APPLICATION OF THE PHYSICAL ASSET MANAGEMENT IN THE

CITY OF CAPE TOWN WATER SERVICES

THABANI MHLONGO

Research report presented in partial fulfilment of the

requirements for the Degree of Masters in Business
Administration at the University of Stellenbosch

Supervisor: Dr. J Smith

Degree of Confidentiality: A

Graduation December 2010

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Declaration
By submitting this research report electronically, I Thabani Shadrack Mhlongo, declare that the
entirety of the work contained therein is my own, original work and I am the owner of the copyright
thereof (unless to the extent explicitly otherwise stated) and that I have not previously in its entirety
or in part submitted it for obtaining any qualification.

7207075613087
Thabani Mhlongo

13 October 2009

Copyright 2009 Stellenbosch University

All rights reserved

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Acknowledgements
I would like to thank my family, Mayibongwe, Ndumiso and Langelihle for their understanding,
patience and support throughout my studies. I also like to thank Victoria, Charity and Zama who
provided me with technical support and assistance during my research. I also wish to thank the
people from the City of Cape Town who contributed a lot of information towards this report. Lastly, I
would like to thank Dr Johan Smith for his willingness to accept me as his student for this research
report.

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Abstract
The City of Cape Town water services is currently operating on the reactive mode and their
maintenance system is not effectively and efficiently utilized. The lack of proper utilization of
Physical Asset Management (PAM) has resulted in the technical department failure to meet the
departmental objectives of providing planned and scheduled maintenance activities, reducing
equipment downtime and ensuring planned delivery of quality spares at the appropriate time.
The aim of the report is to provide guidance in the implementation of physical assets management.
The report looks at different maintenance strategies available and evaluates the current operating
scenarios for the department and further recommends the relevant strategy that will suit the
department. Physical asset management as a maintenance program provides an effective planned
and scheduled maintenance system to reduce labor and downtime. This ensures that the correct
materials and parts are utilized and that the workmanship is of a high quality. A Maintenance Plan
provides documented and sequenced tasks with labour and types of material required to execute
the plan.
Infrastructure assets are systems that serve defined operational needs, where the intention is to
maintain the asset for continual use on a certain level. One of the main aspects in infrastructure
network is the degree of interdependency not only within a particular asset network but also among
networks. The failure of one component within a network may undermine the performance of other
networks. One of the major objectives in an infrastructure network is to maintain the necessary
service level through continuous maintenance while ensuring cost effectiveness
The initial step is to choose certain maintenance tactics and then decide how often these tactics
will be performed. The frequency of maintenance, its actions or tactics depends on the current
condition of the equipment which is linked within the technical characteristics of failure and specific
monitoring technique.
Regardless of the system you select, you must start from where you are and then develop an orderly series
of steps to get where you want to end up, so start by assessing your current situation. The most essential
ingredient in your maintenance management system is the people. An excellent system run by poorly trained
or unmotivated people will be adequate at best but well trained people with positive attitudes can make an
excellent system world class.-Thomas Westerkamp

TABLE OF CONTENTS
Declaration..
Acknowledgements...
Abstract...
Table of contents.......
List of figures......
List of tables.................................................................................................................
List of appendices...........................................................................................................
List of acronyms..............................................................................................................

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CHAPTER 1- Introduction and background................

1.1 Introduction...
1.2 Statement of the problem...........
1.3 The research objectives......
1.4 Assumptions and delimitations..
1.5 Plan of study.........
1.6 Research design and methodology......

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CHAPTER 2 Literature and physical asset management strategy perspectives. 7

2.1 Introduction....... 7
2.2 Defining physical asset management . 7
2.3 Different physical asset models.................9
2.3.1 Campbell uptime strategy.......... 9
2.3.2 Pragma asset management improvement plan strategy 11
2.3.3 International infrastructure management manual strategy........ 12
2.3.4 Worley international......... 15
2.3.5 Why is physical asset management economically important?............................... 17
CHAPTER 3 General asset management plan framework...
3.1 Introduction..
3.2 Maintenance management framework .....
3.3 Developing an asset management plan
3.4 Strategy development
3.4.3 Status analysis...........
3.4.4 Asset management objectives................
3.4.5 Asset data classification.
3.4.6 Data prioritization.
3.5 Asset register..
3.5.1 Asset register set up.
3.5.2 Managing asset register
3.5.3 Data capturing.
3.5.4 Replacement program and costing.
3.5.5 Provisional asset management plans.
3.6 Physical asset management development.....
3.6.1 Attributes
3.6.2 Basic condition assessments...
3.6.3 Prioritization based on condition.

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3.6.4 Critical asset identification..

3.6.5 Maintenance history data collection.......
3.6.6 The next generation maintenance plans
3.6.7 Documentation for decision making.
3.6.8 Determining the target level of service..
3.7 Physical asset management implementation and monitoring..
3.7.1 Maintenance Procedures....
3.7.2 Work order system..
3.7.3 Creating a job card.
3.7.4 Planning and scheduling tools..
3.7.5 Materials management
3.8 Maintenance tactics..
3.8.1 Condition based maintenance
3.8.1.1 Vibration..
3.8.1.2 Lubricants
3.8.1.3 Temperature..
3.8.2 Preventative maintenance..
3.8.3 Expected cost of maintenance.

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CHAPTER 4 Measuring maintenance performance..

4.1 Introduction
4.2 Measuring maintenance productivity......
4.3 Equipment performance measurement....
4.4. Process performance measurement..
4.5. Information management system...
4.6 The balanced score card...
4.6.1 Financial perspective..
4.6.1.1 Direct financial benefits..
4.6.2 Customer perspective.
4.6.3 Internal business process..
4.6.4 Learning and growth

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CHAPTER 5 Assessment of the maintenance strategy for water and

sanitation services ..
5.1 Introduction..
5.2 Organizational climate and culture..
5.3 Expertise and competence...
5.4 Maintenance management systems and procedures...
5.5 Fixed asset register..................
5.6 Computerized maintenance management system
5.7 Maintenance planning, scheduling and control...............................
5.8 Reliability maintenance management...................
5.9 Material management.............
5.10 Fleet management........
5.11 Contracts........
5.12 Conclusion......

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CHAPTER 6 Proposed strategy for technical services within water and sanitation.83
6.1 Introduction.... 83
6.2 Implementation approach.
84
6.2.1 Phase 1: Assessing the current asset management status and framework
84
6.2.2 Phase 2: Condition assessment and performance monitoring.
86
6.2.3 Phase 3: Reliability and monitoring 90
6.3 The maintenance management planning........ ... 93
6.3.1 Important elements of maintenance planning.. 93
6.3.2 Maintenance categories 94
6.3.3 Process of maintenance analysis 95
6.3.4 Creation of the maintenance plan.. 97
6.3.5 Maintenance system. 98
6.4 Conclusion..........99

CHAPTER 7 Summary, conclusion and recommendations...................

7.1 Chapter introduction...
7.2 Summary of research results...
7.3 Conclusions..
7.4 Recommendations.

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List of sources.....109
Appendices..........................................................................................................................111

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List of Figures
Figure 2.1: Uptime maintenance strategy model..10
Figure 2.2: Asset management process14
Figure 3.1: Asset life cycle18
Figure 3.2: The relationship between maintenance and operations.....28
Figure 3.3: Maintenance analysis process....29
Figure 3.4: The required information on a job card..31
Figure 3.5: The space where the required task or work required is entered33
Figure 3.6 Material management process.34
Figure 3.7: Probability of failure...37
Figure 3.8: Relationship between different maintenance related cost..40
Figure 4.1: Cost strategies...46
Figure 4.2: Measures to benchmark performance...49
Figure 5.1: Maintenance backlog per section...59
Figure 5.2 Backlog of job cards per month60
Figure 5.3: Average reactive versus proactive work percentage for 2008...61
Figure 5.4: Maturity Graph...64
Figure 5.5: Planning and review process..67
Figure 5.6: Staff utilization due to lack of planning..68
Figure 5.7: Maintenance management tactics..79

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Figure 6.1: Condition monitoring process.88

Figure 6.2: Decision matrix..89
Figure 6.3: Computerized Maintenance Management System objectives......91
Figure 6.4: Reliability Centered Maintenance implementation..92
Figure 6.5: Turning cost centre into profit centre.....96
List of Tables
Table 3.1: Development of an asset management plan...................................................................20
Table 3.2: Implementation and Monitoring phase............................................................................21
Table 3.3.Classification of an asset on the system for horizontal and vertical identification.........23
List of Appendices
Appendix A: Maintenance and Equipment Audits.111
Appendix B: Maintenance Strategy Overview.......116
Appendix C: Maintenance Strategy tree........................................................................................117

List of Acronyms
AM

Asset Management

AMP

Asset Management Plan

AMiP

Asset Management improvement Plan (Pragma)

CMMS

Computerized Maintenance Management System

DCF

Discounted Cash Flow

EAMS

Enterprise Asset Management System

ELEC

Electrical

ECSA

Engineering Council of South Africa

IIMM

International Infrastructure Management Manual

JIT

Just In Time

KPA

Key Performance Areas

MRP

Material Requirement Planning

M &O

Maintenance and Operation

MM

Material Management

MTTR

Mean time to repair

MIS

Management Information System

NPV

Net Present Value

NIMS

National Infrastructure Management Strategy

OEE

Overall Equipment Effectiveness

PAM

Physical Asset Management

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PCS

Process Control Systems

PM

Plant Maintenance

RCM

Reliability Centered Maintenance

ROI

Return on Investment

SMAM

Strategic Municipal Asset Management

SOP

Safe Operating Procedure

SWP

Safe Working Procedure

TQM

Total Quality Management

USA

United States of America

WSDP

Water Services Development Plan

WSP

Workplace Skills Plan

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CHAPTER 1
INTRODUCTION AND BACKGROUND
1.1 Introduction

The National Infrastructure Management Strategy (NIMS) was adopted and approved by the
Parliament of South Africa in August 2006. The primary objective of the strategy was to strengthen
the regulatory framework in governing, planning and maintenance in the public infrastructure and
more importantly to assist in the process of continuous improvement. The key process of NIMS is
to create an emphasis beyond operational issues of infrastructure including reliability and
sustainability within the industry.
Production capacity is a function of engineering design, physical constraints and established
managerial practices. Production results from the application of physical assets. The effective
output of the operating environment can be increased through a systematic analysis and alteration
of the physical asset. The responsibilities for such effectiveness are held by management,
operations and the maintenance system. The desired effect of this analysis is an increase in
production capacity, without the requirement for additional capital asset investments.
Maintaining an asset cannot reduce the inherent probability of failure produced by the interaction of
physical limiting factors. However, the incorporation of dependability oriented innovations centered
in engineering produces a mechanism for systematic analysis that improves the reliability of
operating within the environment.

Furthermore, the implementation of resulting programmes

reduces the inherent probability of failure, increases the availability of production capacity and
optimizes asset performance (Bleazard & Khu, 2001:36).
The inefficient use of resources for infrastructure has placed a major burden on public finances,
diverting resources that could be used for social upliftment in the form of education, healthcare and
other social development initiatives. Most organizations tries to meet the infrastructure needs
through investment in infrastructure creation without recognizing the long term life-cycle costs
associated with the on-going operations, maintenance and renewal of infrastructure (Urquhart &
Bush, 2000:3)
Understanding which assets are mission-critical to a plan will ensure the need to focus and assist
in prioritizing the allocation of limited resources. Asset managers need to understand the failures of
each asset because this directly influences the type of maintenance required. An advanced and

co-operative partnership between production and maintenance will produce a better planning
schedule. With the help of a skilled planner, the plan can be implemented and developed.
Valuable and precious resources are lost when not enough time is allocated for maintenance.
Having proper information and a management system with strong supporting systems can help to
plan and control a business ensuring that accurate information, analytical capabilities and skills are
in place for value-added improvement (Coetzee, 2009:2).
1.2 Statement of the problem
This research aims to establish the relationships between physical asset management strategies
and business objectives. The study will analyze current models used in the industry, especially in
the water department within the City of Cape Town that maintains, operates and manages the
physical assets. The analysis will aim to establish the gaps within the current asset management
strategy and the best practices which should be followed.
The research questions are as follows:

Can physical asset management models that are established and recognized
internationally be used in the water and sanitation companies and organizations in
South Africa?

What are the fundamental requirements for the implementation of sustainable asset
management practices?

Are the applications of physical asset management models beneficial to organizations

and companies?

1.3 The research objectives

This research will review the literature in the field of physical asset management which includes
different models developed for this purpose and maintenance management philosophies. The
studys aim is to provide a clearer understanding of the role of physical asset management in
medium or large organizations and how this impacts and influences the quality of management in
their operational asset base.

The key elements of physical asset management are:

A well defined service level and performance standard which are linked to strategic
goals and objectives

Equipment condition and life cycle approach

Investment objectives (IIMM 2006 Version 3: 1.6)

These key elements provide the platforms to develop the basic design and techniques to manage
and provide replacement programmes as well as project financial outlays. The next approach
involves the collection and analysis of detailed information concerning the asset condition,
performance, life cycle cost and any management options. The highlighted challenges faced by
waste water and water treatment plants in water utilities provide an opportunity for the
development of an asset management plan (AMP) which will enable water utilities and
municipalities to manage and maintain the infrastructure as well as develop an infrastructure life
cycle programme.
AMP is a long term tactic for managing infrastructure to achieve the organizations strategic goals.
The plan provides mechanisms for long term strategic planning and capital budgeting. The plan
also includes the following:
Organizational strategic goals;
Level of service delivery and performance standards to be used for measurement;
Growth and demand projections;
Asset management strategies/tactics;
Financial projections including cash flow forecast; monitoring, control and review mechanisms
for an asset improvement plan.
The objective of physical asset management (PAM) is to develop and maintain the infrastructure to
ensure that asset requirements and asset management strategies are driven by defined service
levels and performance standards. Scarce financial resources must be properly allocated and
managed to optimize investments in the infrastructure. The life cycle of an asset is considered
when determining asset operations, maintenance, renewal and development strategies (Schneider,
2000:2)

The requirements to fund depreciation and corroding of waste water infrastructure have resulted in
an intensive drive to focus on both valuations of infrastructure and improvement of physical asset
inventories and skills. The life span of waste water infrastructure is far below that of any other
water or electricity infrastructure due to the corrosive nature of waste water and the operating
conditions. Most plants contain

outdated infrastructure built over 30 years ago and the

unavailability of compatible spares for most of the equipments poses a serious danger to human
life and the environment.
The average life span of a wastewater treatment plant according to the sanitation department of
the City is about 20 years whereas some of the current operational plants are currently over 30
years old. In most waste water organizations there is no standard equipment list, especially those
of vital sewer networks. The inventory and spares become obsolete creating a major problem
when, for example, pumps need to be repaired or replaced.
The responsibility and challenges faced by the company are to develop a sustainable infrastructure
asset management. This system must provide planning and have an appropriate improvement
programme for applying and delivering the best practices while moving towards a reliable asset
management system. The strategy aims to address the most difficult challenges faced by the
company, with the main challenge being the successful identification of gaps and how to
implement action plans within the current system.
1.4 Assumptions and delimitations
The study focuses on water and wastewater treatment plants that are operated and maintained by
the City of Cape Town. The focus will be on the operations and maintenance systems in the water
and sanitation departments.
1.5 Plan of study
The research will develop systems and mechanisms to be used for maintenance planning,
measuring performance, productivity and resource utilization to ensure equipment and resource
reliability.
The study will develop the following three research propositions that aim to model the requirement
of an integrated asset management framework in an organization.

The requirement for an appropriate linking mechanism in considering asset

management for business decisions is by encouraging discussions between planners,
operators and maintenance personnel.

The requirement for management processes to monitor the relevance of physical asset
management requirements and monitoring their performance.

The requirement for appropriate skills and competencies within organizations to monitor
and continuously review procurement or management strategies and take advantage of
advances in technology development. The analysis will look at the organizational
structure, communication processes, work flow and resources available against the
work load for different teams. Issues of management will also be examined. The
responses from all relevant stakeholders will be analyzed and information will be
gathered from operations and maintenance manuals.

The information on the status of the equipment will be prioritized and categorized once all data on
the current status conditions of the equipment/maintenance system have been assessed. The next
step would be to select a maintenance option for the particular plant and machinery and then enter
the option into a maintenance system.
1.6 Research design and methodology
This research made use of structured interviews, discussion forums and system analyses to
determine the current practices used by the water and sanitation department within the City of
Cape Town.
The literature review traced the evolving role of physical asset management and management
practices against a background of rapid technological change and changing emphasis in
management thinking about how best to manage business resources in fulfilling corporate
objectives.
The research will be structured into three parts:
Literature review: The first part will provide an historical overview of (i) the role of physical asset
management by water and sanitation organizations and, (ii) a review of the economics of
operational asset management with regards to resource management and asset life cycle.

