Contracted Services

Although not an industry in itself, this style of maintenance management now makes up large parts of various other industries. The Asset Owner / Asset Manager model for outsourcing asset management has now become prevalent through many utilities operations, rail operations, mining operations, sections of the oil production industry, the car manufacturing industries and various defense industries throughout the world.

Each one of these industries themselves has vastly different requirements, which change depending on factors such as the country they are in. However the driving factor controlling the requirements of companies in outsourced maintenance operations is the contract under which they manage the assets. This has profound implications, some of which are actually counter productive to good maintenance practice. In situations where there is an AO/AM arrangement, there are also commercial factors that are not the case in industries where the asset owners are also the managers of the asset base.

From the asset owner perspective the over-riding concern is that of risk, including risk of safety or environmental disasters, risk of profit loss, risk of inadequate capital spending or the risk of receiving the asset back from the asset management firm in a less than desirable condition.

From the asset managers’ perspective the concern is primarily in maintaining profit margins. However with the changes to legislation throughout the world, there is also the growing need for asset managers to be focused on the management of risk. This is particularly the risk of safety or environmental incidents above all others, or to put it in different terms, the ability of the asset managers to defend the decisions and management regimes that they put in place.

This provides two at times contradictory views of asset management from within the same organization. The asset manager may find that they are restricted by contractual or commercial limitations, from delivering the asset regimes that safe and continuous operation requires. The asset owners may find that they are spending too much based on outdated understandings of asset life and replacement considerations.

One of the key requirements within this context is for both the asset owner and the asset manager to be aware of the levels of maintenance that the asset base will require in order to maintain the level of risk that both consider to be adequate. This differs from industry to industry, and from country to country. Regardless of this both can benefit from the following style actions-

-          Understanding the safest minimum levels of maintenance for the asset base

-          Understanding the true constraints on asset condition (rather than relying on outdated age-based thinking only)

-          Understanding what changes in legislation and regulation mean in terms of reliability initiatives, data capturing and management regimes, or levels of maintenance.

If the asset base can contribute substantially to the competitive positioning of the asset owner organization, or it significantly reduces the levels of risks that are present in the corporation, then these initiatives can force a mutually rewarding review of the existing contract. It is strongly recommended that companies engaged in this form of business need to regularly review their asset management focus, and the focus that the contract allows them to have. This is particularly the case where there are extremely long term contracts in place.

Defense Industries

The defense industries are almost seasonal in their requirements of physical assets. However unlike other seasonal industries, such as sugar production, there is no defined active period. Defense industries need to be able to operate assets in a manner that allows them to go from a stand-by, or low-use operation, to a 100% operation within a short period of time. When in 100% operation there is often little or no downtime for maintenance activities.

This poses a unique set of problems for defense industries and maintainers, for example-

-          How to provide maintenance strategies that allow equipment to run for extended periods with little or no maintenance, regardless of the environment that it is going into

-          How to ensure that maintainers are kept active during standby periods

-          How to ensure that equipment is ready for immediate deployment as and when required

-          How to manage warehouse inventory levels in a cost-effective manner that allows for all modes of operation

For those new to defense environments, there is often the appearance that cost is no objective. There are high levels of resources, large numbers of assets and people and the need to protect the interests of the nation. However this is not a correct view. Defense organizations, as with other organizations, are always under intense pressure to deliver value for money and to reduce costs. As with other industries, there is a need to either reduce costs, or prove that the current level of costs are what is required to maintain the level of readiness and performance that is demanded.

The disciplined approach to all things within the military creates an extremely efficient framework for executing maintenance strategies. All things that should be done, at a certain time, are usually done in an efficient and rapid manner. While this is a great benefit, there are other issues that arise from this, such as over-maintaining, leading to increased risk of failure. There are also often large opportunities for a reduction in routine maintenance, particularly when taking into account the differing operational use of the equipment.

With these points in mind, the following may be considerations for maintainers operating within the defense industries-

-          The use of on-line condition monitoring for equipment inspection while at 100% operation. This implies uses of e-collaborative technologies such as are in use through other industries today.

-          Dedicated maintenance regimes for each operational use of a piece of equipment. This may include regimes for stand-by, semi-operational and fully operational phases.

-          Reduction of overall maintenance levels in accordance with good reliability Practices

Other Examples

The detail above lists only a few examples where asset management techniques and strategies change dramatically. Some other examples may be things such as quality concerns in manufacturing industries, capital spending effectiveness for aging infrastructure networks or budget assurance for regulated industries.

At all times this requires a differing and unique set of performance indicators with a differing and unique perspective, that is, the perspective that best suits a particular company, in a particular industry, in a particular operating environment. A defense MSC may be entirely different to the MSC of a regulated electricity distributor, which may be different to a vertically-integrated electricity company in a de-regulated market.

All of this points to the fact that maintenance is not generic, nor is it something that is easily able to be transposed from one company to another. Practices involving e-collaboration within the defense forces may not be suited to a manufacturing plant; risk management practices within utilities industries may not be adequate to try and transpose onto the mining industry in the same form. This can change substantially when reviewing companies using the Asset Owner / Asset Manager style arrangement. In these cases corporate objectives can often be driven more by contractual needs than by accepted good practice in asset management.