Implementing Enterprise Asset Management For Dummies, …

1 Implementing Enterprise Asset ManagementFORDUMmIES by Paul McKeon, CGI and Darren Ramshaw, EDF EnergyA John Wiley and Sons, Ltd, PublicationImplementing Enterprise Asset Management For Dummies Published by John Wiley & Sons, Ltd The Atrium Southern Gate Chichester West Sussex PO19 8SQ EnglandFor details on how to create a custom For Dummies book for your business or organisation, contact For information about licensing the For Dummies brand for products or services, contact our Home Page on 2013 by John Wiley & Sons Ltd, Chichester, West Sussex, EnglandAll Rights Reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning or otherwise, except under the terms of the Copyright, Designs and Patents Act 1988 or under the terms of a licence issued by the Copyright Licensing Agency Ltd, 90 Tottenham Court Road, London, W1T 4LP, UK, without the permission in writing of the Publisher.

2 Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Ltd, The Atrium, Southern Gate, Chichester, West Sussex, PO19 8SQ, England, or emailed to or faxed to (44) 1243 : Wiley, the Wiley logo, For Dummies, the Dummies Man logo, A Reference for the Rest of Us!, The Dummies Way, Dummies Daily, The Fun and Easy Way, and related trade dress are trademarks or registered trademarks of John Wiley & Sons, Inc. and/or its affiliates in the United States and other countries, and may not be used without written permission. All other trademarks are the property of their respective owners. John Wiley & Sons, Ltd, is not associated with any product or vendor mentioned in this OF LIABILITY/DISCLAIMER OF WARRANTY: THE PUBLISHER, THE AUTHOR, AND ANYONE ELSE INVOLVED IN PREPARING THIS WORK MAKE NO REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE ACCURACY OR COMPLETENESS OF THE CONTENTS OF THIS WORK AND SPECIFICALLY DISCLAIM ALL WARRANTIES, INCLUDING WITHOUT LIMITATION WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE.

3 NO WARRANTY MAY BE CREATED OR EXTENDED BY SALES OR PROMOTIONAL MATERIALS. THE ADVICE AND STRATEGIES CONTAINED HEREIN MAY NOT BE SUITABLE FOR EVERY SITUATION. THIS WORK IS SOLD WITH THE UNDERSTANDING THAT THE PUBLISHER IS NOT ENGAGED IN RENDERING LEGAL, ACCOUNTING, OR OTHER PROFESSIONAL SERVICES. IF PROFESSIONAL ASSISTANCE IS REQUIRED, THE SERVICES OF A COMPETENT PROFESSIONAL PERSON SHOULD BE SOUGHT. NEITHER THE PUBLISHER NOR THE AUTHOR SHALL BE LIABLE FOR DAMAGES ARISING HEREFROM. THE FACT THAT AN ORGANIZATION OR WEBSITE IS REFERRED TO IN THIS WORK AS A CITATION AND/OR A POTENTIAL SOURCE OF FURTHER INFORMATION DOES NOT MEAN THAT THE AUTHOR OR THE PUBLISHER ENDORSES THE INFORMATION THE ORGANIZATION OR WEBSITE MAY PROVIDE OR RECOMMENDATIONS IT MAY MAKE.

4 FURTHER, READERS SHOULD BE AWARE THAT INTERNET WEBSITES LISTED IN THIS WORK MAY HAVE CHANGED OR DISAPPEARED BETWEEN WHEN THIS WORK WAS WRITTEN AND WHEN IT IS also publishes its books in a variety of electronic formats. Some content that appears in print may not be available in electronic : 978-1-118-48538-5; ISBN: 978-1-118-48540-8 (ePDF)Printed and bound in Great Britain by Page Bros, Norwich 10 9 8 7 6 5 4 3 2 1 IntroductionH ave you ever wondered how modern society would function without the machinery, equipment and infra-structure that surrounds it? How would life be without new apps for your iPAD, no running water, no reliable electric lighting? How would society get by without planes, trains, road networks, shipping and haulage, pressurised water supply, telecommunications, cloud-computing, electricity, pressurised gas supply, sewerage services, mass-manufacture and refining and processing plants?

