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Risk-Based Asset

Management
David J. Mierau, PE, CMRP
Director, Reliability Solutions
Life Cycle Engineering
10-MAR-2015
Asset Management Risks
Robust Quality System:
Compliance with Asset Risk
Control Strategies such as
Preventive and Predictive
Maintenance Plans

Business Continuity
Planning: Integrating the
supply chain network and
having good governance
systems

Graphic Source: ISPE Drug Shortages Prevention Plan Introductory Summary, ISPE, August 2014
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Impact of Manufacturing Disruptions
Drug Shortages by Primary Reason for Disruption in Supply in 2012

66% of disruptions resulted from:


Facility remediation efforts (35%)
Manufacturing issues (31%)
Graphic Source: Strategic Plan for Preventing and Mitigating Drug Shortages, Food and Drug Administration, October 2013
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Recent Focus on Asset Management
ISO 55000 (2014): Asset Management
Standards
BSI PAS 55 (2004, 2008): Optimized
Management of Physical Assets Standards
ASTM E2500: Pharma-specific Guidance

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Risk-Based Asset Management in
Other Regulated Industries
Commercial Airline Industry
Nuclear Power Generation
US Military
Space Programs
Subsea Oil & Gas Drilling (emerging)

Many foundational asset management, reliability


and maintenance standards written in 1970s-
1980s

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Asset Management System
Implementation Framework
Leadership,
Policy & Strategy
Asset Management System

Asset Management
Strategy
Business Value Delivery
Asset Management Case
ISO 55000 Compliance
Objectives
Operate &
ASSET Reliability Excellence
Process Safety Management
LIFECYCLE
Maintain
Mechanical Integrity
Asset Management ISO 31000 Risk Management
Capability Asset Management Plans
Procure &
(Processes, Procedures Commission
Construct Asset Criticality
& Knowledge)

Physical Asset Portfolio

Graphic Source: Life Cycle Engineering, Copyright 2014


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Connection to Operational Excellence
Think about the necessary components to sustain
manufacturing operations:
Safety
Quality
Productivity

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Benefits of Risk Management
MANAGEMENT
Awareness of real
exposures
INFORMATION Knowledge of
Expected Loss controls quality
how much do I lose Cost benefit analysis
Economic Profit

DATA on average? Improved risk


Loss data collection Unexpected Loss mitigation and
how much I could transfer strategy
Risk indicator data reasonably expect
FOUNDATION collection to lose in a bad
Risk strategy, Control self- year?
tolerance assessment Control Scores
Roles and Risk assessment and how good are the
responsibilities analysis controls I have in
Policies and Automatic notification place?
procedures Follow-up action
Risk definition and reports
categorization

American Society for Quality

Management & Control Quality

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How can Risk-Based Asset
Management impact Quality?
Requires management of physical assets across
the entire asset life cycle
Commission
Concept Design Procure Install Qualification Operate Sustain Decommission
Validation

Provides focus on what assets are critical to the


patient (quality & supply) and the business
(safety & productivity)
Provides a process for managing resources and
priorities applying most robust risk control
strategies to highest risk assets

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Risk-Based Asset Management
(RBAM) Model

Graphic Source: Life Cycle Engineering, Copyright 2014


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RBAM: Classify Phase
Process flow mapping
Value stream mapping
Relationship models (hierarchy)

The RBAM Classify phase ensures that all


assets are documented with parent-child Additional References
relationships defined. Hierarchy: ISO 14224

It also defines where value opportunities


exist related to asset performance
improvements.

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Asset Functional Hierarchy

(1)
Typical application of
Use/ Location Data

Business asset criticality is at


Category
these levels of the
(2)
Installation/
functional hierarchy
Business Unit referenced in ISPE
(3) C&Q Baseline Guide
Cost Center/ Op Unit

(4)
Function

(5)
Equipment Subdivision

System

(6)
Sub system/Asset

(7)
Component/Maintainable Item

(8)
Part/ BOM

Graphic Source: ISO 14224


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Functional Hierarchy Example
Benefits of an
Optimized Functional
Hierarchy:
Event tracking and
trending by various
groupings: function,
systems, etc.
Appropriate system
definitions for asset
criticality analysis
Comprehensive asset
listing of all site
components and parts
along with associated
systems

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RBAM: Analyze Phase

Equipment Criticality
Failure Analysis
Risk Analysis
Risk Ranking

The RBAM Analyze phase evaluates risks


associated with potential asset failures,
quantifies risks and provides a way to
prioritize risk control activities.

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Equipment Criticality
Holistic Equipment Criticality includes the following
impact elements:
Quality Impact Mean Time Between Failure
Business (MTBF)
Health, Safety & Environmental Mean Time to Repair (MTTR)
Customer/Patient Supply Utilization
Single Point of Failure

Additional References
Criticality: ISPE Baseline Guide
for C&Q, Impact Assessments

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Asset Criticality Thought Process
Determining function of equipment, system, item
process, etc.
Is it main equipment or an auxiliary item?
Is it a unique item or common with others?

