PREPARATION OF METHOD STATEMENT

Standard Format for Method Statement

1. Cover page (Title page)
   
2. List of Content
   
3. Purpose and Scope
   
4. Standards used or referred
   
5. Organisation
   
   1. Designation of Officers (named officers)
      
   2. Scope and Responsibility
      
6. Plants and Equipments
   
   1. Numbers and type of plant and machineries
      
   2. Certificate and Type of permits/certificate of fitness
      
   3. Specialised equipments (if any)
      
7. Specialised staff
   
   1. Designation of officers and workers
      
   2. Scope and responsibility
      
8. Construction Activities and Sequence of Works
   
   1. Preliminary works
      
      1. Pre-site checks
         
      2. Site survey and setting out
         
      3. Temporary works
         
      4. Location of works
         
      5. Level of workers competencies for each activities and works
         
   2. Main works
      
      1. Sequence of works to include persons involved
         
         1. Sequence of activity and work
            
         2. Construction dimensional tolerances and limits
            
         3. Holding points and approval before commencement of next activity
            
         4. Sketches, kinematics drawings, etc
            
         5. Maintenance of construction works
            
         6. Construction of work inspections and tests
            
         7. Material sampling, delivery and inspection
            
         8. Usage of plants and machineries
            
         9. Acceptance criteria
            
      2. Accesses to site
         
      3. Hours of works
         
      4. Approval process and/or special approval requirements
         
      5. Third party involvement or handover of work site or temporary access for nominated sub-contractors and/or contractors
         
      6. Specialist or Specialised contractor's method statement
         
      7. Construction constraints
         
      8. Energy and water usage and requirements
         
   3. Acceptance and Finishing Works
      
9. Legal requirements
   
10. Environmental measures
    
11. Health and Safety Measures
    
12. Risk Management
    
13. Design and/or Construction and/or Shop Drawings
    
14. List of Related Method Statements
    
15. Detailed Inspection and Test Plan
    
16. List of quality control forms
    
17. Standards, specifications and other documents listed in paragraph 4 above
    

Note:

The method statement submitted is not limited to the above statements but only the minimum requirements that are required in a method statement

Condition Assessment

Some questions and answers on condition assessment.

1.0 What is condition assessment?

1. Condition assessment is the act to quantify the physical state at a given point of time

2.0 Why do we need condition assessment?

1. To have a clear knowledge of the asset condition and how they are performing
2. Prioritisation of maintenance programs especially budgeting purposes
3. Formulation of predictive failure mode or analytical mechanism
4. formulation of maintenance strategies

3.0 What is the main ingredients of a condition assessment?

There are basically 3 main ingredients of condition assessment that is:

1. planning
2. investigation
3. analysis

4.0 What is the details for para 3.0?

1. planning

i. Must prioritise based on:

1. criticality

2. type of asset

3. age of the asset

4. rate of deterioration

5. economic value of the asset

(source: international infrastructure management manual)

ii. Evaluate the cost benefit analysis of condition assessment

iii. Implement periodic reassessment of condition assessment plan\

- The condition assessment plan must be resources loaded

- and fulfill SMART

v. Establish tools such as:

1. Manual

2. Standard Operating Procedures

2. Investigation

i. assessment techniques

1. Industrial or governing standards

2. Manufacturer’s manual

3. In-house manuals

ii. Type of investigation

1. Desktop review

2. Visual

3. Test (either in-situ or laboratory testing)

iii. Time frame

- Periodic or non periodic

iv. Cost of the assessment

1. Cost of assessment will be governed by:

a. Depth of investigation,
b. Extent of coverage (units involved, locations etc)
c. Extent of data
d. Use of manpower – internal or external, equipments, machineries,
e. Availability of data (from public domain etc)

2. Budget

v. Data collection

1. In-situ or calculated

2. Automation or manual

3. Analysis

• Future economic benefits
• Failure analysis
• Grouping of assets according to condition rating or grading system
• Customised analysis based on current needs and assessment

5.0 What is the outcome of condition assessment?

• Facility condition index
• Residual life or future economic benefits
• Acquisition of new assets or replacement of assets
• Maintenance and operations plans and strategies
• Maintenance prioritisation
• Budgeting

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Index on Asset Management

(Please click on the links to read the articles)

New articles

1. Essential initial documents in asset management - new topic updated 08 Feb 2010

Asset Management System/Tools/Enablers

1. Economic Evaluation
2. Information System
3. Perfomance Management
4. System Thinking in Asset Management
5. Risk Management
6. Whole Life Cycle Costing

