1. Risk-Based Asset Management
David J. Mierau, PE, CMRP
Director, Reliability Solutions Life Cycle Engineering
10-MAR-2015

2. Asset Management Risks
Robust Quality System: Compliance with Asset Risk Control Strategies such as Preventive and Predictive Maintenance Plans
Business Continuity Planning: Integrating the supply chain network and having good governance systems
Graphic Source: ISPE Drug Shortages Prevention Plan Introductory Summary, ISPE, August 2014

3. Impact of Manufacturing Disruptions
Drug Shortages by Primary Reason for Disruption in Supply in 2012
From the Strategic Plan: “Quality or manufacturing concerns can involve compromised sterility, such as roof leakage; mold in manufacturing areas; or unsterilized vials or containers to hold the product—issues that could pose extreme safety risks to patients.”
66% of disruptions have a direct connection to physical asset management – most likely all of facility remediation causes and a portion of manufacturing issues
66% of disruptions resulted from:
Facility remediation efforts (35%)
Manufacturing issues (31%)
Graphic Source: Strategic Plan for Preventing and Mitigating Drug Shortages, Food and Drug Administration, October 2013

4. Recent Focus on Asset Management
ISO (2014): Asset Management Standards
BSI PAS 55 (2004, 2008): Optimized Management of Physical Assets Standards
ASTM E2500: Pharma-specific Guidance
Referenced standards provide the elements of a holistic asset management program and should be referenced when creating a corporate or site asset management policy and program.

5. Risk-Based Asset Management in Other Regulated Industries
Commercial Airline Industry
Nuclear Power Generation
US Military
Space Programs
Subsea Oil & Gas Drilling (emerging)
Many foundational asset management, reliability and maintenance standards written in 1970s-1980s

6. Asset Management System Implementation Framework
Leadership,
Policy & Strategy
Asset Management System
Asset Management
Strategy
Business Case
Business
Case
Create or
Value Delivery
ISO Compliance
Reliability Excellence
Process Safety Management
Mechanical Integrity
ISO Risk Management
Asset Management Plans
Asset Criticality
Asset Management
Objectives
Acquire
ASSET LIFECYCLE
Operate &
Maintain
Dispose or
Discuss elements of the model and how to implement/create an Asset Management System that is in alignment with ISO 55000
Provide more specifics around the value delivery
Replace
Operate &
Asset Management
Capability
(Processes, Procedures & Knowledge)
Maintain
Procure &
Construct
Commission
Physical Asset Portfolio
Graphic Source: Life Cycle Engineering, Copyright 2014

7. Connection to Operational Excellence
Think about the necessary components to sustain manufacturing operations:
Safety
Quality
Productivity
Compare to the “fire triangle” and the need for Oxygen, Heat and Fuel in order for a fire to start. For sustained manufacturing, you must have all three components of Safety, Quality and Productivity. Without one of these items, the operation will be shutdown and/or patients will be put at risk.

8. Benefits of Risk Management
Awareness of real exposures
Knowledge of controls quality
Cost benefit analysis
Improved risk mitigation and transfer strategy
INFORMATION
Expected Loss – how much do I lose on average?
Unexpected Loss – how much I could reasonably expect to lose in a bad year?
Control Scores – how good are the controls I have in place?
DATA
Loss data collection
Risk indicator data collection
Control self-assessment
Risk assessment and analysis
Automatic notification
Follow-up action reports
FOUNDATION
Risk strategy, tolerance
Roles and responsibilities
Policies and procedures
Risk definition and categorization
Economic Profit
© American Society for Quality
Management & Control Quality

9. How can Risk-Based Asset Management impact Quality?
Requires management of physical assets across the entire asset life cycle
Provides focus on what assets are critical to the patient (quality & supply) and the business (safety & productivity)
Provides a process for managing resources and priorities – applying most robust risk control strategies to highest risk assets
Concept
Design
Procure
Install
Commission
Qualification
Validation
Operate
Sustain
Decommission
Discuss how risk-based asset management is more focused than general asset management and the economic advantages as well as drug shortage prevention advantages

10. Risk-Based Asset Management (RBAM) Model
Focus on Classify, Analyze, Control, Measure sequencing and the Continuous Improvement Cycle
The goal at the top is “Operational Stability” – not reliability excellence, maintenance excellence, operational excellence, etc.
Graphic Source: Life Cycle Engineering, Copyright 2014

11. Additional References
RBAM: Classify Phase
Process flow mapping
Value stream mapping
Relationship models (hierarchy)
The RBAM Classify phase ensures that all assets are documented with parent-child relationships defined.
It also defines where value opportunities exist related to asset performance improvements.
Additional References
Hierarchy: ISO 14224
Expand explanations of each element with some examples – discuss parent-child functional hierarchy example.
Value stream mapping helps maintain program alignment to overall business strategy.

