The Asset Management Systems Model

AM Systems Model Blog

What is a model and why have one? Models are graphical depictions that illustrate and describe concepts and ideas, and can be very useful to explain those ideas simply. 

Asset Management Concept Model

Our previous post introduced the Asset Management Concept Model that described the underpinning Four Principles of Asset Management – being Output Focus, Capabilities, Level of Assurance and Learning Organisation – see the figure above.

Asset Management System Model

These four Principles are enacted within the Management System for Asset Management – more easily called the “Asset Management System.” If you have read ISO 55001 you will have noticed that in the introduction, the term “Asset Management System” is used as a shorthand to describe the term “Management System for Asset Management”.

We will now look into that model – the Asset Management Systems Model – see the figure above for all three asset management models. All these three models were developed by the Asset Management Council (Australia).

In particular, the three models that make up the suite, describe:

  • The “Why of asset management” – the Asset Management Concept Model;
  • The “What of asset management” – the Asset Management Systems Model; and
  • The “How of asset management” the Capability Delivery Model (or sometimes called – Asset Management Process Model)

What is the purpose of an Asset Management Systems Model?

What is a management system? A management system is defined as a set of interrelated or interacting elements of an organization to establish policies and objectives, and processes to achieve those objectives.

In a small organization there may not be an official system, just ‘our way of doing things’. Often ‘our way of doing things’ is not written down, instead it is in the head of the staff. However, the larger the organization the more likely it is that there are written instructions about how things are done. This makes sure that nothing is left out and that everyone is clear about who needs to do what, when and how. When an organization systemizes how it does things, this is known as a management system.

The purpose of the Asset Management Systems Model is therefore to:

  • Describe the key elements and components of an Asset Management System: and
  • Describe how all those elements relate.

In particular, the Asset Management System Model describes:

  • The important role of Leadership and Culture within a management system;
  • The relationship between the stakeholders involved setting the requirements for the organisation and the organisation itself.
  • The relationship between an Asset Management Policy, the Strategic Asset Management Plan and the Asset Management Plans to business needs, that is the business Strategic Plan and the associated objectives. It also describes the relationship to the policies required by other ISO standards (such as safety, environmental, financial, HR etc)
  • The relationship between the organisational/business objectives and the requirements of the Asset Management System including the relationship between the organisational objectives and the processes and procedures contained within the Asset Management System.

An effective management system has many benefits including:

  • Increased surety of achievement of business outcomes;
  • Efficient resource use;
  • Improved risk management, and
  • Increased customer/client satisfaction as services and products consistently deliver what the business promised.

The Asset Management Systems Model is shown in the figure below.

Importantly, this model was developed to fill a shortfall within ISO 55001 – and that is, to describe the elements that make up an Asset Management System. Interestingly, ISO 55001 describes the requirements for such a management system (to be certified), but does not directly address the elements of an Asset Management System.

Outputs/Artefacts

ISO 55001 describes the asset management artefacts (documents) needed by business, namely: 

  • An Asset Management Policy – states intention and direction of an organisation, approved by the CEO – see the figures below.
  • A Strategic Asset Management Plan (SAMP) – specifies how business/organisational objectives are converted into Asset Management Objectives – the SAMP is approved by the Executive — see the figures below.
  • A number of Asset Management Plans (AMP) – activities, resources and timescales to achieve objectives – the AMPs are approved by the delegated Asset Manager – see the figures below.

Some Key Points about the Asset Management System Model

Stakeholders

Stakeholders are those people/organisations that have an interest in the Asset Management System. These might include – investors (both private and corporate), shareholders, regulators and customers etc.  

Collectively they set the direction of the organisation through the Board (their representative).

The Stakeholders also set the risk appetite of the organisation. They do this through the Chairman of the Board approving the Risk Management Plan – which contains the Stakeholder expression of that risk appetite. Asset Managers are required to apply that risk appetite whenever they make a decision, such as the development of a maintenance, operations and spares task and plan.

Leadership

The Stakeholders directly influence the leadership style and workplace culture of the organisation. They do this by virtue of their influence upon the Board and the Strategic Plan of the organisation.

The leadership style and associated workplace culture is a key determinant of the effectiveness of physical asset management within the organisation. As a result, an important consideration for any Asset Management System is the identification of an appropriate supporting asset management culture.

Organisational Objectives

The Organisational Objectives are set within the Strategic Plan, as approved by the Board/Stakeholders.

Asset Management Objectives

The Asset Management Objectives are developed and documented in the SAMP. These reflect a set of requirements that the physical assets of the organisation must achieve, if the Organisational Objectives contained within the Strategic Plan are to be achieved.

In essence the Asset Management Objectives reflect:

  • The physical assets needed to achieve the organisational objectives; and
  • The requirements (or outputs & outcomes) that each physical asset must deliver; together with
  • How all those assets work together, to achieve the Organisational Objectives.

In doing this, it should be clear which physical assets are required to meet each and every organisational output/outcome. In other words, it should be clear which assets are needed to support which business output/service level and in turn which revenue stream.

In this way, it is possible to link the operating costs (maintenance, spares, operations and fuel etc) associated with each needed physical asset to each revenue stream – thus enabling asset managers to demonstrably support the organisation achieve a desired balance of cost, risk and performance (being both physical and financial performance).

Process Management

The Asset Management System must contain supporting process and procedures – through which the organisation can systematically identify and develop plans that will assuredly achieve the required Asset Management Objectives.

The next Post will explain this typical series of decision-making processes. The overall process is called the Capability Delivery Model. The Capability Delivery Model is a high-level asset management process model.

Roles and Responsibilities

To support decision making, roles and responsibilities have been identified and implemented. This is usually done within the SAMP.

Competency and Engagement

Each decision maker must be demonstrably competent to make the decision required of them.

Decision Making

The decisions to be made, through the application of the processes and procedures, reflect the Asset Management Objectives. For example – An Asset Management Objective might include a requirement (among others) that the physical assets of the business must be demonstrably “Safe to Use” – not only for the staff of the organisation but also for members of the public (if that is relevant). As a result, the organisation, through its Asset Management System must develop, implement, and continually improve the decision-making processes while documenting the rationale for how such decisions are made, including the application of any regulatory and or legal requirements.

Risk Management

The basis of decision-making is risk. Decision-making involves:

  • Firstly – by understanding the context;
  • Secondly – by understanding the risk appetite of the organisation to be applied, when making a decision.
  • Thirdly – by understanding the risks (for both good and bad outcomes) that might result from any uncertainty associated with the achievement of the organisational objectives; followed by
  • Identification of appropriate risk mitigation activities (e.g. Maintenance tasks, training programs, redesign tasks etc including the use of Personal Protective Equipment etc); and in turn
  • Identifying the residual risk associated with the identified risk mitigation activities (activities that reduce Consequences and activities that reduce Likelihood).

Performance Monitoring and Improvement

Performance Monitoring and Improvement includes:

  • Identification of KPIs (e.g. from Asset Management Objectives) and establishing plans for how such KPIs are to be measured and managed;
  • Identification of any data needs to support KPIs measurement;
  • Identification of a continual improvement program based upon both understanding the key risk concerns for the business as well consideration of sensitivity analyses of data (where should I look first).
  • Development and implementation of a Failure Reporting and Condition Monitoring System (FRACAS) to support the above.

Summary

In summary – an Asset Management System containing all the elements described above, is a necessary business tool that enables the business to be confident that stakeholder needs will be met.

Leave a reply