. From the time of procurement, the asset has disposal or
replacement value; there are several steps or processes that need to take place to ensure that the
equipment life cycle is preserved and prolonged.
Fig. 3.1 Illustration showing stages in Asset life cycle. (Source: Uptime strategies for maintenance
management 2000: 4).
Asset Strategy
Plan
Evaluate
Design
Procure
Operate
Maitain
Upgrade
Dispose
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The benefits of asset management requires the involvement of all departments from maintenance,
operations, engineering, finance, design and any other relevant departments. The maintenance
framework aims to maximise the production rate of a particular equipment or asset while increasing
its productive capacity and eliminating wastage by reducing the inventory or procurement cycle.
Maintenance objectives are the foundation of maintenance vision and should outline the annual
plans and budgets of the department. The first step in developing maintenance plans and
budgeting processes is to understand the current condition of an asset. A typical maintenance
objective would include the following:
To align the maintenance management process with a focus on pro-active and planned
corrective maintenance.
To develop short- , medium- and long-term maintenance planning.
To train and develop employees in line with their job requirements, career progression and
attrition rate.
To implement maintenance management systems to assist with work and resource
management.
Evaluating the current condition and processes enables the maintenance person to develop and
implement correct maintenance tactics by understanding the weaknesses and strengths of the
current process. The evaluation and assessment could take the form of a questionnaire, process
evaluation through observation or structured interviews. The assessment of equipment status and
condition is done through condition monitoring, equipment performance analysis and normal
periodic checks. These results will assist in developing the asset improvement plan.
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3.3 Developing AMP
The development of an asset maintenance plan (AMP) needs to be classified into different stages
with targets, basic requirements and objectives at each stage. Table 3.1 shows a three-stage initial
process of developing the asset management plan.
Table 3.1 Stages in the Development of an Asset Management Plan:
Stage: Target: Requirements:
Stage 1
Strategy development
Current status analysis
Setting the asset management objectives
Asset data classification
Prioritization of data collected
Stage 2
Asset register
Set up the asset register
Set up how the register will be managed
Capturing of data
Replacement program and costing
Provisional asset maintenance plans
Stage 3
Asset management
Attribute data
Basic condition assessments
Prioritization based on condition
Critical asset identification
Maintenance history data collected
Prepare the next generation maintenance plans
Documentation of decision making process
Determine the target levels of service required
Table 3.1 provides the fundamental requirements for the developmental phase of the asset
management. This is the foundation of asset management and if not developed correctly, the
physical asset management will be incomplete or incorrect. The second phase of asset
management development covers the implementation and monitoring. Table 3.2 summarises the
stages, targets and requirements.
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Table 3.2 Implementation and monitoring phase of asset management
Stage: Target: Requirements:
Stage 4 Asset improvement/upgrade plan Maintenance procedures
Decision and process flow
Failure analysis
Stage 5 Techniques required Risk analysis
Identify where equipment is in its life cycle
Develop plan for replacement
Decision making based on life stage and budgets
Stage 6 Management system Performance management
Performance evaluation
3.4 Strategy development
The development of a maintenance plan for an existing asset will be based on best practices and
the current state of the equipment. This should highlight the objective, the asset requirement and
the current analysis of an asset.
3.4.3 Status analysis
The status of the equipment can be measured by performing an equipment survey, performance
analysis and feedback process from a data registry. Information can also be collected from user
feedback and surveys, and the age and condition of the equipment. The status of the equipment
should be based on the types of problems or failures.
3.4.4 Asset management objectives
The objective of asset management is to develop and create a system that will ensure optimum
utilisation of an asset or infrastructure. This can be achieved by implementing the best practices
that will ensure that:
Asset requirements and asset management strategies are driven by defined service levels
and performance standards.
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Life cycle approach is used when determining asset maintenance, operations, design and
renewal strategies.
Proper management and correct allocation of financial resources should optimise the
investment in infrastructure.
Asset management is not a fixed process but evolves as the condition of operation and
infrastructure status changes over time. This ensures that the equipment delivers as expected.
The objectives assist the asset owners during decision-making processes with regards to the
condition of the asset so that changes can be implemented for corrective measures when required.