12. Asset Functional Hierarchy
(1)
Business
Category
(2)
Installation/
Business Unit
(3)
Cost Center/ Op Unit
(4)
Function
(5)
System
(6)
Sub system/Asset
(7)
Component/Maintainable Item
(8)
Part/ BOM
Use/ Location Data
Equipment Subdivision
Typical application of asset criticality is at these levels of the functional hierarchy – referenced in ISPE C&Q Baseline Guide
Graphic Source: ISO 14224

13. Functional Hierarchy Example
Benefits of an Optimized Functional Hierarchy:
Event tracking and trending by various groupings: function, systems, etc.
Appropriate system definitions for asset criticality analysis
Comprehensive asset listing of all site components and parts along with associated systems

14. RBAM: Analyze Phase Equipment Criticality Failure Analysis
Risk Analysis
Risk Ranking
The RBAM Analyze phase evaluates risks associated with potential asset failures, quantifies risks and provides a way to prioritize risk control activities.
This phase of RBAM is where risk analysis and risk ranking are utilized

15. Equipment Criticality
Holistic Equipment Criticality includes the following impact elements:
Quality Impact
Business
Health, Safety & Environmental
Customer/Patient Supply
Mean Time Between Failure (MTBF)
Mean Time to Repair (MTTR)
Utilization
Single Point of Failure
Additional References
Criticality: ISPE Baseline Guide for C&Q, Impact Assessments
Holistic asset criticality considers various aspects of what makes a system/asset critical. Discuss how criteria is created and how all systems are rated with cross functional teams. Ultimate responsibility for each category is by functional area e.g. quality owns the quality numbers, etc.

16. Asset Criticality Thought Process
Determining function of equipment, system, item process, etc.
Is it main equipment or an auxiliary item?
Is it a unique item or common with others?
Redundancy – Duplication – Alternative
Do you have a standby backup?
Do you have alternative means to continue normal operation?
What is the likelihood of a failure mode occurring? (High/low)
Consider history of failures for equipment
Consider possibility and frequency of failures
What are the consequences of failure?
Any production losses as a result of failure? How much?
Any safety, environmental, or business losses as a result of failure?
What is the likely period out of operation?
Can the repair be done onsite?
Are spare parts available? How long to get parts if not in stock?
What is the longest time for repairing the failure?

17. Typical Asset Criticality Considerations
Quality/Reg.
EH&S
Business
Reliability
Maintenance
Supply Chain
Decom.
Asset Recap. Value
Environmental, Health & Safety Impact
Downtime Impact
Yield/Discard Losses
Failure Rate (MTBF)
Utilization
Single Point of Failure
Inventory
Logistics
Mean Time to Repair (MTTR)
Maintenance Cost

18. Asset Criticality Criteria Example

19. Criticality & Risk Control Strategies
Asset Criticality Tier
Additional Analysis
Risk Control Strategy
Criticality
Top 15% A
Asset Specific FMEA
PdM, PM, NDE/MI, OC, Redundancy
Top 35 to 15% B
Asset Type FMEA
PdM, PM, NDE/MI, OC
Top 65 to 35% C
Simplified Maint. Review
PdM, PM
Top 85 to 65% D
OEM Maintenance
Minimal PM - Contractor
Asset criticality is broken down into 3-5 tiers or levels based upon overall risk. The tiers are reviewed by all stakeholders for “outliers” that need to be moved.
Lowest 15% E
None
RTF – Run to Failure

20. Analyzing Criticality Data
Look for quality and safety “outliers” – High quality and safety scores in lower tiers (low overall criticality value scores)

