1. Leaders in Asset Management "How to" Select & Implement Property Standards NPMA NES 2010 Lyle Hestermann, CPPM CF MIAM Director, Standards Development and Utilization

2. Leaders in Asset Management Selecting VCSs is easy!

3. Leaders in Asset Management Concepts For This Session Are: 1.What VCSs are there? 2.Integrating Standards Into Your Procedures. 3.Standards And Self Assessment 4.Using The Equipment Control Matrix 5.Taking Full Advantage Of The LDD Standard 6.Using the LRP Standard (previously the Admin Control Std) 7.Connecting The Dots – Using The Standards together

4. Leaders in Asset Management Published Standards E2131Standard Practice for Assessing Loss, Damage, or Destruction of Property E2132Standard Practice for Physical Inventory of Durable, Moveable Property E2135Standard Terminology for Property and Asset Management E2279Standard Practice for Establishing the Guiding Principles of Property Management E2306Standard Practice for Utilization and Disposal of Personal Property E2378Standard Practice for the Recognition of Impaired or Retired Personal Property E2379Standard Practice for Property Management for Career Development and Training E2452Standard Practice for Equipment Management Process Maturity (EMPM) Model E2453Standard Practice for Determining the Life-Cycle Cost of Ownership of Personal Property

5. Leaders in Asset Management Published Standards E2495Standard Practice for Prioritizing Asset Resources in Acquisition, Utilization, and Disposition E2497Standard Practice for Calculation of Equipment Movement Velocity (EMV) E2499Standard Practice for Classification of Equipment Physical Location Information E2604Standard Practice for Data Characteristics of Equipment Records E2605Standard Practice for Receiving Property E2606Standard Practice for Receipt Notification as a Result of Tangible Property Movement E2607Standard Practice for Cannibalization/Reclamation of Serviceable Equipment Components to Support Demand Requirements E2608Standard Practice for Equipment Control Matrix (ECM)

6. Leaders in Asset Management Published Standards E2631 Standard Practice for Physical Placement of an Entity-Controlled Supplemental Identification Label E2671Standard Practice for Defining Movements, Shipments, and Transfers of Tangible Property E2672Standard Practice for Identification and Categorization of Tooling E2674Standard Practice for Assessment of Impact of Mobile Data Storage Device (MDSD) Loss E2675Standard Practice for Property Management System Outcomes E2676Standard Practice for Tangible Property Mobility Index (MI) E2715Standard Practice for Moveable Property Storage E2811Standard Practice for Management of Low Risk Property (LRP) E2812Standard Practice for Uniform Data Management in Asset Management Records Systems

7. Leaders in Asset Management Draft Standards WK27486 New Practice for Property Management Database Asset Catalogs (Technical Contact: Brandon Kriner) Ballot E53 (11-02) Item 002;Brandon Kriner WK29521 New Classification for Property Types (Technical Contact: Eric Fassett)Eric Fassett WK32431New Practice for for Sales of Personal Property (Technical Contact: Robert Holcombe)Robert Holcombe

8. Leaders in Asset Management

9. Entity/Corporate/Company/Site/Whatever – start with the basics i.Guiding Principles, E2279 ii.Terminology, E2135 (Property Management and Compliance) Integrating standards into your procedures.

10. Leaders in Asset Management Entity/Corporate/Company – the basics E 2132, Standard Practice for Physical Inventory of Durable Moveable Property (Physical Inventories) Integrating standards into your procedures.

11. Leaders in Asset Management Entity/Corporate/Company – the basics E 2132, Standard Practice for Addressing and Reporting Loss, Damage or Destruction of Tangible Property (Property; Control of Loss, Damage or Destruction (LDD)) Integrating standards into your procedures.

12. Leaders in Asset Management Entity/Corporate/Company – the basics E2605, Standard Practice for Receiving Property (????) Integrating standards into your procedures.

