A Vision of an ISO Compliant Company by Bruce Hawkins, MRG, Inc.

Similar documents
Asset management Overview, principles and terminology

ICMI PROFESSIONAL CERTIFICATION

1 Management Responsibility 1 Management Responsibility 1.1 General 1.1 General

DIRECTOR TRAINING AND QUALIFICATIONS: SAMPLE SELF-ASSESSMENT TOOL February 2015

CGEIT Certification Job Practice

Cascading the BSC Using the Nine Steps to Success

ENVIRONMENTAL MANUAL. Page 1 of 26 Uncontrolled when printed NCH Env Manual Vers 11.0 date 01/02/18

Mapping ISO/IEC 27001:2005 -> ISO/IEC 27001:2013

trinity ISO 45001:2018 A New Standard for OH&S Management System 4/27/2018

EHQMS Manual & Policy Document

THE PROCESS APPROACH IN ISO 9001:2015

ISO Standards in Strengthening Organizational Resilience, Mitigating Risk & Addressing Sustainability Concerns

Connecticut Valve & Fitting Co.

Internal Oversight Division. Internal Audit Strategy

Enterprise Risk Management Program Development Update. Finance & Audit Committee Meeting September 25, 2015

Director Training and Qualifications

QUALITY and ENVIRONMENTAL, HEALTH & SAFETY MANAGEMENT SYSTEM MANUAL

S. Fomichov, A. Banin, I. Skachkov, V. Lysak, O. Gaievskiy, N. Yudina. Quality Management System. Standard. Management Systems

Quality Management System Guidance. ISO 9001:2015 Clause-by-clause Interpretation

CORPORATE MANUAL OF INTEGRATED MANAGEMENT SYSTEM

ISO Revision Launch Event

ISO 9001:2015 Expectations

Strategy and Objective Setting. Using the Balanced Scorecard รองศาสตราจารย ดร.นภดล ร มโพธ คณะพาณ ชยศาสตร และการบ ญช มหาว ทยาล ยธรรมศาสตร

Role Description Director Asset Management - Building and Facilities

Strategic Asset Management Plan

Asset management Overview, principles and terminology

25 D.L. Martin Drive Mercersburg, PA (717)

The table below compares to the 2009 Essential Elements and the 2018 Enhanced Data Stewardship Elements

Enterprise Risk Management Montana State Fund

T E A L C O N S U L T I N G L T D I S O A G U I D E

SHORT ANSWER QUESTIONS (KEY) UNIT- I

Johan G Nel Centre for Environmental Management. North-West University Potchefstroom Campus Private Bag X6001 POTCHEFSTROOM 2520

Quick Guide: Meeting ISO Requirements for Asset Management

25 D.L. Martin Drive Mercersburg, PA (717)

<Full Name> Quality Manual. Conforms to ISO 9001:2015. Revision Date Record of Changes Approved By

ISO 9001:2008 Quality Management System QMS Manual

AS 9100 Rev C Quality Systems Manual AS-050C-QM

Quality Manual. Quality Manual. In support of ISO 9001:2015. Approved by: Paul Brisson. Date: 17-May-18 Page 1 of 33

Security Operations Manual

Management Accounting Concepts

IN2CONNECT UK LTD QUALITY ASSURANCE MANUAL

1 Introduction. 20 August 1995; 19:29 1 Master04.Doc

ISO 55001; First Edition,

Head of HSE. Group Services, Risk

ISO NEW STANDARDS FOR ASSET MANAGEMENT. Peter Way PSM Chair NAMS.AU - IPWEA Member of MB 19 (Australia Mirror Committee)

AUSTRALIAN ENGINEERING COMPETENCY STANDARDS STAGE 2 - EXPERIENCED PROFESSIONAL ENGINEER

GLOSSARY OF TERMS For Business Performance Management

Measuring Performance Systems and Structures to drive improvement

Moving to the AS9100:2016 series. Transition Guide

International Organisation for Standards: ISO 14001:2015 Review

ISO 9001: 2015 Quality Management System Certification. Awareness Training

Head of IT Operations

Quality Manual ISO 9001:2008 ISO 9001:2015

EXIN ITIL Exam Questions & Answers

Calgary Housing Company Asset Management Audit

ISO Changing the Conversation Mark T. Gasser Nicholas E. Fioravante

GOVERNANCE OF INFORMATION TECHNOLOGY (IT)

