Epa 6 Bre PDF

The Fundamentals of Asset Management
Step 6. Determine Business Risk (Criticality) A Hands-On Approach
Toms bad day
Fundamentals of Asset Management
Third of 5 core questions

3.
Which assets are critical to sustained performance?

How does it fail? How can it fail? What is the likelihood of failure? What does it cost to repair? What are the consequences of failure?
AM plan 10-step process
Develop Asset Registry
Assess Performance, Failure Modes
Determine Residual Life
Determine Life Cycle & Replacement Costs
Set Target Levels of Service (LOS)
Determine Business Risk (Criticality)
Optimize O&M Investment
Optimize Capital Investment
Determine Funding Strategy
Build AM Plan
3. Which assets are critical to sustain performance?

FMECA; Business Risk Exp.; Delphi Techniques
Risk is the heart of AM
Risk
Asset Management
Definition of risk
Risk in AM-speak is the consequence of failure multiplied by the probability of failure Often used as a measure of criticality Preferred term is business risk exposure (BRE)
Variables in business risk exposure

Probability or likelihood of failure (PoF) Consequence or impact of failure (CoF) Risk mitigation or risk reduction and avoidance
Lets clarify terms

Ambiguous: Risk Criticality Preferred: Probability of failure Consequence of failure Business risk exposure
All assets have a probability of failure

Two key questions 1. Is the failure reasonably predictable? 2. Is it cost-effectively preventable?
Most common patterns of failures

Two key failure patterns
1.
Bathtub curvetypically applicable for mechanical and electrical assets

High
Percent of Failures
Low Decreasing
Time
Increasing
10
Most common patterns of failures

Two key failure patterns
1. 2.
Bathtub curvetypically applicable for mechanical and electrical assets Age-based curvetypically applicable for civil passive assets
High
Percent of Failures
Low Decreasing
Time
Increasing
Reliabilitythe probability that a component or system will perform its specified function for the specified period under specified operation conditions Fundamentals of Asset Management 11
Recall the four major failure modes

Failure Mode Capacity LOS Definition Volume of demand exceeds design capacity Functional requirements exceed design capacity Consumption of asset reduces performance below acceptable level Operations costs exceed that of feasible alternatives Tactical Aspects Growth, system expansion Codes & permits: NPDES, CSOs, OSHA, noise, odor, life safety; service, etc. Physical deterioration due to age, usage (including operator error), acts of nature Pay-back period Management Strategy Redesign O&M optimization, renewal O&M optimization, renewal Replace
Mortality
Efficiency
NPDES is National Pollutant Discharge Elimination System, CSOs are combined sewer overflows, and OSHA is Occupational Safety and Health Administration
12
The role of primary failure modes in determining the probability of failure

Decision Issues
Start Is capacity an issue? No 1. The probability of failure is different for each primary failure mode! 2. Look for imminent primary failure mode! Yes Likely before other modes? Yes
Failure Mode
Capacity
End of asset life

18 months
Range
Has LOS changed from design?

No Is physical reliability an issue? No
Yes
Likely before other modes?
Yes
LOS
3 years
Yes
Yes
Mortality
10 years
Redoit has to fail somehow
No
Is cost to operate an issue?
Yes
Yes
Efficiency
5 years
13
Failure analysis

Performance parameters What to monitor
Failure cause Failure behavior Failure mode
Failure end state Failure consequences
Function (It works)
Functional Failure (It doesnt work)
Function
Defined by performance standards
Functional Failure End state or potential end state; Evidence what you see
Failure Cause Contributing & root causes; reasons why failure occurred
Failure Mode Mechanism of failure
Failure Behavior Evident, hidden, random, P-F interval
Failure Consequences Cost, safety, environmental
14
Cause and effect diagram

Effect
Electric motor burned out Effect Cause Effect Cause Physical damage Cause Water inside motor Incorrectly assembled No assembly procedure Forklift bashed motor No protective crash barrier No schedule
Effect-Cause
Internal contact Worn bearing
Root Cause
No lubrication
Effect
Burned out contactor
15
Probability of failure (PoF)

PoF is directly related to the failure mode We cannot absolutely determine PoF Sometimes we have good data, sometimes we do not We can estimate a range of failurehow early (pessimistic) and how late (optimistic)
16
What are sources of Probability of Failure?