Definition

1. Asset Definition
2. Asset Management Definition

Asset Management Fundamentals:

1. Asset registry
2. Roles and responsibility
3. Asset objectives
4. Service criteria
5. Asset condition and performance
6. Asset life cycle
7. User expectations
8. Asset stakeholders
9. Asset management objectives
10. Asset planning

General Interest

1. Perspectives in Asset Management
2. The Frequent Asset Management Question
   Why Do We Need Asset Management?

Essential Initial Documents for Asset Management

When an organization embarks on an exercise to procure an asset (s), the procurement documentation would be as perfect as the asset itself. But when the asset is procured and put into service, that’s where all problems start.

Firstly, the original procurement documentation is no where to be found,

Secondly, the person who holds the original procurement documentation is either retired or has moved out from the organization,

Thirdly, the asset does not have the proper documentation describing its physical capabilities or even life span or the type of maintenance needed.

So, what documentations that we need for assets?

The documentations are quite simple to obtain at the time the asset is procured but hard to retain when the asset is in service. The documentations are as follows:

a. The procurement documentation
b. The as-built drawings or the installation drawings (if applicable)

c. Quality assurance records (if applicable)
d. Manual (or operating manual)

The organization must keep these documents for as long as the asset’s service life or even design life. Whenever the organization move to a new complex or even a new office building, these documents are invaluable as the current office’s files.

To test our organization, just answer these simple questions:

a. For a start, do we have the office’s computer manual?
b. What’s the office’s computer service life?
c. How much is the cost of the original purchase?
d. Where are the licenses for the software?

If the answers are all “no” or “do not know”, then the organization need to start to obtain and retain the necessary documentations for the assets procured. Without these documentations, then the organization would find hard to maintain the asset or even to ensure the asset operate as it should be during its design and service life.

Just imagine, a cable stayed bridge or an aircraft does not have an operating manual. Would you feel safe to travel on it?

Economic Evaluation

The above economic evaluations are used and described in the International Infrastructure Management Manual (International Edition 2006). The manual also describe the use of Benefit Cost Analysis (BCA) and Multi-criteria Analysis (MCA) to support Optimised Decision Making.

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Information System

Asset Management Information System

Asset Management Information System is defined as the use of information and communication technology, which include data acquisition and processing, software, and hardware that are necessary to provide an essential support system for an effective asset management in an organization.

The use of electronic based system has become more apparent in a big and widespread organization, which need real-time, online and future information for optimized decision-making. The need to have an electronic based information system will depend on the following factors:

1. The cost of development
2. The cost of acquisition and maintenance
3. The expertise needed
4. The benefits that will be derived from the information system

The information system will be a non-physical asset except for the hardware and have to be managed in line with asset management principles. However, in the United Kingdom’s asset management requirements as in PAS 55-1, the information system is a pre-requisite to an effective asset management as defined below:

4.3.1 Asset Management Information System

The organization shall establish and maintain (an) asset management information system(s). The system(s) shall be designed and maintained to provide an adequate support and information to the organization in meeting all of the requirements set out in clause 4 of this specification. It shall include provision to support the development and implementation/achievement of the asset policy, strategy, risk identification, assessment and control, objectives, targets, plans. It shall also support all of the requirements related to the implementation and operation, checking and corrective actions and the management review.

The information shall be accessible to all relevant employees and other relevant third parties including contractors as appropriate.

Where separate asset management information systems exist, the organization shall ensure that the information provided by these systems is consistent.

However, the requirements do not specify specifically an “electronic-based system” or a computerized system, but the current technology is on using a computerized system that will enable online and real-time information.

To have an excellent information system, the ingredients are as follow, that is:

1. Be able to perform basic functionalities in asset management and fit for purpose
2. Be able to interface with existing and future systems
3. Having excellent data management
4. Having basic or advance analytical tools
5. Must be enterprise wide

System Functionality

The information system must be able to, as a minimum, to have the functionalities listed in the diagram below:

The organization must also develop an asset identification system to allow a unique identity to each individual asset in the organization. Without an asset registry, there will be no asset management, as we do not know what asset to manage. This is the first function of an information system that needs to be fulfilled before proceeding on to other systems as in the diagram above.

A simple audit will suffice to determine the current position of the organization in the asset management information system maturity model. From this model, a strategic framework on asset management information system will be developed in conjunction with the strategic framework on asset management of the organization.