3.4.5 Asset data classification
Asset classification is done to ensure a common understanding between all asset users. The first
step is to define the asset or equipment and classify it. There is always a debate between finance
and maintenance staff on exactly what an asset is and this impacts on the depreciation or
capitalisation of the asset or equipment.
The asset must be classified into different classes and sub-classes with each class having a class
code and sub-class with sub-class codes. This simplifies the operation when one needs to
investigate and report on both a horizontal and vertical basis and when there is a need to check
similar classes of equipment through the organization or within a particular area. Table 3.3
indicates the different classes that can be used to classify assets:
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Table 3.3 Classification of asset on the system for horizontal and vertical identification
Number Class Class Code Sub Class Sub - Class
Code
1 BLOWERS BLR Blower-centrifugal fan type. BLR01
Blower-roots type, belt-driven. BLR02
2 BELT PRESSES
3 CENTRIFUGES CENTRIF
Centrifuge- horizontal spinner type. CENTRIF01
3.4.6 Data prioritization
Once the analysis has been completed, the condition of all the assets and equipment confirmed,
the database created, and the data prioritized in terms of asset classes the next stage may
commence. The data is prioritized to ensure that maintenance interventions are correctly
developed and are based on the current condition of the asset and the performance requirements.
This also ensures the proper utilization of resources.
3.5 Asset register
Asset register is a record of asset information considered worthy of separate identification including
inventory, history, technical and financial information (IIMM 2006 Version 3: xii).
3.5.1 Asset register set up
The basic requirement for implementation of PAM is that the company must have a correct asset
register reflecting all assets for the company. The asset register provides the functional location of
an asset. This functional location describes where the asset is or installed in a hierarchical format
with its attributes (make, model, size etc). The register will also have the serial numbers of the
equipment to identify them during maintenance or when they are sent for repairs.
A properly developed asset register simplifies the process of developing historical information of
the asset and recording all the repair costs and usage data. This will assist maintenance personnel
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to ascertain the time it has been running and what type of maintenance is required at any particular
time.
3.5.2 Managing asset register
The management of an asset register is an important function within the business. It ensures the
integrity of the asset database and if there is one central control point that nobody tampers with the
asset database. An authorized person should control the process of registering or removing an
asset as well as updating the master data.
3.5.3 Data capturing
To ensure that the master data is updated, the person in charge of the asset register needs to
develop a process flow that will be known throughout the company so that everybody is aware of
the process. It will highlight the flow of responsibility from the time a new asset is purchased. The
data entry person is authorised to remove or scrap an asset when necessary.
3.5.4 Replacement programme and costing
Accurate information of the assets condition, usage and expected life will enable the planning
section to estimate a replacement period and cost of the asset. The basis for the correct
replacement programme needs to be developed by the maintenance and replacement section.
This will depend on the accuracy and the integrity of the master data.
3.5.5 Provisional asset management plans
The information gathered so far will enable planning for the basic maintenance and replacement of
an asset. The available status of an asset will include the current usage and expected life span of
the equipment. This will enable the development of an infrastructure maintenance programme
showing required maintenance frequency and the type of repairs. Although it is difficult to estimate
accurately the cost of maintenance, which includes the labour and material costs, estimated costs
can be calculated for planning purposes.
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For efficiency, the provisional asset management plan must contain information that will assist in
decision-making and the planning process for repair or replacement. The following information
must be included:
Labour- all wages and benefits of the traders and assistants.
Materials- all the supplies, parts, components, consumables and other vital items that will
be required by the maintenance personnel.
Services- engineering workshops, facilities and stores or warehouses where equipment can
be stored or repaired.
Technical support- supervision, planning, materials coordination, administrative support and
data capturing.
Outside services- all contracted services, specialty services, training and consultants that
maybe required.
Functional location and equipment cost.
3.6 PAM development
3.6.1 Attributes
The structuring of attributes follows a pre determined pattern that puts them into hierarchical
structures with functional locations and equipment registers, the next step is to group them into
classes of assets. In each class, the attributes of the assets such as model, size, capacity,
maintenance intervals, serial numbers and date commissioned are indicated. This information is
crucial in developing the schedules that meets the asset requirement and performance
expectation. The performance of the asset is measured against these attributes.