Models for physical asset management: The second part is an overview of developments in
business management that affects the practice of physical asset management. In this section the
research will also examine the various models and variables and current options of asset
management. Currently, practices are not in line with internationally recognized procedures. The
researcher will use qualitative data that will be collected through interviews and interactions with
the relevant stakeholders within the City of Cape Town.
Physical asset management: The last section will identify the gaps and recommend ways of
implementing the best practices in the water and sanitation organizations.

CHAPTER 2
LITERATURE AND PAM STRATEGY PERSPECTIVES
2.1 Introduction
The benefits of maintaining physical assets correctly includes financial and capability gains. An
asset is meant to provide a required service on a continual basis. The cost of maintaining physical
assets vary, depending on the life stage and usage. Several different strategies are employed by
various experts to ensure that the equipment is reliable.
2.2 Defining PAM
An asset management system represents the latest evolution in the traditional facility management
approach and focuses on maintenance services and reliability. The services concentrate on
achieving long term maintenance cost reduction based on applying innovative maintenance
strategies in a total cost approach. (Heinemann, 2002:1)
Rather than relying on the bidding process in its requests for proposals, asset management relies
on a more strategic and long term asset management system with cost control in mind. This can
help municipalities to standardize their systems and reduce the inefficiencies of managing multiple
systems, components and technologies from a variety of vendors which immediately reduces
process cost (Garibay & Ronsivalli, 2008:36).
Computerized maintenance management systems (CMMS) and enterprise asset management
systems (EAMS) have changed little conceptually in the past 25 years. Unlike their operational
counterparts, enterprise resource planning packages which have undergone several significant
changes continue to receive a lot of attention. Insufficient attention is given to extending the core
functionality to take real advantage of EAM systems potential, not only for maintenance functions
within organizations but also for the entire business. Developing such a strategy requires the
correct data and monitoring equipment. It also requires a departure from the breakfix
maintenance strategies (Dunks, 2007:17).
An issue related to operational excellence that frequently arises is that of physical asset
management. A number of articles covering this topic have developed excellent ideas. But these
articles are typically related to maintenance management rather than true asset management.
Calling the process described asset management does not lend it greater business credibility and

is therefore an important shift in thinking. For one to excel in asset management, it is essential to
ensure that business expectations for the assets are operational in the short and long term.
Furthermore it is vital to understand the assets current condition and capacity relative to the
business requirements now and in the future (Moore, 2006:35).
The majority of asset management software applications focus only on the maintenance and
availability of plant equipment especially instrument assets. Although instrument maintenance is
the key element of plant asset maintenance strategy, maintenance improvements by themselves
do not maximize the performance of the overall manufacturing asset base. Demands to optimize
plant operations with this limited asset management focus may result in a degradation of
performance. Optimizing plant assets to meet business objectives requires a holistic approach to
asset management that goes well beyond the traditional focus of asset management software and
contemporary means (Fitzgerald, 2005:34).
Asset management is an evolving process that improves in condition, performance and operational
cost requirements which can then become better understood. To ensure that supporting activities
are improved and incorporated into asset management plans, an improvement plan is required to
accomplish this in a planned and progressive manner. A typical methodology for preparing an
asset management improvement programme is to review its current status and level of
sophistication within the organization and the implementation of asset management activities,
asset data and knowledge, reliability and accessibility, information systems to support asset
management process and plans to identify the optimum life cycle of management tactics and
resources (Worley International, 2000:9).
Initially asset management begins by asking why the asset is required and how it relates to the
business plan. Subsequently a closer examination sets the purpose, function(s) and standards of
performance. It is then justified by comparing costs to benefits and ranked as an investment option
by the company. After company approval, a detailed design and the specifications are described,
after which the asset is constructed or procured, installed, and finally operated and maintained.
Physical Asset Management (PAM) can be described as a set of processes, tools, performance
measures, cross functional collaboration and teamwork to optimize the complete life cycle impact
of the physical asset on the business performance (Campbell, 1995:13).

The reliability centered maintenance (RCM) is the method for determining the most appropriate
policy for any given asset in its present operating context. (Campbell 2006: 224).
The benefits of reliability centered maintenance (RCM) is that it can work for any type of utility
including electric, gas, water and waste water. It can increase efficiency and cut costs while
providing regulated utilities with the evidence they need to prove compliance with stringent
guidelines covering basic quality of service and service delivery (Geraghty, 2001:37).
2.3 Different PAM models
PAM focuses on performance-based maintenance systems. The two major benefits derived from
PAM models are reliability and quality of service. The type of maintenance focuses on two
strategies: reliability centred maintenance and quality management. The following section looks at
various strategies recommended by asset management specialists.
2.3.1 Campbell uptime strategy
Maintenance improvement fails when there is little or no understanding of the situation at hand.
There may be a strong inclination in the department to retain the status quo or this could lead to
friction between production and maintenance. Technically, it may imply a lack of knowledge about
automation or how to predict probable failures (Campbell 1995:13)
Campbell (1995:12) described the maintenance strategy as shown in Fig. 2.1. The foremost
requirements in any business plan are the needs of the customers, shareholders and other
stakeholders. The key objective for each function and element in the business strategy is drafted
with those elements in mind. Maintenance is likely to have the following targets:
Maximise the production rate of a particular product
Phase out the operation of a plant or product line
Add productive capability (assets) for another plant
Eliminate stores inventories through vendor collaborating.

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Campbell (2006:21) described the following four objectives as the foundation of the maintenance
vision as it would shape the annual plans and budgets of the department.
To re-engineer the entire maintenance management process with particular emphasis
onpreventative and planned work
To select and implement a computerized maintenance and inventory management system
To introduce a multi-skilling pilot project in conjunction with the local union
To augment the short, medium and long range maintenance planning capabilities

Fig. 2.1 Uptime Maintenance Strategy Model (Source: Campbell, 1995:12)

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2.3.2 PRAGMA AMIP Strategy

Pragma is an asset management specialist organization that have developed various strategies to
deal with asset management challenges, one of the strategy they have developed is called asset
management improvement plan (AMIP) strategy (2005) is based on a set of comprehensive
framework pillars. Pillars are the areas in which the asset management function must excel in
order to achieve their goals of optimising asset effectiveness and performance. The four pillars are
based on the original thirteen (13) pillars or the building blocks of the PAM model. The model is
divided into different phases or focus areas. Each phase has its own objective and key
performance areas that need to be achieved within the phase.
Phase 1- Strategy alignment- the aim of this phase is to develop and align the maintenance and
business strategies.
Phase 2- Framework selection- once the strategies have been aligned the next step is to select
the correct framework. This works as a guide towards the implementation of the strategy and takes
place within the assessment, development and planning of the asset improvement plan.
Phase 3- Asset management maturity mapping- the maturity growth process is a mapping of the
maturity of the asset in relation to industry standards. The aim is to establish a common
understanding of the field of asset management, the AMIP framework to be used and what is each
of the key Performance Areas (KPA).
Phase 4- Setting targets- after consideration of the specific operating environment and strategic
focus, improvement targets can be set for prioritised pillars. This requires a careful analysis and
understanding of asset management audits.
Phase5- AMIP Master plan- this is a facilitated process where a customised asset management
and improvement programme is developed. The phase takes into consideration the resource
constraints that might hamper the process. Here the required actions and targets are determined,
documentation developed, responsibilities allocated and target dates set.
Phase 6-Implementation of the master plan- the execution phase: this phase ensures that all the
required actions that have been developed during the master plan are completed. All the
constraints and bottlenecks must be removed to ensure success of the master plan.

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Pragma has identified a number of areas that leads to inefficient and ineffective operation:

Reactive maintenance i.e. time and effort spent fixing breakdowns, rather than investing in
the preventive tasks.

Over maintenance i.e. running maintenance schedules too frequently

Lack of good planning and scheduling which causes ineffective utilisation of resources

Not measuring the correct performance indicators to support strategic direction

Incorrectly devised maintenance tactics (preventive maintenance plans)

Repetitive mistakes i.e. the absence of failure analysis in order to learn how to prevent
similar future events

Inadequate skills levels

2.3.3 International Infrastructure Management Manual strategy

Infrastructure assets are stationary systems that serve defined communities where the system as a
whole is intended to be maintained indefinitely to a specified level of service by the continuing
replacement and refurbishment of its components.
The international infrastructure management manual (IIMM) (2006 Version 3:1.3) refers to the
following as infrastructure assets:

Transportation networks (roads, rail, ports, airports)

Energy supply systems( gas, electricity, oil production, transmission and distribution)

Parks and recreation facilities

Water utilities (water supply, wastewater and storm water systems)

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Flood protection and land drainage systems

Solid waste

Education and health sector

Manufacturing and process plants

Telecommunications

The IIMM provides the most comprehensive coverage of asset management practices. Section 2
of the manual provides a detail process for producing asset management plans whilst section 1
provides the asset management plan and the process of structuring the maintenance plan. It
provides the step by step process of developing an asset management plan by providing a guiding
framework; the initial sections concentrate on writing an asset management plan, developing an
asset improvement plan with information systems, and data management strategy.
The overall structure reflects the asset management philosophy and framework, setting the
direction and plans for implementation of asset management (section 2), the optimal programme of
capital or asset renewal, operational, maintenance and management activities.
Section 3 of the IIMM reflects the enabling process of asset management and supporting systems
as well as data analysis applied to identify needs or levels of service demand and optimal
programme design (section 4).

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The figure 2.2 shows the IIMM framework, the pillar that drives the maintenance philosophy:

Fig. 2.2 Steps in the Asset Management Process( IIMM 2006 Version 3:1.3)
The tactical asset management plan needs to identify strategic outcomes that the plan specifically
supports and focuses on. It also needs to have performance measurement and monitoring
systems. The key elements of the asset management approach for ensuring effective and
integrated planning include:

Providing a robust process and corporate strategic plan to which an asset management is
linked. This is achievable through a process of formalising the desired customer outcome
and identifying the strategic plan, the adopted outcomes and the specific asset
management plans, associated budgets and actions which support them. The assessment
of the progress and monitoring is accomplished through performance management
systems.

Development and implementation of a performance development process to complement

and support both the strategic plans and asset management plans. A hierarchy of
performance measures decentralized from the strategic outcome statement is developed

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for use at different levels of decision-making. The process requires managers to link annual
work programmes back to specific strategic plans outcomes via a business plan.

Ensuring the process of strategic monitoring and review provides flexibility to advance
identified changes in the asset management plans into strategic plans.

Reviewing of the existing asset plans includes a discussion on how asset plans contribute
to desired strategic outcomes, linking the asset management service to the managers
business plans and a focus on improving AM practices that influence the quality of strategic
decision making.

2.3.4 Worley international

Circa 2000, the World Bank introduced new urban and local government strategies. The strategy
was in response to the increased demand for World Bank assistance from the level of local
government as well as an understanding that effective urban development is directly linked to the
raising of living standards and promotion of equity (Circa 2000:2).
The four objectives for urban and local government strategy based on sustainable cities are:

Liveable: committed to ensuring that the poor achieve a healthy and designed living
standard that provides a system for housing, secure land tenure, credit and transportation.

Competitive: providing a supportive framework for productive firms, to promote buoyant,

broad based growth of employment, incomes and investment.

Well governed and managed: with representation and inclusion of all groups in the urban
society, with accountability, integrity and transparency of government actions in pursuit of
shared goals and with strong capacity of local government to fulfil public responsibilities
based on knowledge, skills, resources and procedures that draw on partnerships.

Bankable: financially sound and credit worthy, financial health of municipalities requires the
adoption of clear and internally consistent systems of local revenues and expenditures,
transparent and predictable inter-governmental transfers, general acceptable accounting

16

procedures, asset management and procurement practices and prudent conditions for
municipal borrowing.
Improving the management of municipal infrastructure can bring major benefits by ensuring that
scarce resources are used in the most cost effective manner, thereby enhancing economic growth,
improving living standards and improving environmental sustainability. Inefficient use of resources
and infrastructure can place a major burden on public finances, diverting resources that might
otherwise go to the most critical areas of meeting social objectives.
Strategic municipal asset management (SMAM) is an approach to develop and maintain
municipally owned infrastructure assets to ensure that:

Asset requirements and the management of municipal assets is driven by defined service
level and performance standards linked to strategic planning.

Scarce financial resources are properly allocated and managed to optimise investment in
infrastructure.

A long term approach is taken when determining asset operation, maintenance, renewal
and development strategies.

Water services and water boards are responsible for management of water a commodity used in
many different processes including fabrications, processing, washing and cooling, industries in
power generation, steel mining, manufacturing and high technology. Agriculture and tourism are
important beneficiaries of clean water supplies throughout the country.
The maintenance sector forms an integral part of South Africas total construction delivery capacity;
its activities are on-going and substantially local in nature. The adoption of asset management
practices will lead to the growth of the maintenance sector which, together with its inherent labour
intensity will stimulate sustained job creation, skills development and broad-base black economic
empowerment. Poor operation and maintenance practices can increase the demand of limited
water resources and further alter water quality which in extreme cases can deprive natural
environments of its water requirement; which leads to changes in habitats and occasionally a loss
of habitats.

17

The application of asset management practices is aimed at improving the quality, integrity and
operational efficiency of water supply systems. Infrastructure within the water sector is not being
managed due to the lack of political will, management systems, knowledge, resources and
appropriate skills.
2.3.5 Why is PAM economically important?
When a business is not doing well, especially in the midst of an economic downturn, most business
organizations have a tendency of cutting back on non essentials. In most cases those expenses
represent the current expenditure for which the benefits are realised later. The question that arises
is how a business can cut PAM costs without undermining the long-term prospects of the business.
The following actions are extremely important to consider when ensuring that correct decisions are
taken that will have the long-term benefits for the business:

Extend the Asset life to delay capital expenditure or cost of replacement.

Reduce the risk of failures that result in catastrophic effects.

Managing and minimising risk that have financial implications for the business.

18

CHAPTER 3
GENERAL AMP FRAMEWORK
3.1 Introduction
It is important to describe the creation of a practical vision for maintenance and development of an
asset management plan (AMP) that can be integrated into the business plan. This chapter looks at
effective leadership for gaining control of the maintenance functions and advancing to continuous
improvement activity, which translates to asset productivities. The chapter also looks at the
procedural aspects of ensuring equipment life cycle productivity including processes of planning,
scheduling, determining the level of maintenance and deciding which types of maintenance best
ensures equipment performance and productivity.
3.2 Maintenance management framework
Maintenance forms one part of the asset life cycle; it is one step in a nine step asset management
process described in Fig. 3.1. Asset management begins by asking why the asset is required and
how it relates to the business plan. The business plan includes the purpose, function and
standards of performance. The life cycle involves comparing cost to benefit and can be listed as an
investment option by most companies. From the time of procurement, the asset has disposal or
replacement value; there are several steps or processes that need to take place to ensure that the
equipment life cycle is preserved and prolonged.

Dispose

Asset Strategy
Plan

Upgrade

Evaluate

Maitain
Operate

Design
Procure

Fig. 3.1 Illustration showing stages in Asset life cycle. (Source: Uptime strategies for maintenance
management 2000: 4).

19

The benefits of asset management requires the involvement of all departments from maintenance,
operations, engineering, finance, design and any other relevant departments. The maintenance
framework aims to maximise the production rate of a particular equipment or asset while increasing
its productive capacity and eliminating wastage by reducing the inventory or procurement cycle.
Maintenance objectives are the foundation of maintenance vision and should outline the annual
plans and budgets of the department. The first step in developing maintenance plans and
budgeting processes is to understand the current condition of an asset. A typical maintenance
objective would include the following:

To align the maintenance management process with a focus on pro-active and planned
corrective maintenance.

To develop short- , medium- and long-term maintenance planning.

To train and develop employees in line with their job requirements, career progression and
attrition rate.

To implement maintenance management systems to assist with work and resource

management.

Evaluating the current condition and processes enables the maintenance person to develop and
implement correct maintenance tactics by understanding the weaknesses and strengths of the
current process. The evaluation and assessment could take the form of a questionnaire, process
evaluation through observation or structured interviews. The assessment of equipment status and
condition is done through condition monitoring, equipment performance analysis and normal
periodic checks. These results will assist in developing the asset improvement plan.

20

3.3 Developing AMP

The development of an asset maintenance plan (AMP) needs to be classified into different stages
with targets, basic requirements and objectives at each stage. Table 3.1 shows a three-stage initial
process of developing the asset management plan.
Table 3.1 Stages in the Development of an Asset Management Plan:

Stage:
Stage 1

Target:
Strategy
development

Stage 2

Asset register

Stage 3

Asset
management

Requirements:
Current status analysis
Setting the asset management objectives
Asset data classification

Prioritization of data collected

Set up the asset register
Set up how the register will be managed
Capturing of data
Replacement program and costing
Provisional asset maintenance plans
Attribute data
Basic condition assessments
Prioritization based on condition
Critical asset identification
Maintenance history data collected
Prepare the next generation maintenance plans
Documentation of decision making process

Determine the target levels of service required

Table 3.1 provides the fundamental requirements for the developmental phase of the asset
management. This is the foundation of asset management and if not developed correctly, the
physical asset management will be incomplete or incorrect. The second phase of asset
management development covers the implementation and monitoring. Table 3.2 summarises the
stages, targets and requirements.