CMMSmean time between failures (MTBF) Vendor and industry information Other failure records (hard copies) Our brilliant memories (staff) Our SCADA system (if we have one and if it keeps records on this asset)
PoF is probability of failure, CMMS is computerized maintenance management system, SCADA is supervisory control and data acquisition
17
Finding a proxy for measuring failure

Can age, usage, or condition be substituted?...
High
Age? Usage? Condition?
Data distribution of asset performance
Performance
Decay curve Mean asset condition
Minimal asset standard Assets performing below standard

Low 0
Percent of Effective Life Consumed
50
100
18
Linking probability of failure to age of asset (% effective life consumed)

% of Effective Life Consumed <10 20 30 40 50 60 70 80 PoF Rating 1 2 3 4 5 6 7 8
90 Failed
9 10
PoF is probability of failure
19
Linking probability of failure to direct observation tables

Assessment * Almost certain Very high High Quite likely Moderate Low Very low Probability Weighting 100 75 50 20 10 2 1 Description Expected to occur within a year Likely to occur within a year Estimated 50% chance of occurring in any year Expected to occur within 5 years Estimated 20% chance of occurring in any year Expected to occur within 10 years Estimated 10% chance of occurring in any year Expected to occur within 50 years Expected to occur within 100 years
* Likelihood of occurrence within a year
20
Recall alternative: tying condition score to asset failure how?

Data distribution of asset condition
1 2 4 6
8
Excellent
Condition
Decay or failure curve
10
Performance
Poor
Minimum
Physical Failure
0 20 40 60 80 100
Percent of Effective Life Consumed
21
Relating condition to Probability of Failure through % Physical Life Consumed

Element SCORE Technical Performance Operational Performance Reliability Availability Description 1 Substantially exceeds current requirements Negligible attention required As specified by manufacturer Virtually always operational 3 Exceeds current requirements Exceeds current requirements Infrequent breakdown 5 Meets current requirements but with room for improvement Meets current requirements but with room for improvement Occasional breakdown 7 Obvious concerns: cost/benefit questions Obvious concerns: cost/benefit questions Periodic breakdown 9 Inefficient; becoming ineffective, obsolete Difficult to sustain performance 10 Failing, not capable of sustaining required performance Failing, not capable of sustaining required performance Virtually inoperable Virtually impossible to return to service; parts no longer available; unavailable trained personnel Maintenance is frequent with recurrent patterns of failure; asset must be virtually constantly monitored to sustain performance
Maintainability
% Physical life consumed CONDITION SCORE
Continuous recurrent breakdown Out of service only for very Out of service for Increasingly difficult to Extensive downtime short periods moderate period; return to service; parts duration; difficult to return moderately difficult to becoming a challenge to service; parts, difficult to return to service acquire, rare skills required Increasing minor Scheduled maintenance Work orders well above Easily maintained; OEM Largely preventive maintenance with some maintenance required; becoming frequent; more average for type of asset; maintenance is corrective maintenance periodic corrective experienced trades people recurrent minor repair; straightforward beginning to show up; maintenance including required for maintenance; close monitoring required; baseline monitoring some repair shortening of frequency of work orders most senior people monitoring intervals increasing substantially required to sustain with short monitoring performance intervals Almost new; up to 10% Up to 30% physical life Up to 50% physical life Up to 70% physical life Up to 90% physical life physical life consumed consumed consumed consumed consumed 1 3 5 7 9
Virtually consumed, imminent failure 10
Prob of Failure
0.1
0.3
0.5
0.7
0.9
0.99
22
Relating condition to Probability of Failure through % Physical Life Consumed

