Enterprise Asset Management is an emerging strategic tool enabling optimal utilization of assets contributing to business goals of an organization. Come join us as we uncover the hidden potential of Asset Management with our deep insights spanning industry domains and technology

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September 30, 2014

Use of Smart Maintenance Model in Electric Utility Industry for Power Grids-Part II


Random asset breakdowns take the business by surprise and makes it suffer with hefty erosion of capital as a significant amount of Industry capital is in the form of assets. The only way to prevent is to gauge the pattern of asset breakdowns and predict it before the damage is done.


                                                            Fig 1: SMART MAINTENANCE MODEL

After the data is assimilated by means of real time monitoring of assets through SCADA, DFR, IEDs and historical data secured through EAM tool, the next phase is to analyze the data so as to pick up a trend or pattern of assets breakdowns. The ultimate goal is the move from reactive (scheduled, break-fix) and preventive (condition-based, preventive) to predictive maintenance. The data collected so far by means of real time monitoring and Asset management tool will be analyzed to spot repetitive patterns and trends based on which predictive actions to safeguard assets will be taken. Linear Regression analysis is used for predicting the unknown value of a variable from the known value of another variable. The variable whose value is to be predicted is known as the dependent variable and the one whose known value is used for prediction is known as the independent variable. The model uses the linear equation:

                                                                                       y = a +bx

 Where y is dependent variable and x is independent variable. This is also known as the 'Line of best fit'.

A base year is taken ahead of which the asset breakdown data is plotted to arrive at a scatter diagram. A hypothetical example will be say to take year 1990 as the base year, so all the asset data collected since 1990 till date will be used to predict the future asset breakdown trend. Here we are going to plot the graph taking X as the 'Number of days from the base date' and Y being the 'Number of times the asset has broken down'. The value on Y axis will be cumulative and keeps on adding. Say from base year to 180 days,  asset has broken down 2 times, 360 days from base year asset has broken down 9(2+7) times and so forth. After plotting the data, a line is drawn in such a way so as the distance between the line and the coordinates on the graph is minimum, this is done using Sum of Squared Errors (SSE). This is the 'Line of Best Fit'. With the help of this line we will predict the probable future asset breakdown time window. Using the equation arrived at(y = 0.0375x - 7.5333), we can give the value of x (number of days from base date) and based on the value of x we can find out the value of y which will be the predicted value. The data plotted should be at least for 5 years so as to pick a trend. The more the quantity of data in terms of the number of years, the more reliable and accurate the predictions will be.

The diagram mentioned below shows the asset breakdown data plotted on a graph called as Scatter Diagram. A line of Best Fit is arrived using Linear Regression Equation.




After the likelihood of assets breakdown is gauged, the next step is to take remedial measures. As soon as the probable asset breakdown time frame is predicted, a prudent maintenance activity is carried on that asset before it enters the predicted breakdown time frame. The prime focus of the maintenance activity will be on the problems because of which the asset might have been broken down in the past and may see a downtime again in future if the maintenance is not carried out. So a maintenance carried on the asset beforehand will practically eliminate the probability of breakdown because of similar problems faced earlier.


Smart Maintenance Model using Predictive Maintenance by way of Linear Regression is a boon for the electric utilities where the entire industry is reliant on the proper functioning of asset. The collection of data using both real time monitoring and historical data leaves no stone unturned for optimizing asset performance. This gives management a leading edge ahead of its competitors to manage asset lifecycle costs in a better way and make informed and judicious decisions.

September 2, 2014

Risk based Asset Management

Assets play a very vital role in every enterprise. Depending upon the nature of business, each organization categorizes their asset based on risk, criticality, safety & reliability and performs maintenance activity on their respective assets. Multiple risks are involved at every step of asset life cycle. In order to make sure that every vital asset performs within defined capability limits, risks have to be identified and proper measures have to be placed even before the risks appear.

The initial move to build risk based asset management is to indulge pertinent SMEs in a multi-dimensional performing peer. This is because, in association they can bring forth a shared sense of urgency with cumulative view including top tier management and rest of the organization in its execution.

