Abstract
As assets deteriorate and/or new technology becomes available, asset-intensive industries across the world struggle with planning and justifying the necessary reinvestment to renew and modernize their equipment. This paper presents a methodology for rapidly creating an optimized long-term asset renewal plan that targets the maximization of value to the organization. It ensures alignment with top-level strategic objectives, while at the same time is built from the bottom up, based on the assets’ condition, system functions and criticalities. It also involves broad participation and buy-in from technical staff, so there is widespread consensus on the emerging priorities.
The methodology is based upon the 6-step SALVO Process for Strategic Asset Lifecycle Value Optimization, the product of a 5-year multi-sector R&D collaboration programme. Benefits of the method include the ability to calculate and demonstrate the monetized value, risks and other business impacts generated by each proposed intervention at different potential timings, and the optimization of combined effects within any overriding constraints (such as budgets, resources or timing commitments). This involves quantifying and modelling the trade-offs between Capex, Opex, risks, performance and sustainability, with mixed quality data and expert/tacit knowledge, using state-of-the-art decision support tools. It also achieves, usually for the first time, true alignment between technical and financial departments, providing a transparent and auditable basis for the interventions and funding requirements. A case study is demonstrated and discussed, with lessons learnt, from the successful creation of a 10-year renewal and modernization plan at a large electricity transmission company (ISA CTEEP) in Brasil. This work formed part of a wider 3-year asset management innovation project under the R&D programme supported by the Brazilian electrical sector regulator, ANEEL.
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References
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Trento, S., Woodhouse, J., Jay, P. (2022). Building an Optimal Long-Term Asset Renewals and Modernization Plan Through Quantified Cost/Risk/Performance Value. In: Pinto, J.O.P., Kimpara, M.L.M., Reis, R.R., Seecharan, T., Upadhyaya, B.R., Amadi-Echendu, J. (eds) 15th WCEAM Proceedings. WCEAM 2021. Lecture Notes in Mechanical Engineering. Springer, Cham. https://doi.org/10.1007/978-3-030-96794-9_16
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DOI: https://doi.org/10.1007/978-3-030-96794-9_16
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