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3.6.2 Basic conditions assessments
The condition of the class of assets must be established and the basic assessments can be
classified as poor, satisfactory or good. The condition establishes the basic step in developing the
asset plans. A poor rating would indicate that the asset requires immediate remedial attention. An
asset that is rated satisfactory will require normal routine maintenance, while an asset in good
condition will require routine maintenance exceeding the service level required.
3.6.3 Prioritization based on condition
After establishing the classes and condition of the assets it is necessary to develop different
categories of interventions based on their condition. Internationally recognized standards that
classify maintenance tactics into three categories of maintenance services, A, B or C will be
utilised. The different service levels depend on the usage, intervals, duration of service and the
activities that need to be performed for each category.
3.6.4 Critical asset identification
Identification of the critical assets minimises delays during asset malfunction and speeds up the
replacement process. The lead-time for most of the assets is very long and the procurement
process can increase that lead-time due to delays in ensuring that all approval processes are
followed. Classifying critical items minimises the delays and assists the maintenance personnel in
identifying all assets that have an impact on service delivery when malfunction occurs.
3.6.5 Maintenance history data collection
The work order system which involves all the activities including the type of work and resources
required, functional location and the cost for the work are logged to create historical data for the
asset. The history makes it easier to analyse the performance and introduce the required
maintenance intervention for an asset.
The first step in historical data collection is to assess the initial condition and examine owner
manuals. Once the provisional maintenance plans have been executed, the data is logged into the
system to create historical data.
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3.6.6 The next generation maintenance plan
Once the provisional maintenance plans are carried out, asset classes grouped, basic condition
assessment carried out, and all the data logged into the system, the next step is to use all that
information including the historical data to develop a proper asset maintenance plans. The plan will
represent the base-line for creating the maturity target profile for the asset, asset classification,
critical analysis and maintenance tactics.
3.6.7 Document for decision making
The asset maintenance plan is a definite requirement for decision making processes in asset
management. When the asset malfunctions a decision needs to be made as to whether the cost of
repairs is justified. The replacement cost must be evaluated against the renewal cost. This decision
making process includes the cost benefit analysis which can be achieved by looking at the
condition, cost and history of an asset.
The PAM strategy for asset management requires that enough information on an asset be
available for decision-making. Lack of data makes this process difficult. Provisional maintenance
may be recommended based on the initial condition of an asset.
3.6.8 Determining the target level of service
The target service level provides an idea of the required level expected from an asset. If the level
of service is not satisfactory a decision needs to be made whether to alter the maintenance
intervention or to replace the asset. It is important to determine whether an asset that will be
measured against performance meets the required level; measurement against the set of
standards will determine whether a replacement or renewal is required.
3.7 PAM implementation and monitoring
3.7.1 Maintenance procedures
The success of the PAM strategies depends on correct implementation and monitoring. This
includes developing proper procedures to be followed by the technical and operations personnel.
Best practices must be implemented and the operators must ensure that the equipment is well
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operated. The safe working procedures ensure that there is a common understanding between the
different departments .Newly appointed personnel must understand how the equipment operates to
reduce maintenance costs. Figure 3.2 indicates the relationship between the departments involved
in asset management.
Fig. 3.2 The relationship between maintenance and operations
The maintenance plan includes the tasks and its key activities. Planning and scheduling includes
identification, prioritization, materials, labour/skills required, safety considerations, execution and
reporting. The maintenance plan also includes the estimated time required to complete certain
tasks for optimum performance.
The objective of asset management is to create a programme that is effectively planned and
scheduled to reduce labour and downtime. When a malfunction occurs, the programme will ensure
that the correct parts and materials are used and that the work quality is higher than that of an
unplanned one (John Campbell 2000).
The key steps in maintenance work starts with identifying what has to be done and ends with
analysing the results of what has been done. The six steps are shown in Fig 3.3:
Identify- the need for maintenance work from a simple noisy bearing to the complexities of
interpreting a vibration analysis and trends. The probability of identifying the real problem
before it becomes serious increases from simple inspection to complex analysis.