Element SCORE Technical Performance Operational Performance Reliability Availability Description 1 Substantially exceeds current requirements Negligible attention required As specified by manufacturer Virtually always operational 3 Exceeds current requirements Exceeds current requirements Infrequent breakdown 5 Meets current requirements but with room for improvement Meets current requirements but with room for improvement Occasional breakdown 7 Obvious concerns: cost/benefit questions Obvious concerns: cost/benefit questions Periodic breakdown 9 Inefficient; becoming ineffective, obsolete Difficult to sustain performance 10 Failing, not capable of sustaining required performance Failing, not capable of sustaining required performance Virtually inoperable Virtually impossible to return to service; parts no longer available; unavailable trained personnel Maintenance is frequent with recurrent patterns of failure; asset must be virtually constantly monitored to sustain performance
Maintainability
% Physical life consumed CONDITION SCORE
Continuous recurrent breakdown Out of service only for very Out of service for Increasingly difficult to Extensive downtime short periods moderate period; return to service; parts duration; difficult to return moderately difficult to becoming a challenge to service; parts, difficult to return to service acquire, rare skills required Increasing minor Scheduled maintenance Work orders well above Easily maintained; OEM Largely preventive maintenance with some maintenance required; becoming frequent; more average for type of asset; maintenance is corrective maintenance periodic corrective experienced trades people recurrent minor repair; straightforward beginning to show up; maintenance including required for maintenance; close monitoring required; baseline monitoring some repair shortening of frequency of work orders most senior people monitoring intervals increasing substantially required to sustain with short monitoring performance intervals Almost new; up to 10% Up to 30% physical life Up to 50% physical life Up to 70% physical life Up to 90% physical life physical life consumed consumed consumed consumed consumed 1 3 5 7 9
Virtually consumed, imminent failure 10
Prob of Failure
0.1
0.3
0.5
0.7
0.9
0.99
23
Scoring the Consequence of Failure

Table 4 Consequence of Failure ( CoF)
Loss of Service Safety Agency's Image Can be out of service indefinitely No impact No media or no consequence 1 Cannot be down a month Minor inconvenience Neutral coverage 3 Social/community/ organizational Cannot be down a Cannot be down a day week Moderate injury and some Minor injury sickness Adverse media 5 Econcomic/Financial Financial impact Economic impact Low cost Insignificant 1 Moderate cost <$100k 3 High cost <$500k 5 Environmental Spill, flood Short duration, small quantity onsite Some basement backups Moderate basement backups, some offsite spillage Many inconvenienced; moderate health and habitat issues Extensive complaints adjacent to station; lingering area odor Severe health and habitat issues; some mandatory vacation of premises Extensive area-wide complaints Large areas vacated and closed to public access; entensive specialized containement cleanup required Odor at dangerous levels at spill site; evacuation of premises required Severe sanctions; damage reversible in five years or more 10 High cost; diverts $ <$2 million 7 Painful change of priorities <$10 million 9 Likely to trigger rate Increase, staff changes >$10 million 10 Widely adverse media 7 Cannot be down 8 hours Major injury, sickness, some death Continual; political opposition 9 Cannot be down one hour Subsrtantial death, widespread injury and sickness Nationally adverse media 10
Odor
No complaints
A few compliants adjacent to Moderate complaints station adjacent to station Minor violation - reporting only 3 Regulatory sanction possible 5
Permit compliance Score
No consequence 1
Extensive regulatory Regulatory sanction sanction virtually assured; likely; Damage reversible damage reversible in one to less than one year five years 7 9
24
Quantifying consequence of failure

