Assets Maintenance Report: Leadership, Risk and Life Cycle

This report examines the critical aspects of assets maintenance within an organization, focusing on stakeholder expectations, risk-based management, and the application of life cycle costing. It begins by emphasizing the importance of asset maintenance for all stakeholders, including customers, creditors, and management, and how equipment malfunctions impact their interests. The report then assesses the scope of the maintenance organization, highlighting the limitations of the current team and suggesting delegation of authority for more efficient operations. It further analyzes the documented systems within the maintenance department, including electronic linkages between departments for costing, spare parts, work planning, and condition monitoring. The report details the management's commitment to risk-based maintenance management across various project phases, from concept and design to decommissioning. It also explores the application of life cycle costing in decision-making, integrating it into the design process for long-term cost-effectiveness. The conclusion acknowledges the successful implementation of risk-based maintenance and life cycle costing but recommends empowering the maintenance team for timely execution. The report also addresses time value of money, availability measures, and maintenance performance indicators, providing a comprehensive overview of asset maintenance strategies.

Running head: ASSETS MAINTENANCE
Assets Maintenance
Name of the Student:
Name of the University:
Authors Note:

2ASSETS MAINTENANCE
Table of Contents
Answer to Question 1.................................................................................................................3
Needs and expectations of the stakeholders form the maintenance of specific assets:..............3
Scope of the maintenance organisation:.....................................................................................4
Level of documented system for maintenance department:.......................................................4
Commitment and support from the leadership for risk based maintenance management:........5
Application of life cycle costing in maintenance decision making in the organisation:............7
Conclusion:................................................................................................................................7
Answer to question 2..................................................................................................................8
Answer to question 3..................................................................................................................9
Answer to question 4................................................................................................................10
Reference..................................................................................................................................11

3ASSETS MAINTENANCE
Answer to Question 1
Introduction:
In the following report, an effort is being made to draw the attention towards the
importance of maintenance of the fixed assets of the company. In pursuance of that various
components of asset risk management are discussed including the management’s support for
the risk based management system, the expectations of the stakeholders from the
maintenance of the assets and proper study is conducted to find and discuss about the gaps in
the maintenance processes of the assets is conducted. Finally the scopes of improvement in
the existing processes are being suggested to the management for its consideration.
Needs and expectations of the stakeholders form the maintenance of specific assets:
The maintenance of the assets is not only the point of concern for the management of
the company rather it is the consideration of almost all the stakeholders of the company
directly or indirectly. The proper functioning of the assets clearly affects the stakeholders in a
particular way (Campbell & Reyes-Picknell, 2015). For instance in case of the halt in the
operations of the operations of an entity due to malfunction in its equipment and machinery
required for production, it will affect the customers of the company as the supply of the
product will get hampered. It will further hamper the creditors of the company as the
company will not be able to timely payback the dues because of the decreased revenue as a
result of halt in the operations of the business. Hence, every stakeholder of the company has

4ASSETS MAINTENANCE
his own sets of expectations from the company in respect of the kind of maintenance the
management is ensuring for its important and vital equipment.
Scope of the maintenance organisation:
The scope of the maintenance team is limited to the order received from the
management and execution of the same. The maintenance team doesn’t possess the authority
to conduct a maintenance check all by itself. The maintenance team waits for the orders to be
issued by the senior management for the conducting a maintenance exercise only them it
possible for them to perform their duty (Parra et al., 2016). It is a loophole that is present in
the way of functioning of the organisation with respect to late responses to the needs for
maintenance. If the due responsibility along with justifiable amount of delegation of authority
is exercised by the management then the function of maintenance of the equipment could be
undertaken in a more scientific manner than present. It will help the management to reduce it
replacement cost which is generally a lot more than the maintenance costs that it incurs.
Level of documented system for maintenance department:
It is referred to as presence of some formal manner of documentation systems for the
purposes of storage, collection, interrogation, analysis and reporting of information. These
are required for the proper functioning of all the elements of the maintenance management.
The organisation has various linkages present in the electronic format within the departments.
They are as follows:
a) Maintenance costing to financial management:
The records kept by the maintenance department regarding the total costs of maintenance
helps the financial management team to factor in the information while calculating the net
benefits that is expected of the production.