21

Table 3.2 Implementation and monitoring phase of asset management

Stage:
Stage 4

Target:
Asset improvement/upgrade plan

Stage 5

Techniques required

Stage 6

Management system

Requirements:
Maintenance procedures
Decision and process flow
Failure analysis
Risk analysis
Identify where equipment is in its life cycle
Develop plan for replacement
Decision making based on life stage and
budgets
Performance management
Performance evaluation

3.4 Strategy development

The development of a maintenance plan for an existing asset will be based on best practices and
the current state of the equipment. This should highlight the objective, the asset requirement and
the current analysis of an asset.
3.4.3 Status analysis
The status of the equipment can be measured by performing an equipment survey, performance
analysis and feedback process from a data registry. Information can also be collected from user
feedback and surveys, and the age and condition of the equipment. The status of the equipment
should be based on the types of problems or failures.
3.4.4 Asset management objectives
The objective of asset management is to develop and create a system that will ensure optimum
utilisation of an asset or infrastructure. This can be achieved by implementing the best practices
that will ensure that:

Asset requirements and asset management strategies are driven by defined service levels
and performance standards.

22

Life cycle approach is used when determining asset maintenance, operations, design and
renewal strategies.

Proper management and correct allocation of financial resources should optimise the
investment in infrastructure.

Asset management is not a fixed process but evolves as the condition of operation and
infrastructure status changes over time.

This ensures that the equipment delivers as expected.

The objectives assist the asset owners during decision-making processes with regards to the
condition of the asset so that changes can be implemented for corrective measures when required.
3.4.5 Asset data classification
Asset classification is done to ensure a common understanding between all asset users. The first
step is to define the asset or equipment and classify it. There is always a debate between finance
and maintenance staff on exactly what an asset is and this impacts on the depreciation or
capitalisation of the asset or equipment.
The asset must be classified into different classes and sub-classes with each class having a class
code and sub-class with sub-class codes. This simplifies the operation when one needs to
investigate and report on both a horizontal and vertical basis and when there is a need to check
similar classes of equipment through the organization or within a particular area. Table 3.3
indicates the different classes that can be used to classify assets:

23

Table 3.3 Classification of asset on the system for horizontal and vertical identification

Number
1

Class
BLOWERS

BLR

Sub - Class
Code

Sub Class

Class Code

Blower-centrifugal fan type.

Blower-roots type, beltdriven.

BLR01
BLR02

BELT PRESSES

CENTRIFUGES

CENTRIF

Centrifuge- horizontal spinner

type.

CENTRIF01

3.4.6 Data prioritization

Once the analysis has been completed, the condition of all the assets and equipment confirmed,
the database created, and the data prioritized in terms of asset classes the next stage may
commence. The data is prioritized to ensure that maintenance interventions are correctly
developed and are based on the current condition of the asset and the performance requirements.
This also ensures the proper utilization of resources.
3.5 Asset register
Asset register is a record of asset information considered worthy of separate identification including
inventory, history, technical and financial information (IIMM 2006 Version 3: xii).
3.5.1 Asset register set up
The basic requirement for implementation of PAM is that the company must have a correct asset
register reflecting all assets for the company. The asset register provides the functional location of
an asset. This functional location describes where the asset is or installed in a hierarchical format
with its attributes (make, model, size etc). The register will also have the serial numbers of the
equipment to identify them during maintenance or when they are sent for repairs.
A properly developed asset register simplifies the process of developing historical information of
the asset and recording all the repair costs and usage data. This will assist maintenance personnel

24

to ascertain the time it has been running and what type of maintenance is required at any particular
time.
3.5.2 Managing asset register
The management of an asset register is an important function within the business. It ensures the
integrity of the asset database and if there is one central control point that nobody tampers with the
asset database. An authorized person should control the process of registering or removing an
asset as well as updating the master data.
3.5.3 Data capturing
To ensure that the master data is updated, the person in charge of the asset register needs to
develop a process flow that will be known throughout the company so that everybody is aware of
the process. It will highlight the flow of responsibility from the time a new asset is purchased. The
data entry person is authorised to remove or scrap an asset when necessary.
3.5.4 Replacement programme and costing
Accurate information of the assets condition, usage and expected life will enable the planning
section to estimate a replacement period and cost of the asset. The basis for the correct
replacement programme needs to be developed by the maintenance and replacement section.
This will depend on the accuracy and the integrity of the master data.
3.5.5 Provisional asset management plans
The information gathered so far will enable planning for the basic maintenance and replacement of
an asset. The available status of an asset will include the current usage and expected life span of
the equipment. This will enable the development of an infrastructure maintenance programme
showing required maintenance frequency and the type of repairs. Although it is difficult to estimate
accurately the cost of maintenance, which includes the labour and material costs, estimated costs
can be calculated for planning purposes.

25

For efficiency, the provisional asset management plan must contain information that will assist in
decision-making and the planning process for repair or replacement. The following information
must be included:

Labour- all wages and benefits of the traders and assistants.

Materials- all the supplies, parts, components, consumables and other vital items that will
be required by the maintenance personnel.

Services- engineering workshops, facilities and stores or warehouses where equipment can
be stored or repaired.

Technical support- supervision, planning, materials coordination, administrative support and

data capturing.

Outside services- all contracted services, specialty services, training and consultants that
maybe required.

Functional location and equipment cost.

3.6 PAM development

3.6.1 Attributes
The structuring of attributes follows a pre determined pattern that puts them into hierarchical
structures with functional locations and equipment registers, the next step is to group them into
classes of assets. In each class, the attributes of the assets such as model, size, capacity,
maintenance intervals, serial numbers and date commissioned are indicated. This information is
crucial in developing the schedules that meets the asset requirement and performance
expectation. The performance of the asset is measured against these attributes.

26

3.6.2 Basic conditions assessments

The condition of the class of assets must be established and the basic assessments can be
classified as poor, satisfactory or good. The condition establishes the basic step in developing the
asset plans. A poor rating would indicate that the asset requires immediate remedial attention. An
asset that is rated satisfactory will require normal routine maintenance, while an asset in good
condition will require routine maintenance exceeding the service level required.
3.6.3 Prioritization based on condition
After establishing the classes and condition of the assets it is necessary to develop different
categories of interventions based on their condition. Internationally recognized standards that
classify maintenance tactics into three categories of maintenance services, A, B or C will be
utilised. The different service levels depend on the usage, intervals, duration of service and the
activities that need to be performed for each category.
3.6.4 Critical asset identification
Identification of the critical assets minimises delays during asset malfunction and speeds up the
replacement process. The lead-time for most of the assets is very long and the procurement
process can increase that lead-time due to delays in ensuring that all approval processes are
followed. Classifying critical items minimises the delays and assists the maintenance personnel in
identifying all assets that have an impact on service delivery when malfunction occurs.
3.6.5 Maintenance history data collection
The work order system which involves all the activities including the type of work and resources
required, functional location and the cost for the work are logged to create historical data for the
asset. The history makes it easier to analyse the performance and introduce the required
maintenance intervention for an asset.
The first step in historical data collection is to assess the initial condition and examine owner
manuals. Once the provisional maintenance plans have been executed, the data is logged into the
system to create historical data.

27

3.6.6 The next generation maintenance plan

Once the provisional maintenance plans are carried out, asset classes grouped, basic condition
assessment carried out, and all the data logged into the system, the next step is to use all that
information including the historical data to develop a proper asset maintenance plans. The plan will
represent the base-line for creating the maturity target profile for the asset, asset classification,
critical analysis and maintenance tactics.
3.6.7 Document for decision making
The asset maintenance plan is a definite requirement for decision making processes in asset
management. When the asset malfunctions a decision needs to be made as to whether the cost of
repairs is justified. The replacement cost must be evaluated against the renewal cost. This decision
making process includes the cost benefit analysis which can be achieved by looking at the
condition, cost and history of an asset.
The PAM strategy for asset management requires that enough information on an asset be
available for decision-making. Lack of data makes this process difficult. Provisional maintenance
may be recommended based on the initial condition of an asset.
3.6.8 Determining the target level of service
The target service level provides an idea of the required level expected from an asset. If the level
of service is not satisfactory a decision needs to be made whether to alter the maintenance
intervention or to replace the asset. It is important to determine whether an asset that will be
measured against performance meets the required level; measurement against the set of
standards will determine whether a replacement or renewal is required.
3.7 PAM implementation and monitoring
3.7.1 Maintenance procedures
The success of the PAM strategies depends on correct implementation and monitoring. This
includes developing proper procedures to be followed by the technical and operations personnel.
Best practices must be implemented and the operators must ensure that the equipment is well

28

operated. The safe working procedures ensure that there is a common understanding between the
different departments .Newly appointed personnel must understand how the equipment operates to
reduce maintenance costs. Figure 3.2 indicates the relationship between the departments involved
in asset management.

Operation

Management

Maintenance

Fig. 3.2 The relationship between maintenance and operations

The maintenance plan includes the tasks and its key activities. Planning and scheduling includes
identification, prioritization, materials, labour/skills required, safety considerations, execution and
reporting. The maintenance plan also includes the estimated time required to complete certain
tasks for optimum performance.
The objective of asset management is to create a programme that is effectively planned and
scheduled to reduce labour and downtime. When a malfunction occurs, the programme will ensure
that the correct parts and materials are used and that the work quality is higher than that of an
unplanned one (John Campbell 2000).
The key steps in maintenance work starts with identifying what has to be done and ends with
analysing the results of what has been done. The six steps are shown in Fig 3.3:

Identify- the need for maintenance work from a simple noisy bearing to the complexities of
interpreting a vibration analysis and trends. The probability of identifying the real problem
before it becomes serious increases from simple inspection to complex analysis.

29

Plan- this step ensures that all the resources necessary to execute the job are accounted
for. The planning personnel determine what has to be done, the resources required and the
sequence of activities required for safe working procedures. The planner must be a
technically orientated person who is able to determine the sequence of events to complete
the activity, including the estimation of required time.

Schedule- to schedule the work, the planner needs to know who is available, what
resources and material will be required and the availability of the resources. It is important
to have knowledge of which jobs are mandatory, the procurement system and the lead-time
for procurement of various materials.

Assign- the assignment of the task depends on the maintenance policy and the process in
place for prioritizing work. The maintenance system will schedule and assign job cards with
details of activities to relevant teams for execution. The job card system makes it easier to
track the progress and re-schedule the work.

Execute- the maintenance process is a revolving one and the execution is the easiest part if
the initial steps are followed correctly. When the work scheduled on the job card is
completed the information is captured by the data capturer.

Analyse- the information captured from the job card for completed work is entered back into
the system. It becomes the history of an asset and is analysed for further action if required.
This analysis can estimate the life span and expected problems of an asset to implement
further maintenance activities and performance analysis.

Fig. 3.3 Maintenance analysis process (Source: Campbell 1995:46)

30

3.7.2 Work order systems

Two types of work order systems are currently being used by different companies. One is paper
driven and the other is computer driven. A typical work order will include the originator, the planner,
the supervisor, accounting officer, the scheduler, production and the tradesman. The work order
will have a number for referencing and audit purposes. The benefits derived from a work order
system are:

Planning and scheduling mechanisms for complex jobs.

Cost collection mechanism for labour, stores requisitions, purchase orders and services to
charge against a piece of equipment or cost centre.

Way to capture delays and measure productivity.

Tool to manage and determine work backlogs.

Assist to manage equipment history and to analyse the failures and effectiveness of
maintenance efforts.

31

3.7.3 Creating a job card

An example of how a work order or job card is created and the process of creating a work order on
the maintenance system are shown in Fig. 3.4 and 3.5.
A job card is created and then work details are entered into the system and saved.
How to create a job card:

On your work order screen, click on

; a blank job card screen will open, with the following

available job number.

Fig 3.4 Required information on a job card (Source: ERWAT On key system 2009: 4)
All dates will default to the current date. The date for completion of the work will be indicated.

32

Click on

to open the asset tree, select the relevant asset.

Type in the work required, select the type of work.

The GL code and cost centre code are linked to the asset and will change accordingly. However,
please check if it should be mechanical or electrical, as they differ.

Add the responsible trade (click

to see which trades are available), select staff member and

select work order importance (1 most important, 4 least important)

Click

to save job card.

Job card labour required tab

Use the labour required tab to view the labour requirements for each task and assign labour
resources to the job request, together with estimate time durations and dates.
Note!
The section and trade are mandatory but the staff member can be assigned at a later stage.
If a staff member is assigned before the section and trade, then the section and trade are
populated with the staff members section and trade.
If the section and trade are assigned before the staff members, then the staff members assigned
to execute the work must be associated with that section or company and belong to the selected
trade. The staff lookup list is limited to persons who work for the selected section or company and
belong to the selected trade.
Each labour items date required must be within the work orders start on date and complete by
date.
How to assign labour resources to a work order:
1. Click on the labour required tab.
The labour required tab appears.
2. Enter the required data.
3. Add any notes that might be relevant to the labour required.

33

4. Click

to save the data.

Labour required tab

Fig. 3.5. The space where the required task or work required is entered. (Source: ERWAT On key
system 2009: 5)
3.7.4 Planning and scheduling tools
Different planning tools are available on the market. Most commercially available systems have
comprehensive modules that include work order management, equipment records and history,
preventative maintenance tasks and scheduling, costing and budgeting, material management and
labour capacity planning.
Some of the tools that can be used for planning are the Computerised Maintenance Management
Systems (CMMS), the Gantt chart, the Critical path method and the Pareto diagram.
The Gantt chart is a useful tool for planning and scheduling. It lists steps and activities along the
vertical line and the time needed to accomplish them along the horizontal line. It gives the
sequence, duration, start and finish times of events and the overall project start and finishing times.
It is useful for planning and managing projects.
The Critical path method gives a relationship between different events; it is most useful when used
in an activity network diagram. It determines the minimum time either required to complete a
project, independently, sequentially or interrelated sequence. Once plotted, the path with the
longest duration is the critical path.

34

The Pareto diagram is a bar chart used to prioritise and help separate the vital few from the trivial
problems. It uses the 80-20 rule, which is 80 percent of the problems are associated with 20
percent of the equipment.
3.7.5 Materials management

Most systems with capabilities for materials management enable the process of managing
materials effectively. Spare parts, components, lubricants, fasteners, and all other maintenance
materials account for fully one-half of most companies maintenance budget. To manage
maintenance materials effectively and save on potentially wasted money due to neglect of
materials, the process begins with purchasing, storing and inventory control.

1. Specify

5. Use

2. Source
Materials
process

4. Control

3. Order

Fig. 3.6 Materials management process

Specify- the equipment register simplifies what is needed in an accurate manner and
provides updated configuration of the status. The major equipment assembly is delimited
into smaller components or parts that could be built into a unit. Other equipment might have
integrated components that can be dissembled and re-assembled for repairs if needed.

Source- partnerships between suppliers and buyers are an integral part which drives the
success of the materials management process. The overall value of the transaction and
relationship is governed by trust. The buying process is no longer driven by cost but the
ability of the supplier to meet the customer expectation and demand.

35

Order- the order is placed once the supplier and the specification of the equipment is
known. Items kept in an inventory holding account are normally ordered once the minimum
order point has been reached. The final user is not involved in the ordering of equipment.
The final user is only involved at the determination of the minimum order point. The user
will receive the items from the warehouse or the control store.

Store- the main objectives of having a maintenance store is receiving, stocking and issuing
material that has been assigned to the job cards. The efficiency of the maintenance store is
enhanced or limited by the location, layout and the technology. The quality of service will
improve by employing good quality inspectors.

Control- the movement of items at the maintenance stores depend on the availability of
tradesmen. The stores can be well resourced but if the inventory movement is not
controlled adequately the advantages of maintenance stores will not be realised. The
inventory of spares and materials should be managed and measured rigorously in the same
way those raw materials, work- in-progress and finished goods are measured.

Use- The productivity of the maintenance teams is affected when the waiting times for the
materials and parts increases. Time that it takes to arrange material is recorded on the
requisition slip. When the material is found it is issued and brought to the workshop. The
just-in-time process assists in reducing the waiting time, although all the bottlenecks must
be sorted out before the process can be employed.

3.8 Maintenance tactics

The development, implementation and success of the PAM strategy depend on the choice of
maintenance tactics. Different equipment requires different tactics, as there is no standard system
that can be suitable for all types of equipment. The tactic used will depend on the type, condition
and usage of the equipment. The maintenance tactics is a battle plan against equipment
breakdown; it outlines the systems of dealing with problematic situations and preventing
breakdowns. The maintenance tactics provide an action plan, interventions and the timing of the
action that is required. The different options available are:

Run to failure- maintenance performed only after the equipment has failed; this is normally
done on electronic equipment and electronic circuit boards

36

Redundancy- building redundancy into the systems ensures that when the primary
equipment fails the secondary equipment is available.

Schedule component replacement- this is a scheduled maintenance programme at

predetermined intervals based on the running times or usage regardless of the condition
before or after that period.

