Thursday, September 26, 2013

Critical Factors to Determining Criticality of Your Asset Base

Today, thanks to a conversation I was having yesterday with a client here in the United Kingdom, I thought I would pontificate on the science of criticality. Here are three quick points to think about when you are setting up your equipment criticality process.
First ABC or 123 is not enough.
The idea for criticality is that you are listing your assets in order of importance to your business goals. The more granularity you provide then the easier it becomes to use the list for things like:
Planning, sequencing, and scheduling (order of job plan development and level of plan detail etc.)
Materials stocking and spares (critical equipment may have critical parts or spares)
Equipment maintenance plan development (level of detail and techniques applied)
If all of your assets are in three or five "buckets" of criticality you can run into issues. For example lets say you have 1000 assets and five levels of criticality, but in the mind of your facility staff you have a process driven plant with assets in series so almost nothing is unimportant. Because of this, your team scores few low criticality assets in the 1 (lowest) criticality. Now you have say 970 assets in four levels of criticality with most of them on the upper end but you reserved the highest level for safety or environmental assets. Now you have 920 assets spread across 3 levels. Even if they are spread evenly you will have 30 percent of your assets in each category. This is just not good enough to facilitate good business decisions. So what can you do? Try at least a 100 level criticality and better case is that you use a 1000 point scale. The idea is to get the assets spread apart across the range so that when you use criticality in decision making it does not give you buckets of assets but instead just a few assets at each level.
The second thought is that your criticality criterial must disperse the assets out across the range. You should have at least 10 criteria. They should include things like:
Spare parts availability
Historical reliability
Importance to the process
Safety, health, and environmental effect
And others.
Third, this was an interesting though provided by the client who was studying their spare parts supply chain, you should take the spare part availability to the next level and think about supply chain risk. As many countries close down and off shore the manufacture of spare parts and equipment your risk can go up.  For example ten years ago here in England if you needed a spare part for a mill there might be three suppliers here in country that could manufacture and provide that part with in a few weeks maximum. Now it is only made and stocked in India or Japan and the local manufactures are gone. Think about the earthquakes and tsunamis that have effected Japan and the wars that have effected other supplier regions. This puts the facility at risk raising the criticality of that asset because if it breaks and the only spares are in an unstable part of the world. It could be months or even years before that part is available. Because of this risk we may want a factor to raise criticality to the point that critical spares are kept onsite for this machine.
So there are three things to think about as you ponder the set up of your criticality process. I'm sure you will think of others.

1 comment:

  1. A good point raised about expanding the range of criticality scores in order to be able to disperse the assets. Doing so will ensure that the most critical will appear as the most important.

    Another point not mentioned in the realms of Criticality scores is that about weighting of the criticality criteria. Many methodolgies set weights and also cap scoes at say 100 ( or even 1000). This is a flawed process unless the weighted scores are set wide enough to always elevate the asset to the top of the list were the asset that exhibits the most series consequence comes out on top. Otherwise there is the danger that in combining all the consequence scores, an asset that only exibits this 1 most series consequence becomes diluted against others that score low individual scores but combined across a wider range of consequences.

    N.B. As there a degree of uncertainty assoccated with the expected consequences occuring should an asset fail, the lower the number of expected conseqences, the more accurate the outcome.

    Another area worthy of note is that of setting arbitary cut of'fs that assigns an asset as say "high", "medium" or "low" citicality. By allowing scores to run freely, a natural pattern will emerge that can be identifyied by setting out a priority against the consequence criteria. E.G. Using say "H&S" then "Reputation" then "Financial", it then becomes apparent where these natural separations occur. This goes a long way in eliminationg the otherwise very subjective appraoch of assigning assets by score against arbitary cut-offs, which also supports the argument of declaring what is deemed to be the most critical assets.