5ASSETS MAINTENANCE
b) Spare parts list to stores manager:
This record kept by the maintenance department helps the accurate and timely
procurement of the right kind of tools by the stores department. This ensures timely
conduct of the maintenance of the equipment (Chew et al., 2017).
c) Work planning to shutdown schedules:
This means the information regarding the time required by the maintenance team is
communicated to the management and the schedule of the timing for which the
factory will be in-operative during the day is communicated to the maintenance team.
This ensures proper cooperation among them.
d) Work planning to condition monitoring:
An effective record is maintained regarding the expected dates of conduct of
maintenance of the equipment and the present condition of the machines. This ensures
that in case of an emergency maintenance requirement the maintenance team provides
the same.
Commitment and support from the leadership for risk based maintenance
management:
The management is supportive and conscious about the implementation of the risk based
maintenance management. Being aware about the fact that all throughout the life cycle of the
project it is susceptible to certain risks, the management has divided the project into several
segments or components in whose respect the application of the risk management takes place.
They are as follows:
a) Concept and design-
The management effectively tries to reduce the risk of the project at the concept and
design part itself. This approach of the management is termed as “front end

6ASSETS MAINTENANCE
elimination” of risk or “front end minimisation” of risk. During the concept and
design part of the project, the management gives due attention on variety of areas
which are listed below:
1) Project Risk Assessment: In this area operations like feasibility studies and
financial risk assessments are undertaken.
2) Safety Risk Assessment: in this area studies on safety hazards, hazard and
operability and quantified risk assessment is undertaken.
3) Operational Risk Assessment: In this area critical machinery risk assessment,
reliability and availability studies and simplified failure modes and effects
analysis(SFMEA) are undertaken.
b) Construction :
During this phase of the project the management ensured that the capital equipment
and systems have been manufactured, installed and connected in a safe and reliable
manner (Kristjanpoller et al., 2017).
c) Production and operations:
During the production phase the scope of management to reduce the risk is
minimised. It gets restricted to installation of improved control systems that ensure
the safety related hazards and commissioning of improved maintenance practices
which ensures operational risks.
d) Decommissioning or disposal:
The management adopts proper facility design during this phase of the project. In
absence of consideration given on this behalf the team responsible for the task of
decommissioning finds itself amongst a variety of problems.

7ASSETS MAINTENANCE
Application of life cycle costing in maintenance decision making in the organisation:
Life cycle costing is an important economic analysis which helps in the selection of
the alternatives which are responsible for impacting the pending and future costs. It involves
comparison of the initial investment options and identification of the least cost alternatives
for a period of twenty years (Lee et al., 2016). The application of the life cycle costing
method by the management in the organisation is done as follows:
a) Integration of the Life Cycle Costing in the design process itself.
b) The building design process evolves from general concepts to detailed analysis of
the project.
c) For the purpose of ensuring effective development, commitments are made and
retained in respect of the building systems in the conceptual phase.
d) The building systems are analysed for appropriateness in the first stages of Design
Development Phase.
e) A commitment is made by the management on the direction of the system at this
stage and also further LCC studies are conducted which are focussed on detail
within each system.
Conclusion:
The management has been able to effectively implement risk based maintenance
management and simultaneous application of the Life Cycle Costing mechanism for the
decision making in the organisation. Going by the steps taken by the management this far, it
has been able to take steps to ensure that the expectations of all the stakeholders will be met.
However, the maintenance team of the organisation is still functioning as per the wishes and
whims of the management rather than on the basis of the need of the hour. In case
maintenance is effected when the machinery didn’t need it immediately the entity incurs

