Category Archives: Operations

Risk Management is Boring: Brain Hacks to Protect Your Business

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One challenge for many businesses is the wonderfully unsexy world of risk management. Due to the overwhelming optimism of entrepreneurs, stopping the bad things happening can often be overlooked. However, when you let people rip you off, exploit your weaknesses or you just leave a small door open to be manipulated, it can be fatal, says Daniel Murray CEO of Empathic Consulting. Daniel gave the keynote address to over 400 people at Mainstream Conference 2019 in Melbourne, demonstrating the incredible power that empathy has to build business relationships in our digitally focused but disconnected age. In this article he gives us a different way to look at risk management and shares some ways to encourage people to engage their “moral compass” in order to self-regulate risk. It Turns Out We’re All Cheaters There were a number of interesting experiments conducted by professor Dan Ariely from MIT regarding cheating. They asked people to complete a challenging test, then they give them the answers to self-mark their effort, walk to the front of the room and shred their paper before telling the administrator the number of correct answers they correctly answered. They then receive payment for each correct answer. So, do people cheat? What was interesting was not that some people cheated, but that all people consistently cheated. Ariely had tampered with the shredder so they could check and indeed, almost all people cheated, not by a lot, but on average they increased the number of correct answers from 3 to 4 … Continue reading →

Why You Can’t Skip the Journey to Destination Digitisation

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Digitisation offers opportunities for improvements to industrial processes that were only dreamed of a decade ago. Digital twins, autonomous vehicles, drones and remote sensors are changing the way assets are maintained, helping to extract the value desired by stakeholders. Nowhere is this disruption more evident than in the mining industry, where vast quantities of earth and rock are moved each day and even a minor improvement in production methods can result in huge financial gains. But implementing these changes requires asset stakeholders to have a common understanding of exactly what that value is, and the metric by which it is to be measured. For over 20 years, WesTrac has provided mining equipment services to operations in Western Australia, NSW, the ACT and China. Jean Ferreira is General Manager for Technology with WesTrac in WA. His teams are responsible for the deployment, maintenance and support of the largest autonomous mining fleet in the world – roughly 130 autonomous Caterpillar trucks, all based in WA. Ferreira spoke at this year’s Mainstream Conference about the challenges faced by mining operations as they transition from spreadsheets to digital twins and autonomy. Because when looked at closely, even the simplest of links in the extraction chain renders surprising layers of complexity. Mining Value Chain The mining process is a chain of functions. After raw material is extracted from the earth, excavators and trucks begin loading and hauling operations. The ore is taken to a plant that crushes it into workable fragments. This is sent by rail to … Continue reading →

Devon Energy: A Data-Assisted Asset Integrity Approach

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In 2008, the combination of technical breakthroughs in directional drilling and hydraulic fracturing technologies started a wave of industry transformation and disruption that continues today. One US company at the forefront of this is Devon Energy, headquartered in Oklahoma City. A Fortune 500 oil and natural gas exploration and production company, Devon has some 3,400 employees and a capex of $US 2.4 billion. In Canada, Devon produces heavy oil through steam-assisted gravity drainage, producing some 35,000 barrels a day from each of three plants. Then there’s the horizontal drilling and hydraulic fracturing (fracking) of shale oil deposits throughout the US. Working in some of the most adverse conditions in the world, Devon’s asset integrity approach is based on constantly monitoring data from its rigs. Data technology, along with team-building in its WellCon rig control centres, is not only improving drilling accuracy, but enabling the implementation of autonomous processes. Ben Williams, VP and CIO of Devon Energy, shared his insights into the company’s challenges and its asset integrity approach at this year’s Mainstream Conference. Asset Management in a Harsh Environment Williams says Devon has invested heavily in asset integrity because of the hazardous environments its rig locations present to workers and equipment. “Our asset integrity teams on the oil-producing plants have the unenviable problem of having to keep up with inspections on a highly complex asset,” Williams says. “They do inspections on pipelines and plants at times of the year when these are virtually inaccessible. The ground is like tundra, it … Continue reading →

