Global Trends in Asset Management


Nov 18, 2013 (4 years and 7 months ago)



Multiple Sclerosis

Global Trends in Asset Management

Scott Morris, Associate Director Global Engineering

March 6, 2013

Global Trends in Asset Management


What is asset management

What is PAS


What are the financial and investor trends

What are the
risk and insurance

What are the

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?


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

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




Who is responsible for Asset

Depends on who you ask






Who is right?

The Seven Questions of Asset

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

The answers to these questions lead to
choices and

Are all groups aligned?

Do the people making these decisions have the right

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




Act (PDCA)

Focused on Physical Assets

Has become defacto regulatory standard in some industries

PAS 55

Line of Sight




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

Operational Excellence

Market Share Matters

Focus on Core Business

Continuous Improvement

Innovate or Evaporate

Growth is Essential

No substitute for Quality

added Only

driven Decisions

Competitive Cost

Characteristics of Highly Competitive

Operational Excellence

The main
of Operational
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
kaizen, one
piece flow, jidoka, and heijunka."

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


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


that what you're doing is
actually reducing the risk of breakdowns and business interruptions
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

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


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




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

Martin Sedgwick, Head of Asset Management at Scottish

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

Royce, Head of Strategic Asset Management at Anglian Water

ISO 55000

Asset Management




Global Trends in Asset Management