Sophisticated
Direct Costs to the Local Government
Repair and return to service costs Service outage mitigation costs Utility emergency response costs Public safety costs Admin & legal costs of damage settlements (Lost product costs) Property damage costs (including restoration of business) Service outage costs Service outage mitigation and substitution costs Access impairment and travel delay costs Health damages Emotional strain/welfare Environmental Pollution, erosion, sedimentation Destruction of/damage to habitat Attractability (tourist, economic)
Direct Customer Costs

Full Economic Cost
Community Costs

25
Alternative view of criticalityimpact on core processes

Code 1 2 3 4 5 6 7 8 9 Description Mandated by law or corporate policy Impacts multiple processes, runs continuous without an on-line spare Impacts multiple processes, runs intermittently without an on-line spare, and/or causes lost production in fewer than 4 hours Impacts a single process, runs intermittently without an on-line spare, and/or causes lost production between 4-24 hours Impacts a single process, runs intermittently without an on-line spare, and/or causes lost production in fewer than 24 hours Impacts multiple processes, runs continuous with an on-line spare, and causes no lost production Impacts multiple processes, runs intermittently with an on-line spare, and causes no lost production Impacts a single process, runs intermittently or continuous with an on-line spare, and causes no lost production Minor or no impact on safety, product, or cost
26
Alternative view of criticalityimpact on revenue

Code 1 2 3 4 5 6 7 Description Assets required for conducting value stream functions that produce the core unit of value
Assets required to ensure that revenue producing assets are powered or controlled
Assets required for order fulfillment functions such as sales orders, production planning, shipping, and accounting Assets required for other core production or service functions such as material handling or warehousing
Non-revenue producing assets required for protecting revenueproducing assets from inoperable conditions
Non-revenue producing assets required for conducting supporting business functions Non-revenue producing assets that impact quality of life
27
Determining significant failures

The business risk exposure trade-off
High
High probabilitylow consequence
Probability
D High probabilityhigh consequence
A Low probabilitylow consequence
Low Low
Low probabilityhigh consequence
Consequence
High
28
Business risk exposure drives work program

Worst first?
High
No
Poor
Probability
Fair
Good
Good
High
Low Low
Consequence
29
Business risk exposure drives work program

Work program response
High
B
Aggressive monitoring
Immediate work
Risk
A Sample
monitoring
Low Low
Consequence
High
30
Relating Business Risk Exposure to management action
1. Set strategic levels of service & tolerable risk limits
Advanced Concepts and Techniques in Infrastructure Asset Management
31
Simple risk (criticality) metric
Condition, Reliability, Performance
Costs of the Consequences of Failure Business Risk Exposure (BRE)
Probability of Failure (PoF)
Consequence of Failure (CoF)
PoF
CoF
BRE
32
BRE 1simple approach

Business risk exposure (BRE) increases (higher numbers) as probability of failure (PoF) and consequence of failure (CoF) increase
High
Probability of Failure
1
1
Low
2
2
3
3
High
Low
Consequence of Failure
33
Introducing risk mitigation into the risk metric

Risk mitigation significantly reduces the risk metric BRE = PoF x CoF x R Where
To Aeration Tanks
PoF is probability of failure CoF is consequence of failure R is a risk mitigation factor (1.0)
See Detailed Schematic of Blower 4 System Below
Air Discharge Header

Check Valve
1
Centrifugal Blower Butterfly Valve Venturi Meter Silencer
25,000 CFM Blower System
2
3
4
5
Air Intake Duct

Filter
Air Intake
Louver Damper
34
Determining risk mitigation factor

Start
Does any other system/asset/approach fully fulfill the function if the asset fails? No Does any other system/asset/approach partially fulfill the function if the asset fails? Yes Full Mitigation Yes Partial Mitigation No No Mitigation
35
Example of assigning weight to risk mitigation in this case, redundancy

Type Redundancy Partial Full Double Percent Redundancy 50 100 200 Percent PoF Reduction 50 90 98
Set weights considering operating circumstances, where possible True redundancy (peak vs. average) Age and condition of equipment Nature of operating environment Nature of failure modes (evident, hidden, random)
36
Step-by-step BRE methodology