Schedule overhaul- the equipment is stripped and overhauled at a predetermined planned

period; this is normally done during a planned shutdown on a bi-annual basis or annually
during low season or low peak period when the equipment is in low production.

Ad hoc maintenance- this maintenance is done as and when required; this could be done in
preparation for the high production period or when the equipment is problematic and is not
running consistently.

Preventative maintenance- preventative maintenance is done periodically and includes

inspections, lubrications, minor adjustments and any other failure prevention maintenance.

Condition based maintenance - this type of maintenance is based on the measured

condition of the equipment. The monitored conditions include vibration, temperature, flow,
stresses and several other conditions. On this basis maintenance interventions are
planned.

Redesign - the maintenance is designed to ensure reliability of the equipment. This is

mainly done when the condition of the equipment cannot be correctly measured and when
there are no reliable systems that will provide an analysis of the equipment. Most of the old
equipment that has been discontinued by the suppliers falls within this category.

The selection of the correct tactics will depend on the understanding of the type of failure, type of
equipment and cost of maintenance. The difficulty in maintenance selection can be analysed by an
age curve which would reveal the approximate time that the equipment fails. This would indicate
whether there are more failures in the earlier or later stages of the equipment life.

37

Figure 3.7 indicates the higher probability of failures during earlier and later stages based on the
age of the equipment failures from the technical reports of the City of Cape Town.

Probalility of Failures
10
9
8
7
6
5
4
3
2
1
0
commisioning

Middle period

Old life

1--5 years

5--15 years

15--20 years

Fig. 3.7 Probability of failure

Although Fig 3.7 provides an indication of the probability of failure of equipment it does suggest
that failures are directly related to age. Other related factors may include: use, compatibility,
equipment, and the installation conditions.Two tactics are commonly used and most applicable to
water services industries:

Condition based-maintenance.

Preventative maintenance.

3.8.1 Condition based maitenance

Condition based maintenance is effective because it detects and warns of a failure before it
actually occurs. The warning gives enough time to react and intervene without affecting the
equipment productivity. This type of maintenance is most applicable in the heavy industries,
rotating machinery and all other equipment that fails in a cause and effect manner. The selection
of an appropriate method to be used depends on the type of equipment and the measurements
required. Some of the factors to be considered are:

38

The failure mechanism.

The reliability of the method to be used.

The warning or response time of the device.

The cost of the method to be used.

The skill level required to monitor, operate and interpret results.

The costs are sometimes driven by the skill required, but combining some of the methods to
monitor more than one operation at a time would simplify cost management thereby providing
great benefits.
3.8.1.1 Vibration
Vibration analysis monitors the mechanical movement of the machine. This method monitors the
vibration levels and movements outside the predetermined range. The baseline is set by
monitoring the regular or required operation of the equipment. The common sources of vibration on
moving equipment are misalignment and imbalances. Detecting the problems earlier will enable
quick diagnostics and the location of the problem.
3.8.1.2 Lubricants
Lubricant analysis involves monitoring the lubricating oil condition and wear particles. This includes
physical and chemical analysis of the oil, viscosity and acidity. The oil samples are checked
periodically and compared to the baseline to check the deterioration. The chemical analysis of the
wear particles can indicate the suitability, condition and stage of deterioration of the oil.
3.8.1.3 Temperature
Temperature monitoring looks at loose connections, deteriorating splice connections, and
damaged insulation. It detects the temperature changes in the equipment or at the connection sites
such as corona discharge, hot electrical connections, refractory lining defects, roofing and its
insulation.

39

3.8.2 Preventative maintenance

Preventative maintenance reduces equipment failure and emergency repairs by promoting
maintenance proactively through inspections and basic scheduled maintenance. The probability of
failure is reduced by a logical overhaul or replacement schedule which minimises disruptions. The
preventative maintenance requires that equipment be classified and failure patterns be recorded
so that proper maintenance for each equipment can be developed.
The preventative maintenance is done through a work order system where a plant maintenance
system is used. The work order for preventative maintenance is either condition-based or normal
routine maintenance. The work order will have a task list outlining specific tasks to be performed
during maintenance.
3.8.3 Expected cost of maintenance
When maintenace on asset is aligned with business strategy and performed correctly, it will have
an impact on the overall maintenance budget. Figure 3.7 displays the relationship between various
costs related to maintenance, including preventative and emergency cost. The figure shows the
expected results that occur when preventative maintenance is done properly. The cost of
preventative maintenance will grow linearly while the cost of breakdowns will be expected to
decline exponentially. The total cost of maintenance will decrease to a point and then increase.

40

Fig. 3.8 Relationship between different maintenance related cost (Source: IIMM 2006:3.106)

41

CHAPTER 4
MEASURING MAINTENANCE PERFORMANCE
4.1 Introduction
The optimization of maintenance systems and management can be realised through proper
measurement. The overall capacity and cost associated with maintenance is linked to the types of
resources available and management strategy. Measuring maintenance productivity ensures
constant improvement. The strategy can be reviewed on a regular basis using strategic objectives
and a master plan as a guide. Productivity, equipment performance and processes can be
measured.
4.2 Measuring maintenance productivity
The defined service levels and performance standards provides the basic requirements for
measurements. The service levels must support the strategic goals, based on the asset
requirements and customer expectations. Some of the equipment has legislative and regulatory
requirements, which must be included in the performance measurements. Productivity measures
the performance of the team against set levels and standards. Using the computerised
maintenance system makes it easier to measure the productivity of the teams and the utilisation of
resources.
This can be done by measuring the number of job cards that are finished in a month versus the
number of job cards that were issued to individuals at the beginning of the month. The utilisation is
the measure of the time spent on the overall job cards in a month versus the time available for
individuals in a month.
4.3 Equipment performance measurement

The key to equipment performance is the correct design and expected performance levels since
the equipment will be measured against the set performance. The measurable service level for
performance standards for equipments includes the following:

Reliability and availability- measure of the availability as well as the equipment downtime
and the frequency of downtime.

42

Safety- measure of the compliance rate with the safety requirements.

Economic efficiency- the measure of the quality of service or production rate.

Environmental objectives- measure of the rate of compliance with environmental

requirements and legislation.

Quantity rate-measure of the capability of equipment to render the required and expected
service.

Equipment effectiveness- overall measure of availability and precision of the equipment.

Maintainability- measure of the ability to make equipment available after it has failed.

4.4. Process performance measurement

The inputs into the business process are cost, human resources, materials and any other
resources required to complete the work order. A maintenance management system is a business
process used to make it easier to manage the system. There are different categories and
classifications that are required to ensure common understanding and to approach maintenance
management. These procedures and processes make it possible and easier for maintenance
personnel to differentiate between various maintenance processes.

Planned and unplanned- the aim is to minimise the unplanned maintenance and have more
planned maintenance since unplanned maintenance disrupts the service delivery and can
be costly in case of equipment malfunction.

Schedule compliance- this high rate of compliance with schedule PM (define) indicates that
there is less disruption in the business process while the opposite indicates that the
company is in fire-fighting mode.

Work order management- this is a procedure of handling the maintenance process. When
in place, the backlog will be minimal and a process of handling the flow of work will prevent
work from accumulating.

43

Urgent and normal purchases- the aim is to deal with the procedure for emergency work
and requisitions. The planned maintenance will consider lead-time during planning while
emergency orders and requisitions will be handled in terms of the company emergency
procedures. There should be no lead times for emergency orders.

4.5. Information management system

The company would have many different types of equipment, which will differ in complexity and
type of parts. The inventory management and asset register for all different assets will be difficult to
manage using conventional methods. The computerised maintenance management system is an
idea tool to manage maintenance activities and manage the history of information as well as the
asset register. The CMMS will help track the type, date, materials and costs involved in
maintenance done on equipment. This information is required for decision making and useful in
comparing cost of repairs with cost of replacing equipment. The CMMS uses two different
modules, which are plant maintenance (PM) and material management (MM). One helps to
manage maintenance activities and planning while the other deals with managing equipment or
material process.
The two modules are divided into many sub-modules that are designed for various related
functions such as operating various data management and analysis activities.

Work order management- process of managing work orders and estimates cost and
tracking the work order status and priority.

Planning and scheduling- uses tasks and adds resources required to complete the tasks
and schedule maintenance work while identifying between preventative and unforeseen
breakdowns

Preventative maintenance- establishes the maintenance schedule, describes the required

work, list the activities and materials required and allocates a cost.

Inventory control- manages the stores inventory; it also tracks the movement of inventory
between used and on-hand materials and costs. It can further allocate inventory items for
maintenance purposes.

Labour- tracks the human resources availability and usage, skills required, and training
history. It also manages the movement of resources between work orders.

44

Equipment history- records the history of repairs and costs, labour used, manage
equipment down-time and tracks equipment failures.

Equipment identification- manages the equipment functional location, numbers and make
of equipment.

4.6 The balanced score card

The balanced score card translates an organizations mission and strategy into a set of
performance measures that provides a framework for a strategic measurement system. It
emphasizes financial objectives, but also includes the performance drivers of these objectives. The
scorecard measures organizational performance from four perspectives: financial, customer
perspective, internal business process, and learning and growth.
4.6.1 Financial perspective
Maintenance impacts and influences the profitability and financial performance of an organization.
The survey done in other countries showed that magnitudes of maintenance costs in the USA is
about 25% of the total indirect costs and are increasing at alarming rates. Data from the United
States Department of Commerce indicated that the total expenditure on maintenance has been
increasing at a rate of approximately 15% per annum from 1970 to 1980. The expenditure on
maintenance is also significant when expressed in monetary terms and resource commitments
(van Niekerk, 1984:14).
The strategic objective for the financial focus of an organization is to ensure long term funding and
investment for a business and financial stability for operational and business activities. PAM
focuses on ensuring the asset availability and reliability by providing access to funding for asset
maintenance.
Assets need to be valued and the key is understanding how assets depreciate over their useful life
and correctly allocate costs and calculate income streams. Valuation and infrastructure financial
planning require the understanding of asset life cycle and replacement process.
The financial reporting standards require that assets be valued at fair value or market type
valuation and where the fair value can not be established, the discounted cash flow (DCF) analysis
on future earnings is used as a basis for valuation. In some cases, both market value type

45

valuation and future earnings may be difficult to establish. Hence the depreciated replacement cost
is the most appropriate method to be used for valuation.
Costs occur in all phases of asset life. Major errors occur when the emphasis or focus on decision
making is only placed on the initial capital costs when evaluating assets and acquisition options
while ignoring long-term decision making.
Life cycle cost includes the following:

Initial capital/ investment cost.

Operation and maintenance costs.

Refurbishment and renewal costs.

Administration, overheads and taxes.

Depreciation.

Capital use charges/rate of return.

A sustainable, long-term approach to asset planning requires preparation of long-term financial

forecasting. This enables maintenance planning of renewals or upgrades.
4.6.1.1 Direct Financial Benefits
Direct financial benefits and costs that can be quantified and linked with decision making of the
financial investments. These include the following:

Revenue generation.

Asset life extension.

Reduction in operating, maintenance and disposal cost.

46

Risk cost reduction.

Revenue generation is the difference in income generated before and after completion of a project.
Revenue generation should be based on the net income gain to the organisation and not just the
specific projects being considered. PAMs objective is to extend the asset life and the direct
benefits are calculated by determining the NPV, which is the value of the asset to the organization
derived from the continued use and subsequent disposal in present monetary values. The net
benefit is the NPV of the operating and maintenance benefit each year over the project life.
Operating costs are all maintenance related costs associated with active utilisation of the asset.
These costs include the costs required to keep an asset as close as possible to its original state or
condition. Operating and maintenance costs are estimated over the life of the project and can be
estimated by extrapolating historical expenditure or alternatively they can be calculated by
identifying maintenance activities, which could include asset failure analysis.

Broad cost leadership

Broad differentiation

BEST COST PROVIDER

Focused cost leadership

Focused differentiation

Fig. 4.1: Different Cost strategies available for an organization

47

Figure 4.1 indicates the different cost strategies available for an organisation depending on the
type of its business. Good financial planning and focus will enable the organisation to choose the
correct strategy.
4.6.2 Customer Perspectives
Organisations that manage networks of assets have varying knowledge about the physical
attributes of those assets and financial forecasts based on that knowledge introduces variability.
Confidence levels tend to be lower for water utilities, with extensive underground asset networks.
The organization will typically have disparate information about such assets and therefore
decisions based on such information will tend to have significant degree of subjectivity. Statistical
methods of expenditure prediction and sensitivity analysis are used by various utilities where basic
asset data is uncertain or unknown.
The objective of the physical asset management is to prepare the long-term financial forecasts that
outline the organisations future financial requirements based on all information relating to asset
creation, maintenance, renewal or rehabilitation and disposals. While financial forecast assists
maintenance engineers and maintenance personnel to plan ahead for future maintenance
requirements for different assets, it also assists the asset owners to prepare correct budget and
long-term forecasts for asset maintenance and use. The key issues that need to be addressed
from the customer perspectives are:

The required funds to acquire, operate, maintain and renew the asset

The time when the funds will be required

The true costs of providing infrastructure services depend on the standard or level of service
required. Every user expects a high standard of service, the transparent cost of providing the
service and the realistic expectations.
4.6.3 Internal Business Process
Asset management information systems should contain both technical and financial information
designed and maintained to enable the organisation to manage their efficiency and effectiveness,
policy and strategy, risk management, planning and implementation and operation.

48

The important step of the process is to get the information architecture correct. This translates the
business requirement into a process that identifies all business information requirements, the
relationship between information requirement and business functions and the key steps that
outlines how the information is best delivered and structured for the end user. Information systems
should clearly support business processes and facilitate continuous improvement.
Competent personnel are required to ensure that asset information is accurate, timely and of high
quality. The asset information system must be capable of delivering the information necessary to
support business process and asset management. The competent person will be tasked with
responsibility for:

Maintaining asset information management and ensure it conforms to the required

standards.

Bulk asset data entry and maintenance of the quality and integrity of asset data base.

Governance of the overall corporate information resource.

Providing guidance in the developing of strategy for the expansion and application of all
asset information.

Policy development and guidelines for the use of the information systems.

The objective of investment in asset management systems and data collection is to support
documentation, which in turn supports the business process. There must be documented policy
guidelines, which will ensure compliance with quality assurance and standards. The benefits to be
derived from an integrated approach to the management of assets and standardised process are:

Organisational flexibility.

Business operational flexibility.

Improved quality and asset information.

Proper dissemination of asset information internally and externally.

49

Resource utilization efficiency

An integrated approach to the management of all asset classes

Maintenance
Equipment Effectiveness
Availability
Reliability
Response time
PM Schedule compliance

Typical Measurement
65%
95%
No of days
1 hour
93%

Planned/Unplanned hours
Cost per total operating cost
Stores
Value
Turnover
Service level
Coverage
Staffing

65:35
20%
Typical Measurement
Rand value
92%
8hr/5day
No of personnel

Stores issue/Total maintenance material

45%

Fig. 4.2 Measures to Benchmark Performance

4.6.4 Learning and Growth
The majority of introduced processes have brought increased attention on the importance of
evaluation which has resulted in measurements and analysis experiments conducted to evaluate
the contribution of specific programmes. This has created a shift in mindset of many organizations
where in most cases, the emphasis has been on the bottom line and now the shift is more aligned
with the business approach, which focuses on training and development. New strategies put
emphasis on return on investment (ROI), which measures and evaluates the performance and
training improvements. For an ROI process to be useful, it must balance many issues such as
feasibility, simplicity, credibility and soundness. To satisfy the needs of the critical groups and
process requirement, the following criteria are essential:

50

The ROI process must be simple, void of complex formulas, lengthy equations and
complicated methodologies.

The ROI process must be economical and must be implemented easily; the process must
become a routine part of training and development without requiring significant additional
resources.

The assumptions, methodology and techniques must be credible and logical. Systematic
steps are needed to earn the respects of the end user; this requires a very practical
approach for the process.

The process must account for other factors that have influenced output variables; this
emphasizes the importance of incorporating credibility and accuracy within the process.

The process must have the flexibility to be applied on a program basis. In some cases an
estimation of an ROI is required before the actual programme is developed.

The ROI process must be applicable with all types of data, including hard data which is
typically represented as output, quality, costs and time.

The process must have a successful record of accomplishment in a variety of applications;

in many case models are created but never applied successfully. An effective ROI process
should withstand the wear and tear of implementation and should get the expected result.

To ensure that the job performance needs are met, a review of the detailed objectives of the
programme are done to select the measures that could be improved by a team effort and to review
the skills required for the program. The output of ROI analysis designed to add value at the
operational level can be measured through evaluation of the process at a determined time. The
criticality of skills, the direct effects of applying these skills, the high level of management interest,
the size of the target audience and the higher than average cost are factors contributing to the
success of the training and development initiatives.