Management
Maintenance
Operation
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Plan- this step ensures that all the resources necessary to execute the job are accounted
for. The planning personnel determine what has to be done, the resources required and the
sequence of activities required for safe working procedures. The planner must be a
technically orientated person who is able to determine the sequence of events to complete
the activity, including the estimation of required time.
Schedule- to schedule the work, the planner needs to know who is available, what
resources and material will be required and the availability of the resources. It is important
to have knowledge of which jobs are mandatory, the procurement system and the lead-time
for procurement of various materials.
Assign- the assignment of the task depends on the maintenance policy and the process in
place for prioritizing work. The maintenance system will schedule and assign job cards with
details of activities to relevant teams for execution. The job card system makes it easier to
track the progress and re-schedule the work.
Execute- the maintenance process is a revolving one and the execution is the easiest part if
the initial steps are followed correctly. When the work scheduled on the job card is
completed the information is captured by the data capturer.
Analyse- the information captured from the job card for completed work is entered back into
the system. It becomes the history of an asset and is analysed for further action if required.
This analysis can estimate the life span and expected problems of an asset to implement
further maintenance activities and performance analysis.
Fig. 3.3 Maintenance analysis process (Source: Campbell 1995:46)
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3.7.2 Work order systems
Two types of work order systems are currently being used by different companies. One is paper
driven and the other is computer driven. A typical work order will include the originator, the planner,
the supervisor, accounting officer, the scheduler, production and the tradesman. The work order
will have a number for referencing and audit purposes. The benefits derived from a work order
system are:
Planning and scheduling mechanisms for complex jobs.
Cost collection mechanism for labour, stores requisitions, purchase orders and services to
charge against a piece of equipment or cost centre.
Way to capture delays and measure productivity.
Tool to manage and determine work backlogs.
Assist to manage equipment history and to analyse the failures and effectiveness of
maintenance efforts.
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3.7.3 Creating a job card
An example of how a work order or job card is created and the process of creating a work order on
the maintenance system are shown in Fig. 3.4 and 3.5.
A job card is created and then work details are entered into the system and saved.
How to create a job card:
On your work order screen, click on ; a blank job card screen will open, with the following
available job number.
Fig 3.4 Required information on a job card (Source: ERWAT On key system 2009: 4)
All dates will default to the current date. The date for completion of the work will be indicated.
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Click on to open the asset tree, select the relevant asset.
Type in the work required, select the type of work.
The GL code and cost centre code are linked to the asset and will change accordingly. However,
please check if it should be mechanical or electrical, as they differ.
Add the responsible trade (click to see which trades are available), select staff member and
select work order importance (1 most important, 4 least important)
Click to save job card.
Job card labour required tab
Use the labour required tab to view the labour requirements for each task and assign labour resources to the job request, together with estimate time durations and dates.
Note!
The section and trade are mandatory but the staff member can be assigned at a later stage.
If a staff member is assigned before the section and trade, then the section and trade are populated with the staff members section and trade.
If the section and trade are assigned before the staff members, then the staff members assigned to execute the work must be associated with that section or company and belong to the selected trade. The staff lookup list is limited to persons who work for the selected section or company and belong to the selected trade.
Each labour items date required must be within the work orders start on date and complete by date.
How to assign labour resources to a work order:
1. Click on the labour required tab. The labour required tab appears.
2. Enter the required data.
3. Add any notes that might be relevant to the labour required.
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4. Click to save the data.
Labour required tab
Fig. 3.5. The space where the required task or work required is entered. (Source: ERWAT On key
system 2009: 5)
3.7.4 Planning and scheduling tools
Different planning tools are available on the market. Most commercially available systems have
comprehensive modules that include work order management, equipment records and history,
preventative maintenance tasks and scheduling, costing and budgeting, material management and
labour capacity planning.
Some of the tools that can be used for planning are the Computerised Maintenance Management
Systems (CMMS), the Gantt chart, the Critical path method and the Pareto diagram.
The Gantt chart is a useful tool for planning and scheduling. It lists steps and activities along the
vertical line and the time needed to accomplish them along the horizontal line. It gives the
sequence, duration, start and finish times of events and the overall project start and finishing times.