Levels of filtering and sophistication
Increasing
5% of Assets
Advanced
Filtering and Sophistication
BRE 3
20% of Assets
Intermediate
BRE 2
100% of Assets
Basic
BRE 1
1-10 matrix of CoF & PoF, 1-100 Score 1-1,000 CoF, 0-100% PoF, 0-1000 Score
Decreasing
Full Economic Cost Model, Probability = MTBF, 0-$millions

Increasing
Decreasing
Time
BRE is business risk exposure, CoF is consequence of failure, PoF is probability of failure, MTBF is mean time between failures
37
Level 1simple
BRE rating = probability x consequence
Asset No. 1 2 3 4 5 6 % Probability .60 .70 .40 .66 .95 .10 Consequence 4 2 5 10 7 10 Risk Mitigation Factor 0.50 1.00 1.00 1.00 1.00 0.90 Risk Rating 1.2 1.4 2.0 6.6* 6.7* 0.9
* Requires further investigation
38
Level 2intermediate
Multiple elements, enhanced FMECA analysis techniques
Element Safety Environment Functionality Cost Rating 1-5 1-5 1-5 1-5 Weighting 10 6 5 8 Max. Score 50 30 25 40
145
FMECA is failure mode effect critical analysis
39
Example of risk table

Matrix of probability and consequence of failure
Consequence of Failure Probability of Failure Very low Low Moderate Quite likely High Very high Almost certain 1 L L L L M M S 2 L L L M M S S 3 L L M M S S H 4 L M M S S H H 5 M M S S H H H 6 M S S H H H H
L is low risk, M is moderate risk, S is substantial risk, H is high risk
40
What is tolerable risk?
1. Set strategic levels of service & tolerable risk limits
As you think of Business Risk Exposure, consider following questions for each asset or asset group:
What is a tolerable Consequence of Failure that can happen repeatedly and why? What is a Consequence of Failure that cannot happen even once and why? What do you want to avoid the most and why? What risk score could be acceptable at times and why?
Categories
Tolerable with reactive/PM focused management strategy (run to failure) Tolerable with proactive/PdM/monitoring management strategy Not tolerable cannot fail
41
Tolerable risk mapping

Tolerable Risk Graph (BRE = 50)
10 9 8 Probability of Failure (PoF) 7 6 5 4 Zone 1: Intolerable Risk Zone 2: Tolerable and Manageable Risk Assets with a consequence of failure score that are similar to Zone 1 in terms of the environmental and operational impacts that would be experienced on failure; however failure of these assets is not highly likely at this time; aggressive monitoring is called for. Zone 3: Tolerable and Manageable Risk Assets in this zone have a consequence of failure and probability of failure that warrant aggressive monitoring and management. Zone 4: Tolerable and Manageable Risk Assets in Zone 4 experience failure consequences that are tolerable because they are managed through designed redundancy and operational mitigations such as spares and condition monitoring. Zone 5: Repeatable Risk - Minor consequences are experienced due to failure of assets in Zone 5. Repeated failures are acceptable in terms of consequence.
3
2 1 0 0 1 2 3 4 5 6 7 Consequence of Failure (CoF) 8 9 10
42
Risk Mapping
Operational Failure
least likely
most likely
Structural Failure
43
Modifying the 10-step process
Set Target LOS
Establish Risk Ratings (Criticality)
Develop O&M Plans
Develop CIP Program
Build AMP
44
Modifying the 10-step process
Set Target LOS
Establish Risk Ratings (Criticality)
Develop O&M Plans
Develop CIP Program
Build AMP
45
Putting it all togethercalculating business risk