51

CHAPTER 5
ASSESSMENT OF MAINTENANCE MANAGEMENT STRATEGY FOR WATER AND
SANITATION SERVICES
5.1 Introduction
A vast infrastructure network of roads, water supply, sewage networks, power supply, flood
protection, recreational and other assets define the worlds urban cities. These assets are
managed predominantly by local and central governments and constitute a major investment over
many generations, created in the hope that benefits will accrue through increased productivity,
improved living conditions and greater prosperity.
Municipalities manage the worlds largest portfolio of infrastructure assets on behalf of their
communities. It is therefore appropriate for municipalities to be vitally interested in asset
management and in particular the techniques that aid responsible asset management.
The key elements of effective asset management are:

Defined service level and performance standards linked to infrastructure objectives.

Optimal investment.

A long term (life cycle) approach.

In 2000, after restructuring of the various municipalities into six entities which eventually formed the
Cape Metropolitan council, the management of water and sanitation took a decision to implement
the PAM principles, aimed at ensuring good governance and asset usage optimisation. Standard
asset management practices are currently being implemented in many countries across the world.
The local governments in Australia, New Zealand and United Kingdom are the leaders in
implementing and standardising asset management programs (IIMM 2006 Version 3). The
legislation requirements in the South African water industry calls for the provision of Water
Services Development Plans (WSDP) by the water services authorities and water service
providers. These plans are equivalent to asset management plans and are designed to meet
minimum requirements for services and financial planning though a proactive approach that would

52

develop and implement advanced asset management planning as required by the government and
legislation.
Maintenance management assessments were intended to check and assess the implementation of
the integrated asset management strategy in line with the municipality requirements to have a clear
defined infrastructure asset management strategy. In addition to the provision of water services to
all households, businesses and industries in the metro, the municipality is also responsible for the
on-going operation and maintenance of the infrastructure installed including the asset management
function of the municipality.
The key focus for the assessment is the maintenance practices that should be instituted for good
maintenance management assessed against world class benchmarks in the maintenance
management of environments.
The assessment covered the following maintenance areas in detail:

Maintenance management systems and procedures.

Computerized maintenance management systems (CMMS).

Organizational climate and culture.

Maintenance control, planning and scheduling.

Reliability maintenance management.

Fixed asset register.

Fleet maintenance and operations management.

Contracts and procurements.

53

5.2 Organizational climate and culture

The organization or department must display the following attributes to ensure proper
organizational structure and create a positive environment for employees:

Teamwork.

Positive attitude.

Productivity conscious.

Responsiveness to technology.

Motivation.

Healthy relationship with other departments.

Balanced supervision in managing people and work output.

Client focus.

Satisfactory completion of work.

These attributes are essential for the department to function effectively and efficiently in order to
fulfill its obligations and objectives. The water services technical department has been restructured
a few years ago but there are organizational issues related to culture, climate, processes and
administration that require special attention from the management. The following are the key
findings in this regard; this is noted in the appendix B.

Vision and Mission

Technical services and its subsections have no clear defined vision and mission.
Organizations or departments without their own defined role in terms of vision and mission
find it difficult to achieve direction and map the direction for the department to ensure that
everybody within focuses on departments objectives.

54

The vision and mission must define the purpose of existence and all employees must feel
part of it meaning that inclusivity is the key.

Teamwork within the Department

The department has experienced high turn-over in leadership at management level and this
has created a void causing misalignment due to instability and a lack of team cohesion. At
lower levels there is no sign of strong team work which could have been supported by
positivity and group cohesion. There is concern with regards to the work methodology as
most of the work is done through trial and error; there is no proper planning and scheduling
of work. An encouraging point though is that through the challenges identified, work orders
and outstanding jobs have decreased on average which shows that employees are working
even though it is not through a proper maintenance system.

Team Productivity
Outputs of the maintenance department and its sections must be measured as a basis for
continuous improvement and this will give an indication of the departmental productivity.
The assessment found no proof of any measurement to check and measure productivity
and performance. In addition there were no defined performance measurement systems
to drive productivity in the department. Maintenance key performance indicators (KPI),
activities and performance measurement are not clearly defined for the whole department
and they are not dispersed to lower hierarchical staff ranks but only among senior
management.
The shortcomings can be overcome by the implementation of the following:
o

Development of the maintenance KPIs for the whole department that will disperse
down per section to all maintenance teams.

Develop a balanced reporting matrix or tool that can be used to measure all
sections at the same level.

All KPIs to be drawn from the same maintenance data in CMMS.

55

Measurement intervals to be standardized and have fixed period or time frames.

Change and New Technology

The personnel of various sections within the technical department have different views with
regards to the utilization, productivity measurement and usage of maintenance systems. A
proportion of the staff viewed the maintenance system negatively and it became clear that
there are misunderstandings with different views of the objectives and expectations of the
management concerning the maintenance management system.
A good understanding of new methods and technology in theory should start with the senior
management and once they have fully appreciated the technology, it can then be dispersed
down to all levels of the organization successfully.

5.3 Expertise and competence

Implementing successful maintenance asset management requires high quality capability and
capacity in engineering knowledge and skills; this will be complemented by the continuous
development and experience in the maintenance environment.

Training and development of personnel

The Technical services within water and sanitation in the City of Cape town does not have
training and development plans for individuals and no training requirements have been
identified to address the required skills and competencies. The only form of training was the
Work Place Skills Plans (WSP) which was not available for employees. This training was
indicated as being completed but no proof within various sections of the department was
apparent.
Graduate training programmes for engineers and technicians are not formalized and there
are no guidelines and time frames to develop graduates for the industry. No process is
available to track the training progress and assess the performance of the trainees. These
training programmes must conform to the requirement of institutions like the Engineering
Council of South Africa (ECSA) and other institutionalized authoritative bodies. Currently
there is no formalized coaching and mentorship systems. The department must consider

56

mentorship and coaching to assist in the effective building of expertise and skills especially
for new recruits. A skills transfer programme will enhance an organizations tradition and
train new recruits with the norms of the organization.
No evidence exists that managerial, supervisory development, negotiation skills and time
management training are taking place. There is a norm and understanding that such
training is managed and organized at corporate level but it is important that such
developmental training does take place and is driven throughout all department levels.
Recent techniques combined with the latest advanced technologies within the technical
environment include problem solving skills and decision analysis. This requires section
heads, maintenance managers and superintendents to have the necessary skills and
competencies in those areas. Evidence of such training or workshops are lacking in the
department. The relationship between different personnel related competencies and growth
of the organization is translated to organizational performance and productivity.
5.4 Maintenance management system procedures
The technical services department does not have a maintenance policy document which is
supposed to be the driving mechanism behind maintenance activities. A maintenance
policy should outline the objectives; underline the procedures to be followed under various
conditions including emergency procedures, the departments approach on backlog and the
outsourcing of certain tasks and activities within the department. The appendix B outline the
process to be followed in the creation of a good maintenance system and the proper
implementation of the maintenance system that can benefit the organization.

Maintenance Policy and Procedures

The maintenance policy forms the solid foundation where all maintenance practices are derived
from. It is vital that this document exists and it should give the general approach, guidelines
and principles of effective maintenance management. The technical services do not have a
documented policy and guidelines for technical activities. Employees just depended on the
course of action and experience of certain individuals. The policy can be developed over a
period of time and a project or task team can be mandated to develop such a policy. The task
team should comprise of people from different sections to ensure uniformity and
standardization.

57

The objectives for developing a maintenance policy is to ensure that work methods,
maintenance procedures, safe operating and working procedures are documented. This
ensures synergy and standard methods throughout the organization and can also assist the
development and training of new personnel in the organization to disseminate knowledge of the
operating methods of certain equipments. These documents are reviewed on a continuous
basis to ensure that they are relevant and regularly updated. Tasks must be completed within
the minimum time in an economical fashion without compromising quality and safety.
Different sections within the technical services department use different methods. This
produces maintenance confusion within operations department especially when job activities
involve different sections and personnel and there are no documented processes and
guidelines. The maintenance guidelines and procedures should include the following
processes:

Defect reporting and handling procedures.

Work order management procedure.

Planning and scheduling.

Procurement procedures.

Maintenance work execution.

Breakdown or emergency management.

Repairs, replacement and scrapping procedures.

Medium term planning.

Maintenance KPI.

Preventative maintenance process.

Maintenance schedule developer.

58

Prediction and condition monitoring procedures.

Incident investigation.

Continuous and performance measurement.

Root course analysis.

A proper implementation of the maintenance systems will depend on the successful development
of the maintenance KPI which will assist in the development of policy and strategy formulation. The
KPI will assist in measuring the performance of the department against the service levels and
agreed standards.
The findings reveal that there is no KPI to measure the maintenance team against the client
expectation and service level agreement. The service level agreements were found to be outdated
and no personnel were assigned to monitor conformity and performance. The major concern of the
maintenance system is a lack of effective use of the system and as a result, no benefits and value
can be drawn from it while the city has paid enormous amounts money towards the implementation
of the SAP. SAP is an enterprise resource planning (ERP) system which incorporates the
maintenance module.
The reports drawn from SAP did not indicate the objectives and the plan of action in problem areas
and whether any steps were taken to address critical issues since no processes and protocols
were identified. Some of the reports that were generated included:

Preventative maintenance.

Corrective maintenance.

Man-Power utilisation.

Plant availability.

Material and labour cost.

59

Maintenance cost by location.

Number of breakdowns and down time.

These reports can be used effectively to manage resource utilization and to manage maintenance
activities; they will also provide superior inputs towards budgeting and can be used to track
progress to provide the required interventions timeously. Other reports for utilization are used to
ensure that the available resources are used effectively and to check when additional resources
are required to avoid unnecessary costs. Figure 5.1, 5.2 and 5.3 below shows the reports drawn
directly from SAP used by the City of Cape Town water and sanitation departments.

450
400
350
300
250
200
150
100
50
0

ELEC
PCS

02 march 09 march 16 march 23 march 30 march 13 april

Fig. 5.1 Maintenance backlog per section

60

Issued job cards Backlog

Work Centre

Amount

WAM270

WAM220

WAM260

10

WAM240

24

WAM250

24

WAM230

31

WAM300

37

WAM290

38

WAM210

56

WAM310

62

WAM320

106

WAM280

149

Fig. 5.2 Backlog of job cards issued per month

61

REACTIVE VS PROACTIVE
80%
70%
60%
50%
40%
30%
20%
10%
0%
Reactive

Proactive

Fig.5.3 Average reactive versus proactive work percentage for 2008

5.5 Fixed asset register
The maintenance system is based on the asset register, which contains the data of all equipment
available for the organisation. The fixed asset register contains the equipment identity including the
numbering, physical location and equipment or asset number. It is easier to organize the asset
register if the company is using the maintenance system as its data base. Most systems have the
capability to classify equipment by their class or type that can be used to organise the asset
register.
It was observed that the asset register for technical services was incomplete. Most of the assets
were not correctly accounted for and not registered on the asset register because no single person
was assigned responsibility for updating the asset register. Most companies appoint one or more
individuals to register and deregister an asset when it is procured or condemned, respectively.
Although the city uses the SAP R3 system, which has the capability for creation and updating the
asset register, the fixed asset register was poorly managed making it difficult to implement asset
management and to plan for asset maintenance. The maintenance system uses the work order
system to ensure that an asset in the maintenance plan is linked to that particular asset. This
information is available for future references and can be used to plan for future upgrades, renewals
or replacements. If equipment is not registered on the asset register maintenance planning and

62

scheduling becomes difficult and results in poor maintenance reporting and wrong cost allocation
while maintenance budget will not reflect the correct costs because of the missing assets.
The average productivity measured on the job cards was less than 30%. Assuming that one work
day of 7.5 hours equals 7.5 man-hours; a productivity of 30% means a person works for 2.25 hours
of actual period. If productivity increases to 60% then a person does productive for 4.5 hours. The
quality and accuracy of the results depends on whether the correct information is entered on the
job cards. If some of the assets are not on the register or work is not properly entered on the
maintenance system a wrong impression is created.
5.6 Computerized Maintenance Management System

The CMMS is a system that is used by the technical department based on a SAP called SAP PM
Module or plant maintenance. The system is poorly utilised and is a cause of huge frustration to
the employees. There is confusion because the old management systems are being used in
parallel with the current system. The master data has not been updated causing confusion as to
whether some assets are missing or not on the master data.
The normal CMMS links the two processes of maintenance and materials processes. This
programme lays out the entire cycle beginning with the requirements and ending with an analysis
of purchasing and inventory control. The complete maintenance plan is addressed from identifying
needs to be accomplished and an analysis of the finished work. The Maintenance and materials
processes converge in the plant together with equipment configuration and bill of materials. An
understanding of the system lies in the availability of the blue print of how the interactions take
place within the institution/department. The capturing of the correct information into the system will
ensure an improvement in the decision-making process and will enable the business to progress
towards the maturity graph.
The CMMS is usually divided into modules of related functions which operate the various data
management and analysis activities.
The eight common modules/ capabilities that were evaluated are the following:

Equipment identification and bill of materials: all equipment covered by the CMMS is logged
with name plate data and the set of equipment is linked or identified according to hierarchy

63

or relationship. This was found to have been correctly done at the beginning but at the later
stage was ignored and hence never updated.

Work order management: this manages the process of opening a new order; estimates the
costs associated with the order, tracks the status of various orders on the system and ranks
them according to the priorities given. While SAP module has this capability, it is not being
utilised.

Preventative maintenance: it helps establish the PM schedule, describes the required tasks
and materials, allocates costs and set schedules. This is commonly used but not at full
capacity.

Inventory control: it manages the stores inventory. Its function is to track inventory on hand
and use as well as costs and allocation of inventory items for maintenance. This module
has never been used; the department depends on the procurement section to notify it of the
materials movement and availability.

Equipment history: records the history of equipment, which includes refurbishments, repair
costs, labour, down time, and utilisation in order to track failures and special events in the
equipment life cycle.

Labour: keeps an inventory of individuals, their skills, availability schedules, training history
and utilization to enable accurate work order and project scheduling and backlog control.

Budgets and costs: Projects, estimates and gives actual costs in multiple cost centres for
labour, material, services and allocated overheads.

CMMS utilisation by the department was at a very low scale. All of the above-mentioned modules
were found to have been utilised at a very minimum level and most of the modules were not
utilised at al. Yet a large amount of the money was invested in the system.

64

REAL
BENEFITS

EFFICIENCY
IMPROVEMENT

Maintenance

DEVELOP BUSINESS PROCESS

Initiatives

Asset Management
Strategy

Fig. 5.4 Maturity Graph

Figure 5.1 shows that the technical department is currently on the first column in their utilization of
the system. There is a business process being followed and the database does not have historical
information that can be used to make decisions. The need for a document management system is
in demand and this will help compliment the information management capacity that is available on
SAP. In this case, the hardcopy of the documents is in the possession of individuals. This is risky
to the organisation since most staff resign from the organisation and are reinstated as consultants.
These consultants use the same documentation that actually belongs to the organization. The
department did not have a technical library that catalogues all the manuals, drawings, projects and
contracts documentations for future references.
The review and assessment of transactions and reports from SAP reveal the following findings.

Flog structure was not properly set up, most of the new equipment not are not loaded into
the system and no standard process set up to be followed.

Master data is not complete.

Material master not being used and service master not existing at all.

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Planning and scheduling tools not properly used.

Existing task list is outdated while it has been standardised to all similar equipment and
sometimes not applicable to other equipment.

There is a lot of legacy systems being used in parallel with SAP, like spreadsheets with
constitute duplications as SAP provide that capability.

The process of reporting defects through creation of notification on SAP not formalized and
sometimes not used.

The most important aspect of the CMMS (SAP) is to enable and manage integration points within
the business. The SAP modules that integrate closely with Plant Maintenance module (PM) are
Material Management (MM) and Finance (FI). The key foundation of the integration is the master
data, without which the accuracy of the integration is doomed to failure. The development and
maintenance of the master data for the water and sanitation department will be crucial and it is
important that during the development process correct and proper standards are used.
5.7 Maintenance, planning, scheduling and control
Maintenance planning entails work order definition, scoping, resource planning, labour planning,
equipment planning, logistical arrangements and all other resources that may be required during
an execution of a task. This definition describes how preventative and corrective maintenance will
be executed and it sometimes includes costing of all resources on the work order.
Maintenance scheduling involves the process of allocating planned maintenance work to specific
time periods for execution of the work order. Specific resources including labour, materials,
equipment and tools are included in the work order. This ensures that all allocated resources are
utilized to their maximum to avoid a waste of resources. The maintenance planning and scheduling
impacts on the following maintenance issues:

Helps increase the amount of time resources spent on the actual work without delays.

Drives the rigorous execution of preventive maintenance, which is the key element of asset
management strategy.

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Instrumental in driving the initiatives and eliminates wastage.

Assists with accurate estimation of requirements for budgeting and resource allocation.

Eliminates the conventional way of planning and execution of work, which is based on
unwritten rules.