13. Leaders in Asset Management

14. Standards and Self Assessment

15. Leaders in Asset Management Standards and Self Assessment E 2452 – 05e1 Standard Practice for Equipment Management Process Maturity (EMPM) Model

16. Leaders in Asset Management Standards and Self Assessment The standard recognizes five maturity levels:

17. Leaders in Asset Management Standards and Self Assessment Can Property Do Their Job In A Vacuum?

18. Leaders in Asset Management Standards and Self Assessment

19. Leaders in Asset Management Standards and Self Assessment

20. Leaders in Asset Management

21. Using The Equipment Control Matrix 1. Scope 1.1 This practice describes equipment control classes (ECCs), equipment control levels (ECLs), and their relationships. 1.2 This practice is intended to be applicable and appropriate for all equipment-holding entities. 1.3 This practice covers property categorized as equipment. Equipment as defined in Terminology E 2135 is nonexpendable, tangible moveable property needed for the performance of a task or useful in effecting an obligation. 1.4 This practice can be applied to an individual item of equipment, to groupings of equipment, or to all or a subset of an entity’s equipment. 1.5 In accordance with the provisions of Practice E 2279, this practice clarifies and enables effective and efficient control and tracking of equipment.

22. Leaders in Asset Management Using The Equipment Control Matrix 5.1.1The ECCs are based on the consequences of the loss of control of the equipment. There are five classifications, or groupings, which define the ECCs.

23. Leaders in Asset Management Using The Equipment Control Matrix 5.1.1.1Equipment Control Class 1—Consequence of loss of control is a societal safety/security impact, which is characterized by negative societal safety or security impact. 5.1.1.2 Equipment Control Class 2—Consequence of loss of control is a personal safety/security impact, which is characterized by negative personal safety or security impact that does not rise to the level of a societal safety or security impact. 5.1.1.3 Equipment Control Class 3—Consequence of loss of control is an operational impact, which is characterized by negative operational impact that does not rise to the level of a personal or societal safety or security impact.

24. Leaders in Asset Management Using The Equipment Control Matrix 5.1.1.4 Equipment Control Class 4—Consequence of loss of control is a compliance impact, which is characterized by negative compliance with applicable laws regulations or other relevant internal or external guidance that does not rise to the level of an operational impact. 5.1.1.5 Equipment Control Class 5—Consequence of loss of control is not discernible, which is characterized by having no visible or recognizable impact on the organization.

25. Leaders in Asset Management Using The Equipment Control Matrix 5.2 Equipment Control Levels (ECLs): 5.2.1 The five levels of control of equipment are based on differentiated tracking specifications. 5.2.1.1 Equipment Control Level A.—Continuous, which provides real time tracking and control with either human or electronic monitoring and surveillance at all times. 5.2.1.2 Equipment Control Level B.—Continuous while mobile, which provides real time tracking and control with either human or electronic monitoring and surveillance at any time the equipment is not stationary in a secure, fixed location.

26. Leaders in Asset Management Using The Equipment Control Matrix 5.2.1.3 Equipment Control Level C.—Event tracking, which provides the level of control characterized by manual or electronic recording of movement, accountability, or stewardship changes. 5.2.1.4 Equipment Control Level D.—Containment, which provides the level of control characterized by process or electronic methods of assuring equipment items are contained within a designated area. 5.2.1.5 Equipment Control Level E.—No tracking and no protection are required at this level.

27. Leaders in Asset Management Using The Equipment Control Matrix Equipment Control LevelS Equipment Control ClassA. Continuous B. Continuous While Mobile C. Event TrackingD. ContainmentE. No Tracking 1. Societal Safety/Security Impact 2. Personal Safety/Security Impact 3. Operational Impact 4. Compliance Impact 5. No Discernible Impact S = Standard Control and Tracking I = Increased Control and Tracking D = Decreased Control and Tracking NR = Not Recommended

28. Leaders in Asset Management Using The Equipment Control Matrix Equipment Control LevelS Equipment Control ClassA. Continuous B. Continuous While Mobile C. Event TrackingD. ContainmentE. No Tracking 1. Societal Safety/Security Impact S 2. Personal Safety/Security Impact 3. Operational Impact 4. Compliance Impact 5. No Discernible Impact S = Standard Control and Tracking I = Increased Control and Tracking D = Decreased Control and Tracking NR = Not Recommended

29. Leaders in Asset Management Using The Equipment Control Matrix Equipment Control LevelS Equipment Control ClassA. Continuous B. Continuous While Mobile C. Event TrackingD. ContainmentE. No Tracking 1. Societal Safety/Security Impact S 2. Personal Safety/Security Impact S 3. Operational Impact 4. Compliance Impact 5. No Discernible Impact S = Standard Control and Tracking I = Increased Control and Tracking D = Decreased Control and Tracking NR = Not Recommended