Core Risk Probability of Failure
Consequence of Failure
Risk Mitigation Factor
Business Risk Score
Use design or standard life table
Adjust for Design standard Construction quality Material quality Operational history Maintenance history Operating environ. External stresses Consider Failure mode Condition Operating Performance Reliability Availability Maintainability
Consider Safety, health, and welfare Environmental impact Process criticality Repair costs Revenue and aggravation impact on customers and agency
Heres the point of the analysis to identify and deploy risk mitigation strategies!
Consider Redundancy Diversion/Pipe around Spares on site SCADA Etc.
46
Managing riskreduction options

Management Treatment Options
Reduce Probability
Reduce Consequence
Add Redundancy
Manage PostFailure Impacts
Refocus O&M
Insure
Refurbish/Replace
Influence Customer Expectations
47
What caused the Jones Street power station to fail?

Truck hits pole and causes power failure Junes incident report
48
Lets apply failure analysis techniques with Tom

Performance parameters What to monitor
Failure cause Failure behavior Failure mode
Failure end state Failure consequences
Function (It works)
Functional Failure (It doesnt work)
Function
Defined by performance standards
Functional Failure End state or potential end state; Evidence what you see
Failure Cause Contributing & root causes; reasons why failure occurred
Failure Mode Mechanism of failure
Failure Behavior Evident, hidden, random, P-F interval
Failure Consequences Cost, safety, environmental
49
Recall the cause and effect diagram

Effect
Electric motor burned out Effect Cause Effect Cause Physical damage Cause Water inside motor Incorrectly assembled No assembly procedure Forklift bashed motor No protective crash barrier No schedule
Effect-Cause
Internal contact Worn bearing
Root Cause
No lubrication
Effect
Burned out contactor
50
Junes incident report notes

Hour 19:35 Notes Entered superstructure to shut off power breakers before power-up. The main breaker had been thrown. No immediate clue as to what caused it to trigger. No sign of arcing or flash explosion around the box. That means neither Motor-pump 1 or Motor-pump 2 could run. No wonder the overflow. Why both down? Power temporarily restored by Costly Electric & Illumination. Will return in am to install permanent pole. (Shouldnt we ask them to move it back from the road?) Mac and I turned on main breaker to Motor 1. Immediately heard loud screeching. Seems to be from Motor 1. Immediately shut main down. Turned off breaker to Motor 1. Turned on main. Good news Motor 2 ran fine. No unusual noise. Nice to have lights. Wonder if coffee pot works! Noted that motor mounts on Motor 1 appear looseblack skid marks up to half inch from front feet. Back shows movement, but not as bad.
20:25
20:30
20:40
51
Junes incident report notes, continued

Hour 20:45 Notes I entered wet well and dry well with Motor 2 running. Mac stayed top. Noted that the two shaft guides on the wall for Motor-pump 1 was completely loose, one side pulled off wall. Bolts pulled clear from wall too. Noticed substantial play in pump shaft at the coupler to the shaft. Way too much play here. See photos. My guess at this pointlooks like vibration worked the shaft guides loose, increasing strain on the motor, working the motor loose, which strained bearings to point of break down. Sent crews home with Motor-pump 2 running alone. What to do with Motor-pump 1? Repair? Refurbish? Replace? Will discuss with you after I get some shut eye.
05:15
05:30
52
Toms cause and effect diagram

Effect
Main breaker thrown Effect Cause Effect Cause Pump overload Cause Breaker failure Not fully seated Defective breaker case Bearing stressed Misaligned
Effect-Cause
Breaker overload Motor overload Bearing dry
Root Cause
Grease cap failed
Effect
Impeller jammed
Defective
Defective
53
Which major failure modes are at work?

Decision Issues
Start
Is capacity an issue?
Major Failure Mode

Yes
Yes
Capacity
No
Has LOS changed from design?
Yes
Yes
LOS
X
~
54
No
Is physical reliability an issue?
Yes
Yes
Mortality
No
Redoit has to fail somehow
No
Is cost to operate an issue?
Yes
Yes
Efficiency
Risk mitigation: does Tom have redundancy? If so, how much?