8ASSETS MAINTENANCE
unnecessary costs whereas avoidance of maintenance due to callousness of the management
causes it heavy repair or replacement costs. Hence the management should look forward to
delegation of authority to the maintenance team to ensure timely execution of the
maintenance function (Dack et al., 2017).
Answer to question 2.
Time value of money is referred to the idea that the money present at this moment is
worth more than the same amount in the future because of its earning capacity. Discounting is
used when the entity wants to find the present value of its investment for the purpose of
comparing it with the initial outflow. Compounding is used to determine the future value of
the present outflow of cash and comparing it with the expected results after the specified
period of time.
A B C D
Investment -10000 -12000 -15000 -12000
Annual receipts 5000 3000 6000 4500
Salvage Value 2000 2000 3000 2500
MARR 10% 10% 10% 10%
Period years 5 5 5 5
PW receipt 18953.93 11372.36 22744.72 17058.54
PW Salvage 3221.02 3221.02 4831.53 4026.275
Total PW of Cash inflow 22174.95 14593.38 27576.25 21084.82
PW of Investment 12174.95 2593.38 12576.25 9084.82
Annual Receipt 5000 3000 6000 4500
Annual cost -2500 -2500 -2500 -2500
Net AW 2500 500 3500 2000
FW Receipt 75525.5 45315.3 90630.6 67972.95
FW of salvage 2000 2000 3000 2500
Total FW of cash inflow 77525.5 47315.3 93630.6 70472.95

9ASSETS MAINTENANCE
Answer to question 3.
The different types of availability measures are as follows:
a) Instantaneous or point availability
b) Average uptime availability
c) Steady state availability
d) Inherent availability
e) Achieved availability
f) Operational availability
M ct
MTBM u
M pt
MTBM s
MTBM
MTBF
Failure
ptℒ

10ASSETS MAINTENANCE
Answer to question 4.
Maintenance performance indicators are used for the purpose of evaluation of the
effectiveness of the maintenance that has been carried out. It must be kept in mind that during
the development of MPI it is important to relate them to both the process inputs and process
outputs. Every company has to measure its maintenance performance in order to remain
competitive and cost effective. The following factors have to be evaluated in detail for the
purpose:
a) Productivity of labour
b) Organisation staffing policy
c) Training of management
d) Training of planner
e) Technical training
f) Planning of work order and proper scheduling
g) Control over stores material and tools
h) Preventive maintenance and maintaining equipment history
i) Monitoring of engineering and conditioning
j) Measurement of work and incentives
k) Information system
M ct

11ASSETS MAINTENANCE
Reference
Campbell, J. D., & Reyes-Picknell, J. V. (2015). Uptime: Strategies for excellence in
maintenance management. CRC Press.
Chew, M. Y. L., Conejos, S., & Asmone, A. S. (2017). Developing a research framework for
the green maintainability of buildings. Facilities, 35(1/2), 39-63.
Dack, D., Taylor, D., & McDonnell, D. (2017). Using a reliability assessment approach to
improve upgrade and renewal decisions of existing port and maritime
structure. Australasian Coasts & Ports 2017: Working with Nature, 322.
Kristjanpoller, F., Crespo, A., Barberá, L., & Viveros, P. (2017). Biomethanation plant
assessment based on reliability impact on operational effectiveness. Renewable
Energy, 101, 301-310.
Lee, T., & Tso, M. (2016, October). A universal sensor data platform modelled for realtime
asset condition surveillance and big data analytics for railway systems: developing a
“Smart Railway” mastermind for the betterment of reliability, availability,
maintainbility and safety of railway systems and passenger service. In SENSORS,
2016 IEEE (pp. 1-3). IEEE.

12ASSETS MAINTENANCE
Parra, C., Márquez, A. C., Viveros, P., Llort, G., & Aguilar, A. R. (2016). Case Study on a
Maintenance and Reliability Management Model Proposal: A Third Set of Locks
Project. Optimum Decision Making in Asset Management, 1.