A Best Practice Reference Model For

Asset Lifetime Extension

Rob van Dongen

Executive Consultant Mainnovation
IAM Conference, June 2012
 Agenda

1 Background & Objective VITALE

2 The VITALE reference model

3 VITALE products in more detail

4 How vital are the assets in the UK?

Market Research: How Reliable Is Dutch Installed Base?

Executed by TNS Consult

March - April 2010
Target segment: Dutch asset owners
1785 companies with 100+ employees
Response: 420 companies (= 23,5%)
Segmentation into 5 industries
Statistical justification: 95% accuracy
for each industry
Installed Base In The Netherlands = 400 Billion
Conclusion 1: Highly Reliable Assets, But ..

Asset Reliability
 Conclusion 2: Serious Concerns About Safety

% Companies with realistic probability on safety

incident
 Conclusion 2: Serious Concerns About Safety

% Companies with realistic probability on safety

incident
Conclusion 3: Aging Assets Cause Reliability Issues

55% of Dutch Asset Base

reaches end-of-life before 2020 Remaining Asset Lifetime (years)
Aging asset requires more
maintenance
Maintenance budget has been
cut due to economic crisis >
severe maintenance backlog
Current economic climate does
not allow replacement
Life time extension is only
option to keep industry in the
Netherlands
 Project objective

To develop a branch independent reference

model for lifetime extension
Based on knowledge and experience already
present in the Netherlands and beyond
Enabling the asset owner:
to continue creating value with their aging assets
in the future
to make the proper investment decisions

Improving the competitiveness of the

Dutch industry
Growth of the maintenance market
 Participants
Government Sponsors

Maintenance Consult
 Agenda

1 Background & Objective VITALE

2 The VITALE reference model

3 VITALE products in more detail

4 How vital are the assets in the UK?

 What is life time extension?

A project approach in order to extend the lifetime of

an asset until after the (original) design lifetime

The (maintenance) activity type in order to achieve

lifetime extension is strongly dependent on the
cause of the end of life
 Core elements of lifetime extension

A project approach in order to extend the lifetime

of an asset until after the (original) design lifetime

The (maintenance) activity type in order to achieve

life time extension is strongly dependent on the
cause of the end of life.
 Causes for end of life
Compliance aging

Asset integrity

Risk-

improvement
Performance
reduction

Technical aging
Economic aging

Asset Asset
Asset costs
performance
reduction
Cost

Function
adjustment

Asset
functionality
Commercial aging
 Causes for end of life
Compliance aging
TECC-initiators
Asset integrity
for lifetime extension
Risk-

improvement
Performance
reduction

Technical aging
Economic aging

Asset Asset
Asset costs
performance
reduction
Cost

Function
adjustment

Assettypes
TECC-aging
functionality
Scheduled initiation
Trend initiation
Commercial aging
Unforeseen initiation
 VITALE-reference model
Select assets that Make replace-or-
reach end of life extend decision
time (TECC) for your assets

Understand your
assets in terms of Prepare & perform
TECC aging LTE project

Know your assets

in terms of risk Update asset
profile and current configuration and
and expected age align organization
and inventory
 VITALE-reference model

Set up and
monitor cost- Monitor scope,
benefit-analyses lead time and
during entire life budget
cycle

Research
degradation Manage asset
patterns of critical data and
equipments documents
VITALE-reference model
 Agenda

1 Background & Objective VITALE

2 The VITALE reference model

3 VITALE products in more detail

4 How vital are the assets in the UK?

VITALE Process definitions
VITALE Controls
VITALE levels of professionalism
 VITALE Self Assessment
Step 1:
Determine
described
way of working

Step 2:
Compare current
state with
process
description

Step 3:
Test for each
process phase
the
achieved criteria

Step 4:
Determine the
maturity level
VITALE maturity level needs to be improved!

Average of 2.8 is reasonable well

No company has implemented a
fully integrated LTE process yet
Underexposed focus areas are:
1. Managing Asset Portfolio
2. Monitoring Vitality
A. Degradation Management
B. Business Case Management

For each sub-process a best

practice is available
 Case TenneT
TenneT TSO is the Dutch electrical grid asset
manager
Responsible for over 50,000 assets
To monitor the vitality of their assets:
TenneT introduced the Asset Health Index
Expected lifetime is compared with current
condition
Resulting in prediction of remaining lifetime
Prescribed maintenance strategy for each health
category
To select LTE-critical assets:
Outcomes of Health Index are input for corporate
risk matrix
Scenarios are developed for groups of high risk
assets
Resulting in new investment strategy:
From Risk Focused to Overall Balanced
Balance between risk, performance and costs
 Case Nedtrain

Nedtrain maintains a fleet of 2,800 passenger trains and 260 locomotives

For some decades Nedtrain executes an extensive maintenance research program for its most
critical systems and equipments, like:
Bogies
Compressors
Traction systems
Maintenance research includes:
Monitoring the degradation of components
Detecting failure modes
Predicting new lifetime of components
The result for a group of 586 bogies was:
67% increase of the maintenance interval
Life Cycle Cost reduction of 74%
Cost for maintenance research program appr. 0,02% of LCC
 Case ProRail

ProRail is asset manager of Dutch rail infrastructure

Asset management budget = 1.000M EUR/year
LTE process is managed by separate department called Long Term Asset Planning
All assets have their theoretical end of life date registered in SAP EAM
On 1st of January SAP a list is automatically generated with assets with theoretical end of life date
minus 7 years
All these assets will be inspected during the year on their actual condition and expected and of life
date, which is updated in SAP EAM
For assets that reach end of life two NPV scenarios are calculated (replace or extend)
Actual execution date will be determined based on expected end of life date and cluster
opportunities
 Agenda

1 Background & Objective VITALE

2 The VITALE reference model

3 VITALE products in more detail

4 How vital are the assets in the UK?

 Need for LTE-improvement

Peer group average of 2.8 is

reasonable well
Underexposed focus areas are:
1. Managing Asset Portfolio
2. Monitoring Vitality
A. Degradation Management
B. Business Case Management

For each sub-process a best

practice is available
There are no integral solutions
implemented yet
 Discussion

Are your assets approaching the end of life?

Will your company allow you to replace the
aging assets?
Do you have an approach for Life Time
Extension?
Would you be interested in an English
version of VITALE?

Which aging asset are you most concerned about?