The technical department is currently working furiously at the breakdown maintenance strategy.
This is evident from the high levels of equipment failures and lack of formal planning and
scheduling processes. The problem is aggravated because incumbents assigned to these tasks do
not have the technical expertise and training for planning and scheduling techniques.
There is an overlap between maintenance planning and maintenance execution because of the
lack of proper maintenance plans from the planners. This results in maintenance supervisors doing
part of the planners duties. There is no formal planning and scheduling meetings between the
planning office and maintenance teams. The recommended steps for the department are to first
start with planning, scheduling and agreeing on the execution of work to provide guidelines to the
maintenance team. The second step is to develop a customised training module on planning and
scheduling for planners to improve their knowledge level on planning and scheduling.
Appendix A and B, gives a clear guide on the process to be followed. Appendix A can be used
for maintenance and equipment audits to determine the levels and condition of the equipment and
maintenance progress.
Appendix B gives different maintenance processes that can be adopted for various sections.

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Figure 5.5 outlines the process that can be followed during the strategic implementation and a
regular review of the strategic plans.

Awareness
prepare and finalise plans
prepare information packs
identify key stakeholders

Strategic Review anually

Strategic Review

Planning

Controlling /
progress

Implementation

Problem reas identified

Problem analysis
intervention by Exco if required

Fig. 5.5 Planning and review process

Ensure participation
Set up project team
Monthly review meetings

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Figure 5.6 below shows the staff utilization report from the technical department of the City of Cape
Town,

2007

2008

ELEC

129%

82%

Mech

108%

121%

Fig. 5.6. Staff utilization due to lack of planning

5.8 Reliability maintenance management
Reliability-centred philosophy provides organizations with a competitive advantage by continually
improving plant and equipment reliability, availability and performance. Upon establishment of
good maintenance systems and practices, an organisation would consider a reliability effort to
further develop production capacity and reduce variation in equipment performance. A successful
reliability effort will succeed if embraced by all relevant stakeholders (i.e. maintenance, operations,
stores and all other support groups. See Appendix B for the whole maintenance strategy overview
and implementation).
Different companies use different tools and processes. However, a good reliable philosophy can
deliver significant benefits without spending considerable amounts of money. A very simple
process can be employed to ensure that all tasks completed for the purpose of maintaining an
operation are done to appropriate levels or standards. It is a level of discipline implemented across
the whole continuum in which stores, planning, operations and maintenance uses certain
techniques and tools to pro-actively influence the reliability of equipment, reduce equipment related

69

losses and eliminate repetitive failures. The main objective of this philosophy is to move the
organisation from a repair focused culture to a reliability-focused culture.
Reliability management is an advanced level of asset management. The foundation of asset
management is to develop the basic procedures, develop maintenance standards as well as all
other CMMS related procedures to ensure that the entire hierarchical chain in an organization
accepts the idea and they implement the maintenance systems. Other processes, which include
the planning, scheduling and material management or procurement processes, must be instituted
before and the implementation of performance measurement in both the maintenance resources
and equipment is the key to reliable management.
Reliability management utilises the equipment history, performance measurement tools such as
condition monitoring and other systems to obtain information regarding the performance of the
equipment to ensure that correct preventative maintenance is done timeously. This process also
assists in planning for future upgrades or renewal of the asset. Available maintenance related
costs will assist the manager to make an informed decision whether the equipment should be
maintained or replaced because of high maintenance costs.
The reliability management section within technical services is still new. It has not been properly
developed and hence lacks the capacity to operate. Policies, procedures, and strategies are nonexistent. The objective of this section is either not clear to its management or it does not exist. This
is a critical component of the Technical department but it does not appear to receive priority in
terms of capacity, funding or level of importance. The section does not involve itself in technical
issues and its only capacity and core function is data capturing. The section had two technical
personnel as drivers of the maintenance processes and policies.
It is crucial that the decision makers look at correcting the situation by creating and capacitating the
Reliability management section. This will ensure that proper procedures and policies for the
department are formally developed. The main objectives will be to:

Review and improve the equipment maintenance programmes.

Evaluate preventative maintenance effectiveness.

Develop predictive maintenance techniques and procedures.

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Implement condition monitoring programmes.

Investigation of failures using structured techniques and also perform root cause analysis.

Develop training and development interventions for technical personnel on reliability

technologies.

Review and analyse the activity task, work methods and material usage practices.

Develop Safe Working Procedures (SWP) and Standard Operating Procedures (SOP).

Review equipment maintenance history and trends to ensure that correct interventions are
implemented.

Identify and implement improvement requirement to maintenance and operating practice.

Ensure that the existing strategy and procedures are appropriate.

Identify and recommend the detailed improvement to activities such as lubrication and
service task list.

Research solutions to eliminate defects.

Improve maintenance task scheduling.

Ensure data integrity.

5.9 Material management

The success of maintenance planning and scheduling depends on the efficiency of the material
management process. The availability of material, spares and other procurement items ensures
that maintenance plans are executed on time and minimises the backlog on maintenance.
Sometimes other departments enter into service level agreements with supply chain management
to ensure that there is a smooth process between planning, execution of work and resourcing of
planned work with material and spares.

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The quality of planning is the key and maintenance personnel need to get involved in all aspects of
the equipment life cycle, from design, installation and disposal of the asset. High redundancy/
obsolescence risks and non-availability of critical spares can often be reduced and can even be
avoided with involvement of material management in the spares determination and structuring.
This may sometimes involve the equipment classification into different categories to ensure that
high priority equipment that have significant impact in the functioning of the water or waste water
treatment are available when required.
Supplier involvement at the commissioning stages of the equipment is also important. Cost saving
can be realised through correct alignment with the right supplier. The influence of the suppliers is
useful in risks assessments and technological innovations within their specific markets. Involving
suppliers will also assist in early identification of obsolete equipment before catastrophic situations.
Materials management should ensure and encourage supplier partnerships and involvement in the
root cause analysis during equipment failures. This will ensure the uninterrupted supply of goods
and services while maintaining the equipment ownership and good relationship with the supplier
prompting quick response during equipment failures or diagnostic failures. The absence of supply
chain management policies or strategies for dealing with material handling or sourcing often limits
the potential of the department. There are other practices available on the market that help in
optimizing inventory management and implementing the best practices in supply chain
management to assure the reliability of service provided by the supply chain.
Maintenance loops consist of procurement, stores and maintenance management to ensure the
correct flow of materials and the management of inventory. The inventory needs to be kept at a
manageable level, not too high and not too low. This study revealed misunderstandings and
different interpretations within the technical department and the supply management. This involved
classification of emergency work, priority assets and the process that is followed in resolving them.
As a result many work orders were kept open because of the lead time for materials. High priority
equipment were open for abuse since the supply chain management refused to release material
orders that were classified as high priority.
The lack of skilled planners and maintenance planning resulted in confusions over emergency
procedures. For example, maintenance staff classified all maintenance work as urgent because
there is no formal planning. Some of the gaps identified during assessments were:

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Lack of maintenance involvement in capital projects and equipment acquisitions.

Non existent relationship between supply chain and maintenance personnel.

Lack of understanding and cohesion of the supply management policies and strategy.

No meetings or interactions between maintenance and supply chain.

The lack of involvement of the supply chain in maintenance issues delays the procurement and
acquisitions of large equipment, especially those that are ordered from overseas. The creation of a
standardized acquisition policy will ensure standardization of equipment, which is lacking at the
moment. The variety of different types of equipment within the same plant creates difficulties for
the supply chain to obtain and correctly inventory the items. The value of having regular meetings
and stakeholder interaction between the maintenance personnel and material management will
achieve the development of common standards which will be documented to outline the following:

Specification standards.

Quality standard establishment.

Stock levels.

Redundancy management.

Forecasting and planning of upgrades.

Vendor management and preferred suppliers.

Operational requirement should take precedence in the determination of preferred suppliers and
acquisition policies. This is why there is a need to involve other departments within the City of
Cape Town. This will ensure that the City of Cape Town benefits from the economies of scale
when purchasing equipment from major suppliers, especially when ordering items in bulk. The
integration and incorporation of other departments will eliminate the unnecessary duplication of
functions and decrease spending while increasing the quality of service and reduce the lead-time
for material delivery.

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Technical services do not have a standardisation policy and this has resulted in maintenance
personnel purchasing from different equipment manufacturers or suppliers. It is common to find
three or four different brands of bearings in the maintenance store, purchased from different
sources. The absence of a standardization policy and preferred supplier limits the purchasing
power of the organisation, limits the potential economies of scale and has negative impacts on
inventory and cost management. The organisation does not have a strategy of monitoring and
measuring performance value gain or loss due to repetitive repairs of equipment such as motors
and gearboxes. No commercial history is recorded to monitor systems for repairs and replacement.
The layout and location of stores creates delays in maintenance execution due to the time taken
during material collection. The decision to close some of the stores located close to maintenance
was taken by the supply chain without the involvement or consent of maintenance personnel. The
decision was purely unilateral. This highlights and underscores the importance of a good
relationship between supply chain and technical personnel. Some of the gaps identified are as
follows:

Satellite stores not managed through the maintenance system (SAP).

Procurement systems not userfriendly.

Material master not being used.

Sole supplier practice being abused.

Communications between maintenance, procurement and reliability management not

conducive to good working relationship.

Management of repair systems does not exist.

Critical spares not held at the stores but held by suppliers which is risky.

Stores requisitions uses manual system.

Materials preservation programme not in place.

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5.10 Fleet management

The success of maintenance activities and responsiveness depends highly on the availability and
condition of the maintenance fleet. All the fleet must comply with the relevant Road Traffic Act and
related legislation in terms of vehicle roadworthiness. Management has the responsibility to ensure
that the cost of transport operations and its related functions complies with the companys financial
planning and its objectives while they meet customer expectations in terms of level of service. The
financial and operational objectives will form the foundation of the fleet management policy, which
should give guidelines based on the corporate objectives, financial plan and operational criteria as
well as standards. The fleet policy must give clarity and guidance on:

The type, sustainability and age of vehicles used.

The mileage and operating conditions.

The quality and frequency of maintenance.

The responsibility of the driver and company.

Clarify the liabilities in term of roadworthiness and fines.

An assessment of the fleet management of the Technical services was based on the following key
elements of fleet management policy and in terms of best practices:
o

Vehicle selection criteria and specification.

Vehicle replacement.

Vehicle maintenance.

Tyre management.

Fuel management.

Vehicle policy.

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Risk management and loss control.

Management information System (MIS).

Legal compliance.

Service providers.

Fleet management policy

A fleet management policy does not exist for technical services but it available at corporate
level that are enforcing compliance. The technical policy is being developed but in a
fragmented format although fleet operation has been in existence for quite a long period. It
is expected that such a policy should be in place.

Vehicle selection and specification

There are no guidelines on vehicle selection and specification to ensure that these aspects
are based on criteria such as fuel economy, environmental consideration and supplier
support services. This is also influenced by procurement policies.

Vehicle maintenance strategy

Regular maintenance of vehicles guarantees availability and better management of
operating costs. The policy ensures that vehicles are safe and roadworthy and complies
with legal standards. This enforces sustainability of vehicles and protects the company
against any legal action which may arise due to non-compliance. There was no evidence
that a vehicle maintenance strategy exists and was being used even though there was
information on the existence of a policy. Furthermore, there were no lists of preventative
maintenance tasks or schedules with detailed maintenance instructions and frequencies of
the inspections. The department relied on the pre-trip inspections from the vehicle drivers.
These reports were not being audited to ensure that the managers attended to identified
defaults. The vehicle maintenance tasks lists and schedules must be available and
captured in the maintenance system for all vehicles.

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Tyre and fuel management

The fuel management system that was adopted and used by the department is one of the
best and is widely used in by fleet management companies. Due to the effectiveness of the
policy, the fuel costs were already reduced. One of the recommendations was the removal
of fuel dispensers, which were managed by the city, as there was no capacity to manage
the high risks.
Tyre management was not consigned and the current system that is partially used is not
effective due to the lack of control measures. Due to the risk of theft and system abuse and
the size of the fleet it is necessary to have a tyre management programme with other
reputable companies who provide such service. The department must consider
implementing the tyre management system.

Fleet audits

Audits are done to assess and compare the state of fleets in organisations with a set of preapproved and defined standards to establish whether improvement or interventions are
necessary and to ensure compliance with fleet management policy. These audits must be
carried out on a regular basis on an agreed time frame. The assessments found that there
is no regular or formal audit system in place and there is no documented audit tool to cover
all elements of an audit. An independent and impartial person or non-partisan party with no
interest in the department may lead the auditing to ensure objectivity and neutrality.
Vehicle replacement planning is a vital component in fleet management. The following are
suggested measures to develop the procedures:
o

Pre-determined expected useful life for each category of vehicle and type.

Estimate the residual value at the end of the vehicle useful life.

Estimate the productivity of vehicle types at the end of its useful life.

Owning and operating expense over the useful life.

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Vehicle disposal procedure and estimates of value beyond the useful life taking into
consideration the cumulative cost, condition and mileage.

Objective assessments before vehicles are written off due to accidents or

replacement.

Replacement procedures and the criteria.

5.11 Contracts

Equipment designs and blueprints influence their performance while poor designs may adversely
affect them. For example:

Inaccessibility of parts and components causing delays, errors and damages in

maintenance equipments.

Inventory levels.

Modifications and engineering changes.

Demand for more direct support during operations.

General increase in support costs.

Demand for maintenance resources.

Safety requirements.

The full capabilities of machines are realised by ensuring that during normal operations in their life
cycle, necessary support is in place for maintenance, training of operators, documentation, spares
and information. It was evident that earlier mentioned equipment management philosophies were
not in place within the technical department resulting in many maintenance breakdowns, a variety
of spares and non-standardization of equipment. The availability of such a policy is crucial
especially when looking at the asset base and the value of the asset being maintained. The early

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equipment life must form part of the procurement policy and needs to be used inline with the
current procurement documents.
These documents must cover in details the following requirement as specifications:

Equipment specification.

Task list requirements for failure analysis.

Spares requirements.

Bills of materials.

Training requirements.

Drawings and as-built drawings.

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1st Generation:

2nd Generation:

3rd Generation;

4TH Generation:

Strategy

Breakdown

Prevention

Prediction

Reliance

Structure

Central craft

Multi craft groups

Multi-skilled

Poly-skilled

trades

Technician

Self analysis

Maintenance
tactics:

groups

Failure

Operate to

Scheduled

Failure mode,

management

failure

overhaul

Critical analysis

Data

Card files

Mainframe

Fully functional

Fully networked

function

CMMS

Stations

Availability

Equipment

Probabilities

management

Measures

Throughput

Effectiveness
Fig. 5.7 Maintenance management tactics (Source: Campbell 1995:151)

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5.12 Conclusion
The Technical Services Department within the City of Cape Town is a strategic maintenance
department focusing on managing intensive assets that are critical for the water and sanitation
department. The key objective for the water and sanitation department is to provide water and
sanitation to millions of people in Cape Town and the surrounding areas. The success of the
technical services department in providing a reliable service as expected by various stakeholders
depends on having a solid foundation built on the ideals stemming from an excellent maintenance
management system.
The assessment of this study has revealed that the department lacks key maintenance
fundamentals limiting its potential to provide maintenance services to their clients. The department
is currently functioning on a reactive mode of maintenance and spending more time on breakdown
maintenance and little or no time on preventative maintenance. This was evident in the high
number of equipment breakdowns and chronic failures. This culture of ineptitude is evident across
all sections in the technical services department. The implications of maintaining the status quo
leads to high maintenance costs, lack of equipment reliability and availability, lack of stability within
the department and a strained relationship with the various interlinking operations departments.
The department does not have a maintenance management policy, which spells out the
maintenance strategy for the department. In addition, no maintenance procedures are documented
describing how maintenance must be carried out within the department. The department needs to
provide guidance on the acceptable standards of maintenance. The lack of maintenance policies
and procedures creates confusion within the department as different individuals develop different
interpretations of procedures and the processes when rendering maintenance services. Although
the department utilises SAP R3 as their maintenance module of CMMS, the evidence shows that
the systems are not properly used.
It was found that some of the configurations in the maintenance system are not user friendly
creating confusion and high levels of frustration amongst maintenance staff and others who are
supposed to use the system. The master data was found to be incomplete and the maintenance
task list was not properly developed for equipment on SAP. The maintenance task list and master
data should receive priority if the department wants to develop the correct foundation for
maintenance management system. The equipment numbers and the fixed asset register are not

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complete in SAP and some of the newly commissioned equipments are not correctly entered in the
system.
The integration and relationship between the supply chain and maintenance personnel is very poor
resulting in poor service delivery and an on-going confrontation between the two crucial
departments. The procurement system has an important role in the execution of preventative
maintenance and availability of spares and equipment. However, the poor relationship between
personnel of two departments has a negative impact in their functioning. Maintenance planning
and scheduling are the key drivers for maintenance organizations and their functions and activities.
Good planning and scheduling ensures that preventative maintenance is carried out in a planned
and cost effective manner. Thus the lack of these two key functions renders the department
functionless and without short or long term direction.
The need for properly trained maintenance planners with the correct background and expertise in
the technical field is not be underestimated. The current scenario where maintenance planners do
not possess the necessary background limits the potential for the reliability management section to
ensure proper support to maintenance sections. The role and function as well as the objectives for
the design and contracts section is currently not clear. This section can play a crucial role in
management of contracts and projects as well as ensuring the standardization of equipment to
assist the department with inventory management. The current situation where each subdepartment within the water and sanitation department have their own design and contract section
appears to be fragmented and results in silo effects between different departments.
Good maintenance policies and the balanced score cards approach does not exist within the
technical services. These systems will ensure measurement of activities and suggest interventions
for corrective measures to provide proper service to the clients. The fleet management section has
a number of gaps in policy, procedures and maintenance related items including tyre management
and vehicle replacement policies. While the department utilises SAP as their key CMMS it was
found that there is a lack of knowledge on the utilization and the capabilities of the system. This
has resulted in some personnel running their legacy systems in parallel with the CMMS.
Each deficiency on average requires other inter-related corrective actions while some offer the
opportunity for collateral improvements. Some deficiencies can be corrected using maintenance
and operations (M&O) work orders, while others could be corrected with the required capital
funding. The cost for correcting the total system usually exceeds available annual M&O funding. If

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one would calculate renewal of the system over an anticipated facility life of 50 to 100 years, the
annual capital required will be about 2.74 percent of the current facility replacement cost. This is an
additional amount over the normal operations and maintenance spending of the facility (Qualine
and Rabenaldt, 2002: 174).
Phased facility assessments, matching available time and effort to desired deliverables offer real
benefits and should include:

Prioritising corrective actions or maintenance and matching corrective actions with available
funding streams.

