By Shane Johnson, Preservar CEO
In heavy industries, such as mining and manufacturing, the effective management of assets forms the backbone of operational success. We all know this and understand the consequences if we don’t follow the fundamentals, however, when the short-term needs of the business take over (frequently driven by price corrections or cost blow outs) there is a tendency to take short cuts – “if in doubt push it out”, as they say.
You will never see this in aerospace as the perception of risk if something goes wrong is far greater and decisions are made with a well-researched and scientific approach. In contrast, traditional asset management approaches (here on terra firma) often fall short in addressing the complexities inherent in maintaining and optimising assets over the long term. It doesn’t mean decisions to defer or reduce cost shouldn’t be made, just that science and robust conversations around risk should be part of it. All too often when only judgement is used (or trade in hope), I’ve seen it cost operations millions of dollars in downtime and lost production further down the track. In fact, when prices eventually recover or take off, our capacity to take advantage of the market change can be diminished by the poor performance of our assets. Let me introduce you to the subject of systemic asset management.
Understanding Systemic Asset Management
Systemic asset management transcends some of the conventional asset management (AM) methods of improvement by adopting a holistic approach to asset optimisation while positioning the business to take advantage of future plausible scenarios – whether positive or negative. Unlike traditional AM improvement methodologies, which tend to focus on short-term fixes and immediate/urgent needs, systemic AM takes a strategic and long-term view of the entire operational ecosystem. It involves scrutinising the interplay between various components of the system and identifying opportunities for comprehensive improvement at a systems level. This means that when the plausible scenarios do play out, we can either take advantage of the upside or defend the business through difficult times.
We need to look beyond the superficial symptoms that are causing operational issues and truly understand the underlying problems a business is trying to solve in the medium to long term. An example is when Preservar was called in by a client to increase the availability of a shovel fleet. During diagnostics we uncovered inefficient resource scheduling, inspection regimes, supply chain, operations and procurement issues as the root causes. Much broader system issues than anticipated were causing the mechanical failures. Only addressing the symptom would be like patching a rocket’s cracked exterior, when an overheating combustion chamber is the cause – a short-lived solution at best. With a systemic AM approach, we are able to address the source of the issue on a systems level, in this case, not only improving shovel fleet availability for the long term, but also identifying numerous other opportunities for improved efficiencies that also benefit other fleets. This holistic approach involves collaborating closely with all stakeholders, including executive teams, to align AM strategies with the broader business objectives and appropriately understand the quantum of risk involved in decisions that are being made.
The Path to Sustainable Growth
If you hope to reap the rewards of implemented AM solutions for years (not months) to come, ensure you partner with experienced people who utilise comprehensive, systemic AM models. Furthermore, pre-packaged, one-size-fits all AM solutions are not the answer. This is because the business’ needs and context are ever-changing. Your needs and operational challenges will evolve, so too should your AM system, with a scientific approach to asset decisions which adapts to the various business cycles.
Looking Ahead
As heavy industries navigate an increasingly competitive landscape, the importance of effective AM cannot be overstated. By embracing the principles of systemic AM, businesses can unlock new opportunities for growth and resilience. The journey may be challenging, but the rewards are substantial; predictable and sustainable operations, enhanced profitability, and a competitive edge in an ever-evolving market.
In conclusion, systemic AM offers a transformative framework for navigating the complexities of heavy industries. By embracing data-driven insights and adopting a strategic mindset, businesses can pave the way for a future defined by sustainable growth and operational excellence.