special features

rotating equipment
instrumentation & control
refining
gas processing
petrochemicals
PETROLEUM TECHNOLOGY QUARTERLY
ptq
Q3 2009
cover and spine.indd 1 15/6/09 17:48:30
Improving asset performance and
process safety
I
n todays turbulent economic
times, asset-intensive manufacturing
businesses are under heightened
pressure to achieve proft levels that
will satisfy their primary stakeholders,
while maintaining safety performance
that is more than just acceptable.
Accomplishing this objective requires
a thorough, sustainable business plan
not just for the company, but for
its valuable physical assets as well.
Asset-intensive businesses can attain
signifcant improvements in reliability
and safety by providing employees
with meaningful and attainable goals
that beneft them and the business;
with effective tools to accomplish
these goals; and, fnally, with capable
practitioners placed in strategic roles to
provide leadership and guidance.
Lack of work processes
The oil refning industry has historically
faced the challenges related to
extracting optimal performance from
a large installed base of assets while
maintaining and improving safety
performance. Risk was acknowledged
but not managed. Change seemed
unachievable within a culture where
strongly ingrained behaviours
favoured production output. Refners
knew that improvements in planning,
scheduling and executing maintenance
were needed but lacked the work
processes and systems to achieve them.
In particular, the volume of problems
represented by large numbers of assets,
such as pumps, valves, vessels, piping
and instruments, overwhelmed the
paper-based systems in place to manage
them. Plant challenges exceeded the
capability of technology to address
them. Eventually, techniques and
technologies evolved and grew to the
How to achieve effective risk management and excellence in plant reliability and
safety through asset performance management
Roy E WHItt Meridium
point that as the new century dawned,
effective planning and scheduling
systems, quality and reliability prac-
tices, risk-based techniques, invest-
ments in computerised maintenance
management systems (CMMS) and
project management systems all
became the norm in multiple industry
sectors. Unprecedented productivity,
reliability and safety performance
resulted. Now, new and potentially
even greater opportunities exist in the
management of equipment strategies
generated from the information
collected by these earlier techniques
and technologies. In short, technology
has now outpaced industrys ability to
implement known solutions.
While there has been tremendous
improvement in reliability and safety
performance in many refneries in the
last decade (Figure 1), refners have
much more opportunity to increase
capacity and safety performance. Doing
so will require visionary leadership,
implementation of best practices
enabled by technology solutions and
capable people in key roles.
Establishing meaningful goals
Refning margins are characteristically
cyclical, as demand ebbs and fows
with petroleum availability and price.
Thus, costs are always a prime concern
and major emphasis for managing a
business during times of thin margins.
But, companies often focus on that
which is easily controlled operating
costs and lose sight of what might be
more important a proper focus on
those things that will make the business
successful in the long run. Executive
leadership must focus the refning
organisation on a few critical business
drivers typically, production, cost
and risk. The objectives must be
articulated in a manner that allows
employees to develop actionable
steps to support the stated business
objectives. While the issues are
complex and many, the approach
needs to be simple and concise. During
tough economic times, cost reduction
is a necessary reality but must be
accomplished with knowledge of the
impact on risk to production and safety.
In a commodity business, lower costs
www.eptq.com PTQ Q3 2009 125
80
84
88
92
96
76
l999 l998 200l 2002 2000 2003 2004 2005 2006 2007 2008 l997
Reliability
Costs
Safety
t
n
e
c
r
e
P
0.5
l.0
l.5
2.0
2.5
3.0
0.0
Figure 1 Reliability and safety trends at a large US Gulf Coast refnery
Source: data extracted from Walter Pintos (Lyondell) report Excellence in Stationary Equipment
Reliability, delivered at the 2004 NPRA Reliability & Maintenance Conference and Exhibition.
desired asset performance management
business plan that can take a plant to
world-class performance in reliability.
Such an APM business plan should
address all the traditional blocking and
tackling issues related to maintenance
and turnaround execution and then
identify the work processes and best
practices for a highly effective asset
performance management programme.
After almost two decades of providing
asset performance management
software to global leaders in multiple
asset-intensive industry sectors,
Meridiums software solutions enable
asset performance management work
processes that include best practices
relevant to world-class reliability
groups, serving as a guide for any
engineer or manager trying to improve
asset performance while managing
risk. These work processes, categorised
as asset integrity and reliability
optimisation, are presented here, but
are not the focus of this article:
APM asset integrity

