Water Journal : Water Journal May 2015
WATER MAY 2015 28 Opinion asset management success factOrs Leadership in creating high performance teams, an understanding of value, structure and corporate culture – as well as an understanding of the impact of AM decisions on organisational risk profiles – all have a significant role to play, including a holistic approach to asset management. While AM is seen as an emerging business discipline rather than a technical discipline, it is a fact that AM has evolved out of the technical areas and “soft skills for technocrats” is thus also a focus area. A further crucial element is the balance between capital efficiency and optimisation of operational performance, an area of ongoing opportunity. The advent of “Operational Readiness” addressed this to a degree; however, significant potential for greater contribution in minimising ‘value leakage’ exists with involvement of the AM professionals earlier in the asset lifecycle. The capacity to prevent value leakage and to leverage the opportunity to influence “locked- in”, or embedded cost is illustrated in Figure 3 and the “Greenfields Example” that follows (Figure 4), demonstrating the importance of creating a solid base for informed decision making. minimising ‘value leakage’ and gaining Business advantage Greenfield Example: A request to develop AM plans for a multi- billion dollar greenfield infrastructure project involving open ocean marine infrastructure was received. A risk review of the design identified six ‘durability critical’ elements, leading to the creation of decision support tools reflecting options analysis. ‘Optioneering’ models based on variable assumption inputs were built, the first addressing the issue of cable-tray material. This revealed, based on asset owner assumptions, that changing the cable-tray material, at an estimated additional cost of $1m, returned a net present cost (NPC) saving of >$100m. Figure 4 illustrates the net outcome of this first optioneering model; water sector experience in a desalination environment with cable tray material supporting this outcome. Higher asset availability improved revenue potential by >$4.3Bn. Asset owner feedback was: “The analysis demonstrates true optioneering and effect on revenue streams”10 “From an applied asset management perspective this is excellent work.” 11 The balance of the durability critical items reflected further design changes, incurring additional build cost of around $2m rendered NPC savings of an additional >$400m. None of the other issues impacted production availability, so there was no further gain in revenues. Net outcome: Estimated additional investment in modified design of $3m rendered NPC savings of over $500m and potential increase in revenue of >$4.3Bn. Brownfield Application The opportunity for achieving business advantage through prudent application of AM in the brownfield space also exists and, once again, significant gains and value creation in terms of reliability, availability, maintainability, operability, dependability, safety and efficiency gains in existing undertakings have been realised. During the lifecycle of long-lived assets they inevitably go through mid-life upgrades, refurbishment, or rehabilitation, also known as sustaining capital. Each of these represents an ideal opportunity for the application of optioneering in providing decision makers with options in making informed decisions to the best advantage of all stakeholders. An AM-optioneering approach can also be adopted in creating informed decision-making bases around potential changes in operating parameters. Meeting short-term imperatives that may be 10 e-mail Fri 4/05/2012 11 e-mail Thu 12/07/2012 Figure 3. Capacity to influence whole-of-life economic performance of assets, cradle to grave. Synopsis: Asset Management AM Consideration Aim Level Outcome AssetValueOptimisation Executive Perspective WHY AM? Executive Leadership Resolution-Purpose- Direction-Vision-Policy Strategic Intent WHAT would AM look like and seek to achieve? Executive and Senior Management Strategy Development and Planning Strategic Asset Management (SAM) Tactical Execution HOW is AM success accomplished Middle Management Tactical Plans, Systems and Execution Operational Implementation DO Practical application Supervisory, casual effect and action Optimal Asset Performance in Support of Business Outcomes Training and Development CONTEXT Fundamentals, More Advanced Aspects as Required Up-skilling, Common Platform of Understanding Figure 2. Whole-of-life asset performance optimisation.
Water and CSG
Water Journal June 2015