The Sustainable Plant: A Checklist for the Responsible Manufacturer

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The importance of sustainability in manufacturing is growing at an exponential pace. The US Department of Commerce defines sustainable manufacturing as “the creation of manufactured products that use processes that minimise negative environmental impacts; conserve energy and natural resources; are safe for employees, communities and consumers; and are economically sound.”  In this context, the term sustainable manufacturing includes the extraction, process and manufacturing industries. Globally, consumers are increasingly concerned about sustainability. According to a 2017 Gallup poll, the percentage of people who believe that climate change is real and human-caused is up to 68%, and growing sharply. Concern over water quality, air quality, soil quality, oceanic “dead-zones,” plastic bottle islands and a host of other environmental issues is also rising sharply. These concerns are affecting consumer buying habits. According to a Nielsen study, the percentage of consumers who will pay more for sustainably produced products has risen sharply, increasing from 50% in 2014 to 55% in 2015 and an even sharper increase to 66% in 2016. The trend is consistently on the rise (figure 1). Figure 1 – The percentage of consumers who are willing to pay for sustainably produced products is rising sharply Additionally, according to the same Nielsen survey, millennials are even more oriented toward sustainably produced products. 73% of consumers who are under 34 years of age are willing to pay more for sustainably produced products as compared to 66% for the general population (figure 2). Early research indicates that the effect is even stronger fro generation … Continue reading →

Pioneers of Smart Technology: SA Water Case Study

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In 2017 South Australian Water implemented a “smart network” in Adelaide’s CBD, using smart technology to listen to the water network for leaks, reducing the impact of water main failures on customers, and maximising the life of the water supply network. The broad role out of smart sensor technology to monitor water networks isn’t extensively used around the world, in fact SA Water is the first water utility in Australia to do so on this scale. We recently interviewed Peter Seltsikas, South Australian Water’s Senior Manager of Asset Management who shared their story at Mainstream Conference in Melbourne.   Peter, tell us about the lead up to this smart network implementation. How did you receive buy-in from the Asset management team, and how did you decide to go ahead with this particular project? The adoption of smart technology in SA Water has been driven by our vision of delivering world class water services for a better life and by recognition that a large part of achieving that vision lies is becoming a digitally enabled utility. To achieve our vision it is paramount that we listen and understand what our customers value and recent feedback has been that they value minimal disruption in their day from water supply issues, whether that be disruption to community as a result of water main leaks or disruption to their direct water supply.   With the asset management team having a key role in driving asset performance and therefore delivering a more reliable service we are … Continue reading →

5 Steps to Developing Critical Asset Strategy with ISO 55000 

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At the Mainstream Conference in 2017, Andrew Schweitzer, Cold Reduction Maintenance Strategist from BlueScope, spoke about how the company broke down the requirements of ISO 55000 to identify and develop a strategy for managing their critical equipment. Here are some of the takeaways from their journey to critical asset management strategy with ISO 55000.   Note: You can also listen to the full audio of this presentation, linked with slides here.   What Drove the Need for Implementing The ISO 55000 Standard at Bluescope?  BlueScope is a large steel solutions, manufacturing and distribution company employing 9,000 employees across Australia, New Zealand and the Pacific.   During the global financial crisis in 2009 the company felt the pain of cutbacks, tight margins and export losses. They saw a transition to reactive maintenance and they were putting a lot of effort into activities that didn’t add value to the business. They were dealing with bottlenecks in processes, specifically following a move to SAP and with it, the transfer of uncleansed master data from a legacy system.   There was a need to implement a plan that would allow for better decision-making, risk mitigation, a better understanding of assets and critical management strategies – overall improved efficiency and effectiveness. This is when they decided to take a close look at ISO 55000 as a guide to improving the management of their assets.   The Four Fundamentals  Bluescope chose four fundamentals from ISO 55000 that were most important to the company, and focused on those aspects as the cornerstones for driving improvement. These were:   Maximising the value the asset provides  Alignment of the organisational objectives with the asset decision making  Leadership and workplace culture   Assurance/confidence … Continue reading →

Which Maintenance Scorecard Is Best: Simple, Pyramid or Full Audit?