Even before we get to know more about development of the system, it is necessary to know the concepts of Risk.

What is Risk?
The idea of Risk has been with us since quite long time: Concepts of which were first published in the mid-17th century. Risk management is defined by ISO 31000 as: "The effect of uncertainty on objectives".

Risk = Probability x Consequence
Three significant angles of Risk are:
1. Effect: An Effect is a shift from the normal result positive and/or negative.
2. Risk: Risk can be defined as the consequence of an action and its associated occurrences.
3. Uncertainty: Uncertainty is the condition of not having enough information, knowledge or understanding over an event its consequence or outcomes.

Basically, in a Risk-based Asset Management System (RBAMS) one has to muster appropriate data in line to the value stream. These collected information is used to make responsible decisions that will in turn add greater value to the organization. The result of adopting RBAMS results in making ideal choices and to do "right things" to mitigate risk. However, configuring this capability of the system to have long lasting and feasible effect on the business and to be able to withstand organizational and management shifts is the greatest challenge. The development of RBAMS can entail a huge investment of time which can run into years. Therefore it needs both short term (1-2 years) and long term (10-15-20 years) ambitions to set a future map to improve the capability of RBAMS.

RBAMS model is made up of four phases that are crucial to the success of this strategy. (PDCA) is the iterative approach of plan, do, check and act followed by models like Risk management and Asset Management. The simplified form of these elements fall as below:

1. The Plan sets corrective goals along with the processes with detail description to achieve them.
2. The Do executes the strategy and musters information required to verify and improve the plan.
3. The Check function estimates the mustered information for accordance to the scheme developed and in execution of the same. It is also made sure that improvements are encouraged during the course.
4. The Act works on considering the changes mentioned its implementation or rejection of data on the course of iteration.

The RBAMS Process

RBAMS is a continuous cycle that begins from collecting the main targets to be achieved, data of assets and resources and their base lined systems. The highest degree of the risk management work can then be pointed to those most crucial to the organization. Once crucial/significant assets are recognized, a risk assessment is executed to find threats and analyze the chance of occurrence and the resulting effect and additional measures that would make less severe this effect to a level agreeable to management.

Organization Structure of RBAMS

org structure.jpg                                                                                                
• Strategic Management looks to recognize the organization's purpose, its targets and objectives. It is really necessary to set priorities and to focus energy and resources towards common goal to establish the system.
• Operations Management advances the organization towards its purpose by concentrating on short term activities on daily basis.
• Risk Management is that process that assists to deal risks and uncertainties to make sure the organization is in line to reach its objectives.

Once risks are recognized, it is essential to overcome them. Complete eradication of the risk cannot be assured but its impact can be made less.  This system through which risks are reduced is known as Risk Management. The mitigation of risks to avoid loss by analyzing the process and parameters even before investing is the major purpose of Risk Management.
Risk-based Asset management System - Its Advantages:

1. Enabling Focus on KPI and Analytics: In case your system is not a risk-based, there would more expenditure on symptoms detected rather on root cause of the loss incurred. This might not allow one to focus on KPI and analytics.
2. Prioritization of Resources: While fixing critical problems expenditure on time, money and materials can be prioritized appropriately if the system is Risk-based.
3. Focused Goals and Continuous Improvement: It helps to achieve allied project goals and targets with regulatory consent and also provides scope for continuous improvement.
4. Comprehensive Risk Mitigation: RBAMS is all about recognizing, reducing and eradicating risks. It is followed by coordinated application of resources to minimize probability of risks.
5. Support on Asset Reliability: An Asset management system that is risk based is a combination of process and risk management alongside maintenance on condition based to ensure source utility based on process criticality. Thereby offering assurance of reliable analysis that includes a scope of further improvement with time.

RBAMS can help any organization to accurately log their asset information. Additionally, it can help system to identify multiple risks and losses and can provide scope of constant improvement through a reliable enterprise asset management. It should be borne in mind that RBAMS is not a one-time measure in a dynamically changing environment. It needs to be monitored for control through robust Internal Audit process.  Whenever necessary this should be supplemented by an External Audit to derive the benefits of the outsider's view on critical processes.

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