Failure is not an option!

One of the fundamentals in preventing failure is the thorough and effective management of the business assets, in particular those deemed to be critical.

While working with many clients using Riskenomics as an asset management tool, amongst other applications, my experience has been that the following steps are the cornerstones of managing assets to prevent failure.

Know what you have

This is not just about knowing which assets you have – and where – but more importantly about what condition each asset is in, when it will need replacing and how much that replacement will cost. So a detailed survey of systems, condition and data gathering is required.

The best way to manage this information is to store it in an asset register. Before you select one, think carefully about what you need it to do and what data you will need gathered from your systems survey. Don’t forget that you will need, at some time, to replace the equipment, so ensure a forward 10 to 15 year replacement plan is included.

Critical systems impact analysis

Review each system and complete a business impact analysis to understand which systems support critical business functions.

Service level required

Once you understand the critical business systems you can set the required service levels to ensure optimal performance from the systems while at the same time maintaining asset value.

To get optimal performance you will need to measure the systems performance against its design/operating criteria within the environment each system is serving to analysis the gaps and improve energy performance and maintain statutory compliance.

Critical asset review

Not all assets are equal – some are more critical than others. This level of criticality will be determined by a combination of the likelihood of the asset failing plus the consequences of failure.

Those consequences will include things such as loss of income, damage to reputation and brand and the cost of remedial action and repair. There may also be penalties for failing to comply with statutory regulations.

Linking the asset register into dependency models to manage operational risk will provide a great deal of insight into the criticality of specific assets.

In terms of determining criticality, Darrin Wikoff recommends define the characteristics that should be taken into account and then weighting each to identify their significance to the business.

The resulting score of each asset is then considered along with the ease with which the organisation can reduce the consequences of a single-point of failure. Those assets with a higher score, but where the risk can be reduced relatively easily, can then be moved lower down the ranking of criticality, allowing the business to focus on those assets that Wikoff describes as “truly unreliable”.

Financial investment

Finally, the financial implications. Critical asset management provides management information on:

  • The benefits of planned preventative maintenance (PPM)
  • Where to deploy resources based on the condition of the asset
  • When and where to replace rather than continue to repair, based on the cost and the associated risk
  • Long term financial planning on infrastructure requirements

By knowing the level of risk, the criticality of the asset and the required redundancy, management can make informed decisions on how to manage their assets.