Keeping assessment data current.

Stretching the resources to be able to do more with less.

Promoting innovative approaches that can shrink problems into manageable solutions.

Audit results which promotes to equipment life cycle model and replacement cycles.

Developing portfolio data base.

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CHAPTER 6
PROPOSED STRATEGY FOR THE CITY OF CAPE TOWN TECHNICAL SERVICES
6.1 Introduction
The water and sanitation department is responsible for both bulk water supply and bulk sewage
treatment. The fresh water supply treatment plants do not require a rigorous maintenance
compared to the sewage treatment plants. Sewage treatment plants require more maintenance
because of the corrosive nature of the sewer. The presence of sewage and other wastes in rivers
or streams can produce harmful effects, such as diseases due to contamination of water. Sewage
contains large numbers of bacteria and other pathogenic organisms, which can be harmful to man.
High concentrations of these substances are more likely to give rise to diseases.
In the early days of public sanitation before sewage treatment plants were common, it was normal
practice to run sewage or other waste into the nearest stream, river or lake if there was a problem
at the plant. At the seaside towns, the sewage was run into river estuaries or directly into the sea
itself but as cities grew and the volume of wastewater increased, the effects grew increasingly
harmful to local sea life and caused contamination of nearby beaches. Awareness

of the

phenomena led to the consideration of various means to improve the situation; amongst these
were the provision of sewage treatment facilities and the emphasis on the asset maintenance.
Good treatment of sewage or effluent is necessary to ensure the reduction of the identified risks;
hence, it is very important that the technical services department is geared to provide the
appropriate service to ensure that treatment plants are reliable. The sewage organisms use up
most of the available oxygen in the water which results in water not supporting normal life. To
minimise equipment failure, it is necessary to carry out preventative rather than corrective
maintenance, which involves repairing and replacing damaged parts. Preventative maintenance
includes detailed inspections, reliability checking, cleaning, lubrication, replacement of defective
parts and calibration where required. Task schedules must be planned for maintenance to be done
by a process controller, maintenance personnel or their assistants. Certain equipment must be
checked daily or monthly at set time intervals or during the actual running hours of the equipment.

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6.2 Implementation approach

The Asset Management (AM) plan should be consistent with the organizations strategic plan, risk
management framework, nature and scale of the organizations assets, operations and the
availability of resources. In developing an improvement programme, the organization must assess
and decide on the realistic rate of implementation and on the deliverable plan of action. Different
equipment requires different maintenance tactics or approaches (Appendix C). Maintenance
approach could be preventative or corrective, though the important factor is the type of equipment
used.
The approach or process would identify and include the following:

Corporate business needs for AM process.

Current practices and status of AM practices.

The gaps between the current practice and business needs.

Develop and implement the AM improvements, considering the risks and costs of options to
close the gaps and the resources required.

Improvement task outcomes, project responsibilities and resources.

Proper maintenance of equipment contributes to its efficiency and life span. The identified gaps
between the technical services and the benchmarked processes available in the market and widely
used systems can be properly implemented in a phased approach to ensure that there is a smooth
transition between the current practices and the targeted levels. Most AM programmes failed
because improvement activities are seen as a sideline to the persons main job of operating the
assets.
6.2.1 Phase 1: Assessing the current asset management status and framework
The focus on this phase is to get the basics and fundamentals in place and start with the process
of developing a maintenance policy and strategy. The basic maintenance process will be

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developed to kick start a proper planning and scheduling environment. The areas of focus in
phase 1 will include the following:

Daily and Weekly meetings to sensitise people of the process

Develop maintenance policy and strategy

Basic maintenance management

Fundamentals in preventative maintenance

Basic inspection
Basic lubrication
Basic equipment numbering and condition
Work order control

This should focus on equipment condition and monitoring which is based on the manufacturers
operation manual or instruction, which covers the following areas:

Type and grade of oils and grease to be used

Frequency of greasing and oil changes

How much oil or grease must be used

Troubleshooting in case of problems e.g. overheating, excessive vibrations

Business process implementation

Planning development and training
Maintenance improvement programme implementation

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Procurement improvement
Identification of all critical spares for equipment for prioritisation
Utilization of material master and basic contracts
Implementation of satellite stores
Develop good working relationship with Procurement department to enhance the
maintenance improvements.

The scope of phase 1 for assessing the current AM status could relate to the four broad AM plan
inputs/outputs and the AM process plan:

Processes: the processes, analysis and evaluation techniques needed to support effective
AM plan.

Information Systems: The information systems to support AM process and manipulate the
data.

Data: Appropriate accessible and reliable data for manipulation by information systems to
produce the outputs required for effective decision making.

AM plans: Identifying the optimum lifecycle management tactics and resources.

Implementation tactics: Strategic tactics required for dealing with organizations, contractual
and people issues.

6.2.2 Phase 2: Condition assessment and performance monitoring

Condition data is used to determine the need and timing of some preventative or remedial action to
prevent loss of service or economic loss. Performance monitoring is done to compare actual
performance with service standards and systems design. Once the base level maintenance
management procedures and systems are in place and working well, including processes such as
planning and scheduling, materials management and the collection and use of performance data,

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the next phase, phase 2 may commence. The focus of phase 2 is prevention and breakdown
reduction through the implementation of the reliability centered processes and culture within the
maintenance department.
The best practice outcome of implementing AM processes for decision making and supporting data
collection and information systems is to gain a:

Knowledge of assets owned.

Knowledge of physical condition of assets.

Knowledge of levels of service agreed with customers.

Knowledge of performance and reliability.

Asset utilization and capacity.

Asset value and predicted future demand for service.

Predict the failure modes and estimated time of failure for assets

Ability to analyse alternative treatment options and determine the likelihood and
consequences associated with different failure modes. The above processes are outlined in
Fig. 6.1.

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Fig. 6.1 Condition Monitoring process (Source: IIMM, 2006:3.3)

The focus areas of phase 2 will include the following:

Reliability based maintenance programme development

RCM process
RCM decision logic
Preventative and predictive maintenance schedules
Equipment criticality and risk assessment
Decision matrix

Maintenance schedules

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Spares requirements

Local content potential

Skills requirements

Special tools

Time requirements

Fig. 6.2 Decision matrix (Source Campbell, 1995: 115)

Problem solving entrenchment

Procurement Effectiveness

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Develop cataloguing principles and source software

Set up the Material Requirement Planning (MRP) requirements
Create information records and source list
Enforce the use of material master and make it a compulsory requirement for new
equipment purchases
implement equipment standardisation policy
6.2.3 Phase 3: Reliability and monitoring
This phase looks at the reliability and accuracy of the information to ensure that decisions are
made from correct and accurate information. It also looks at ensuring that correct master data,
materials register equipment register and fixed asset register are in agreement. The updating of
the maintenance tasks list and materials register forms the core of maintenance management and
will be the focus of this phase.

CMMS should have the following basic capability

CMMS reports development
Equipment register update
Master data cataloguing
Material master creations
Service master creation
Bills of materials

Maintenance and materials processes converge in the plant. The equipment configuration and the
materials required must be reported in the analysis conducted. The maintenance management

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systems can be better understood and utilised if there is a blue print of how they should interact.
At the same time, the CMMS simplifies the job management information. The CMMS may run on
the main frame, minicomputer, workstation, microcomputer or network and because of their
increasing capabilities and ease in networking for multiple users, micros are the most popular
platform for CMMS software.

Category

Goal

Business Objectives

Reduce failures
Improve
Reduce stoppages
availability,
Increase speed
reliability and
Reduce rework
maintainability
Performance monitoring

Increase
Capacity

Reduce Cost

Reduce overall
maintenance
costs

Reduce labor Reduce

storage inventory
Reduce emergencies
Reduce paperwork
Performance Monitoring

Systems Objectives
Analyze equipment
histories manage
equipment data
keep skills profile
Keep bills of materials
Build PM routines
Monitor machine variance
Costs and performance
data on equipment
Control jobs
Plan labor/materials
Analyze usage
Analyze investment
Schedule PM
Analyze breakdown
Automate work orders
Automate PO's
Cost by area, labor, job

Fig. 6.3 CMMS Objectives

Reliability based maintenance

Condition Monitoring
Maintenance task review
Operator checks

This approach complements other improvement initiatives, such as just in time (JIT) and total
quality management (TQM). It provides:
An improved support from people in operations, materials and technical departments for RCM and
ensures the acceptance of change. It also provides flexibility and cost effectiveness, minimizing
the need for full time staff. The foundation of this process is the cross-functional RCM review team

92

of employees and this ensures that all critical areas of physical asset management are covered for
not only maintenance but also the operations, procurement and financial needs.

Fixed asset register update

Early equipment management

Fleet management systems

Maintenance audits tools

Fig. 6.4 RCM implementation process

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6.3 The maintenance planning

Optimising maintenance management is a major challenge for the asset managers. They need to
strike a balance between planned and unplanned maintenance arising from unexpected failures. A
risk based approach is used which looks at the required performance from the clients perspective
and organisational outcomes for the service at lowest cost. The risk based maintenance approach
looks at various processes, which includes:

Identifying assets and their expected outputs.

Performing failure analysis to predict potential failures.

Analysis of different maintenance options and changing maintenance intervals.

Assessment of the lifecycle costing option to ensure reliable performance.

The required maintenance outcomes are usually expressed as service levels and performance
measures in maintenance contracts. The detailed work maintenance practices required to achieve
the outlined outcomes are developed and assessed through formal maintenance analysis.
6.3.1 Important elements of maintenance planning

The best practices in maintenance management planning involve the activities that involve inputs
and outputs from both maintenance and operational staff and other staff who would execute the
maintenance tactics. The maintenance activities should include:

Development of business objectives and performance criteria and measurement of

performance against these objectives.

Analysis of failures and root cause analysis to prevent recurrence.

Costs benefit analysis to determine optimum benefit between planned and corrective
maintenance.

Operations and maintenance manuals outlining the procedures as appropriate.

94

Contract management auditing procedures and work quality, quality of workmanship and
reporting procedures.

Contractors performance audits and feedback.

Operations and maintenance data capturing/recording and processes for tracking

maintenance performance.

Process of continuous improvement and monitoring of all activities and updating of

documents.

6.3.2 Maintenance categories

There are two maintenance categories for asset management. These ensure the reliability and
performance of equipment and are undertaken to reduce the probability of asset failure to an
acceptable standard or level. These activities include:

Preventative maintenance actions done before asset failure, this is a regular programme for
ensuring asset functionality and availability.

Servicing tasks which require consumable materials and the process of replenishment of
consumable materials.

Condition monitoring systems determine the conditions and functioning of equipment. The
aim of this process is to determine the level of operation, predict the failures before they
occur and introduce the corrective measures to prevent catastrophic failures.

The process of categorizing maintenance is done to differentiate between various maintenance

tactics so that the correct tactic can be used to restore the asset to its original condition. Choosing
the wrong tactic could result in high cost of maintenance and the poor utilisation of resources.
Unlike the planned corrective maintenance, unplanned corrective maintenance is work carried out
in response to problems or defects reported by the user or operations, to restore the asset to its
original operational condition. Technical staff may carry out the corrective maintenance. Some of
the unplanned activities include:

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Equipment repairs, this is limited to fault isolation and dismantling of the equipment to
restore or replace the faulty item or component.

Modification and design, this is the process to enhance the performance of the equipment
to enable it to meet its operational objective.

Condemnation and replacement, where it is uneconomical to repair the asset, it is replaced

to avoid costly maintenance activities.

6.3.3 Process of maintenance analysis

Reliability centred maintenance is based on the philosophy that maintenance is the key function of
the company. It is crucial for the expected function performance and productivity goals to be
achieved. RCM approach can be applied to provide a

reachable balance between planned and

unplanned maintenance, especially for critical assets to ensure that required, and expected
performance levels are achieved.
The RCM is a progressive based process and it examines and analyzes the following issues
related to assets.

The assets owned and operated by the organisation.

Functions of an asset and how it contributes to the achievement of the performance

standard.

The asset objective and performance standard.

How the asset can fail to perform its objectives and the causes of failure.

Consequences of each failure and what should be done to prevent each failure.

The ways of predicting and preventing each failure and the cost effective options.

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The formulation of the RCM process depends on the maintenance principles that the organisation
wants to implement. The reliability maintenance systems with the assistance from CMMS will
create and grow the profit centre instead of a cost centre.

10%
Profit
Center

90%
Cost
center
100%
Profit
center

Fig. 6.5 Turning Cost Centre into Profit Centre (Source Plant Engineering, 2008:25)
In an effort to view maintenance as a positive activity, it is important to see it as a profit centre
instead of a cost centre. A cost centre approach is strictly concerned with adhering to the budget
and decreasing expenses as much as possible. In contrast, the profit centre model realizes that
investment and operating costs can be allocated to improve efficiency, this efficiency naturally
results in higher profits (Bagadia, K. 2008: 2).
Maintenance is the backbone of any organisations where equipment needs to be maintained,
whether at a manufacturing plant or Utility Company. With CMMS in place, maintenance can save
time and money for a number of industries. Another way that companies can turn maintenance into
a profit centre is through Overall Equipment Effectiveness (OEE), OEE consist of three factors:

Availability: the percentage of time that the equipment is available for production.

Utilisation: The rating of the equipment, from the design specification.

Quality rate: this gives indication of how good the final product is out of all products
produced.

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Overall equipment effectiveness is a good path to follow to turn maintenance into a profit centre,
as the following equation supplied by Bagadia: (Bagadia 2008:2)
OEE = Availability X Utilization X Quality rate
6.3.4 Creation of the maintenance plan
Once the set of tasks are determined, the required activities, interventions and the condition of
equipment are known it is necessary to develop the maintenance plan. The maintenance plan
consists of maintenance tasks for individual equipment, which are organised into a detailed plan of
action. The maintenance plan will normally consist of the following:

Maintenance and operations objectives, performance criteria and expected outputs.

Maintenance policies covering planned and unplanned maintenance activities and outline
the overall maintenance strategies.

Maintenance and operations standards.

The required basic inspections performed by operators and preventative maintenance

plans.

Procedures for dealing with critical events, classifications of critical items or equipment.

The emergency repairs processes and responses during certain failures.

The detailed maintenance plan will enable the organization to establish the improvement potential
within the system. Two types of improvement will results from a well-designed and integrated plan:

Functional improvements: improvements in the process for handling maintenance work and
cost improvement. The functional improvements are essential for employee support.

The cost improvements: these are long term management support.

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The majority of organisations will write their improvement potential in a mission statement so that it
can provide focus on tangible goals for everyone involved. Measurement of results versus the
goals will keep management and employees informed of progress and keep them motivated during
various phases of development. The improvement cost will depend on the needs uncovered during
the assessment of the current situation and determination of the improvement potential.
6.3.5 Maintenance system
Understanding of maintenance work process and flow will enable managers to identify and
eliminate inefficiencies as well as to develop an effective, productive and improved work process
flow. Usually maintenance personnel work under pressure due to emergencies and other
unplanned activities while technicians do not have time to correctly analyse the root cause of the
problem and instead tend to fix it and move on to the next problem. This can lead to recurring
breakdowns and long-term loss of productivity.
With the utilization of workflow management and scheduling, technicians can spend more time
determining the root causes of problems. When repairs are thorough and complete the risks of
recurring defects and further damages are minimised, saving invaluable amount of capital in the
process. It is crucial that inefficiencies in planning and scheduling as well as in work process flow
are minimised or else latest technologies will be rendered obsolete to the cause.
Some technologies have the potential to turn an efficient maintenance department into a real time,
problem solving maintenance centre. Adding CMMS technology to the maintenance system can
enhance efficiency and lead to cost saving measures. A CMMS can improve the workflow and add
flexibility to further improve scheduling while allowing employees to initiate and approve work
orders. Work order management will ensure that the maintenance manager knows how many work
orders are generated each week. This will assist in tracking the productivity of personnel, which
includes the time spent on the job, materials used, labour and all other resources used for the job
including costs related to the work order.