30. Leaders in Asset Management Using The Equipment Control Matrix Equipment Control LevelS Equipment Control ClassA. Continuous B. Continuous While Mobile C. Event TrackingD. ContainmentE. No Tracking 1. Societal Safety/Security Impact S 2. Personal Safety/Security Impact S 3. Operational Impact S 4. Compliance Impact 5. No Discernible Impact S = Standard Control and Tracking I = Increased Control and Tracking D = Decreased Control and Tracking NR = Not Recommended

31. Leaders in Asset Management Using The Equipment Control Matrix Equipment Control LevelS Equipment Control ClassA. Continuous B. Continuous While Mobile C. Event TrackingD. ContainmentE. No Tracking 1. Societal Safety/Security Impact S 2. Personal Safety/Security Impact S 3. Operational Impact S 4. Compliance Impact S 5. No Discernible Impact S = Standard Control and Tracking I = Increased Control and Tracking D = Decreased Control and Tracking NR = Not Recommended

32. Leaders in Asset Management Using The Equipment Control Matrix Equipment Control LevelS Equipment Control ClassA. Continuous B. Continuous While Mobile C. Event TrackingD. ContainmentE. No Tracking 1. Societal Safety/Security Impact S 2. Personal Safety/Security Impact S 3. Operational Impact S 4. Compliance Impact S 5. No Discernible Impact S S = Standard Control and Tracking I = Increased Control and Tracking D = Decreased Control and Tracking NR = Not Recommended

33. Leaders in Asset Management

34. Taking Full Advantage Of The LDD Standard

35. Leaders in Asset Management Taking Full Advantage Of The LDD Standard Acceptable loss ratios, per E2131: ECC1 is 0 %. ECC2 is 0.5 % (dollar value or quantity). ECC3 is 1 % (dollar value or quantity). ECC4 is entity establish IAW law, regulation or contractual guidance, otherwise 3%

36. Leaders in Asset Management Taking Full Advantage Of The LDD Standard - In Your LDD Report 14. Loss ratio in relation to program: Currently, this program has over 4,000 line items of equipment accountable at an acquisition cost of $15.9 million. The loss of this item and the items represented on three other loss letters represent a less than 0.5% loss ratio as determined by line items, and a less than 0.3% loss ratio as determined by acquisition value, well within DoD guidelines and ASTM E53 2131-09, Standard Practice for Addressing and Reporting Loss, Damage or Destruction of Property.

37. Leaders in Asset Management Taking Full Advantage Of The LDD Standard Perspective!

38. Leaders in Asset Management

39. E2811-11 Standard Practice for Management of Low Risk Property (LRP)

40. Leaders in Asset Management Using The LRP Standard 1. Scope 1.1 This practice covers the assessment of risk and management of low risk property (LRP). 1.2 This practice is directed at tangible LRP. 1.3 This practice does not promote mismanagement or dereliction of duty to protect property, nor protecting property unreasonably – to the extent that usefulness is impaired. This practice recognizes the constraints of materiality and costs versus benefits in the control and management of property.

41. Leaders in Asset Management Using The LRP Standard 3.1.2life cycle processes (LCP)—the various management and control stages of property from its acquisition through disposition; these processes include but are not limited to acquisition, receiving, identification, records, movement, maintenance, storage, physical inventory, loss, damage, and destruction reporting and disposition.

42. Leaders in Asset Management Using The LRP Standard 3.1.3 low risk property (LRP)—assets that are monitored and controlled at the discretion of asset managers and typically consist of low risk expendables or durable equipment and tooling based on established and disclosed criteria. (Refer to 4.2 for more information.)

43. Leaders in Asset Management Using The LRP Standard 4.1 LRP should be administratively controlled and managed to a lesser degree or with a more efficient technique than higher risk property.

44. Leaders in Asset Management 4.2 The type and scope of control and management should be commensurate with the level of risk. The entity shall determine the level of risk using the following criteria: 4.2.1 Scarcity, 4.2.2 Technological obsolescence, 4.2.3 Lead time, 4.2.4 Standardization, 4.2.5 Criticality, 4.2.6 Sensitivity, 4.2.7 Dollar value, 4.2.8 Environmentally regulated, 4.2.9 National security/threat, 4.2.10Schedule constraints, 4.2.11 Vulnerability, 4.2.12 Societal or personal safety, and 4.2.13 Contractual agreements. NOTE 1—The listing in 4.2.1-4.2.13 is not all inclusive and may be supplemented by the entity.