Risk assessment

Asset condition assessment

Strategy and risk management

Mechanical integrity

Safety instrumented system
management.
APM reliability optimisation

Opportunity identifcation

Investigative and analytical
processes

Recommendation management

Reliability in design

Life cycle management.
Each work process is enabled
by a Meridium software solution,
contains best practices applicable to
multiple industry sectors and serves
as the framework for an effective asset
management programme. These APM
work processes are further supported
by others that are foundational and
strategic to the accomplishment of
any asset performance improvement
initiative. They are all documented
in Meridiums value assurance
programme (MVAP).
1

Rather than make arbitrary or
random cost cuts that might negatively
impact asset performance and risk,
MVAP provides management with a
business plan to ensure that a holistic
accompanied by even lower production,
resulting in higher unit cost, will lead to
fewer sales. The focus of this article is
on a well-articulated business plan to
increase proftability and safety, while
managing risk through a laser-focused
asset performance management
initiative.
It is then incumbent upon natural
leaders throughout the organisation to
identify practices and systems that can
be employed to accomplish the
objectives set out by management to
achieve this improvement in reliability.
These leaders will be in middle
management, members of functional
teams, operators and craftsmen or
working as some other key resource.
These are the people who recognise
the wisdom and importance of
implementing work processes and best
practices to create benefts that accrue
toward satisfying the business drivers
outlined by executives. They will
naturally understand how to translate
clearly articulated macro goals into
actionable tasks and intuitively know
which tools or systems to use to get
things done in the feld.
Executives must take care to not de-
emphasise asset performance in their
zeal to control or reduce costs. Issues
should be framed by describing a goal
of using the latest technology to enable
improved productivity while reducing
costs and managing risk. This goal is
and should be conveyed as a win-win
for the company and its employees -
everyone working toward a common
goal of improving reliability and safety
while managing risks and watching
proftability increase.
Employment of reliability improving
work processes
No-one will argue the need to reduce
costs when demand declines and cash
fow is a problem, but simply cutting
costs is not a sustainable business plan.
While it is an answer to an immediate
objective, a more prudent business
approach is to identify the smart costs
to cut, or even where to shift spending
in order to achieve more from the
investments that are being made; and
to do so not simply during a crisis,
but continuously and consistently.
So, how can you most effectively cut
costs without increasing equipment
risk and compromising safety? The
answer is complex and has many
facets. Total operating costs include
expenditures in many areas and each
needs to be reviewed for effectiveness
and effciency. Proper investment in
equipment design and operation is
critical to good business results, but will
not be covered in this analysis. At the
end of the day, there are basically only
two ways to reduce costs: do the work
more effciently and do less work.
However, an important area of
plant expenditures, and one which
generally receives lots of scrutiny
during times of forced cost reductions,
is total maintenance cost, which
should be optimised while managing
risk and ensuring reliability. In fact,
it is even more important to invest in
this optimisation activity with risk
awareness in a cost-cutting environ-
ment. When accomplished within
the boundaries of a well-conceived
asset performance management plan,
the likely result is better reliability,
enhanced process safety and an
improved asset risk profle.
Most traditional approaches to
maintenance improvements focus
on effciency improvements, and the
effective techniques for achieving
these effciency gains are well known,
if not widely practised. On the other
hand, techniques for identifying work
that does not need to be done, or can
be postponed, are relatively new,
introduced onto the industrial scene
in just the last couple of decades.
Reliability-centred maintenance (RCM)
is one approach that is very effective
towards accomplishing this goal on
large, critical systems. Risk-based
inspections (RBI), developed and
employed by the American Petroleum
Institute (API) and its members, are
extremely effective at identifying work
that either does not need to be done
or can be delayed without negatively
impacting risk. Those most effectively
using RCM, RBI and other practices to
eliminate work are doing so with the
aid of technologically advanced tools
an integrated enterprise system for
managing asset strategies generated
by these new techniques and work
processes. When layered on top of an
effective maintenance organisation, this
set of work processes represents the
126 PTQ Q3 2009 www.eptq.com
APM programme is in place for
managing physical assets and then
identifes cost reductions within the
context of that programme. To do so,
an informed approach that is better
than the typical ad hoc model in most
facilities is needed.
Contained within MVAP is a
maturity model that facilitates APM,
as shown in Table 1. It is managements
responsibility to provide the framework
within which employees can safely
and effectively operate manufacturing
facilities, particularly those with highly
hazardous materials or processes.
While many models of organisational
maturity exist, most only address
areas specifc to maintenance practices
and fail to offer a comprehensive
asset management plan establishing
objectives and detailing strategies,
methods and processes that must
be followed to achieve asset
performance goals. On the other end
of the methodology spectrum are all-
encompassing management guides,
such as those offered by system
integrators, investigative bodies and
academics, which couch needed
behaviours and practices in terms so
broad that determining actions are left
almost entirely to the practitioners.
This comprehensive manufacturing
maturity model encompassing
successful practices in safety,
environmental stewardship and
proftability is predicated upon the
premise that an organisation must
obtain and maintain a minimal
level of profciency in each of six
manufacturing domains in order for
a reliability improvement initiative
to have a reasonable chance of
success. Those domains and the
elements contained in them have been
characterised by four maturity levels:
reactive ineffciency, managed control,
strategic improvement and reliability
driven. Successful application of the
model is then achieved by exercising
appropriate leadership, providing
necessary systems and ensuring
requisite expertise is available.
The focal point of the model is
represented by two of the six domains
that contain work processes related
to APM. When applied correctly,
successful process safety management
and improved proftability in a
market driven by real supply-demand
opportunity is virtually assured.
As seen in Table 1, the model has a
total of six domains, or management
systems, with fve programme or work
process elements in each domain. A
reliability improvement programme
primarily housed within the two APM
domains (APM asset integrity and APM
reliability optimisation) is supported
and enabled by four other domains:
Strategic domains

