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Controlling the Silent Killers of Strategic Asset Management - Part 2

This is the last installment of a two-part article that forms the basis of PhD research into the factors that prevent successful execution of asset management strategic initiatives.

Recognition among organizational stakeholders that asset management (AM) is important and requires an integrated and strategic focus is indeed a significant development. However, the mere fact that organizations have a strategic intent does not automatically lead to the achievement of strategic objectives. Asset management practitioners are faced with exactly the same strategy execution challenges as their counterparts in the rest of the business.

The ability of organizations to successfully execute their most important strategic intent is increasingly becoming a key differentiator.  Part 1 of this article introduced the asset management strategy execution enforcement mechanism (AMSEEM), as shown in Figure 1, a practical mechanism that should become part of an organization’s standard operating procedures and DNA.

Part 2 demonstrates the practical operationalization of each of these processes, with reference to an actual AMSEEM implementation within the context of a very large chemical processing plant.

The engineering manager at one of the world’s largest precious metal concentrators was approached during June 2015. After AMSEEM’s purpose was explained, he immediately expressed interest in using the mechanism.

In accordance with the research agreement between Stellenbosch University and the concentrator, the identities of the business units and critical stakeholders will not be revealed.

Figure 1: AMSEEM is a double-loop feedback system comprised of four iterative phases, four major decisions and several implementation processes or steps



The concept of awareness has been used for hundreds of years by many contributors within a range of performance environments. But when it comes to asset management strategy execution failure (AMSEF), executives within organizations often deny its possibility and, even in those environments where progressive managers contemplate the possibility of AMSEF, very few mechanisms existed until now that could assist them in early identification of the presence of those factors that ultimately lead to AMSEF.  

For organizations, some form of “catalyst for change” is normally required to spark them into action. In the case of an asset management organization, the catalyst for change may be a near miss, the failure of a critical piece of equipment, or a total catastrophe.

Operationalization of Phase 1: Awareness and Acceptance

The decision to initiate a risk identification and optimization process was already made by senior executives within the organization before embarking upon the intervention. The catalyst for change in this instance was a suboptimal AM performance and pressure from the central organizational structures.

AMSEEM recommends the completion of a number of action steps during Phase 1. The operationalization of each of these steps for the precious metal concentrator are:

STEP 1 – Constitute a Steering Committee

After consulting with the concentrator manager, the engineering manager and the plant manager, a steering committee was formed. The committee consisted of 18 members representing the most important asset management stakeholder groups: the maintenance manager and a selection of team supervisors, the production manager and a selection of key team supervisors, and a number of planners.

When composing the steering committee, great care was taken to ensure representation across functions and management levels. 

STEP 2 – Evaluate Asset Management Strategy (AMS)

In light of the fact that a complete AM assessment took place prior to the operationalization of the AMSEEM, the AMS evaluation was not a requirement at the concentrator. However, regular references to the observations noted in the AM assessment report were made.

STEP 3 – Create a Statement of Direction (SoD)

Based on the observations made during the AM assessment, the steering committee formulated the following SOD:

"The concentrator accepts the reality that a number of factors prevent us from achieving our goals. We realize that far more value can be unlocked from our physical assets if our asset management strategy is well-defined and executed. We are committed to identifying these factors proactively, understand their impact on the organization and on each other, and are prepared to develop action plans to eradicate these factors or to minimize the possible effect they might have during the asset management strategy execution process."

STEP 4 – Introduction of the Generic AMSEEM

During a one-day workshop, the AMSEEM principles and objectives were explained in detail to the steering committee. All aspects and requirements were presented and contextualized.

STEP 5 – Agreement on the Terms of Engagement

The steering committee formulated these terms of engagement:

Mandate of the Steering Committee

The steering committee will have access to all information required to complete the screening phases. During the screening process, the steering committee may nominate representatives to gather information on its behalf. In the event any dispute arises regarding the sensitivity of any information, the matter will be referred back to the steering committee, which is authorized to access the information.

The screening team will have access to all relevant staff members and can set up meetings with them when required during the screening period.

Meeting Intervals

The steering committee will meet on a weekly basis during the screening period. Thereafter, the steering committee will meet either when reports are presented or decisions regarding progress or significant process changes need to be taken.

Delegation of Authority

The steering committee can delegate authority to relevant staff members or contractors to assist it during the course of the AMSEEM operationalization.

STEP 6 – Develop the AMSEEM Calendar

After agreement was reached regarding the research mandate and scope, a research project plan was developed. An abridged version of the agreed upon project plan is provided later in this article. However, presenting the detailed AMSEEM operationalization calendar falls outside the scope of this article.

STEP 7 – Develop a Stakeholder Communications Campaign

The steering committee considered the principles of internal marketing during the development of the communications campaign. The committee not only considered the themes it wanted to communicate, but also the stakeholder groups or market segments, as well as the use of the most appropriate communications media.

Impact and Effectiveness of the Process and ArtIfacts

Awareness in itself plays a critical role in prevention. During conversations with 14 of the 18 steering committee members, as well as e-mail correspondence entered into after the completion of the study, it was confirmed that awareness levels regarding the potential impact AMSEF could have on the sustainability of the concentrator increased significantly as a result of both the AM assessment and the AMSEEM operationalization.

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Grahame Fogel y Johann Stimie

Grahame Fogel es Director de Gaussian Engineering y Consultor en Gestión de Activos por 25 años en todo el mundo. El señor Fogel ha estado asociado con muchos de los programas de referencia más reconocidos del mundo y tuvo un papel pionero en la implementación de PAS-55. Tiene gran experiencia en las industrias de energía, farmacéuticas, mineras y de procesos químicos.

Johann Stimie concluyó recientemente un doctorado en Ingeniería Industrial en la Universidad de Stellenbosch. Johan es un experimentado consultor de estrategias y parte de Gaussian Engineering. Johan tiene un interés específico en Control de Estrategia y Ejecución de Estrategia.

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