Comparison Matrix ISO 9001:2015 vs ISO 9001:2008

ISO 9001:2015 Quality Management System. New/Revised Requirements

Gleim CIA Review Updates to Part Edition, 1st Printing June 2018

Correlation Matrix & Change Summary

UoD IT Job Description

Control of Documented Information. Integrated Management System Guidance

AUSTRALIAN ENGINEERING COMPETENCY STANDARDS STAGE 2 - EXPERIENCED PROFESSIONAL ENGINEER IN LEADERSHIP AND MANAGEMENT

Perry Johnson Registrars, Inc. Licensed Copy #2 RECYCLING INDUSTRY OPERATING STANDARD. Prepared for ISRI Services Corporation

Risk Management Strategy

ISO In 2014 Asset Management System. Benny Mok March 2013

NOGDAWINDAMIN FAMILY AND COMMUNITY SERVICES

InnoWeit Expert Workshop. Standard and Innovation

Moving from ISO 9001:2008 to ISO 9001:2015 Transition Guide

Agile CIO Operating Model

The Communications Audit NEVER MORE RELEVANT, NEVER MORE VALUABLE:

Process Management Framework

CERT Resilience Management Model, Version 1.2

Module 1: The Six Planning Principles

Osprey Technologies, LLC. Quality Manual ISO9001:2008 Rev -

Quality Management System Guidance. Transition Planning Guidance

Enterprise Asset Management. Enterprise Asset Management 1

PRINTED COPY IS NOT CONTROLLED

Board and CEO Services

Support Services Review Template

ISO 28002: RESILIENCE IN THE SUPPLY CHAIN: REQUIREMENTS WITH GUIDANCE FOR USE

Assistant Accountant

Culture and behaviours Creating confidence in your biggest asset

Agenda. Enterprise Risk Management Defined. The Intersection of Enterprise-wide Risk Management (ERM) and Business Continuity Management (BCM)

Asset management Management systems Guidelines for the application of ISO 55001

The operation of this BCMS has many benefits for the business, including:

ISO/IEC INTERNATIONAL STANDARD. Corporate governance of information technology. Gouvernance des technologies de l'information par l'entreprise

Risk Advisory Services Developing your organisation s governance for competitive advantage

The Sector Skills Council for the Financial Services Industry. National Occupational Standards. Risk Management for the Financial Sector

Strategic Management & the Entrepreneur

1 REALIZING RESULTS WITH LEAN MANUFACTURING THROUGH A CULTURE OF CONTINUOUS IMPROVEMENT DINNER MEETING JANUARY 8, 2019

Capital Programmes Orchestrating Success

CORPORATE GOVERNANCE King III - Compliance with Principles Assessment Year ending 31 December 2015

ISO 14001: 2015 Environmental Gap Analysis

Operational Risk Management

The Kvaerner management system. An introduction to how we manage our business

Corporate Governance. GFSC Presentation and Transcript Notes.

Next-generation enterprise risk management

Transcription:

A Vision of an ISO 55000 Compliant Company by Bruce Hawkins, MRG, Inc. ISO 55000 refers to a series of three standards outlining the purpose, requirements, and implementation guidance for an Asset Management System. They are intended to enable an organization that is adopting them to achieve sustainable business objectives through effective and efficient management of assets. They also enable the organization to extract maximum value from their assets by balancing risk, cost, and asset performance. The ISO 55000 requirements for an Asset Management (AM) System are similar to other ISO Management System standards, including ISO 9001 for Quality Management and ISO 14001 for Environmental Management. It consists of requirements for leadership, planning, support mechanisms, performance evaluation, and continual improvement. So what are the characteristics of an organization that would benefit from adopting it? Definitions First, we need to define an asset. Per the standard, an asset is a thing, item, or entity that has potential or actual value to an organization. Assets can be tangible (like property, plant, or equipment) or intangible (like product brands or intellectual property). The perception of that value will be different to different parts of the organization and its internal and external stakeholders. For example, if we consider a chemical process plant, the value to the business unit may be the revenue produced by its output. The value to the accounting department may be its depreciated book value. The value to the plant s neighbors may be the jobs produced by its operation and the avoidance of hazards produced by chemical spills and releases. Second, we need to define asset management. Per the standard, it is a discipline that involves the balancing of costs, opportunities, and risks against the desired performance of assets, to achieve the organizational objectives. Asset management, as a discipline, aligns the organization s objectives with the abilities of the assets to carry out those objectives and produce their maximum value. Finally, we need to define an asset management system. Per the standard, it is the set of interrelated and interacting elements of an organization, whose function is to establish asset management policy and asset management objectives, and the processes needed to achieve those objectives. It is the means by which the organization practices the discipline of asset management. The elements of the asset management system are an integrated set of tools, such as policies, plans, processes, and information systems that ensure that the asset management objectives are achieved. The implementation of ISO 55000 is not expected to be a Herculean undertaking for most organizations; most companies we have worked with have some of the elements already in place, but the elements are not brought together in a cohesive plan that is linked to the overall business strategy of the organization. As a result, the effort may be geared more toward refining existing elements and tying them together than developing the entire system from scratch. However, it is unlikely that a single element (such as a software package) can fulfill all the requirements of an ISO 55000 compliant system as will be discussed in the remainder of this paper.