Superstructure Motors Control Switchboard Power Pole &Transformer
Access Stairs Inlet Sewer Caisson Drive Shafts Pumps
Inlet Screen
Wet Well
Dry Well
Sump Pump
55
Toms risk mitigation tactical options

Store key spares on site Modify piping to accommodate bypass pumping Provide proper electrical interface for generator Upgrade alarm system to real time SCADA Bury power line Build berm containment Increase redundancy (full) Other
56
Applying business risk to the organization

A business risk is the threat that an eventaction or inactionwill adversely affect an organizations ability to achieve its business objectives and execute its strategies successfully. Management of these risks has the twofold advantage of both avoiding and minimizing the risk itself, and enabling informed business decision-making based on an understanding of where the business vulnerabilities lie.
57
Mapping organizational risk: List risk elements

1. 2. 3. 4. 5. 6.
7.
8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20.
Terrorist attack on OCSD asset (e.g. treatment plant) Regional power outage (up to 24 hours) Safety incident on OCSD project Internal security breach of IT systems Increase in regulatory requirements Finding places to put our biosolids Potential loss of property tax revenue Internal labor unrest at OCSD Consultants ability to meet stakeholders expectations Level of service change for environmental stewardship (constituents of concern) Loss of public confidence in OCSD ability to perform core services Exceedance of pollutants of concerns in groundwater related to GWRS Internal business fraud (e.g. malfeasance) Non compliance by OCSD that result in fines by regulators and legal activities by NGO's Lack of incentives for early retirement of ageing staff that perform physical activities Poor two way communications across OCSD levels Lack of a leadership model in EMT and management level Changing technology vs. CIP decisions Board not supporting the funding required to support CIP/O&M (Full Cost Pricing) Ability to accurately forecast growth of county
21.
22. 23. 24. 25.
26.
27. 28. 29.
30. 31. 32. 33. 34. 35. 36.
Loss of Board institutional knowledge Not sustaining effective plant operations during construction Disasters that destroy collection system or plant Inability to appropriately fund staff at required technical strength Inability to balance strategic initiatives that support GWRS (Groundwater Replenishment System) with plant operations Emergency (operations level) communication among response teams and management for emergencies Lack of alignment of organizational structure with requirements for strategic initiatives Unable to put into effect funding agreement for SARI (Santa Ana River Interceptor) Unable to negotiate new operating agreement with SAWPA (Santa Ana Watershed Project Authority) Public ceases support for GWRS after investment is in place Inability to meet new air emission standards for generating facility Inability to balance impacts on neighbors with desire by public to reduce cost Cost to meet odor and air emissions standards from facilities Privatization of OCSD Recruiting and retention of staff in face of local cost of living Lack of succession planning at OCSD
58
Mapping organizational risk: BRE map

