Avantis' reply to the new ISO 55000 Standard, #Avantis #InRIM

ISO 55000 What are your Options?

Author: VictorLough, Product Manager, Asset Management

You may or may not be aware of the recent global ratification of the ISO 55000 standard for Asset Management. You should be aware that this formal standard will drive change in the way you go about doing business. At its core is a quality management process with a view to continuous improvement. The principle point is that the standards intent is to make Asset Management Strategic, driving interdepartmental collaboration, including strategic lifecycle Asset Management and a bottom to top strategic procedural alignment to drive the change. This poses a policy question to business executives as to how to respond to this event.  

There are at least four ways that you may wish to respond.

You could ignore the whole event and make the assumption that the standard won’t take hold. Try telling that to the insurance industry, who from past experience likes to set the benchmark for a formal standard to demonstrate your competence in all areas of Asset Excellence. In addition, the unprecedented speed of adoption, just less than five (5) years since the proposal was filed, shows the desire from asset intensive industries to have a framework for best practice which will act as the starting point for greater improvement.

Alternatively, you may wish to accelerate your adoption of ISO 55000. However, the capability to mobilize the necessary accredited knowledge and experience, at least in the near term will prove to be a barrier to most. The early adopters, some 15% of the market, who are already utilizing quality processes such as InRIM from Avantis or PAS 55 from the UK’S Institute of Asset Management (IAM) are already reaping the rewards of optimized inventory, reduced risk of unplanned outage and reduced energy costs, and will move quite seamlessly to make the strategic adjustments with accreditation. Therefore, this leaves you with two suitable ways forward for the bulk of the market.

Against all the supporting evidence you may wish to prevent the real change, this is often called “mitigation.” You give approval to the ISO 55000 policy requirement, make all the right noises and simply waste resources on mitigation efforts. In the short term, you check the box and receive the required insurance certification. In doing so, you may well be lining the business up for increased maintenance backlog, increased operational risk and a compromised business performance. An example could be the Buncefield Incident in December 2005 in the UK. This was a destructive fire that has been described as the biggest incident of its kind in peacetime Europe, and was the result of a sequence of events and activities that had taken place in the days, weeks, months and years prior to the incident. The reported primary cause was the repeat failure of the level gauge where it would occasionally stick while the tank was being filled and “flat-line.” The near misses and lack of continuous improvement oversight was an opportunity lost. The millions of dollars in cost to the site operator and the many billions of dollars in cost to tank farm operators in the UK go without saying. If the root cause had been removed, the risk would have gone. Mitigation is an option, and this type of behaviour was regularly exhibited during the 90’s with the ISO 9000 standards adoption. Based on the positive experience of early adopters, the continued high impact, low probability asset failures and the desire which has driven global adoption of the ISO 55000 standard suggests that mitigation is a bad idea.

With limited budget, why waste resource on mitigation when there is so much to be achieved through adaption? To paraphrase the ISO 55000 standard directly “an organization’s top management, employees and stakeholders should implement planning, control activities (e.g. policies, processes or monitoring actions) and monitoring activities, to exploit opportunities and to reduce risks to an acceptable level.” This will require a sustained investment for the journey, but it is much less expensive than the mitigation alternative. At its core, a progressive asset management system framed through ISO 55000 enables an analytical approach through the lifecycle of the assets while at the same time adapting to the achievement of organizational objectives, with a balanced scorecard of costs, opportunities and risk.

There is no doubt that change to ISO 55000 is happening and the early adaptors are already reaping the potential benefits. Long live adaption!