5 Life would certainly be very reality is that wherever, as a society, we have created a reliance on machinery, equipment and infrastructure to deliver advances for humankind, we ve also created a need for the effective Management of these physical assets. As the number of mobile phone users globally reached the six billion mark in 2011, and with the investment of governments and motor manufacturers in electric cars, the reliance on further new technologies still shows no sign of a direct consequence of this reliance, Enterprise Asset Management is a central concern for many enterprises and government policy makers what s new? Surely we ve been managing assets for thou-sands of years? The Romans built aqueducts, roads and viaducts that have lasted for millennia.

6 Many of the other essentials of modern life electricity, gas supply, manufactur-ing, sewerage and so on have been around for at least a cen-tury. So what s different from how we ve been managing and maintaining these assets?Unlike the Romans who could afford immense overdesign on their equipment or the builders of the Brooklyn Bridge in the late 19th century who designed suspension cables to be six times greater than needed, our safety margins are frac-tional today. We ve stripped our planet of readily available Implementing Enterprise Asset Management For Dummies 2resources and have to pay a premium price for what remains. More humans are alive today than have ever lived since the dawn of time, which makes the demand for resources ever greater for example, we re close to running out of infra-structure for power generation to meet the needs of all these resources.

7 This situation places further importance on the Management of the assets that bring those resources to us. As a result, assets need to do more for less investment over a longer time finally, while we don t yet live in towering vertical mega-cities (in case you think we re joking, search online for arcologies ), the interdependence of assets on one another is already very complex in our society. Just consider smart grids, smart meters, fly-by-wire airline navigation and so on. As an example, think how complicated it is to dig a hole in the ground in London, a city that has been rebuilt many times since it was razed to the ground by Boudicca almost 2,000 years ago. Therefore, the effects of poor Asset Management grow rapidly over many governments struggling with the recession and many businesses trying to ride out the economic storm, the last thing you need is for unexpected losses and costs related to machinery, equipment and infrastructure failures.

8 To weather economic cycles of growth and recession, Asset -intensive organisations are best placed to succeed when their Asset outcomes (performance, reliability and cost-effective-ness) are superior to their modern Asset manager needs to achieve more challenging Asset outcomes against a backdrop of ever-increasing regula-tion and financial constraint. To reach this goal, the imple-mentation of Enterprise Asset Management (EAM) needs to be designed to gain the most synergies across the Enterprise . Implementation means challenging age-old practices and pull-ing together resources to get greater efficiencies with better operational performance and financial transparency. Like the design of your complex assets, much of the lifetime run costs of Enterprise Asset Management within your organisation are baked in from the start, so getting it wrong isn t much of an option.

9 Introduction3 About This BookThis book offers answers to today s challenges. For those of you familiar with Smart Metering For Dummies, Smart Grids For Dummies and New Nuclear Power For Dummies, you know what to expect: namely a concise primer to get you rapidly up to speed with business context, terminology, impacts and issues related to the implementation of Enterprise Asset topic of Asset Management is vast, so this book relates to Enterprise Asset Management , addressing a slightly narrower subset of organisations than wider Asset Management does. The book focuses only on large Asset -intensive enterprises rather than all organisations. For this reason, while we refer to standards in Asset Management throughout the book, we only mean within this smaller group of large enterprises hence the term Enterprise Asset Management is also an area where thinking is moving on quickly with global collaboration being driven by organ-isations like the Global Forum on Maintenance and Asset Management (GFMAM), the Asset Management Council (AMC) and the Institute of Asset Management (IAM).

10 There s also convergence of thinking through PAS 55 and ISO 55000. You may be surprised to realise that PAS 55 has been in existence only since 2004. Therefore, this book aims to function as a signpost and handy guide on the topic of the emergence and implementation of Enterprise Asset AssumptionsIn writing this book, we made some assumptions about you, the reader. We assume that: You work in an Asset -intensive industry and understand the need for Implementing good EAM practice to achieve improved Asset outcomes. You re interested in Management of physical assets (including the financial aspect) as opposed to the man-agement of purely financial assets (such as derivatives, bonds and so on).