A risk-based Asset Strategy accelerates accurate decision-making

How can you structure your thoughts and transform options into metrics that build a clear business case?

Posted: January 29, 2020

Asset Performance

A risk-based Asset Strategy accelerates accurate decision-making

I often see that the teams in Production, Maintenance and the Boardroom are not speaking the same language when it comes to making decisions. Important decisions like where to invest and how to budget maintenance manhours and costs often lag when organizations are not able to define a business case for investment. When departments and functions exist silos, it's challenging to get a complete picture of interdependencies and develop a roadmap for achieving operational excellence.

In my experience design and engineering choices, maintenance strategies, and budget decisions are, more often than you would think, made on a best educated guess. In my view, that is steering the enterprise blindly. Which results in a great deal of lost value in the enterprise.

So how can you structure your priorities and transform anecdotes into metrics that build a clear business case?

Link your asset strategy to strategic business goals

I remember one company where the maintenance manager was called to clarify why a specific production line was malfunctioning. The incident was a so-called "priority 1" major malfunction. However, the asset was never marked as risk-critical when building the asset strategy. As a result, there were no spare parts in stock for this specific product nor any prescriptive actions to minimize downtime when the equipment experienced an unscheduled outage.

The result was frustration between departments that could have easily been avoided had a risk-based asset strategy been put in place throughout the organization. Meaning all related departments agree on the acceptable risk of a specific production line all the way down to the asset level. Reliability-centered maintenance (RCM) draws a clear line between asset failure behavior and consequences to business risk. It is important that you link your asset strategy to your strategic objectives like safety/compliance, cost management, production quality, and production output (availability/reliability). This way, you create one single line of communication between departments from the factory floor to board level.

Asset lifecycle decisions made easier

How do you decide on an asset lifecycle, and how do you validate the choice for a more expensive asset or a budget-friendlier one? In one specific case, I was asked to help out where the Asset Management department needed to make such a decision. One asset was approximately 30% cheaper than the other, with both promising an asset lifecycle of 20 years—it seemed like an easy choice.

AVEVA Asset Strategy Optimization software was used to conduct different simulation scenarios. AVEVA Asset Strategy Optimization takes into account the information from both manufacturers and the customers maintenance history, production results, and compliance rules. As a result AVEVA Asset Strategy Optimization was able to show the more expensive asset would be 60% cheaper when calculated across the entire 20 year asset lifecycle. The more expensive asset needed much less inspection and maintenance, and the asset reliability was significantly higher than that of the cheaper version, resulting in less downtime and increased production capacity.

Build the business case for a realistic asset management strategy

In another case, I helped a water municipality that wanted to lead a discussion with their upper management on the acceptable level of asset risk. The maintenance department was faced with a set budget and needed to create awareness of the risks involved in its work and the assets that drove the water treatment and distribution system.

A risk matrix was set up by the team. So far, so good. Yet, the risk matrix was not connected to the budget, meaning there was no clear picture of what the maintenance department could achieve within its operating envelope. There was no connection between the business objectives, the budget and operational costs like material, manhours, production loss, etc. It therefore did not sketch the complete picture and led to miscommunication and disappointment.

It doesn't have to be like this.

alternate textThe methodic RCM approach that keeps your assets at optimum levels of availability and reliability

AVEVA Asset Strategy Optimization

AVEVA Asset Strategy Optimization enables you to build an asset strategy connected to the production strategy and corporate objectives. AVEVA Asset Strategy Optimization provides an in-depth understanding of failure patterns and the mitigating actions you can take before failures occur. It enables organizations to simulate different asset strategies to visualize the balance between risk, cost, and performance of assets, against your evolving business objectives. Imagine how much that could accelerate and improve accurate decision making within your organization?

Register to learn more on Asset Strategy Optimization in our upcoming webinar on February 27th "Hundreds of truths, but which one to choose?" Finding the right balance and optimize asset strategies in record time.

Register Here

 

 

Read the blog "Building an Asset Strategy doesn't have to be a daunting task. Get a head start with the Library in AVEVA Asset Strategy Optimization."

author
Written By
Harry Bleiburgh

It was in his years of working as an APM consultant in a variety of industries that Harry learned how to make heretical methodologies like Reliability Centered Maintenance, Root Cause Analysis, and Fault Tree Analysis practical for the work floor. He has significant insight into how end users use software and what is important to them. This experience helps him today as a Product Manager to create pragmatic functionality for AVEVA software products that helps the end user reach results in a much faster, more intuitive way. Harry has a background in mechanical engineering and business administration.

See how APM 4.0 drives measurable and immediate results to your bottom line. Get Connected

Related Blog Posts

Stay in the know: Keep up to date on the latest happenings around the industry.

Oil and Gas
2019 Hydrocarbon Processing Awards recognizes AVEVA

AVEVA was recognized by the best solution for Digital Twin and Operator Training, and also process optimization and plant operations optimization.

Oil and Gas
5 Tips to Make Digital Transformation easier in the Oil and Gas Industry

Undergoing digital transformation presents many challenges along the journey. It's essential to understand the issues you may face and how you can overcome ...

Oil and Gas
Maximize Oil and Gas Pipeline Efficiency with Integrated Digital Twins

How pipeline companies lean towards digital transformation to improve operational efficiency with AVEVA while enhancing the safety measures

Oil and Gas
$1 trillion to be unlocked in Digital Transformation?

Data is the foundation of Digital Transformation of Oil and Gas. Data feeds into predictive analytics, optimises process, predicts machine failures.

Chemicals
Are you ready to ride the wave of the petrochemical industry growth?

To overcome business and operational challenges, companies will need to increase their level of digital maturity through value chain optimization.

