Key issues in physical asset management (PAM)

industry
refinery
management
Managing physical assets is about dealing with risks over the lifecycle of assets. However Asset Management is often misunderstood: not realizing that it is also a way of thinking that involves the organization and business as a whole. During my more than 25 years’ maintenance experience, I have observed how Maintenance Management transcends into Asset Management without any effective adjustment to the structure, strategy or mindset of an organization. I observed, more than once, cases where production managers (often appointed as Asset Manager) did not discuss subjects such as risk based strategies and business requirements with their maintenance counterpart and technical specialists. I have even witnessed organizations where it seemed that they had opposite concerns and where they were fighting each other about details. Another custom often seen is that fully outsourced maintenance contracts are based on cost (pursuing a reduction of Operational and Capital Expenditure) rather than the continuity of the Asset function (pursuing business continuity by an increased risk predictability and shared responsibility of risk mitigation). These are just two of many examples. But they are typical for organizations who are unable to embrace Asset Management in its full extent in order to benefit from its potential: G...
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The long-term asset replacement plan? – What is it and what is it used for?

industry
oil
refinery
Insufficient control over capex? Unexpected major expenses? The sentence: “that will definitely last another 10 years?” These are all good reasons to consider preparing a Long-Term Asset Replacement Plan (LTARP). I would like to use my contribution to this blog to explain what the LTARP is and what it is used for. THE LTARP IN A NUTSHELL A Long-Term Asset Replacement Plan (LTARP) gives you an insight into the condition and degradation of your installations and, as such, the overall life and expected replacement period of assets. It also forms the basis for investment plans. If you link a replacement value to the life of an installation, it immediately becomes possible to visualize the investments necessary in the years ahead. The LTARP results in a long-term investment plan, substantiated by a knowledge of systems, the market and employees. APPROACH After identifying critical assets, the following will be recorded for each asset individually: Current preventive maintenance. If preventive maintenance tasks replaces an item immediately and in full, the asset in question falls outside the scope of the LTARP; The level of replacement costs. If the replacement value is lower than the investment threshold, the asset in question will not be relevant...
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