It is useful for planning and managing projects.
The Critical path method gives a relationship between different events; it is most useful when used
in an activity network diagram. It determines the minimum time either required to complete a
project, independently, sequentially or interrelated sequence. Once plotted, the path with the
longest duration is the critical path.
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The Pareto diagram is a bar chart used to prioritise and help separate the vital few from the trivial
problems. It uses the 80-20 rule, which is 80 percent of the problems are associated with 20
percent of the equipment.
3.7.5 Materials management
Most systems with capabilities for materials management enable the process of managing
materials effectively. Spare parts, components, lubricants, fasteners, and all other maintenance
materials account for fully one-half of most companies maintenance budget. To manage
maintenance materials effectively and save on potentially wasted money due to neglect of
materials, the process begins with purchasing, storing and inventory control.
Fig. 3.6 Materials management process
Specify- the equipment register simplifies what is needed in an accurate manner and
provides updated configuration of the status. The major equipment assembly is delimited
into smaller components or parts that could be built into a unit. Other equipment might have
integrated components that can be dissembled and re-assembled for repairs if needed.
Source- partnerships between suppliers and buyers are an integral part which drives the
success of the materials management process. The overall value of the transaction and
relationship is governed by trust. The buying process is no longer driven by cost but the
ability of the supplier to meet the customer expectation and demand.
5. Use
4. Control 3. Order
2. Source
1. Specify
Materials
process
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Order- the order is placed once the supplier and the specification of the equipment is
known. Items kept in an inventory holding account are normally ordered once the minimum
order point has been reached. The final user is not involved in the ordering of equipment.
The final user is only involved at the determination of the minimum order point. The user
will receive the items from the warehouse or the control store.
Store- the main objectives of having a maintenance store is receiving, stocking and issuing
material that has been assigned to the job cards. The efficiency of the maintenance store is
enhanced or limited by the location, layout and the technology. The quality of service will
improve by employing good quality inspectors.
Control- the movement of items at the maintenance stores depend on the availability of
tradesmen. The stores can be well resourced but if the inventory movement is not
controlled adequately the advantages of maintenance stores will not be realised. The
inventory of spares and materials should be managed and measured rigorously in the same
way those raw materials, work- in-progress and finished goods are measured.
Use- The productivity of the maintenance teams is affected when the waiting times for the
materials and parts increases. Time that it takes to arrange material is recorded on the
requisition slip. When the material is found it is issued and brought to the workshop. The
just-in-time process assists in reducing the waiting time, although all the bottlenecks must
be sorted out before the process can be employed.
3.8 Maintenance tactics
The development, implementation and success of the PAM strategy depend on the choice of
maintenance tactics. Different equipment requires different tactics, as there is no standard system
that can be suitable for all types of equipment. The tactic used will depend on the type, condition
and usage of the equipment. The maintenance tactics is a battle plan against equipment
breakdown; it outlines the systems of dealing with problematic situations and preventing
breakdowns. The maintenance tactics provide an action plan, interventions and the timing of the
action that is required. The different options available are:
Run to failure- maintenance performed only after the equipment has failed; this is normally
done on electronic equipment and electronic circuit boards
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Redundancy- building redundancy into the systems ensures that when the primary
equipment fails the secondary equipment is available.
Schedule component replacement- this is a scheduled maintenance programme at
predetermined intervals based on the running times or usage regardless of the condition
before or after that period.
Schedule overhaul- the equipment is stripped and overhauled at a predetermined planned
period; this is normally done during a planned shutdown on a bi-annual basis or annually
during low season or low peak period when the equipment is in low production.
Ad hoc maintenance- this maintenance is done as and when required; this could be done in
preparation for the high production period or when the equipment is problematic and is not
running consistently.
Preventative maintenance- preventative maintenance is done periodically and includes
inspections, lubrications, minor adjustments and any other failure prevention maintenance.
Condition based maintenance - this type of maintenance is based on the measured
condition of the equipment. The monitored conditions include vibration, temperature, flow,
stresses and several other conditions. On this basis maintenance interventions are
planned.