System Interfacing

The information system must be able to interface with the existing manual or computerized system that is in existence in the organization. During the development phase, decision has to be made to either upgrade or interface with the existing system. This is crucial and the decision has to be made using asset management principles.

It is also worthwhile to look in newer technologies such as Geographical Information System (GIS), Global Positioning System (GPS), real-time condition monitoring system or even Remote Identification System using radio frequency identification device (RFID) and incorporate these technologies in the information system.

The organization has also to look at interfacing of field data from third parties or proprietary equipments/software especially on condition assessment equipments, off site or field measuring equipments, mobile field scanners, hand-held inputting device and so forth.

An information system without interfacing capabilities will be not be an effective system.

Data Management

The integrity of data must be ensured at all stages of collection and inputting of data. Introduction of a specific process in data collection and input will ensure the following, that is:

1. Correct data is collected and inputted
2. The data has economic value to the system and organization
3. Accurate data at all times.

The integrity of data is important and the organization must ensure at all times the data integrity is maintained at all stages of the data recognition, collection and inputting into the system. The best information system will fail if the data collected has no value and inaccurate, as the information system will give false reports and hence, false information. By having a specific process to handle data, the information system is ensured to have the level of data accuracy as desired.

The organization will also have to make a decision on the level of details that the organization needs, as every data is specific to each organization. Nevertheless, external factors also will determine the extent and depth of the details needed. The external factors are:

1. Legal compliance
2. Clients requirements
3. Government requirements

The above requirement can be done through an in-depth study of the external factors and the impact it has on the information system. Beside this, it is equally important to undertake a study on the user requirement before proceeding to the next phase of development of the proposed information system. These two (2) studies have to be done simultaneously in order to have the highest impact on the proposed information system

Analytical Tools

An information system without any analytical generated reports will only be a data reporting system and not an information system. Having this in mind, amongst the basic analytical tools to be incorporated in the information system are as follows:

1. Benefit-cost analysis
2. Life cycle costs
3. Net present value
4. Current and Future Trends
5. Graphical presentations
6. Modeling tools based on mathematical expressions

The more advanced analytical tools, amongst others are as follows:

1. Condition monitoring
2. Economic models
3. Decay models
4. Predictive models

By having all the analytical, data can be turned into useful information and key performance indicators can be monitored effectively. Hence, the performance of the organization can be displayed as a graphical and meaningful dashboard to be at every level of the organization.

Enterprise Wide

Lastly, the information must be at enterprise wide and be able to be accessed by all levels of staff involved in asset management. The level of use will have a bearing to the effectiveness of the information system, as the competency on the information system would differ at every level of the organization. In a learning organization, the level of use is not a problem for the organization, as the competency, role and responsibility are clearly specified and documented.

Conclusion

Information system is crucial in providing information for, as follows:

1. decision making
2. performance management
3. continual improvement
4. corrective and preventive actions
5. management review
6. knowledge management

The use of asset management principles is necessary in developing and procuring the asset management information system as the asset management information system is a non-physical asset (which include physical asset such as hardware) that has a service potential to the organization.

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Performance Management

Performance Management in Asset Management

Introduction to performance management

Much has been said about performance management where an organization has to measure its progress towards achieving its goals and objectives. In fact, most successful organization put much emphasis on performance management as one of the major management tools. Performance management has evolved from a mere financial reporting tool to become a major decision-making tool. Much of its success comes from the fact that organizations have become so big and widely dispersed all over the country and the board of directors needs to know the well-being of its company fast and real-time. Furthermore, performance management has become the most effective system in creating a goal-oriented culture in government agencies.

Performance management involves establishing data collection system, analytical tools, periodic or regular monitoring and reporting, communicating the performance, continual improvement programme and lastly, using suitable indicators. Even the display of the periodic monitoring and reporting mechanism, has evolve from a mere paper-based report to a more sophisticated online or real-time electronic system, which is predominantly known as dashboard. Some would say that performance management is only meant for the chairperson, board of directors or the head of an organization, but this is not the true scenario now. Performance management is a must for any dynamic and learning organization.

Performance is measured at every level and unit, which is the cascading approach in performance measurement. This is because that in every level and unit, the unit’s performance will reflect back on the overall performance of the organization and the unit must be aligned to the organization’s objective(s). Their performance indicator is not the key performance indicator of the organization, but their indicator merely shows the unit’s contribution to the overall performance of the organization. It shows their commitment and involvement in realizing the organization’s objective(s).

