Step 3: Implementing Intelligent Asset Strategies to Mitigate Risk
You’ve invested in your assets, processes and systems on a massive scale – all in an effort to achieve your business objectives. But are the daily activities your maintenance, operations and inspection teams specifically tailored to manage risk to your business objectives? Implementing intelligent asset strategies can ensure you are directing valuable resources to manage risk as part of their daily activities. Too often we see industrial companies performing maintenance purely based upon tribal knowledge, OEM recommendations or even from a much more simple basis: “what we have always done.” Rarely are these approaches derived from an understanding of the business objective of a given asset or the potential risks it may pose to delivering business value. Intelligent Asset Strategies provide a framework and process to reset your management approach from static, generic maintenance activities to targeted, dynamic strategies which mitigate risk.
Step Number 3 of the five steps for implementing intelligent asset strategies is aimed at just that – ensuring you have an optimized asset strategy in place to properly mitigating risk. Managing risk is one of the most challenging things to do for asset-intensive companies because risk can come in many forms – financial, operational, environmental, etc. Traditionally risk management has not been valued as a key component of building asset strategies so organizations can find themselves in an situation where maintenance, inspection and monitoring programs have been implemented “blind” to the specific objective that the asset needs to deliver to the business – safe, predictable production at an optimized cost.. In most situations, the population of assets which present the most risk are the minority (see my previous blog on statistics and how to achieve this understanding) and by ensuring you have intelligent asset strategies in place for this asset population creates a significant leverage point for your business which can be enabled by Intelligent asset strategies.
Ensuring Risk Mitigation with Intelligent Asset Strategies
When it comes to the riskiest assets, organizations must have maintenance and monitoring mitigation plans in place to ensure predictable results aligned with business strategy. Otherwise your employees, the environment, and your business will be unnecessarily exposed to the impact of unexpected failure consequences which can lead to unsafe work environments, downtime and/or regulatory scrutiny.
Once the riskiest assets are identified, you can focus on areas where unmitigated risk is identified and ensure each activity has a specific objective in reducing risk. You can do this organically, utilizing methods like Reliability Centered Maintenance (RCM) or Failure Modes and Effects Analysis (FMEA) or by optimizing existing strategies through the use of Meridium’s Asset Strategy Library. During this process you specifically identify what activities mitigate specific risks and quantify what level of risk reduction is achievable with the newly proposed strategy. I like to describe this process as providing the owner of the asset strategy two adjustment dials, one for risk and one for cost. This quantification of risk and mitigation, coupled with analytical routines allows for asset strategies to be optimized to meet very specific business goals such as complete risk mitigation or cost reductions at acceptable risk levels. When our customers go through this process, it is very common for them to find activities that are not adding business value while but still adding expense to the maintenance and inspection plan. It is also common for our customers to see the inverse situation where specific risk exists with the asset and there is no activity in place to mitigate it. By following the risk assessment and strategy optimization process, our customers are able to demonstrate that they have performed the appropriate due diligence for their riskiest assets as well as drive quantified value to the business through mitigated risks.
Intelligent Asset Strategies in Action
Rete Ferroviaria Italiana (RFI), the Italian national railway infrastructure manager, has the goal of commercializing train tracks on a secure and reliable infrastructure. Travelers using RFI’s trains must be safe and secure.
As a way to mitigate risk, RFI established several key performance indicators (KPIs) across its enterprise, which includes one central operating group and 15 regional groups. The KPIs they began tracking were:
- Percent of residual (active) risk data (the risk after mitigation)
- Production loss (the economic impact on production caused by train delays)
As a result of implementing these KPIs and a culture of risk mitigation, RFI was able to build living intelligent asset strategies that prioritize maintenance and planning according to risk, which can be continuously adjusted based on newly formed KPIs and budget and/or workforce constraints.
By focusing on risk mitigation for maintenance strategies, RFI estimated a first year savings of €4 million. Maintenance and operations decisions are now based on objectivity rather than subjectivity, eliminating human error to determine maintenance action priorities. Also, by implementing intelligent asset strategies across its enterprise, RFI is able to make comparisons between locations on maintenance strategies in order to internally benchmark and make continuous improvements as needed.
Implementing this step of intelligent asset strategies gives organizations two metrics to balance –risk and cost. Intelligent asset strategies allow users to take control and better understand what the optimal timing is around a specific asset (or fleet of assets), to better manage business decisions through a risk-to-cost basis. That gives industrial organizations a lot of power around the maintenance and optimization of their assets.
Is your industrial organization ready to take the next steps in mitigating risk on your most critical assets? Learn about the next step of implementing intelligent asset strategies - Monitoring and Detecting Emerging Threats.