Business strategy

Any successful initiative must have

a minimal amount of capability and
support with regard to goal alignment
and clarity of direction


Organisation and people

Leadership and exceptional change

management capabilities will make or
break improvement initiatives.
Foundational domains

Technology and data

Capabilities in this domain are

typically relatively strong these days in
established manufacturing companies
and somewhat easier to improve than
other areas

Departmental discipline

Work processes and practices, key

enablers of any programme, require
attention to detail and depend upon
dedicated resources possessing the
appropriate expertise for establishing
and/or improving them. These
resources must receive the active
support of all plant departments,
with effective interdepartmental co-
operation, in order to achieve optimal
results from an APM initiative.
Historically, APM improvement
programmes and other initiatives
fail because the bookend domains of
business strategy and organisation and
people are too weak. Even in large,
global enterprises, the lack of necessary
alignment of business drivers or an
inability to deal effectively with change
can undermine the best programmes
and intentions at the feld level. It takes
DoMAIn objEctIvES
Sustained proftability Decision enablement Managed risk Performance gains consistent execution Resource effectiveness
Compliance Document management Safety instrumented Life cycle Asset optimisation Leadership and vision
system management management practices

Loss control Automated alert Mechanical integrity Reliability in design Operating envelope Culture and effectiveness
and reports
Asset performance Operations and Strategy and risk Recommendation Stores management Transformation
management supporting data management management competence
Business drivers Technology and Asset condition Investigative and Planning and scheduling Skills management
infrastructure assessment analytical processes and certifcation
Business-aligned KPIs Data availability Risk assessment Opportunity Equipment tactics Metrics, rewards
and integrity identifcation and recognition

