Obbie LephauphauSnr Mechanical Engineer

Asset Management departmentSasol Mining, South Africa

Asset life-cycle management: ways of achieving full life and reducing total

cost of ownership

Definitions (1/3)

� Asset management1

� A strategic, integrated set of comprehensive processes (financial, management, engineering, operating and

maintenance) to gain lifetime effectiveness, utilization and return from physical assets.

Source: 1. Mitchell J.S & Carlson J, 2001, “Equipment asset management”2. Blanchard B.S, 2004, “System engineering management”

Asset life cycle phases2

Acquisition phase Utilization phase

Definitions (2/3)

� Asset design capability

Design capability

User Requirements

Utilization phase

Design capability

User Requirements

Maintenance will not improve the performance of asset beyond its design capability

Definitions (3/3)

Acquisition cost(research, design, test, construction, production)

Costs due to asset operations

Costs due to asset effectiveness and/or performance losses

Costs due to divest or dispose the asset

Costs due to maintenance and life cycle support (personnel, spares, test equipment, facilities, data, computer

resources

� Total cost of ownership1

� is the sum of all cost expended in the purchase and the support of the asset from its conception through its operations to the end of its useful life and disposal.

Source: 1. woodward, 19972. Blanchard B.S, 2004, “System engineering management”

Reliability, maintainability and

maintenance� Reliability is the probability that an asset will satisfactorily

perform a specified function for a specified period of time under given operating condition1

� Maintainability is an inherent characteristic of Asset design that pertains to the ease, accuracy, safety and economy in the performance of maintenance actions2

� Maintenance constitutes those actions taken to restore an item to (or retain an item in) a specified operating condition2

� Inherent Reliability and maintainability are design parameters, whereas maintenance is the result of a design

Source: 1. Smith A.M & Hinchcliffe G.R, 2004, “RCM gateway to world class maintenance”2. Blanchard B.S, 2004, “System engineering management”

Significant TCO reduction opportunity

exist during acquisition phase

Source: Blanchard B.S, 2004, “System engineering management”

Life-cycle cost-reduction opportunity

100%

Committed cost (cumulative)

Actual program expenditure

Acquisition phase Utilization phase

95% of costs are committed during design and development phase

Analysis required during acquisition phase

to reduce TCO

� Operating condition analysis� Operating environment

� Operators/maintainers skill

� Reliability Analysis� Inherent Reliability � robustness of design and component quality

� Maintainability Analysis� Easiness, accuracy, safety and economy in the performance of maintenance actions

� System Safety and Hazard Analysis� Identify, eliminate or reduce safety related risks throughout asset life cycle

� Human Factor Engineering Analysis� Prevent human-induced errors and mitigate risks to human due to interface errors

� Logistics Analysis� Reduce field support cost resulting from poor quality, reliability and maintainability

Source: Gulati R, 2009, “Maintenance and Reliability Best Practices”

Assets can be managed at different level

with different priorities and concerns

MaintainUtilizeCreate/ Acquire

Renew/Dispose

Optimize life cycle activities

Sustained performance, cost & risk optimization

ManageAssets

Manage Asset systems

Manage Asset portfolio

Corporate/OrganizationalManagement

Capital investment optimization and sustainability planning

Organizational strategic Goals

Typical priorities and concern

Source: IAM, 2008, “Asset prioritization”

Reliability culture can reduce TCO

People

ReliabilityLeadership

Training & Development

Communication

Performance Management

Process ReliabilityWork Management processes

Production Processes

Business processes

Equipment

ReliabilityMaintenance strategy for assets

Maintenance effectiveness

Extending MTTF or MTBF

Production

ReliabilityProcess control

Equipment utilization� The Organization Is a “Learning Organization”

� There Is a Single Best Way of Doing Things

�The Maintenance Focus Is on Proactive Work and Failure avoidance

� The Production Focus Is on Improving Asset Utilization

Characteristics of a Reliability Culture

Source: Davis J.W, 2008, “Creating a reliability culture in your company”

Core life cycle phases that all assets

progress through

� Determine the phase in which the critical assets are in� Draw life cycle performance curves of critical assets� Is the performance as expected, if not why not� In which phase should your resources be focused

Infant mortality phase Constant performance phase End of life Phase

�Premature failure eliminated� Effective QA/QC� Design that is robust enough to handle true process variable or loading arrangement� Quality is critical to selection of equipment/material� Repair or overhaul practices that result in robust equipment

�Life cycle extension; defer refurbishments/renewals� Continuous improvement plan� Minimize MTTR� Machine health management

� Life limiting sub-assemblies or components�Asset Refurbishment� Asset replacements

Asset life cycle time

Source: van Oene, 2009, “Asset management principals”

Select cost effective maintenance

strategiesIs the rate of

deterioration or

failure predictable

and consistent?

Is there a reliable

indication/early

warning of failure?

Is there a routine

maintenance that will

ensure that item/asset

reach a full life

Is the loss of

production or cost

of run to failure

within acceptable

limit?

Is the item/asset

renewable to as good

as new cost

effectively?

Is the interval between

detection and failure (P-F

interval) sufficient to act

on?

Is there a suitable

condition monitoring

technique that is cost

effective to implement

and operate?

Is routine

maintenance cost

effective?

Scheduled

Renewal

Scheduled

Replacemen

t

Condition

Monitoring

Routine

ServicesRedesignRun to

Failure

Y

Y

Y

Y

Y

Y

Y

YN

N

NNN

N

N

N

Effective management controls that can

reduce TCO

Operating &

Maintenance

Strategies

Material

& Labour

Resource

Control

Change

Control

Work

Control Cost

Control

Resource estimating &

Task assessment

Work programme

scheduling

Preventive, detective &

corrective work

Data

collection

Inspection &

CBM Loop

Problem/Opptt

Identification

Problem/Opptt

Investigation

Evaluation

of Solution

Design &

construction

Source: Woodhouse J, 2004, “Asset management decision-making”

Thank you