Asset management supports the realisation of value from the use of assets, while being able to demonstrably achieve an agreed balance of the likely cost, the resultant risk, and expected asset performance. For example, if the organisation cannot afford the likely cost, then a commensurate reduction in performance and an increase in risk may result. The understanding of how those movements occur and the ability to predict those is a key role for asset management.
Exactly what constitutes value will depend on the organisational objectives, the nature and purpose of the organisation, and the needs and expectations of its stakeholders. And what constitutes an acceptable risk is also a function of the organisation’s values.
This International Standard specifies the requirements for the establishment, implementation, maintenance and improvement of a management system for asset management. Often called the ISO 5500X, this will consist of the following three standards:
ISO 5500X can be used by any organisation and can be applied to all types of assets; however it is particularly intended to be used for managing physical assets.
ISO 55001 has the phrase “management system for asset management”. Indeed, the words “Asset Management System” are intended to replace the wordy phrase “management system for asset management”.
These standards will not tell you how to “do” asset management. Rather, they will tell you what needs to be in place in order to determine whether you are doing it well. They are also intentionally generic, covering as many industry sectors and technologies as possible.
The standards also deliberately avoid any notion of asset management maturity.
One of the biggest challenges for companies will be determining to which of their assets this International Standard should apply for compliance purposes. Indeed, ISO 50001 explicitly notes that organisations can choose to which of its assets ISO 55001 compliance is intended. The requirements of ISO 55001 need to be applied in their entirety to these assets determined by the company!
Capability Partners’ unrivalled understanding of physical asset management is evidenced in the role of our principal, Peter Kohler, and his leadership in developing Australia’s input to ISO55000. The knowledge and leaderships provides the basis of our team’s unique set of skills that, combined with our in-house developed software, can be employed to develop a demonstrable balance between the costs, risks and required performance of your physical assets – a cornerstone of ISO 55000 Asset Management.
With our extensive asset management experience, we are well placed to provide consulting and training services over the entire asset lifecycle to ensure clients achieve value for money in the implementation of ISO 55000 and their preparing for ISO assessment.
A demonstrable balance implies that the organisation can show (by documented reasoning) their understanding of the relationship between the cost of providing the asset performance to the agreed level of risk, the agreed level of risk associated with the delivery of the asset performance, and the agreed asset performance itself.
Risk is usually expressed as the agreed residual risk associated with the delivery of the agreed asset performance, based upon the organisational risk management framework and the stakeholder agreed decision making criteria, imbedded in the risk framework.
Performance is usually expressed as quantitative measures such as asset and asset system reliability, availability, maintainability and supportability against an agreed time frame and an agreed performance specification (expressed in terms that relate to the business need- such as an agreed speed/power curve and specific fuel consumption per unit power etc) over which the relevant risks have been identified and mitigated.
Cost is usually expressed in dollar terms, but may include other measures, where appropriate. The cost associated with this balance is usually reflective of the aggregation of the risk mitigation measures (maintenance, spares, access, special tools etc) and the direct enabling costs (such as fuel etc) and may also include the opportunity costs associated with any asset down time. Each organisation will need to have an agreed cost framework.
ISO expects that this will be the second-biggest selling standard within two years of publication.
ISO 55000 will most likely become the basis on which industry regulators will assess the minimum adequacy of pricing submissions ensuring that such submissions represent “value for money”, while also protecting the longer-term integrity of the assets and satisfying public interests. This will be of particular interest in the utilities and public infrastructure markets.
For non-regulated industries, ISO 55000 is likely to serve as a benchmark for appropriate stewardship of an organisation’s assets and therefore afford some legal protection in the event of safety, environmental or financial issues.
Insurers may also assess the adequacy of an organisation’s Asset Management System using ISO 55001 requirements when determining premiums. The role of asset management maturity will therefore likely become an insurance-led regime.
Organisations may see some form of certification as offering an inducement to investors or providing some other commercial advantage.