Characteristics of an ISO 55000 Compliant Organization The organization that practices asset management in compliance with the ISO 55000 Standard will have several characteristics that set it apart from its peers. First among these will be a clear understanding how their assets physical or non-physical, tangible or intangible enable them to attain the mission and goals of the organization. There will be clear alignment and line of sight between their overall business objectives and the tactical activities that take place every day related to those assets. This line of sight will enable all functions in the organization to understand how what they do translates to business results, helping them to avoid making decisions that would result in sub-optimizing one function at the expense of another to the detriment of the assets. Ownership and accountability for asset management remains at a top-management level, and they continually demonstrate the leadership traits necessary for effective asset management. The executive team fosters a culture of discipline that is focused on delivering the asset management objectives. They use asset management related decision criteria when making capital deployment decisions and work to ensure that the organization views asset management at the same level of importance as safety, environmental, quality, and other considerations. They monitor the performance of the asset management system and ensure corrective or preventive actions are implemented as appropriate. In addition, they ensure that the function of asset management and the operation of the asset management system are aligned with all other organizational functions and that personnel in critical roles within the asset management system have the responsibilities, authorities, and competencies to carry out that role. Employees in such an organization will speak more in terms of value than cost, and will clearly understand how the assets produce that value. Their behaviors will reflect this understanding and will be consistent in capturing and preserving that value. Decisions will be made by considering a whole life view of asset management rather than a short-term focus, and lower life-cycle costs will be the result. The organization will have conducted a stakeholder analysis that determines all stakeholders in the enterprise both internal and external along with their needs, expectations, and their perception of the value that the organization brings. There will be specific requirements for stakeholder communication to the level appropriate to the stakeholder group. This will include routine communications as well as guidance for communication in non-routine circumstances. The organization will have a clear understanding of the risks and opportunities presented by the assets. They will understand the potential negative consequences to business value (whether financial, reputation, or other value characteristics) that the assets present if not managed correctly. With this in mind, they will be able to demonstrate competency in any function that is related to the assets, including design, procurement, installation, operation, maintenance, or disposal. There will be transparent conformity to any regulatory requirements related to the assets. The company will also be better positioned to capture opportunity by deploying capital where it would produce the greatest value. Understanding and addressing both risks and opportunities in this fashion will enhance the ability of the organization to meet its corporate and social obligations.