Nevertheless, the top-to-bottom cascading nature of indicator(s) in an organization is an important fundamental element in performance management. Rightfully, the lowest of the personnel must know the key performance indicator of the organization because their involvement is important to the success of the organizational performance management and for the organization to be able to see the actual big picture of its performance.

Performance management is not only meant for an organization but it is also meant for products and services rendered. It also focus on the effectiveness of the organization’s delivery system and aligning the whole organization towards achieving its goals and objectives. This is done by having a performance management plan (which incorporates the processes, systems and communication plan) and suitable key performance indicators.

The benefits of using performance management are as follows:

1. A systematic measurement system for the organization
2. True understanding of the organizational behavior
3. Enabling a continual improvement program
4. Allow benchmarking against other related organization or industry players
5. Creating a performance based culture in the organization

What are indicators?

There are three (3) types of indicators, which commonly known as:

1. Key Performance Indicator
   A measurement for the performance and progress of achieving the organizational business goals and this is the main performance indicator for the organization
2. Performance Indicator
   Measurements for activities or initiatives that are complementing the critical activities of the organization
3. Result Indicator
   Measurements of output from processes

Performance Management Process

In balanced scorecard concept, vision and objective are important input to measures. Hence, there are four (4) perspectives that need to be considered when putting up measures. The four (4) perspectives are as follows:

1. Financial
2. Learning and growth
3. Business processes
4. Customer

When identifying the key performance indicators, organization must reflect the above perspective(s) besides fulfilling the SMART requirements, otherwise the indicators are either results or performance indicators. The two (2) indicators will however demonstrate the overall picture of the organization, but not its performance.
(SMART: S= specific, M= measurable, A= attainable, R= realistic, T= time-bound or timely)

In establishing the key performance indicator, the top-down is more commonly used rather than bottom-up process. An illustration of this approach is shown below.

Typically, the performance management process specifically for asset management is as follows:

It is a simple process to implement, but the fundamental of this process is that key performance indicator directly relates to the objective(s) of the organization.

Preferably, various management tools should be used to identify the key performance indicators. The tools, amongst others are as follows:

1. Benchmarking
2. Scenario analysis
3. Brainstorming
4. SWOT analysis
5. PESTLE analysis
6. Gap analysis

Using Key Performance Indicators in Asset Management

In asset management, service level is an important aspect of measurement, which measures the ability of the asset to provide service. Amongst the key performance indicators in asset management are:

1. Facility condition
2. Deferred maintenance
3. Customer satisfaction
4. Sustainability
5. Whole life cycle
6. Maintenance norms or operating and maintenance cost
7. Reliability
8. Response time

A few key performance indicators above can be used, but a word of advice, it is far better for the organization to establish its own key performance indicators. The involvement of the whole organization in establishing and implementing a performance management system is ultimate goal of any organization. This is due to the fact that the whole workforce of the organization will be aligned to the same objective(s).

Resources:

1. Department of Public Works, Queensland Australia
2. The Balance Scorecard Institute

Topics of interest

(Please follow the links to read the topics)

Asset Management Tools

1. System Thinking in Asset Management
2. Risk Management
3. Whole Life Cycle Costing

Asset Management Fundamentals:

1. Asset registry
2. Roles and responsibility
3. Asset objectives
4. Service criteria
5. Asset condition and performance
6. Asset life cycle
7. User expectations
8. Asset stakeholders
9. Asset management objectives
10. Asset planning

System Thinking in Asset Management

What is a system?

The late Austrian Biologist Ludwig von Bertalanffy wrote “A system is an entity which maintains its existence through the mutual interaction of its parts”.

Therefore, a system is an interconnected items or dynamic activities performing as a single unit or entity whereas system thinking is simply the art of organizing the interactions between the interconnected and interdependent activities or items. In the case of a building, every item in the building contributes to a proper functioning and the building is a system. As such, every item is interconnected and interdependent of each other.

We have to look at building as system rather than as a rigid object. The item in a building is a subsystem of the building system and that building is a sub-system of a complex of buildings, and that building complex is a sub-system of a commercial hub, and so forth. If any of the sub-system failed, it will create a chain reaction to the sub-system and the system as a whole.