21. Additional Analysis: FMEA
Failure Mode & Effects Analysis
Evaluation of asset (system) risk
Dual focus: functions & components
Evaluate each potential failure mode & cause
Establish risk ranking scales to calculate risk
Risk = Severity x Occurrence x Detection
Establish risk thresholds for taking mitigating actions
Quantify risk reduction
Provide details around steps to execute a FMEA including reviewing all available system information including dwgs, failure history, OEM manuals, etc. Build a functional block diagram, separate major subsystems & components, establish functions and subfunctions, determine failure modes for each combination of functional failure and component, analyze current risk based upon existing risk control strategies, recommend mitigating actions if current risk is unacceptable, analyze to-be risk based upon recommended actions being in-place
Additional References
IEC 60812
MIL-STD-1629A

22. Risk Priority Number (RPN) = Severity x Occurrence x Detection
FMEA Risk Categories
FMEA Risk Calculation
Risk Priority Number (RPN) = Severity x Occurrence x Detection

23. Risk Priority Number (RPN) = Severity x Occurrence x Detection
FMEA Risk Categories
FMEA Risk Calculation
Risk Priority Number (RPN) = Severity x Occurrence x Detection

24. FMEA Risk Evaluation for All Failure Modes & Causes

25. Risk Reduction Summaries

26. RBAM: Control Phase Standard Work Operating Procedures Preventive
Predictive
Condition Monitoring
Remote Monitoring
Operator Care
Critical Spares
Risk control strategies include all items listed above in addition to improvement/project actions where risk can not be mitigated through routine tasks. Give a brief description of each type of work – such as vibration monitoring for predictive maintenance, etc.
The RBAM Control phase is the application of risk control strategies recommended from the Analyze phase

27. Asset Risk Control Strategies
Based upon recommendations from the FMEA and analysis of the “to-be” RPNs
New or updated maintenance plans
Replacement or upgrade projects
New setup or operating instructions
Risk reduction will not be realized until recommendations have been implemented
PdM: Infrared Thermography

28. RBAM: Measure Phase OEE TCO Asset Utilization MTBF MTTR
Expand explanations of each element with some examples
The RBAM Measure phase ensures compliance with documented risk control strategies and provides data for continuous improvement

29. Key Performance Indicators
Trending Equipment Quality Events/Deviations

30. Recognized Industry Standards for KPIs/Metrics
SMRP Best Practice Metrics Guide
BSI Standard EN – Maintenance Key Performance Indicators
ISPE Good Practice Guide: Maintenance
Understand Leading/Lagging Indicators:
Low compliance to maintenance schedule (overdue maintenance work orders) is a leading indicator for asset reliability

31. Risk-Based Asset Management (RBAM) Model Review
Focus on Classify, Analyze, Control, Measure sequencing and the Continuous Improvement Cycle
The goal at the top is “Operational Stability” – not reliability excellence, maintenance excellence, operational excellence, etc.
Graphic Source: Life Cycle Engineering, Copyright 2014

32. Other Elements of Asset Management to Consider
Asset-Related Capital Delivery
MRO Stores & Materials Management
CMMS & Data Historian Support
Organizational Design
Maintenance Work Execution
Maintenance Planning & Scheduling
Reliability Engineering Processes
Loss Elimination, Root Cause Analysis, Critical Spares, etc.

33. Create Your Risk-Based Asset Management Program
Establish a Corporate Asset Management Policy and require risk-based processes
Your Drug Shortage Prevention Program should reference the Asset Management Policy as one element of the Prevention Program
Establish or update procedures and processes for the phases and processes of RBAM
Begin with the Classify phase (field data gathering, value stream mapping, relationship models) & Asset Criticality in Analyze phase
Note that several major pharmaceutical companies have established formal corporate asset management policies and standards.
Also note that asset management is only one element of a holistic drug shortage prevention program – companies need to consider supply chain, notification requirements, etc. as other elements of their shortage prevention program.

34. Take Action and Measure Results
Consider a pilot area/plant to implement and demonstrate improvement
Build & implement new risk control strategies for asset operation and maintenance
These activities reduce risk and improve operational stability!
Note that several major pharmaceutical companies have established formal corporate asset management policies and standards.
Also note that asset management is only one element of a holistic drug shortage prevention program – companies need to consider supply chain, notification requirements, etc. as other elements of their shortage prevention program.

35. Questions & Discussion
Risk-Based Asset Management
David J. Mierau, PE, CMRP
Director, Reliability Solutions Life Cycle Engineering
10-MAR-2015
Exhibit Table #541