45. Leaders in Asset Management Do you control highly sensitive/hazardous/dangerous products the same way you do your office supplies? Do you have procedures, based on VCSs or other widely accepted data, that allows you to determine which life cycle processes you use for low risk property? Using The LRP Standard

46. Leaders in Asset Management Risk avoidance is more costly than risk management. It may be - will be - more efficient to apply common sense and use less control for LRP. Using The LRP Standard

47. Leaders in Asset Management

48. Connecting The Dots – Using The Standards Together How many Property Professionals does it take to manage how much stuff?

49. Leaders in Asset Management 49 The Old Way ENTITYLINE ITEMSACQ COSTFTE Alpha Equipment 22K$150M3 Bravo Stuff Suppliers 3K $25M3 Charlie’s Thingies 1M$20B200

50. Leaders in Asset Management 50 Better ENTITYLINE ITEMSACQ COSTFTEEMV* Alpha Equipment 22K $ 150M31.03 Bravo Stuff 3K $ 25M31.7 Charlie’s Thingies 1M $ 20B2001.24 *ASTM E2497-06

51. Leaders in Asset Management 51 And Better … ENTITY LINE ITEMS ACQ COSTFTEEMVEMPM* Alpha Equipment 22K $150M31.033.2 Bravo Stuff Suppliers 3K $25M31.72.8 Charlie's Thingies 1M $20B2001.243.3 * ASTM E2452-05e1

52. Leaders in Asset Management 52 And Better …. * ASTM E2131-09 ENTITY LINE ITEMSACQ COSTFTEEMVEMPM LDD* Low/High Alpha Equipment 22K $150M3 1.03 3.20.004/.00 Bravo Stuff Suppliers 3K $25M3 1.7 2.82.4/.01 Charlie's Thingies 1M $20B200 1.24 3.30.09/.001

53. Leaders in Asset Management 53 And Better …. * ASTM E2132-01 (2007) ENTITY LINE ITEMS ACQ COSTFTEEMVEMPM LDD Low/H igh PHYS INV * Alpha Equip. 22K $150M31.033.2 0.004 /.00 Triennial / 99.4% Bravo Stuff Suppliers 3K $25M31.72.82.4/.01 Annual / 97.2% Charlie's Thingies 1M $20B2001.243.3 0.09 /.001 Annual / 99.2%

54. Leaders in Asset Management 54 Hmmmmm * ASTM E2608-08 ENTITYLIACQ $ECM * ECC 1ECC 2ECC 3ECC 4ECC 5 LI Alpha 22K $150M23%27%32%18%0% Bravo 3K $25M2%33% 27%5% Charlie 1M $20B10%20%50%15%5%

55. Leaders in Asset Management 55 Now What Do You Think? * ASTM E2132-07 ENTITY LINE ITEMS ACQ COSTFTEEMVEMPM LDD* High/L owPHYS INV * Alpha Equip. 22K $150M31.033.2 0.004 /.00Triennial / 99.4% Bravo Stuff Suppliers 3K $25M31.72.82.4/.01Annual / 97.2% Charlie's Thingies 1M $20B2001.243.3 0.09 /.001Annual / 99.2%

56. Leaders in Asset Management 56 What About The People? * ASTM E2379-04 CERTIFICATION * ENTITYLIACQ $FTE NoneCPPSCPPACPPM Alpha 22K $150M3 3 Bravo 3K $25M32 1 Charlie 1M $20B2006550 35

57. Leaders in Asset Management 57 Make More Sense? * ASTM E2132-01(2007) ENTITY LINE ITEMS ACQ COSTFTEEMVEMPM LDD* High/LowPHYS INV * Alpha Equip. 22K $150M31.033.20.004 /.00 Triennial / 99.4% Bravo Stuff Suppliers 3K $25M31.72.82.4/.01Annual / 97.2% Charlie's Thingies 1M $20B2001.243.30.09 /.001Annual / 99.2%

58. Leaders in Asset Management