Critical Risks : None categorized as Critical
Sanitation Utility Risk Profile

Catastrophic
23
High Risks:
2 Regional power outage (up to 24 hours) 5 Increase in regulatory requirements 6 Finding places to put our biosolids 8 Internal labor unrest 9 Consultants ability to meet stakeholders expectations 19 Board not supporting the f unding required to support CIP/O&M (Full Cost Pricing) 21 Loss of Board instit utional knowledge 23 Disasters that destroy collection system or plant 28 Unable to put into effectiv e f unding agreement with key customer 30 Public ceases support f or potable water af ter inv estment is in place
Consequence
Major
1
30
6 2
28
Medium Risks:
1 Terrorist attack on assetS (e.g. treatment plant) 3 Saf ety incident on major projects 7 Potential loss of property tax rev enue 10 Lev el of serv ice change f or env ironmental stewardship (constituents of concern) 12 Exceedance of pollutants of concerns in groundwater 13 Internal business f raud (e.g. malf easance) 14 Non compliance that result in f ines by regulators and legal activ ities by NGO's 16 Poor two way communications across department lev els 17 Lack of a leadership model in EMT and management lev el 18 Changing technology vs. CIP decis ions 20 Ability to accurately f orecast growth of county 22 Not sustaining eff ectiv e plant operations during construction 24 Inability to appropriately f und staff at required technical strength 25 Inability to balance strategic initiativ es that support groundwater replenishment with plant operations 26 Emergency (operations lev el) communication among response teams and management f or emergencies 27 Lack of alignment of organizational structure with requirements f or strategic initiativ es 29 Unable to negotiate new operating agreement with key customers 31 Inability to meet new air emission standards 32 Inability to balance impacts on neighbors with desire by public to reduce cost 33 Cost to meet odor and air emissions standards f rom f acilities 34 Priv atization of organisation 35 Recruiting and retention of staff in f ace of local cost of liv ing 36 Lack of succession planning
19 5 8 21
Moderate
13 34
20
26
31 29
36 18
12 11 4
33 2422 17 25 14 35 32 10 16 9
27
Minor
15
Insignificant
Rare
Unlikely
Possible
Probable
Certain
Low Risks: Schematic represents allocation of risk rather than absolute values
Likelihood
4 Internal security breach of IT systems 11 Loss of public conf idence in organisation to perf orm core serv ices 15 Lack of incentiv es f or early retirement of ageing staff that perf orm phy sic al activ ities
59
The risk register building an action plan
60
Key points from this session

Given my system, which assets are critical to sustained performance? Key Points: Not all assets fail the same way Not all assets have the same likelihood of failure Not all assets have the same consequence of failure Understanding failure drives acquisition, maintenance and renewal management decisions. Associated Techniques: Failure analysis (root cause analysis; failure mode, effects and criticality analysis; reliability-centered analysis) Failure codes Probability of failure Consequence of failure Business risk exposure Asset list by business risk exposure level Asset functionality statements
61
Toms spreadsheet
62

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The Fundamentals of Asset Management

Step 6. Determine Business Risk (Criticality) A Hands-On Approach

Toms bad day

Fundamentals of Asset Management

Third of 5 core questions

Which assets are critical to sustained performance?

Fundamentals of Asset Management

AM plan 10-step process

Develop Asset Registry

Assess Performance, Failure Modes

Determine Residual Life

Determine Life Cycle & Replacement Costs

Set Target Levels of Service (LOS)

Determine Business Risk (Criticality)

Optimize O&M Investment

Optimize Capital Investment

Determine Funding Strategy

3. Which assets are critical to sustain performance?

Fundamentals of Asset Management

Risk is the heart of AM

Fundamentals of Asset Management

Fundamentals of Asset Management

Variables in business risk exposure

Fundamentals of Asset Management

Lets clarify terms

Fundamentals of Asset Management

All assets have a probability of failure

Fundamentals of Asset Management

Most common patterns of failures

Bathtub curvetypically applicable for mechanical and electrical assets

Fundamentals of Asset Management

Most common patterns of failures

Recall the four major failure modes

Fundamentals of Asset Management

The role of primary failure modes in determining the probability of failure

End of asset life

Has LOS changed from design?

Likely before other modes?

Likely before other modes?

Redoit has to fail somehow

Is cost to operate an issue?

Likely before other modes?

Fundamentals of Asset Management

Performance parameters What to monitor

Failure cause Failure behavior Failure mode

Failure end state Failure consequences

Function (It works)

Functional Failure (It doesnt work)

Defined by performance standards

Failure Mode Mechanism of failure

Failure Behavior Evident, hidden, random, P-F interval

Failure Consequences Cost, safety, environmental

Fundamentals of Asset Management

Cause and effect diagram

Burned out contactor

Fundamentals of Asset Management

Probability of failure (PoF)

Fundamentals of Asset Management

What are sources of Probability of Failure?

Fundamentals of Asset Management

Finding a proxy for measuring failure

Age? Usage? Condition?

Data distribution of asset performance