Rethinking Asset Lifecycle Management

1. Rethinking Asset Lifecycle Management People Processes Technology Andy Chatha President ARC Advisory Group AChatha@ARCweb.com Information

2. Why Rethink Asset Lifecycle Management? • Bigger, More Complex Projects • Riskier Business Opportunities • Limited Capital, Tough Capital Markets • More Mandatory Investments • Global Projects, Global Project Teams • Escalating Labor and Material Costs • Poor Asset Utilization, High O&M Costs • Lack of Skilled Workers • Legacy IT Systems Constrain Improvement • Easy IT solutions can help

3. A New Model for the Major ALM ProcessesALM Processes Have Specific Responsibilities Project Performance Management (PPM) Asset Performance Management (APM)

4. ALM begins with a proper view of the AssetProductive Assets are More Than Equipment PrimaryFacilitiesEquipment Remote Project-CentricProject MgmtEngr/Design Procurement Construction SupportIT HW/SW Mobile MRO Material Asset-CentricOperationsProcess Engr Maintenance Reliability Reference DataFunctionalDesign Procedural Activity RecordsCommercial Status History The Three Asset Classes are Equally Important to Plant Success !

5. Collaborative Devices are Emerging Operator Planner Interactive Chat: - Respond to status request - Run diagnostics - Upload error logs - etc. Shift Supervisor Technical Support Service Engineer PM2009a1 pipeline mixer Device Users, Technical Support, and Service Technicians Can Interact via the Device’s Collaboration Workspace

6. A New Model for the Major ALM ProcessesALM Processes Have Specific Responsibilities

7. An ALM Information Management Strategy A Blend of ALM Process and Corporate Strategies ALIM Improves ALM Performance Through Better Handover Processes and More Efficient Information Exchanges!

8. Performance ManagementBalancing Goals and Developing the Right Mix Commitments Constraints Goals

9. ARC Level 1 Model for ALMThe Major Processes, Goals and Information Mgmt PROCESSES TECHNOLOGY PEOPLE INFORMATION

10. A Structured Set of ALM ModelsStructure Supports More Realistic Process Models PROCESSES Level 1 AIM Performance Level 2 SCHEDULE CUSTOMERS QUALITY COMPLIANCE TECHNOLOGY PEOPLE Operate Performance Maintain Performance Level 3 ROA BUDGET INFORMATION

11. A Typical Level 2 Model for APMAPM for a Process Manufacturing Facility

12. A Typical Level 2 Model for PPMPPM for a Process Manufacturing Facility Asset Management Equipment & Systems Suppliers Strategic Suppliers Project Management Services Fabricators SCHEDULE QUALITY Engineering Services Constructors BUDGET Shareholders Regulators

13. Asset & Project Portfolio ManagementAPPM Processes and Stakeholders AllocateResources RISKS RESOURCES ManageInformation Identify Opportunities EvaluateSolutions BENEFITS

14. A Level 3 APM Model People & Processes APM for a Process Manufacturing Facility Plant & Project Engineering Support PPM Strategic Proc/MfgEngr. Reliability Engr. Equipment Changes OperateStrategy MaintainStrategy Maintenance Planning ProductionPlanning Tactical APM MaintStaff Parts Mgmt MaterialsMgmt OperStaff Operate Maintain Automatic Safety & CMSystems Action Coordination Feedback

15. A Level 3 APM Model for Technology APM for a Process Manufacturing Facility Plant Design, 3D Models, Laser Scanning Plant Engr(M/E/Auto, EH&S) Process Models & Simulation RCM, Reliability Analysis & Simulation, RBI Strategic Proc/MfgEngr. Reliability Engr. EH&S, Sustainability, HR OperateStrategy MaintainStrategy EAM/CMMS, Inspection, Mobile Devices, RFID Maintenance Planning ERP, CPM/MES, Mobile Devices ProductionPlanning Tactical MaintStaff Parts Mgmt MaterialsMgmt OperStaff Automation Systems, LIMS, Historians, Alarm Systems, Safety Systems, SMT Automatic Safety & CMSystems Action Coordination Feedback

16. A Level 3 APM Model for AIM APM for a Process Manufacturing Facility Plant Design, 3D Models, Project Mgmt Plant Engr(M/E/Auto, EH&S) Process Models & Simulation RCM, Reliability Analysis & Simulation, RBI Strategic Proc/MfgEngr. Reliability Engr. EH&S, Sustainability OperateStrategy MaintainStrategy EAM/CMMS, Inspection Maintenance Planning ERP, CPM/MES ProductionPlanning Tactical MaintStaff Parts Mgmt MaterialsMgmt OperStaff Automation Systems, LIMS, Historians, Alarm Systems, Safety Systems, SMT Automatic AIM Safety & CMSystems Action Coordination Feedback

17. A Level 3 APM Model for Information APM for a Process Manufacturing Facility Activity Records Reference Data

18. A Structured Set of ALM ModelsFramework Enables Cross-Industry Benchmarking PROCESSES Manufacturing AIM Performance CUSTOMERS COMPLIANCE COMPLIANCE CUSTOMERS Energy . . . . . TECHNOLOGY PEOPLE Operate Performance Maintain Performance T&D ROA ROA Discrete Process INFORMATION Production

19. A Typical Level 2 Model for APMAPM for Utility – Electrical T&D

20. Key Takeaways • ARC has a long history of research around ALM • We have developed various models to help clients understand issues, develop strategies and select solutions • Our new ALM Model extends that research into more areas and more industries. • The structured nature of our new model: • will enable ARC to provide you with more, valuable ALM research • enable you to develop ALM strategies with more appropriate support for people, processes, technology and information needs analysis, and • enable you to benchmark your ALM performance with peers and other industries and identify the Best Practices for your program

21. Thank You. For more information, contact the author at srsnitkin@arcweb.com or visit our web pages at www.arcweb.com

22. ARC and Asset Lifecycle Management • Our Market Studies and End User reports cover all of the Key technologies, IT solutions and Best Practices in ALM • PET, PSC, Laser Scanning • PAM, Field Devices, Mobile Devices, SCADA, etc. • EAM, FSM, MRO Materials Mgmt • EIM, AIM, GIS • We have developed an ALM community, a website dedicated to ALM and publish a monthly ALM newsletter that is distributed to over 2500 ALM experts • We have also provided consulting services on ALM issues to many leading manufacturers