Furthermore, the earth is a system by itself and therefore we must look at system. To do that, we must possess system thinking. Fritjof Capra said that "the property of network is its nonlinearity as it goes in all directions. It may travel along a cyclical path and becomes a feedback loop".

The important concept of system thinking is that system thinking looks at multiple perspectives and emphasizing on the behavior as a whole not the parts, focusing on goals and performance not the output.

In asset management, we have to look at the asset as a whole and also, as a system. Every major activity in an asset life cycle is a system and it becomes a sub-system to the asset. We look at all angles, crossing disciplines and knowledge and we look beyond the fundamentals. Furthermore, community is a living system and assets are a sub-system to the living system.

As such, system thinking is fundamental and important ingredient to an excellent asset management.

How do we use system thinking approach in asset management?

1. Firstly, we must look at the asset as a system or maybe a sub-system to a bigger system
2. Then, develop a pattern of behavior for the asset, which is basically the asset life cycle (never use a single perspective of the asset, look at multiple perspective crossing boundaries and discipline)
3. Develop a model behavior of the asset
4. Simulate the behavior of the model
5. Develop an alternative approach
6. Simulate the alternative approach
7. Develop feedback loop

By simulating, we are asking questions about its behavior as a whole and we are looking beyond the fundamentals, and that is the beauty of system thinking.

Reading material:

1. http://www.systems-thinking.org/index.htm
2. http://www.fritjofcapra.net/index.html
3. http://www.thinking.net/
4. http://www.systemdynamics.org

Risk Management

Asset Risk Management

Risk can be defined as the combination of the probability of an event and its consequences (ISO/IEC Guide 73) and the possible effect can be either negative or positive. Nevertheless, risk management is focused on the management of the prevention and mitigation of the risks. Gone are the years when flipping a coin will give you a decision, now risks are identified at an very early stage. Hence, risk management is just a state being prepared for the worst, which we are always on top of it.

To manage an asset, there a number of risks involved that need to be assessed, such as:

1. External risk
2. Internal risk

A simple asset risk management model is shown below:

Risk Identification

External risk comes from external factors such financial risk, strategic risk, operational risk and hazard risk. Internally, the risks are nearer to the organization such as information systems, work force, internal financial control and so forth. The risk must be identified all activities and processes of an asset life cycle. There is risk in human behaviour such as unexpected behaviour and misinterpretation of instruction, which can categorized in any of the external and internal risk.

A simple template or even a questionnaire such as the figure below will assist in identifying all risks.

Risk Analysis

Once the organization has identified all risks that will be encountered, the risks are rated according to the probability of occurrence, criticality, impact and importance. All risks must rated to determine its mitigation priority, and it is done systematically by first looking at its probable effect to the asset. For example, unexpected human behaviour will cause rapid deterioration to the asset due to, such as, uncontrollable anger towards the asset. Another example would be that changes in customer would make the asset obsolete in shorter period, which new asset need to be planned and this mean capital expenditure.

A sample template is shown below:

Risk Evaluation

Risk evaluation involves processes to establish the costs, compliance to legal requirements or even environmental factors. This is done after risk analysis, which involve primarily rating the risk. There are a few factors that need to be considered in proposing a treatment such as the cost of mitigation, the effectiveness of treatment and compliance to existing legal environment.

Furthermore, risk evaluation involves decision-making on the risk and the impact of the risk to the organization and the asset concern whether to accept the risk without treatment or with the proposed treatment. Once the decision to treat the risks is accepted, the next step would be to treat the risk.

Risk Mitigation and Treatment

Risk mitigation and treatment is the process to reduce or even nullify a risk using the appropriate or proposed method. The process needs to be constantly monitored and communicate back to the stakeholders on the treatment effectiveness.

Risk Review

Risk review is a process of monitoring of the risk mitigation/treatment and emergence of new risks. Risk review also will highlight the effectiveness of the treatment, any issues in implementation of the mitigation measures and so forth. These reviews will be the basis of effective risk mitigation and treatment whilst acting as a knowledge database.

Risk Reporting

The risk management team shall generate and distribute periodic reports to stakeholders on implementation of the risk management program. The stakeholders need to know that the risk is effectively treated and the actual cost the organization has to bear.

Risk Management Plan

At the end of the day, the organization will have a risk management plan comprising of the above topic. The plan shall contain amongst others the structure for risk management, risk management policy, role and responsibility, monitoring frequency and so forth.

Publication

1. The Institute of Risk Management
2. Australian Standard 4360 Risk management portal