business strategy technology and data APM asset integrity APM reliability Departmental discipline organisation and
optimisation people
DoMAInS
Meridium value assurance programme maturity model
table 1
Copyright 2009 Meridium, Inc.
128 PTQ Q3 2009 www.eptq.com
a skilled leader to concisely articulate
goals and objectives related to safety
and environmental excellence, while
also laying out aggressive expectations
for profts and shareholder returns.
Done properly and well, the effects are
dramatic and convincing.
Understanding cultural impacts,
both enablers and barriers, then
effectively putting into practice a new
industrial culture, should improve
business results.
2
This APM maturity
model provides the framework against
which leaders can measure and track a
sites or organisations capabilities and
progress toward meeting departmental
and corporate business objectives.
When combined with the right set of
macro objectives or key performance
indicators (KPIs), it can be a very
powerful tool for ensuring continuous
improvement in reliability that will
translate into improved process safety.
All 14 elements of the process safety
management regulation
3
in the US are
incorporated within the model and
largely embodied in the two APM
domains. The model is also consistent
with PAS 55,
4
the developing European
standard for optimised management of
physical assets and infrastructure.
APM asset integrity and APM
reliability optimisation domains
contain the key work processes for
any asset-intensive business to achieve
excellence in reliability and equipment
availability.
Applying best practices to improve
performance
Describing the application of all the
work processes included in a
comprehensive APM programme is
beyond the scope of this article, so
a representative example, albeit an
important one, is given to illustrate
the power of systematically employing
the work processes in the MVAP
programme to maintenance and
turnaround practices. When the whole
programme is practised diligently, very
signifcant improvements in reliability
and safety while managing risk are sure
to accrue to the bottom line.
Start with a risk assessment to gauge
and rank the importance of all assets,
or those of current interest, in a way
that allows resources to be focused on
the few pieces of equipment that will
drive the overall success of the plants
reliability effort. This provides a much
needed foundation for any reliability
improvement effort. A particular group
of equipment or discreet systems may
be suspected of incurring more costs
than what is thought to be reasonable.
If so, that is a good place to start rather
than trying to assess an entire facility.
In order to manage the qualitative
risk of assets in a quantitative manner,
a 5 x 5 matrix of consequence and
probability can be effectively employed
(Figure 2). It has been proven to
be effective without the need for
precision - the collective assessment of
consequence and likelihood by a group
of informed craftsmen, supervisors
and engineers provides a basis for risk
determination and management that is
quite adequate.
Once this methodology is established,
the process can be facilitated in most
facilities in a matter of a few hours,
with maintenance and reliability
professionals beginning a systematic
analysis of the targeted assets.
Perhaps the most important
aspect of managing assets is that of
understanding and managing the risk
associated with them. One innovative
technique and capability is the ability
to measure existing risk related to asset
strategies, then predicting changes to
risk by managing the strategies that
mitigate them a business approach
that manufacturers must embrace to
maximise proftability and safety.
The asset strategy management
(ASM)
5
software module provides a
better way to manage asset strategies
using a risk-based assessment approach.
ASM offers a common methodology
to defne actions for an asset and the
mitigated risks, providing the ability
to evaluate existing plans with basic
qualitative risk analysis that is both
straightforward and easy to use.
This assessment capability provides
the ability to easily conduct what-if
scenarios of asset strategy options.
This information can then be
systematically applied to all assets,
beginning with the most important ones,
as defned by a risk analysis of plant
equipment and systems. Maintenance
actions are identifed, from information
provided or common industry strategies,
a risk profle is then determined and
costs associated with that combination
of strategies are documented.
During the systematic review of
a piece of equipment or a discreet
system, the unmitigated risk (the
risk associated with the system if no
actions are scheduled and done) is
graphed. The associated costs, parsed
by type and status, are documented.
The process allows strategies (actions)
to be reviewed, some to be eliminated
on the basis of least impact to risk, or
others to be added if cost effective while
maintaining or reducing overall risk.
Incorporating select work processes
based upon business drivers
Principles and implementation of
select work processes presented herein
should be applied in response to specifc
business drivers and objectives created
to impact them. A straightforward
way of visualising the integration
www.eptq.com PTQ Q3 2009 129
Consequence
|mprobable
0.05
Pemote
0.l
Possible
0.3
Probable
l
Prequent
5
0.05
0.l
0.3
l
5
0.5
Unmitigated
risk
l
3
l0
50
5
l0
30
l00
500
25
50
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500
2500
50
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300
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Low
l0
Medium
l00
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500
very high
l000
y
t
i
l
i
b
a
b
o
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Figure 2 Asset criticality assessment
and continuous improvement of this
approach can be seen in Figure 3.
Every for-proft company desires to add
value as business drivers are addressed.
MVAP ensures that companies
constantly create value by continuously
improving asset performance through
the implementation of software-
enabled work processes aligned with a
companys specifc business objectives.
Maintenance and engineering
organisations can use MVAP as an
effective guide for a world-class asset
performance management programme.
The example described in some
detail in the previous section presents
practices in the strategy and manage-
ment work process. The complete
MVAP programme provides guidance
identifying, managing, optimising and
evaluating asset strategies that are then
integrated with a plants enterprise
asset management (EAM) system or
CMMS. More detailed descriptions of
other APM work processes will be given
in future articles, but it is instructive to
briefy put them into context.
The APM asset integrity and APM
reliability optimisation domains cover
all requirements for an effective APM
programme, but no improvement effort
can be successful unless the supporting
domains are functioning at a minimal
level of maturity. So, a periodic check
of maturity in all six domains is needed
to keep the overall programme poised
for success. When these capabilities
are understood and a minimal level
of competence established, it is time
to pursue additional business benefts
through other reliability techniques.
Longer term management and
reliability techniques, such as root
cause analysis (RCA), RBI and RCM
are available and widely practised
in manufacturing. Each should be
employed within the confnes of a well-
conceived management system that
optimally utilises available resources
based upon the needs of a facility.
Investigative processes, including the
very effective RCA technique, should be
in place to provide quick identifcation
and correction of problems that
negatively impact production and
consume valuable resources. Another
simple but extraordinarily effective
technique for prioritising work and use
of resources is the Pareto analysis.
6
The
more advanced methodologies such
as RBI and RCM are also suggested in
these two domains.
130 PTQ Q3 2009 www.eptq.com
Again, costs are reduced one of two
ways: improve effciency or reduce the
work that has to be done. Traditional
approaches to work management,
such as work studies or planning and
scheduling, are necessary activities
but focus on effciency improvements.
In addition to ASM, when applied
consistently and correctly, RBI and
RCM offer the potential for broader and
deeper improvement results.
RBI provides effective management
of risk with optimal use of resources.
By concentrating resources on higher
risk items, cumulative risk is managed
and reduced. This is a very effective
technique for managing and optimising
work to be done during shutdowns and
turnarounds.
RCM is a methodology for developing
a scheduled maintenance programme
to realise inherent reliability levels
of complex equipment at minimum
cost.
7
This methodology identifes the
right maintenance strategies to ensure
realisation of the inherent safety and
reliability of equipment that comprises
a system, or to point to the need for a
redesign of the system.
Failure modes and effect analysis
(FMEA) is a supporting technique that
8usiness
drivers
Assessment
value
opportunity
8enefits and PO|
Achievable
value definition
Asset
management
ob|ectives
Drive
focus
on
Maintain compliance
Avoid incidents (HSL)
Avoid shutdowns/slowdowns
Pisk mitigation
Cost optimisation
Performance
|dentify and impliment solutions
Optimise day-to-day tasks
Optimise turnaround scope
Optimise spare parts