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Scorecards offer an easy way to track and evaluate maintenance effectiveness. They give a quick picture of your capability and help you to effectively target areas for improvement. They are also an important tool to help justify obtaining additional resources for your mission to achieve continuous improvement. But not all scorecards are the same. There are many different kinds of scorecards, each with different levels of detail included. So which scorecard should you use for your organisation? We are going to compare three different scorecards: Simple, Pyramid, and Full Audit below. But before we look at the selection, here are some questions to ask yourself before you choose which scorecard is right for you, and to help establish parameters around which they will be used. How many metrics do I need? How long will it take to score? What resources are available to score? Automated reports Self-scored reports Manual reports For most of the scorecards we used at Monsanto, we developed software that extracted the data from SAP so we knew everybody was measuring in the exact same way. Wherever possible the data should be pulled with a push of a button so that scores are calculated in the same way for multiple locations. How often will we measure? Establish the optimal frequency (weekly, monthly, quarterly or annually) based on the metrics you are measuring. Who is my target audience? Can the scorecards be rolled up into one score? You don’t want to have disjointed reporting from multiple scorecards. Wherever … Continue reading →

How to Tailor your Asset Management Metrics for Different Audiences

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One you’ve come up with the best measurement, chosen a score card, and started measuring your efforts, it’s time to report on it. But it depends on who the report is targeting as to what you should show and how you should present it. Whether you’re presenting metrics to your maintenance team, customers or management, there are different ways of effectively getting your message across. Here are my top tips for effectively presenting your metrics to different audiences in your organisation. The Maintenance Team Before you present anything to your maintenance team, you have to make sure that every person turning a wrench or putting a metre or something or lubricating something knows what they’re being measured on. You’re going to have a revolt on your hands if you show them a scorecard and say, “I’ve been measuring you on this, and by the way you’re not too good at it.” So let them know first, it’s absolutely critical. Show the summary page and discuss Dig into the details for any score that does not meet expectations Explain how achieving each metric benefits them or the company Ensure the team understands exactly how each metric is calculated   I always show my maintenance team a scorecard for the PM upfront. “Here’s what I expect on a PM, and here’s the questions we ask for each work order. Here’s what I expect when I go out and watch your job. I want to make sure that you had the part staged. … Continue reading →

How to Uncover Improvement Areas Based on Your Asset Management Maturity Level

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What’s the current level of your asset management program? Are you in the beginning stages? Is your program pretty good but you need improvement? Or do you already have a world-class program? Understanding where you are as an organisation is important as it will determine the right direction for your asset management improvements. If you are just starting out, there is no point trying to implement improvements as if you were a world class operation. And even if you already have a world-class maintenance program, there are still things you can focus on to get better. Here are some questions based on the three stages of maturity (basic, sustaining and world class) that will help you determine areas of focus for improvement: Basic If you’re starting out with the basics of asset management, you need to make sure you’re your database is solid and your foundation is set. Do you have a Computerised Maintenance Management System (CMMS)? e.g. an SAP, a Maximo, a program you’re using to write, close, and track work orders Is there an equipment naming convention? Is critical equipment defined and identified? Do standard work instructions exist? Are there PMs for critical equipment? Is there a method to manage instrumentation? Is work planned and scheduled? Do you have a skills matrix? Does a system to manage spare parts exist? If you are starting out as a maintenance organisation or you don’t have some of these basics, these are the areas you should be focusing on – start by … Continue reading →

The Stats Are In: Less Is More When It Comes to Maintenance Spending

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What if I told you the top performing asset management companies spend less money on maintenance and get better results from an operations perspective. Sounds too good to be true, right? According to data from Solomon and Associates, this is absolutely the case. Solomon and Associates are the gold standard of benchmarking, particularly in the oil industry. 98% of the refineries in the world subscribe to the Solomon Study, and executives make decisions based on their standing in the Solomon ratings. … Continue reading →