Redesign - the maintenance is designed to ensure reliability of the equipment. This is
mainly done when the condition of the equipment cannot be correctly measured and when
there are no reliable systems that will provide an analysis of the equipment. Most of the old
equipment that has been discontinued by the suppliers falls within this category.
The selection of the correct tactics will depend on the understanding of the type of failure, type of
equipment and cost of maintenance. The difficulty in maintenance selection can be analysed by an
age curve which would reveal the approximate time that the equipment fails. This would indicate
whether there are more failures in the earlier or later stages of the equipment life.
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Figure 3.7 indicates the higher probability of failures during earlier and later stages based on the
age of the equipment failures from the technical reports of the City of Cape Town.
Fig. 3.7 Probability of failure
Although Fig 3.7 provides an indication of the probability of failure of equipment it does suggest
that failures are directly related to age. Other related factors may include: use, compatibility,
equipment, and the installation conditions.Two tactics are commonly used and most applicable to
water services industries:
Condition based-maintenance.
Preventative maintenance.
3.8.1 Condition based maitenance
Condition based maintenance is effective because it detects and warns of a failure before it
actually occurs. The warning gives enough time to react and intervene without affecting the
equipment productivity. This type of maintenance is most applicable in the heavy industries,
rotating machinery and all other equipment that fails in a cause and effect manner. The selection
of an appropriate method to be used depends on the type of equipment and the measurements
required. Some of the factors to be considered are:
0
1
2
3
4
5
6
7
8
9
10
commisioning Middle period Old life
1--5 years 5--15 years 15--20 years
Probalility of Failures
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The failure mechanism.
The reliability of the method to be used.
The warning or response time of the device.
The cost of the method to be used.
The skill level required to monitor, operate and interpret results.
The costs are sometimes driven by the skill required, but combining some of the methods to
monitor more than one operation at a time would simplify cost management thereby providing
great benefits.
3.8.1.1 Vibration
Vibration analysis monitors the mechanical movement of the machine. This method monitors the
vibration levels and movements outside the predetermined range. The baseline is set by
monitoring the regular or required operation of the equipment. The common sources of vibration on
moving equipment are misalignment and imbalances. Detecting the problems earlier will enable
quick diagnostics and the location of the problem.
3.8.1.2 Lubricants
Lubricant analysis involves monitoring the lubricating oil condition and wear particles. This includes
physical and chemical analysis of the oil, viscosity and acidity. The oil samples are checked
periodically and compared to the baseline to check the deterioration. The chemical analysis of the
wear particles can indicate the suitability, condition and stage of deterioration of the oil.
3.8.1.3 Temperature
Temperature monitoring looks at loose connections, deteriorating splice connections, and
damaged insulation. It detects the temperature changes in the equipment or at the connection sites
such as corona discharge, hot electrical connections, refractory lining defects, roofing and its
insulation.
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3.8.2 Preventative maintenance
Preventative maintenance reduces equipment failure and emergency repairs by promoting
maintenance proactively through inspections and basic scheduled maintenance. The probability of
failure is reduced by a logical overhaul or replacement schedule which minimises disruptions. The
preventative maintenance requires that equipment be classified and failure patterns be recorded
so that proper maintenance for each equipment can be developed.
The preventative maintenance is done through a work order system where a plant maintenance
system is used. The work order for preventative maintenance is either condition-based or normal
routine maintenance. The work order will have a task list outlining specific tasks to be performed
during maintenance.
3.8.3 Expected cost of maintenance
When maintenace on asset is aligned with business strategy and performed correctly, it will have
an impact on the overall maintenance budget. Figure 3.7 displays the relationship between various
costs related to maintenance, including preventative and emergency cost. The figure shows the
expected results that occur when preventative maintenance is done properly. The cost of
preventative maintenance will grow linearly while the cost of breakdowns will be expected to
decline exponentially. The total cost of maintenance will decrease to a point and then increase.
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Fig. 3.8 Relationship between different maintenance related cost (Source: IIMM 2006:3.106)
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CHAPTER 4
MEASURING MAINTENANCE PERFORMANCE
4.1 Introduction
The optimization of maintenance systems and management can be realised through proper
measurement. The overall capacity and cost associated with maintenance is linked to the types of
resources available and management strategy. Measuring maintenance productivity ensures
constant improvement. The strategy can be reviewed on a regular basis using strategic objectives
and a master plan as a guide. Productivity, equipment performance and processes can be
measured.