Optimise life cycle costs

Avoid excessive cost
Life cycle management
Peliability in design
Pecommendation management
|nvestigative & analytical process
Opportunity identification
Safety instrumented system management
Mechanical integrity

Strategy & risk management

Asset condition assessment
Pisk assessment
Are
managed
through
APM work
processes
Product
solutions
Solution cost
Are
enabled
by
n
o
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t
a
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Value map
Figure 3 MVAP value diagram
Copyright 2009 Meridium, Inc.
should be used in concert with the
others to capture specifc information
about failure modes and their impact
by equipment type to be leveraged with
each of the analytical methods.
This does not represent an exhaustive
list of all management and reliability
activities to be employed in an
effective, proftable manufacturing
facility. Rather, it addresses the key
asset performance management
framework and methodologies that
should be practised to ensure an
effective programme is in place. And,
it suggests both short- and long-term
practical approaches to achieving
world-class reliability performance
and asset risk management. The
programme must be an integral part
of the plants business plan, accepted
and supported by all departments,
and intimately woven into the fabric
of the maintenance and turnaround
organisations.
crafting a sustainable future
The MVAP programme elements
presented in this article reveal a
powerful approach for the effective
application of asset management
best practices in a holistic, integrated
business manner, achieving signifcant
reliability and safety improvements
using a risk-managed business
approach enabled by recent software
advancements. Expected outcomes are
achieved through the integration of
reliability practices because business
objectives drive asset strategies.
Common sense and logic generate
the same conclusion in every
industry vertical: asset performance
management is a sound business
practice providing high levels of
mechanical availability and safety
performance and environmentally
responsible operations that represent
signifcant value, generating business
opportunities. However, long-term,
sustainable growth dictates the need
for a holistic business approach one
that incorporates a clear understanding
of current maturity levels; a plan
for improvement; and systems to
consistently and continuously measure
progress, pinpoint improvement
opportunities and execute the necessary
adjustments to meet the business
challenges of today and tomorrow.
References
1 Meridium Value Assurance Program, www.
meridium.com/consulting/mvap.asp
2 Floyd, R C, A Culture of Rapid Improvement:
Creating and Sustaining an Engaged Workforce,
New York, Productivity Press, 2008, 24.
3 Process safety management of highly
hazardous chemicals, OSHA 29CFR 1910.119,
1 June 1992.
4 PAS 55 - what makes TWPL different?, The
Woodhouse Partnership, 16 September 2008,
http://pas55.net/.
5 Meridium Asset Strategy Management
Solution, www.meridium.com/software
6 Mitchell J S, Physical Asset Management
Handbook, Fourth Edition, Houston, Clarion
Technical Publishers, 2007, 325327.
7 Nowlan F S, Heap H F, Reliability-Centered
Maintenance, prepared by United Airlines under
the sponsorship of the Offce of Assistant
Secretary of Defense for Manpower, Reserve
Affairs and Logistics, N.p, Dolby Access Press,
1978, 463.
Roy E Whitt is Vice President, Value Realization,
at Meridium Inc in Roanoke, Virginia. He has a
BSc in chemical engineering from Rensselaer
Polytechnic Institute, New York, and an MBA
from Morehead State University, Kentucky.
Whitt is a graduate of the Ashland Management
Development programme at Indiana University
and the Executive Program of the University of
Michigans Business School.
Email: info@meridium.com
www.eptq.com PTQ Q3 2009 131