Global Trends in Asset Management

butterbeansarmManagement

Nov 18, 2013 (3 years and 7 months ago)

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www.genzyme.com

Melanie
Multiple Sclerosis
UK

Global Trends in Asset Management

Scott Morris, Associate Director Global Engineering

March 6, 2013

Global Trends in Asset Management

Agenda


What is asset management


What is PAS
55


Genesis


What are the financial and investor trends


What are the
risk and insurance
trends


What are the
legislation
and
litigation
trends


What is ISO 55000





What is an Asset?


An “asset is defined as something that has potential value
to an organization”


Value realization occurs when the asset fulfills its function


Asset Management


not a new idea


We own assets for a reason


They will cease to fulfill their function at some point


Some organizations are very good at addressing this fact


Others, not so much






What is Asset Management?


Definition
-

Any system whereby things that are of value to
an entity or group are monitored and maintained. It may
apply

to both tangible assets and to intangible concepts
such as intellectual property and goodwill






What is Asset Management?

Think of the impact on:


Total cost of unavailability


Capital investment planning


Safety


Environmental


Reputation


Who is responsible for Asset
Management?


Depends on who you ask


Investment


Accounting


Operations


Engineering/Maintenance


IT


Who is right?






The Seven Questions of Asset
Management

1. What do we own and where are they?

2. What are they worth?


Asset are more than just sunk depreciating costs


Assets can be competitive differentiators

3. What condition are they in?

4. What do I need to do to them?

5. When do I need to do it?

6. How much money will I need to invest?

7. How do we achieve sustainability?





The Seven Questions of Asset
Management


The answers to these questions lead to
choices and
decisions


Are all groups aligned?


Do the people making these decisions have the right
information?


What are the consequences?


PAS 55 was the first document to address these issues





PAS 55


Developed by the Institute for Asset Management in UK


Made a Publically available specification (PAS) by British
Standard Institute


Introduces to asset management concepts of


Line of site between organizational objectives


Risk to Asset Management Planning


Plan


Do


Check


Act (PDCA)


Focused on Physical Assets


Has become defacto regulatory standard in some industries



PAS 55
-

Line of Sight



11

Floor

Ceiling

Top Management

Decision Making Process

PAS 55
-

Line of Sight


Asset Life

© Copyright Meridium 2012

PAS 55
-

Line of Sight







A partial line of sight destroys business value

Characteristics of Highly Competitive
Companies
-

Operational Excellence


Market Share Matters


Focus on Core Business
:


Continuous Improvement


Innovate or Evaporate


Growth is Essential


No substitute for Quality


Value
-
added Only


Data
-
driven Decisions


Competitive Cost


Characteristics of Highly Competitive
Companies
-

Operational Excellence


The main
objective
of Operational
Excellence
is to reduce
operation cost and wastes, without affecting quality, time
delivery and cost of products and services one has to offer.



"Toyota has turned operational excellence into a strategic
weapon. This operational excellence is based in part on
tools and quality improvement methods made famous by
Toyota in the manufacturing world, such as just
-
in
-
time,
kaizen, one
-
piece flow, jidoka, and heijunka."
[1]


Operational Excellence


Global Trends in Asset Management


Finance and Investment


If you could save your business millions of dollars would you do it?


Brand and reputation are increasingly important


Removing as much uncertainty about the future as possible


Building stakeholder confidence


Demonstrate long
-
term focus and commitment


Organizations are being driven to do more with what they have


However…


Investors are more risk averse


There is a growing focus on operational risk




Global Trends in Asset Management


Finance and Investment

Equipment failures cost the US Refining Industry over $4 Billion per year”


John Aller, Consultant

Asset Optimization LLC


“Operational reliability problems and increased unscheduled downtime


that led to a dull first quarter in which the company lost $1.01 per share


have overshadowed its gains from successful restructuring initiatives over
the last two years.”

Zach’s Investment Reseach

“Bearish on Sunoco’s Future


“…significant planned and unplanned downtime in both Suncor’s
upstream and downstream operations as a cause for concern”


Suncor: Estimates Too High?

Globe & Mail, June 24, 2011


Global Trends in Asset Management


Finance and Investment


Global Trends in Asset Management

Finance and Investment


Global Trends in Asset Management

Finance and Investment


Global Trends in Asset Management


Risk and Insurance

“Demonstrating to an insurer that you are pro
-
active in maintaining your
equipment assets isn't the struggle
-

proving

that what you're doing is
actually reducing the risk of breakdowns and business interruptions
is
much more difficult
.”

Loa Jansen, Manager of Asset Management

Xcel Energy


“Whether you realize it or not, the insurance industry when they charge a
dollar of insurance to your company, part of that pricing of that dollar is
actually based on how well they believe you manage assets and risk”


Don Schubert, SVP Marsh

Meridium Conference 2010

Global Trends in Asset Management


Litigation and Legislation


A class action lawsuit was initiated … that would centre on alleged
negligence by SP AusNet in its management of electricity infrastructure.
The action alleges the power company failed to fit a $10 protective
device on the power line, which contributed to it breaking and starting
the devastating Kilmore East/Kinglake fire



In Maryland, Pepco has neglected grid maintenance and tree trimming,
staff at the Maryland Public Service Commission said this month as part
of the state's investigation into Pepco's reliability.

Global Trends in Asset Management


Litigation and Legislation


We Can’t Wait: Obama Administration Takes Action to Reduce
Prescription Drug Shortages…
Issues Executive Order, Backs
Legislation to Require Drug Companies to Report Shortages


FDA takes great efforts, within its

legal authority…(and) also works with
other firms who manufacturer the same drug, asking them to increase
production, if possible, in order to prevent or reduce the impact of a
shortage


A number of people from the Pittsburgh, Pennsylvania area have filed a
lawsuit against Genzyme Corp. over allegations that it extended a
shortage of a life
-
saving medication…limiting its availability and causing
some patients to have to substantially reduce their doses and leaving
new patients without access to the medication


ISO 55000
-

Asset Management

System



Process to develop ISO standard started in 2010


Builds on PAS 55


Expands from physical assets to include all types of assets
(except HR and Financial)


Applicable to all types and sizes of organization


Forces organizations to define the ‘value’ assets provide,
not the cost


Brings finance into the equation


Breaks down silos

ISO 55000
-

Asset Management

System

-

Vision



It's not really about managing assets; it's more about actually delivering
the business objectives by extracting value from assets


in particular by integrating asset management and process safety
principles
-

Martin Sedgwick, Head of Asset Management at Scottish
Power


Asset management has been evolving for the last ten years, and what
we’re seeing now is a more integrated approach. The way things are
going to operate, I believe, in the future, is more integration between
operations and the investment, which will make us more effective, more
efficient, and actually almost give better service to our customers
-

Chris
Royce, Head of Strategic Asset Management at Anglian Water




ISO 55000
-

Asset Management

System

-

Timeline

Global Trends in Asset Management


Questions?