Developing the Management System When reviewing the standard s requirements in detail, it becomes obvious that gaining compliance is, by necessity, a top-down initiative driven by those responsible for setting strategic direction for the organization. The standard s requirements force alignment between the business strategy, the asset s abilities to carry out that strategy, and the tactical activities that ensure that the assets can continue to carry out that strategy. The organization must have the requisite level of discipline to do the little things necessary to maintain this line of sight alignment, and top management is responsible for creating a culture that maintains this discipline. An Asset Management Policy must be developed that clearly defines how the organization will apply the discipline of Asset Management to achieve its organizational objectives. The policy will set the expectations and guidelines for decisions, activities, and behaviors concerning Asset Management that all personnel must follow. Implied within this policy will be objectives (called asset management objectives ) that the Asset Management System will be responsible for achieving. The policy statement will be posted in prominent locations in the facility. Top management will have clearly articulated the scope of the Asset Management System, including such elements as the assets that make up the portfolio within the system, interfaces with existing management systems (such as ISO 9001), and any organizational functions will be part of or interact with the system. This scope and its boundaries will have been communicated to all relevant internal and external stakeholders. A high-level Strategic Asset Management Plan will have been developed that articulates the way in which the principles outlined in the Asset Management Policy will be implemented. The policy is the document that provides the link between the business objectives and the asset management objectives, and provides the framework for achieving those objectives. The Strategic Asset Management Plan is used in a cascading effect to create individual asset management plans that define the activities that will occur at the asset level. Each asset (be it at the business unit, plant, asset system, or individual asset level) is covered by an Asset Management Plan. This plan defines how that asset is to be managed over its entire life cycle. It will consider any regulatory requirements and environmental influences that may be present and contain the asset s risk profile, including provisions for mitigating this risk to a tolerable level. It will spell out the asset s desired level of service and define the actions necessary to maintain this level of service and any changes in future demand. It will also give details of the capital and operating costs necessary to maintain this level of service, so the total life-cycle costs of the asset will be understood. There will be a line of sight to the organizational goals and vision, including provisions for adjustment or revision in the event of changes to the business or market influences. The organization will have performed a gap analysis between resource requirements defined in the asset management plans and the available resources. A resourcing plan will have been developed to address these gaps, whether they are financial or human in nature. A separate gap analysis will have been performed between the competencies required in the asset management activities and the current knowledge, understanding, skills, and experience needed to fulfill them. This gap analysis will lead to training and development plans as well as succession plans for critical roles within the asset management system. Every individual with

responsibilities and accountabilities that could have an impact on the asset management system will understand their roles and will be provided the support, training, and education needed to execute their duties effectively. In the event any of these responsibilities are outsourced to external service providers, the accountabilities for the effectiveness of the action are retained within the organization, so there is a method to identify any competency gaps with these external service providers as well. The organization will have a communication plan in place to define the frequency and content of communication concerning asset management activities to both internal and external stakeholders. This will help build awareness among internal stakeholders about the importance that the organization places on asset management and the contribution each individual makes to the success of the asset management system. It also builds awareness about the potential risks inherent in operation of the assets to drive compliance with the asset management plan. For external stakeholders, this communication builds trust via the transparency and accountability that such communications provide. The ISO 55000 compliant organization places a high value on its asset information, including process and service capabilities, technical and physical attributes and limitations, maintenance and repair history information, and performance data. Asset-related decisions are routinely made on the basis of information derived from data. The asset information is well maintained and retained for the life of the asset plus any period beyond disposal of the asset to satisfy legal and regulatory requirements. Processes are in place that define how the different elements of the asset management system are to be executed and that ensure all personnel understand their role in making the processes work. Each process has performance measures that illustrate how well the process is functioning and provides early warning in the event of a deviation. A well-defined Management of Change process is in place that requires advanced scrutiny of proposed changes to identify and mitigate any potential unintended negative consequences. In the event that a change to the asset is made, all asset-related information is updated to ensure accuracy. Any asset management activities that are outsourced have controls in place to ensure that the activities are executed as intended in the asset management plan, and the competency of the outsourced service provider to perform those activities is adequate. Processes are in place for governance of the outsourced activity, including performance monitoring, data capture, information exchange, and regular management review. The organization continually monitors the performance of the asset management system through the use of performance measures, internal and external audits, and regular management review. This is done to ensure that the asset management system and policy continue to align with the business goals, the assets and the asset management system are functioning as intended, and the risks presented by the assets are within the organization s risk tolerance. Any problems or nonconformities that are identified through the above reviews are resolved via a formal corrective action system. The organization practices continual improvement by reviewing asset management plans, benchmarking other organizations, attending trade shows and conferences, and consulting with their suppliers and customers.

Benefits There are several significant benefits that accrue to an organization that is in compliance with ISO 55000. Because the organization clearly understands the risks inherent in its asset base and has taken proactive steps to mitigate threats, they should enjoy reduced regulatory scrutiny as well as lower insurance rates. Regular communication with the stakeholders and fewer unexpected issues should drive an enhanced reputation in the marketplace and an improved ability to meet social and corporate obligations. Their assets will not deteriorate unexpectedly because there is an asset management plan in place, leading to improved organizational sustainability. Finally, ISO 55000 complaint organizations should expect improved financial performance because the system in place extracts maximum value from its assets while minimizing operational risks. When a single asset management failure can erase billions of dollars in shareholder value, the organization s executive management team (the key to ISO 55000 implementation) are likely to find these benefits compelling.