Redundancy Duplication Alternative


Do you have a standby backup?
Do you have alternative means to continue normal operation?

What is the likelihood of a failure mode occurring?


(High/low)
Consider history of failures for equipment
Consider possibility and frequency of failures

What are the consequences of failure?


Any production losses as a result of failure? How much?
Any safety, environmental, or business losses as a result of
failure?

What is the likely period out of operation?


Can the repair be done onsite?
Are spare parts available? How long to get parts if not in
stock?
What is the longest time for repairing the failure?

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Typical Asset Criticality Considerations

Quality/Reg.
Environmental, Health &
Safety Impact
Asset
Recap. EH&S
Value

Decom.
Asset Business
Criticality
Downtime Impact
Yield/Discard Losses

Failure Rate (MTBF)


Inventory Supply
Reliability Utilization
Logistics Chain Single Point of Failure

Maintenance

Mean Time to Repair (MTTR)


Maintenance Cost

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Asset Criticality Criteria Example

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Criticality & Risk Control Strategies
Asset
Criticality Additional Risk Control
Tier Criticality Analysis Strategy

Top 15% A Asset Specific FMEA PdM, PM, NDE/MI, OC,


Redundancy
Top 35 to 15% B Asset Type FMEA PdM, PM, NDE/MI, OC

Top 65 to 35% C Simplified Maint. PdM, PM


Review
Top 85 to 65% D OEM Maintenance Minimal PM -
Contractor
Lowest 15% E None RTF Run to Failure

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Analyzing Criticality Data
Look for quality and safety outliers High quality and safety scores
in lower tiers (low overall criticality value scores)

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Additional Analysis: FMEA
Failure Mode & Effects Analysis
Evaluation of asset (system) risk
Dual focus: functions & components
Evaluate each potential failure mode & cause
Establish risk ranking scales to calculate risk
Risk = Severity x Occurrence x Detection
Establish risk thresholds for taking mitigating actions
Quantify risk reduction
Additional References
IEC 60812
MIL-STD-1629A

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FMEA Risk Categories
FMEA Risk Calculation

Risk Priority Number (RPN) = Severity x Occurrence x Detection

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FMEA Risk Categories
FMEA Risk Calculation

Risk Priority Number (RPN) = Severity x Occurrence x Detection

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FMEA Risk Evaluation for All Failure
Modes & Causes

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Risk Reduction Summaries

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RBAM: Control Phase
Standard Work
Operating Procedures
Preventive
Predictive
Condition Monitoring
Remote Monitoring
Operator Care
Critical Spares
The RBAM Control phase is the
application of risk control strategies
recommended from the Analyze phase

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Asset Risk Control Strategies
Based upon recommendations from the FMEA
and analysis of the to-be RPNs
New or updated maintenance plans
Replacement or upgrade projects
New setup or operating instructions
Risk reduction will not be realized until
recommendations have been implemented

PdM: Infrared
Thermography
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RBAM: Measure Phase

OEE
TCO
Asset Utilization
MTBF
MTTR

The RBAM Measure phase ensures


compliance with documented risk
control strategies and provides data for
continuous improvement

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Key Performance Indicators
Trending Equipment Quality Events/Deviations

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Recognized Industry Standards for
KPIs/Metrics
SMRP Best Practice Metrics Guide
BSI Standard EN 15341 Maintenance Key
Performance Indicators
ISPE Good Practice Guide: Maintenance

Understand Leading/Lagging Indicators:


Low compliance to maintenance schedule
(overdue maintenance work orders) is a
leading indicator for asset reliability

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Risk-Based Asset Management
(RBAM) Model Review

Graphic Source: Life Cycle Engineering, Copyright 2014


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Other Elements of Asset
Management to Consider
Asset-Related Capital Delivery
MRO Stores & Materials Management
CMMS & Data Historian Support
Organizational Design
Maintenance Work Execution
Maintenance Planning & Scheduling
Reliability Engineering Processes
Loss Elimination, Root Cause Analysis, Critical
Spares, etc.

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Create Your Risk-Based Asset
Management Program
Establish a Corporate Asset Management Policy
and require risk-based processes
Your Drug Shortage Prevention Program should
reference the Asset Management Policy as one
element of the Prevention Program
Establish or update procedures and processes
for the phases and processes of RBAM
Begin with the Classify phase (field data
gathering, value stream mapping, relationship
models) & Asset Criticality in Analyze phase

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Take Action and Measure Results
Consider a pilot area/plant to implement and
demonstrate improvement
Build & implement new risk control strategies for
asset operation and maintenance
These activities reduce risk and improve
operational stability!

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Questions &
Discussion

Risk-Based Asset Management


David J. Mierau, PE, CMRP
Director, Reliability Solutions
Exhibit Life Cycle Engineering
Table #541 10-MAR-2015
mieraudj@gmail.com
www.LCE.com

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