Oil and Gas
Understanding the Refining and Petrochemical Value Chains to Drive Optimization

Understand the complexity of the refining and petrochemical value chains to create a solid digital transformation strategy that optimizes the entire enterprise.

Oil and Gas
When Digitalization and Transformation are not Enough: Accelerate.

Market-disrupting industrial organizations differentiate themselves by transforming business through innovating and accelerating past the competition.

Oil and Gas
Optimizing my Refinery Blend is Much Harder than Baking Cookies

Refinery products are blended to get final products with desired quantity, quality and schedule specifications. However, rigorous planning, scheduling and ...

Oil and Gas
3 Steps to Maximising Pipeline Integrity

Ageing infrastructure is posing huge challenges for pipeline operators in keeping their pipelines running optimally and profitably in the face of increasing ...

Oil and Gas
How Can Predictive Analytics Reduce Unplanned Downtime in Oil and Gas Production?

Production can increase either by developing new fields or improving asset uptime in existing fields, but asset downtime due to facility maintenance – planned ...

Oil and Gas
My Car Has Predictive Analytics, Why Shouldn’t My Refinery?

Rebroadcast of Air Liquide's experience with predictive analytics and AVEVA

Oil and Gas
How Digital Transformation in Engineering and Design boosts Project Profitability

Low oil prices had sanctioned almost every large Exploration and Production (E&P) projects in the oil and gas industry. Today, with the recent recovery of oil ...

Oil and Gas
The Price of Optimizing Your Process Is Asset Reliability

Predictive maintenance (PdM) strategies enable front-line personnel to act before costly failures occur and maximize value throughout the entire asset ...

Oil and Gas
How Closed-loop Operations Enable Digital Transformation of Oil and Gas Fields

Today, the advancement in technology – cloud platform, analytics and computing power – is revolutionising the way how companies can leverage big data and ...

Oil and Gas
How Pipeline Operators are Working to Improve their Asset Reliability

Asset reliability is a key component of an overall asset performance management strategy. And it plays a big part in helping midstream oil and gas operators ...

Oil and Gas
Maximizing Midstream Profits with OT IT Convergence

Historically midstream oil and gas organizations have kept two critical functions within their businesses almost entirely separate – IT and OT. One of the ...

Chemicals
Operational Excellence: Likely the Most Overused Term in the Process Industries

Operational Excellence isn’t achieved overnight. It is a methodology that takes a commitment to focusing on continually improving the process, and its ...

Oil and Gas
How Virtual Reality Compresses Operators Learning Curve in Oilfields

Unlike a traditional classroom environment, the VR immersive training system facilitates interaction between equipment and environment and scenario simulation ...

Oil and Gas
How Advanced Analytics improve Margins at Natural Gas Processing plants?

mproved fracking technology in oil and gas fields is creating an unprecedented boom in natural gas production, exerting tremendous pressure on natural gas ...

Oil and Gas
Implementing a tiered methodology for pipeline integrity significantly improves business’ chances of preventing leaks

With pipeline operators facing increased scrutiny as of late, the conversation must shift to pipeline integrity. Pipeline integrity encompasses three methods: ...

Oil and Gas
Digitizing the Mobile Workforce

The front-line opportunities to improve plant reliability, safety, and profitability are infinite. Value lies in digitizing the mobile workforce.

Oil and Gas
Why IIoT in Refineries Now?

IIoT in refineries is trending fast and promises great short and long-term results, allowing for smoother refinery optimization.

Oil and Gas
IIoT: Acting on All Big Data

The importance of IIoT, big data and closed-loop operations to bridge the gap between unused data and profitability in refineries.

Oil and Gas
Strategic Implementation of IIoT in Refineries

Delivering Closed Loop Business Operations for the Refinery Enterprise with Schneider Electric Software. Strategic Implementation of IIoT - Refineries.

Oil and Gas
How are you minimizing risk throughout the three phases of pipeline integrity?

Pipeline integrity includes three phases: prevention, detection, and mitigation, which together minimize the chances of a leak and the ensuing repercussions.

Oil and Gas
IIoT: Three Trends Impacting Upstream Producers

Many producers have started looking to IIoT to help them navigate through the digital evolution and create a competitive edge for their operations.

Oil and Gas
How the Internet of Things has Influenced Midstream Pipeline Operations

IoT Internet of Things has provided increased ability to connect, measure and analyze variety of behavioral statistics for midstream pipeline operations.

Oil and Gas
How Big Data and Analytics increase Production Asset Uptime in Oil Fields?

Oil companies must continue to make investments in improving operational efficiencies to sustain and improve their profitability.

Oil and Gas
How Digitalization of Process Design and Operations boosts Profitability in Ethylene production

Learn how to apply impacting digital technologies in ethylene production plant design and operations for higher profitability.

Chemicals
You Must Cross That Bridge Now; Not When You Get to It

A successful Unified Supply Chain and Operations Execution Management solution is a fully functional, bi-directional communicative interface between supply ...

Oil and Gas
Advanced Contractual Risk Management

Reducing cost of capital needed to fund large capex projects

Oil and Gas
China HQCEC uses AVEVA Solutions to Design World’s Largest Coal Liquefaction Construction Plant

Situated in the hi-tech heart of China’s Ningdong Energy Chemical Industry Park, the world’s largest indirect liquefaction processing facility covers 2.8 ...

Oil and Gas
How Digital Operations Management Improves Profitability in this Challenging Oil and Gas Environment

Learn how digital operations management framework enables refineries and petrochemical plants to optimize profitability.

previous next

Sign up for our newsletter and get all the latest information straight from the source.