Critical Assets: Manage them Right for Customer Delight
In my first blog I talked about the ten commandments of Physical Asset Management in which the first rule stated:
Thou shall identify critical equipments that provide goods or services that delight customers
Enterprise asset management was traditionally seen as an internal function of an organization with minimal impact on customer satisfaction. With the advent of the service economy an organization’s focus has shifted on to the customer. There is a paradigm shift in the way asset management is viewed. It now has two important aspects – Critical Assets and Customer Delight. Asset Performance Management is the new buzz word with focus on delivering customer delight.
The objective of enterprise asset management is to increase asset availability. It has an indirect relationship with asset utilization – which is the core objective of the operations function. There cannot be 100% availability and 100% utilization because that essentially means there is no asset maintenance and the asset is available at all times. Asset performance management is a trade-off between availability and utilization. It is an amalgamation of the objectives of the maintenance function and the operations function of the organization.
Maintaining a desired level of service from an asset at a minimum total cost of ownership is the prime objective of asset management. This statement clearly differentiates the main purpose of an asset intensive industry. It emphasizes on the importance on providing reliable service and not on maintaining assets. Identifying critical assets is the first step in ensuring reliable operations. It helps in concentrating the asset management efforts on critical assets and managing the trade-off with the operations function. Different maintenance and risk management strategies are adopted for critical assets over other assets.
Critical assets are identified as assets that are HIGH on ‘Consequence of Failure’ and HIGH on the ‘Probability of Failure’. Predictive maintenance and reliability centred maintenance techniques are deployed for such assets. For example, utilities companies run a Mains replacement programme that works on this definition. Based on the risk score of the mains pipe a structured replacement programme is defined so that the assets are replaced before they fail. The replacement plan is prepared such that the impact on customer service is minimal, if any.
The other way of defining critical assets is by ranking a particular asset against various parameters like:
- Operational and Customer impact
- Safety and environmental impact
- Probability of failure
- Spares lead time
- Asset replacement value
- Planned utilization rate
- Ability to isolate single-point-failures
- Preventive maintenance (PM) history
- Corrective maintenance (CM) history
- Mean time between failures (MTBF) or “reliability”
This number is called the Criticality Rating. This number should be analysed holistically before that asset is termed as Critical. An asset can have a high criticality rating because it has a longer spares lead time but that does not mean that the asset is critical as the spares can be stocked before the failure occurs.
Asset criticality becomes the foundation for all maintenance strategies and work planning. Please do share the techniques that you may have used for identifying critical assets. In my next blog we will discuss about asset sustainability and its importance under the looming threat of climate change.