SKF Reliability Systems - Library

Use of an Asset Productivity Index
in Benchmarking Performance of
Productive Assets
Steve Berquist Fluor Operations & Maintenance (Australia)
(A Paper Presented at ICOMS Asset Management Conference, Sydney 2009)
This paper describes an approach for developing an overall Asset Productivity Index (API) for capitalintensive
productive physical assets. The API is a suite of process metrics and results metrics that
Fluor has grouped and weighted to provide an overall single value know as the API. The use of this
approach in asset performance improvement step change programs is discussed together with issues
surrounding getting the balance right between process and results metrics. The use of metrics to set
targets for step-change improvement programs together with the need to recognise both the time
domain and logical relationship between metrics when change is being implemented is addressed.
Finally an example is provided of the use of the API using a case study.
INTRODUCTION
The use of data for benchmarking the current level of performance of an organisations maintenance and asset
management function is common practice in mature industries. Various industry specific organisations provide
a service calculating a wide range of metrics using customer data provided and then reporting performance
compared to the total population of customer benchmarks recorded. The aim is usually to create awareness
of those areas where a company’s performance is below industry top quartile in any given metric and to then
decide what action if any to take. Often this may result in arranging visits to other companies to learn of the
practices they used to achieve top quartile results or else using consultants or other industry experts to advise
what to do to improve.
One of the challenges faced by maintenance and asset management professionals in preparing to commence
on a program of benchmarking and subsequent improvement actions is to convince senior business executives
that there is significant business benefit available from doing so i.e. a leap of faith is not required. Benchmarking
projects can be expensive often requiring a significant commitment of internal resources together with the
fees of the benchmarking organisation. Step change improvement projects embarked upon following a
benchmarking study require detailed justification to secure the funding required.
Benchmarking studies often produce a bewildering number of metrics and charts showing where the audited
company sits compared to others. The reports are voluminous often and there is usually little guidance as
to which metrics are more important nor to which ones should be the focus of management attention before
others when it comes to taking action to improve.
The time lag between process metrics improving and results metrics improving is another risk to management
commitment to change programs with long delays often leading to doubt and loss of faith that the program
will succeed. Overly optimistic claims of the rate of improvement made to secure management support for
proposed change initiative can ultimately lead to loss of credibility with the program terminated prematurely
due to lack of timely results.
Fluor has developed an approach called the Asset Productivity Index (API) that uses a focused collection of
maintenance and asset management metrics weighted together to provide an overall single measure of an
organisations current success at generating asset productivity for the business. The API is calculated using
data collected from the results currently being achieved by the asset and is usually combined with a diagnostic
audit to present the performance gap between current and potential future performance available. A detailed
step-change improvement plan is then developed if the business benefits from closing the performance gap
are quantified as significant. Once an organisation decides to embark on a program of change in order to
achieve improved business outcomes the API allows measurement of progress towards this objective.
THE ASSET PRODUCTIVITY INDEX (API)
Definition of API Suite of Metrics
The API is comprised of the following collection of Key Result Areas (KRA’s) that the authors company believes
provides a balanced scorecard of success in asset management’s delivery of business benefit from productive
assets. The approach is similar to the calculation of a Consumer Price Index (CPI) where a basket of consumer
expenditure items is weighted to produce an overall index that can be trended as a measure of inflation and
the cost of living. Another example is from the health and fitness sector where a suite of measurements from