Life-cycle asset management: why ISO 55000 matters
What is ISO 55000 and why should facility managers care? This article will provide answers to these questions, but let’s have a look first at what preceded the making of the standard.
A brutal wake-up call
The international ‘ISO 55000 – Asset Management’ standard has evolved out of the British PAS 55 (Publicly Available Specification). This standard has its origins in the deregulation and privatization wave of the 1980s and ‘90s, when the British government sold off public monopolies and put privatized firms on a profit-making basis.
After the privatization of telecoms, utilities, public bus transportation and many other sectors in the 1980s, British Rail was privatized in 1996 and restructured into separate businesses. Railtrack was put in charge of the infrastructure. With a focus on short-term cost savings, Railtrack disinvested in track renewal and maintenance. Work was contracted out to various private companies, which resulted in many different (and often inadequate) maintenance programmes and an overall lack of quality control.
This in turn led to a decline in service reliability and a rail safety crisis which culminated in the Hatfield rail crash in 2000. This major accident exposed chronic deficiencies in maintenance and a judge called it “one of the worst examples of sustained industrial negligence in a high-risk industry”.
It was a brutal wake-up call and four years later (2004) the first version of PAS 55 was published, specifying standards for asset life cycle management, including a model of risk management and technical governance. The success of this standard and the international interest it provoked, have contributed to the birth of ISO 55000.
ISO 55000 for life-cycle asset management
ISO 55000 is a set of international standards for managing physical assets over their entire life cycle, supporting organizations to achieve their purpose most effectively and economically. It promotes good management practices for assets of any type, by organizations of every type and size.
Let’s look at some of the key concepts that are most relevant to building maintenance managers.
“Line of sight”
It is vital for asset and maintenance managers to have a “line of sight” with their organization’s strategic objectives and to ensure that asset management KPIs are aligned with company strategy. This means there is no one-size-fits-all maintenance programme per type of equipment. ISO 55000 encourages asset managers to take a holistic view and consider to what extent an asset contributes to achieving organizational goals – before defining a maintenance concept. If for example, health & safety is a key value for your organization, this needs to be reflected in maintenance KPIs, and extra attention should go to creating a safe environment for everyone, including the technicians performing maintenance tasks.
Total cost of ownership (TCO)
ISO 55000 encourages organizations to look at costs from a life cycle perspective. Total Cost of Ownership is an analysis that takes into account all costs related to owning and operating an asset. This includes purchase cost, but also the cost for installing, deploying, operating, upgrading, maintaining and finally dismantling the asset.
Building life cycle cost – and the case for involving maintenance in an early stage
Viewed over a 30-year period, initial building costs account for approximately 25% of the total, while operations and maintenance costs equal 75%.
Most building life cycle costs are however determined by conceptual decisions made in the early stages. At the design phase for example, businesses have typically spent only 5% of the budget, yet 75% of the total cost life cycle cost is already fixed. Changes become more expensive at every stage, therefore it is important to apply asset management standards and involve maintenance specialists early on.
Risk management to protect a company’s assets (and even its reputation)
Each asset decision should be based on a risk assessment. A risk matrix is a helpful tool for assessing risks based on the consequences of incidents and the likelihood of occurrence. It provides decision support as to which maintenance concept and frequency is best suited.
Another key principle of ISO 50000 it to view asset management as an ongoing initiative that requires constant analysis and tweaking. The PDCA Cycle (Plan-Do-Check-Act) visualizes this process:
- Plan: Identify an opportunity and plan for change
- Do: Implement the change on a small scale
- Check: Use data to analyse the results of the change and determine whether it made a difference
- Act: If the change was successful, implement it on a wider scale and continuously assess your results. If the change did not work, begin the cycle again
Aligning with ISO 55000 can make a significant difference in the way organizations care for their buildings. It helps transcend day-to-day operational management and assess long-term impacts. The standard has already found widespread adoption in utilities, the public sector and DBFM projects. But anyone with responsibility for asset reliability and compliance can clearly benefit from the practices described in ISO 55000.
If you have questions about ISO 55000, about how it can drive value for your organization, or how CMMS software can support you to meet ISO 55000 standards, do not hesitate to contact the MCS Solutions team.