4.2 Measuring maintenance productivity
The defined service levels and performance standards provides the basic requirements for
measurements. The service levels must support the strategic goals, based on the asset
requirements and customer expectations. Some of the equipment has legislative and regulatory
requirements, which must be included in the performance measurements. Productivity measures
the performance of the team against set levels and standards. Using the computerised
maintenance system makes it easier to measure the productivity of the teams and the utilisation of
resources.
This can be done by measuring the number of job cards that are finished in a month versus the
number of job cards that were issued to individuals at the beginning of the month. The utilisation is
the measure of the time spent on the overall job cards in a month versus the time available for
individuals in a month.
4.3 Equipment performance measurement
The key to equipment performance is the correct design and expected performance levels since
the equipment will be measured against the set performance. The measurable service level for
performance standards for equipments includes the following:
Reliability and availability- measure of the availability as well as the equipment downtime
and the frequency of downtime.
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Safety- measure of the compliance rate with the safety requirements.
Economic efficiency- the measure of the quality of service or production rate.
Environmental objectives- measure of the rate of compliance with environmental
requirements and legislation.
Quantity rate-measure of the capability of equipment to render the required and expected
service.
Equipment effectiveness- overall measure of availability and precision of the equipment.
Maintainability- measure of the ability to make equipment available after it has failed.
4.4. Process performance measurement
The inputs into the business process are cost, human resources, materials and any other
resources required to complete the work order. A maintenance management system is a business
process used to make it easier to manage the system. There are different categories and
classifications that are required to ensure common understanding and to approach maintenance
management. These procedures and processes make it possible and easier for maintenance
personnel to differentiate between various maintenance processes.
Planned and unplanned- the aim is to minimise the unplanned maintenance and have more
planned maintenance since unplanned maintenance disrupts the service delivery and can
be costly in case of equipment malfunction.
Schedule compliance- this high rate of compliance with schedule PM (define) indicates that
there is less disruption in the business process while the opposite indicates that the
company is in fire-fighting mode.
Work order management- this is a procedure of handling the maintenance process. When
in place, the backlog will be minimal and a process of handling the flow of work will prevent
work from accumulating.
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Urgent and normal purchases- the aim is to deal with the procedure for emergency work
and requisitions. The planned maintenance will consider lead-time during planning while
emergency orders and requisitions will be handled in terms of the company emergency
procedures. There should be no lead times for emergency orders.
4.5. Information management system
The company would have many different types of equipment, which will differ in complexity and
type of parts. The inventory management and asset register for all different assets will be difficult to
manage using conventional methods. The computerised maintenance management system is an
idea tool to manage maintenance activities and manage the history of information as well as the
asset register. The CMMS will help track the type, date, materials and costs involved in
maintenance done on equipment. This information is required for decision making and useful in
comparing cost of repairs with cost of replacing equipment. The CMMS uses two different
modules, which are plant maintenance (PM) and material management (MM). One helps to
manage maintenance activities and planning while the other deals with managing equipment or
material process.
The two modules are divided into many sub-modules that are designed for various related
functions such as operating various data management and analysis activities.
Work order management- process of managing work orders and estimates cost and tracking the work order status and priority.
Planning and scheduling- uses tasks and adds resources required to complete the tasks and schedule maintenance work while identifying between preventative and unforeseen breakdowns
Preventative maintenance- establishes the maintenance schedule, describes the required work, list the activities and materials required and allocates a cost.
Inventory control- manages the stores inventory; it also tracks the movement of inventory between used and on-hand materials and costs. It can further allocate inventory items for maintenance purposes.
Labour- tracks the human resources availability and usage, skills required, and training history. It also manages the movement of resources between work orders.
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Equipment history- records the history of repairs and costs, labour used, manage equipment down-time and tracks equipment failures.
Equipment identification- manages the equipment functional location, numbers and make of equipment.
4.6 The balanced score card
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