Facilities and equipment management is about to be taken to a whole new level with the release of ISO 55000 Asset Management Standard scheduled for early 2014. Or is it? The long-awaited rollout of this new global standard might not be what many are assuming it will be. Then again, maybe it will. That’s the way it is with the introduction of global standards. Remember the launch of ISO 9000 and ISO 14001?
Regardless, even if ISO 55000 isn’t perfect when it rolls out, it will still provide a very sound foundation for organization-wide life-cycle asset “ownership.” Readers will soon recognize that the ISO standard is NOT solely about fixed assets, either: Instead, it identifies assets as items having “potential or actual value to an organization.” It would have been simpler if it were focused on “physical” or “fixed” assets alone. However, this new definition of an “Asset Management System” will serve as a framework that has long been missing in our fixed/physical asset-based business and industry.
The push for ISO 55000
I expect that the directive to conform to ISO 55000 requirements will come from outsiders (i.e., owners, investors, insurance underwriters and regulators)—and it won’t be optional. For the most part, these entities want an assurance that the organization is systematically addressing risks associated with unreliable assets: high costs, lagging ROI, catastrophic damage, and safety, health and environmental incidents. Compliance with this new global standard goes a long way to assuring that the value assets bring to the business increases. But ISO 55000 does not specify HOW to manage the assets. What, then, is this Asset Management Standard all about?
Simply stated, the intent of the new ISO 55000 Asset Management Standard is to provide a framework that specifies and links life-cycle asset decision making and actions to the strategic goals of the business. Unfortunately, it’s not as simple as that. Let’s review the recent history of Asset Management.
The precursor to ISO 55000 was PAS 55 Asset Management Specifications, issued in 2008 by the British Standards Institution as a “publicly available specification for the management of physical assets.” While PAS 55 has been evolving since 2004 and has developed a significant body of knowledge and track record, the ISO 55000 suite of standards is mostly new content with no track record yet.
A committee of committees
The global committee work devoted to developing the ISO 55000 structures and language took on a Herculean task. It eventually involved representatives from 31 participating countries and 13 observing countries under the guidance of the International Organization for Standardization (ISO) located in Geneva, Switzerland.
The primary players in the ISO 55000 project included PC/251 (ISO Project Committee 251), The British Standards Institution and Technical Advisory Groups (TAGs) from around the world (for the United States, they were ASTM International, ANSI [American National Standards Institute] and the US/TAG [U.S. Technical Advisory Group]). Visualize a “committee of committees” structure that pulled all of the pieces together.
No doubt, the big challenge was combining all the various perceptions, beliefs and assumptions about “asset management” into a cohesive working document. Turning such a working document into a draft standard is yet another huge challenge. Ultimately, the international organization must compile, format and publish the new Asset Management Standard conforming to their standard format and style.
As you can imagine, there were many compromises and disagreements along the way. But once ISO 55000 is released, it will provide one of the most comprehensive global guidelines for improving the fixed assets (and more) for a wide variety of businesses around the world. Expect a steep learning curve leading up to informed discussions regarding the ISO 55000 revision and updating process in about five years.
Defining ISO 55000
Let’s review the elements. ISO 55000 is a “suite” of international standards developed and published by the International Organization for Standardization (ISO). These include ISO 55000, 55001 and 55002. Each of these various elements has a specific purpose in the development and deployment of Asset Management Systems:
The ISO 55001 Standard describes the elements of an Asset Management SYSTEM—it doesn’t specify the process, programs or best practices for actual management of assets. It is NOT a “standard for the management of assets” but rather a “standard for asset management systems.” And though maintenance and reliability processes, programs and best practices fit within ISO 55001, the new standard is NOT about maintenance and reliability. But there’s more…
ISO 55002, on the other hand, reflects “guidelines” for the design and operation of an Asset Management System. Here is where recommendations and examples that support development and implementation of ISO 55001 are discussed. Again, it stops short of discussing HOW to manage specific types of assets. That, of course, is left up to the various asset management stakeholders and experts in the organization seeking to conform to ISO 55001.
Interpreting the terminology
Asset management is more than maintenance management—a whole lot more. When reading the draft documents, one could easily become confused and conflicted with some of the terminology. Accordingly, let’s sort through some basic terms related to Asset Management and the ISO 55000 series. (Notice how the focus of each term changes.)
Asset—A tangible (or intangible) mechanism that adds value to the organization. (The Focal Point)
(Note: At this point, the term “asset” hasn’t been fully defined in the ISO document. The Standard was intended to include physical assets, as well as intangible ones like value-adding intellectual property, software, etc.)
Maintenance Management (My Own Definition)— Structured work processes for the purpose of caring for fixed assets (i.e. equipment and facilities), coordinating the efforts of people and achieving maintenance goals and objectives in support of overarching strategic business goals. (Asset-Care focus)
Asset Management— Coordinated asset-related decisions, plans and activities, using a risk-based approach of an organization to realize value from assets throughout the asset’s life-cycle stages. (Value-Adding Focus)
Asset Management System—A set of interdependent elements of an organization, to establish the asset management policy and asset management objectives and the processes for the development, coordination and control of asset activities over different life-cycle stages, aligned with the strategic goals of the organization. (Organizational-Behavior Focus)
Look to ISO 55000 for the official definitions of applicable terms and concepts.
Critical asset-management success factors
Asset Management, as described in the ISO 55000 documents is NOT about “maintenance and reliability management”—barely a word is spoken about maintenance. But we don’t have to reflect on the basics of fixed asset management very long to recognize that maintenance and reliability practices play a huge role.
“Asset Management” (AM) in general covers the life cycle of physical/fixed assets, and there are numerous critical success factors. At the top if the list, I would suggest the following:
Now’s the time to study the emerging Asset Management Standard. There’s no need to wait on this. Let us position ourselves ASAP to become engaged in the rollout of ISO 55000 across our plants, facilities and organizations. MT