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6.4 Conclusion
It is clear that the utilisation of the maintenance system is not the initial but last step in the physical
asset management. The foundation starts with assessment and understanding of the condition of
the asset. Regardless of the systems that get selected, the first step is to start from the current
situation and develop an orderly series of steps to get to where the target or objective by assessing
the current situation. The assessment will reveal the maintenance interventions and maintenance
tasks required. Then the maintenance tactics are chosen based on the condition of the asset,
which is assessed using the condition assessment methodology.
The maintenance plan will be derived from the two initial tasks, the assessment and condition
monitoring. The maintenance plan will then include the required tasks, resources, materials, labour
and costs. All this information will be entered into the work order system using the maintenance
system or CMMS. The CMMS makes planning and scheduling easier for maintenance personnel
and it ensures that there is a history for the asset for future references including budgeting for
maintenance. The process of developing a maintenance plan involves several interrelated steps for
decision making and these include:

Grouping tasks into work related packages

The intervals at which each work package is to be performed

The decision matrix depends on the plans for individual maintenance tasks, taking into
consideration the operational and maintenance management requirement. Once the decision is
made, it will need to incorporate the maintenance workload and labour requirement within the
maintenance cycle.

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CHAPTER 7
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS
7.1 INTRODUCTION

The research showed that maintenance of an asset cannot eliminate the inherent failure
completely but the risks are reduced significantly by having more structured maintenance
management programmes. The literature research revealed that the common elements in most
philosophies and models that have been developed for management of assets are:

A well defined service level and performance standards linked to the organizations strategic
goals and objectives

Equipment conditions and life cycle approach

Financial implications of asset management

These provide the building blocks for developing the design and techniques to manage
maintenance

and

replacement

programmes

associated

with

financial

projections.

The

requirements to fund depreciation and corroding wastewater infrastructure at the City of Cape
Town have resulted in an intensive drive to focus on both valuations of infrastructure and
improvement of physical asset interventions and skills.
7.2 SUMMARY OF RESEARCH RESULTS

The objective of Physical Asset Management (PAM) is to develop and maintain the infrastructure
to ensure that defined service levels and performance standards drive asset requirements and
asset management strategies. The research looked at establishing the relationship between
physical asset and business objectives by using the City of Cape Town Water and Sanitation as a
case to answer the following questions:

How can the PAM models internationally established and recognised, be implemented and
utilised in the Water and Sanitation organizations?

What are the fundamental requirements for the implementations of sustainable asset
management practices?

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How can the application of PAM be beneficial to organizations?

The literature highlighted how most asset intensive industries are realising the importance of
having an enterprise asset management (EAM) system or other CMMS to track and monitor
business processes. The EAM system has never been more important especially today with
uncertainty in the economic conditions, an ageing workforce and changing regulations. It has
become important that organizations cut or reduce their operations cost while trying to maximise
their revenues.
The internationally established PAM models discussed in this report including the (i) Uptime
maintenance strategies by Campbell, (ii) Pragma AIMIP strategy and (iii) International
Infrastructure Management Manual all gave the similar approaches to physical asset management.
All the strategies outlined the requirement of successfully implementing the asset management
systems and all have shown similarities. Evidence of the success that PAM has achieved through
the team effort amongst all the role players, affected sections and departments in the organization.
Effective implementation of PAM in the organization requires the correct integration of the
objectives with all business functions in a coordinated way and should form part of the business
strategy.
People managing capital-intensive organizations will do well to implement PAM strategies, as it
forces organizations to control their planning, scheduling, maintenance and replacement
programmes. PAM is one business functional area where the reduction in operational cost and
increasing the bottom line can be realised if efficiently utilized. It forces the asset managers to plan
and manage the asset beyond the commissioning date and ensure decision-making becomes
easier throughout the asset life cycle.
The researcher used the current practices for the City of Cape Town to evaluate how most
organizations in the similar industries can benefit from the lessons learned from the City. While the
Technical services within the Water and Sanitation is regarded as the best utilization of
maintenance Technology in managing their asset, the research revealed some short comings in
the department asset management. The recommended proper implementation and utilization of a
maintenance management system and the required resources and interventions are given in
Appendix B. The City has adopted the best practices available in asset management but failed to
implement the basics to ensure sustainability of the system and that has resulted in confusion and

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a lot of people implementing SAP PM module in parallel with their legacy systems while the
organization has invested more than five hundreds millions rand into SAP.
7.3 CONCLUSIONS

It is evident from the research that Asset Management, Physical Asset Management and Strategic
Asset Management Strategies are similar terms used to refer to the process whereby an
organization aims to obtain optimum economical benefit from the process of acquiring, utilizing and
/ or divesting a physical asset. The case study for the City of Cape Town highlighted the fact that
implementation and utilization of the best practices does not have short cuts, and any attempt to
short circuit the process always results in more costs and the loss of economical benefits that
could have been derived from such systems.
During the assessment of the Technical services division of Water and Sanitation, the following
issues were identified:

The methodology of Physical asset management assessment, strategic planning and

replacement were not fully understood and deficiencies within the current process were not
identified and corrected.

The change from previously used fragmented systems and integration to SAP PM Module
was not well managed and this created parallel systems that were still being utilized.

The balanced score card was only applicable to senior level managers and cascaded down
to the operational level and that created a situation where no leadership was driving the
process.

Some of the departments within Water and Sanitation use different systems and this shows
a lack of Direction and leadership for the department.

There is a lack of work order management and the system is conveniently being utilized not
for production purposes and therefore no benefits are produced from using the system.

Reliability Management section, who are the custodians of the system, lack capacity and
appropriate skills to manage and advice other sections about the system.

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The department seems to lack the understanding of the concept of Asset Management and
operate on reactive and the fire fighting mode of maintenance. Worryingly they seem to be
comfortable in doing so and this in turn limits the potential for growth and benefit. The
leadership of the department needs to be trained on the concepts so that they can drive the
process of asset maintenance.

The Asset Management is currently being carried out in pockets on an ad hoc basis
throughout the City and follows no formal approach; a review of strategic maintenance
management has been suggested in the Appendix B.

The set up of an Asset data base, Asset register and Asset Clusters makes it difficult to
utilize the data on SAP, the correct set up is required before the attempt to utilize the
systems is undertaken.

The change management process is required to pilot and manage the change throughout
the organization; this will enable buy in from all stakeholders and ensure compliance.

The development of maintenance policy, which was mentioned as not existing within the
City, was identified as a crucial step to the correct direction in implementing asset
management. This will give direction and guidance to the maintenance personnel on the
process going forward.

The maintenance Management diagnostic gave key areas and elements that are important
towards successful implementation of an Asset management. The systematic implementation
approach provided in Chapter 6 provides a guide into water and other related industries, which
needs sustainable management of their assets. This approach is classified into different categories
starting from business objectives. These are the following:

Business objectives: Business plan and competitive dimensions, nature of business,

operating plans, policies, special regulatory framework, environmental and safety
considerations.

Maintenance strategy: Documented mandate of the organization; Maintenance principles

and improvement plan. This gives the overview of the facilities being managed, capital
expenditure plan and upgrading process and overall operating budget.

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Organizational structure: This should give the structure and the preferred communication
channels, personnel structure and authority for different delegated authority for approval.
Key accountabilities within the organization and hierarchy of maintenance management
system.

Maintenance administration: The custodian of maintenance management and process

flow, cost reporting, cost control and information flow through reports that needs to be
generated from the maintenance system.

Planning and Scheduling: Priority setting, collaboration, work scoping and activity
planning which includes the planning of activities and resources. This process involves
coordination with other relevant department and external parties.

Work order management: This requires the appropriate understanding and competencies
to apply the policies to manage the backlog and the process of maintenance, relevant
authority is required to make appropriate decision to change and prioritise work.

Maintenance tactics: Maintenance requires the selection of appropriate tactics to use for
different equipment. No single tactic will suffice for all equipment in maintenance and the
condition monitoring will assist in deciding the correct tactics.

Maintenance history and Decision making: The CMMS assists in data management and
work processing. The history of an assist allows one make the correct decisions with
regards to the type of maintenance required for the particular equipment and it also assist
in maintenance budgeting.

The Physical Asset Management will be more beneficial to organizations like Water and Sanitation
services and all other Water related organizations especially those dealing with maintenance of
Sanitation as their asset life is shortened by the corrosive nature of the operating conditions.
Accurate and real time fault recording and conditional monitoring are the crucial elements for
organizations dealing with wastewater treatment and water services and this will ensure an agreed
service level.
Response times to faults and turnarounds are managed through work order management and work
planning as this will minimise the environmental impacts during wastewater spillages and

105

blockages. When both planned and unplanned work are recorded through CMMS, equipment
history and work quality is managed through available data source which manages daily, monthly
and financial year work activities including expenditures. When a large number of jobs and
equipment malfunction has to be carried over to the following financial year, the database will
enable financial managers to make appropriate provisions before the financial year-end to avoid
utilizing funds from the new budget for the old work.
7.4 RECOMMENDATIONS

While the paper looked at different maintenance strategies and principles for Physical Asset
Management and the benefits of their utilization, water related industries could benefit more as the
competencies and skills required to perform well in the industries is very scarce. PAM ensures that
knowledge transfers are available from the database for new recruits and the maintenance policies
will enable everybody to operate from the same base. Currently where most people use their gut
feel and experience to maintain assets and standardize maintenance activities.
Performance measurement ensures that there is a common measurement tool when measuring
maintenance performance and that it is applicable to all maintenance personnel and not only to
senior management as that creates confusion and lack of leadership. Maintenance is a
concomitant part of reliability and an integral arm of equipment asset management as it affects the
useful period of an asset. Equipment mean time to repair (MTTR) becomes important to the asset
user as it gives an indication of when the asset will be available for operation and in turn the
information becomes crucial to the maintenance manager for the team productivity and planning.
Water services industries will do well to implement and apply the PAM philosophy in their
organizations, as it assists in achieving high reliability and availability of water treatment equipment
but depends on the following factors of the organizations:

Operating and maintenance philosophy of the organization

Maintenance policy and strategy which drives the maintenance tactics to be used for
proactive maintenance and corrective maintenance

The types of equipment used to monitor the asset conditions to predict and minimise
failures

Depending on the maintenance strategy the organization chooses, a co- ordinate material strategy
will help reduce the equipment down time and the waiting time for spares. Shortening MTTR

106

requires a critical assessment of all steps in machine assembly and disassembly. The asset
management equips maintenance personnel to improve customer service and control cost while
also addressing the quality of service. Equipment maintenance history is crucial for quantitative
reliability work. Details of the past planned overhauls and as-found component conditions,
component failure models, corrective maintenance events, component degradation and its causes
as well as predictive and preventative maintenance provides valuable inputs that describes
equipment behaviour in operation. The primary use of the data will be to develop statistical failure
distributions that represent the failure mechanism of equipment and its subcomponents.
The evidence suggests that different asset management strategies could result in various
problems if not properly applied. The success depends on developing good policy foundations and
understanding of the maintenance requirement. The maintenance function is extremely complex
and requires proper understanding of the underlying maintenance objectives. It is suggested that
the City adopt the maintenance objectives that will become the fundamental principle for all
maintenance activity. An example is the following:
The objective of the maintenance function is to support the production process with adequate
levels of availability, reliability, operability and quality at acceptable levels of safety, environmental
risk and cost
The above objective consists of seven sub-objectives which are: availability, reliability, operability
and quality, safety of equipment, environmental risk and cost.

107

LIST OF SOURCES
Bagadia, K. 2008. Turning maintenance into a profit centre with CMMS. Plant engineering,
Maintenance connection. July, 25:2.
Bleazard, D.G. & Khu, P.T. 2001. Physical Asset Management Philosophies. Engineering and
Mining Journal, March, Vol. 202, 36.
Botes, H. 2006. The evolution from plant maintenance to physical asset management: an analysis
of Sasol Synfuels roadmap for change. Unpublished research report. University of Stellenbosch,
Cape Town August.
Campbell, J.D. 1995. Strategies for excellence in maintenance. Uptime. Oregon, Portland
Campbell, J.D. & Reyes-Picknell, J.V,2006. 2nd Edition. Strategies for excellence in maintenance
management. Uptime. Production Press, New York
City of Cape Town Website. The cooperate strategy and Water services development plan
(WSDP) [Online] Available:
http://www.capetown.gov.za/en/ water/Documents_situation.13_Oct_08.pdf
Accessed 23 June 2009.
The City of Cape Town Water and Sanitation strategy document. [Online] Available:
http//www.capetown.gov.za/en/water/documents/vision_strat_goals.pdf
Accessed: 09 October 2009
Dunks, B. 2007. Effective EAM Strategy drives plant and enterprise success. Plant engineering,
December, 18.
Fitzgerald, K.F. 2005. Recognize the true value of asset management. Plant engineering, Sept, 34.
Garibay, P.& Ronsivalli, L. 2008. Blowing hot and cold. American school Board Journal, July, 3637.
Geraghty, T. 2001. Utilities re-think failing maintenance strategies. Water engineering and
management. November, 37.

108

Koegelenberg, J. 2005.Integrating PAM with business strategy. Unpublished research report.

University of Stellenbosch, April.
International Infrastructure Management Manual. 2006. 3rd edition. New Zealand: Ingenium
Moore, R. 2006 Many facts to an effective asset management strategy. Plant engineering. April,
35-36.
Publicly Available Specification 55-Part 1. Asset management: specification for the optimised
management of physical infrastructure assets. 2004. 1st edition. London: British Standards
Institute.
Publicly available specification 55-Part 2. 2004. Asset management: guidelines for the application
of PASS55. 2004. 1st edition. London: British Standards Institute.
Pradhan, S.A. 2005. Reliability driven asset management strategy for reciprocating compressors.
Aug, 51.
PRAGMA 2001.Asset management improvement program (AMiP). Pragma Brochure. 2008 May
23.
Worley International. 2000. Strategic municipal asset management. Urban and local government.
Background series 5. April, 1-3

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APPENDIX A:

MAINTENANCE AND EQUIPMENT AUDITS

Quick Plant Audit
Name of the plant.. Date:..
Name of the Auditor:.
1. Inlet works
Equipment

Condition

Expected

rating

Rating

Section 1 overall score:..

Comments

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2. Process Equipment
Equipment

Condition
rating

Section 2 overall score:.

Expected condition

Comments/Reasons

111

3. Dewatering Equipment
Equipment
Condition rating

Expected condition

Section 3 overall score:.

4. General condition of the plant and the quality of effluent:

Comments/Reasons

112

Section 4 score:

5. Maintenance System.
5.1 Maintenance plans available.
5.2 Maintenance plan being used.
5.3 Completed jobs/month versus planned jobs..
5.4 Work classification/categorization
5.5 Understanding of maintenance KPI from technical staff..
5.6 Work order management in place..
5.7 Quality of information on work order
5.8 Quality of feedback on work order.
5.9 Availability of spares in stores or to Technical staff.
5.10 Work prioritisation: Corrective versus Prevention
Section 5 score:..
Overall Impression of the Plant.

Overall score:.
Scoring System used:
1: -Worse condition, serious intervention required
2.: -Moderate condition, potential hazard, improvement needed and could be achieved soon
3.: -Good condition, room for improvement

113

4.:-Very good
5.: -Excellent condition, everything well managed
* Average all scores in each section to get the overall score for each section
**Average all scores to get the overall condition of the plant

114

APPENDIX B:

MAINTENANCE STRATEGY OVERVIEW

BUSINESS STRATEGY

MAINTENANCE MANAGEMENT VISION

AND OBJECTIVES

MAINTENANACE MANAGEMENT POLICY

PLANT AND
EQUIPMENT
RELIABILITY
PROGRAMS

Schedule
Development
Preventative
Maintenance
Reliability
Programmes
Predictive &
Condition
based
Maintenance
Continuous
Improvement
Shutdown
Optimization

SAP R/3 PLANT

MAINTENANCE

Plant &
Equipment
structuring
Notifications and
Work Order
structuring
Maintenance
Reporting
Documentation
control
Control &
Integrity
Master Data
Equipment
Master Record

PLANT AND
EQUIPMENT
FACILITIES

Criticality
Housekeepin
g
Internal
Review
Workshop
Tools
Plant
Modification
5-S in
Workshops
Plant
Maintenance
Audits

MAINTENANCE
CONTROL,
PLANNING AND
SCHEDULING

Work Order
Management
Weekly
Maintenance
Planning
Maintenance
scheduling
Shutdown
Management
Equipment
Repair
Replacement &
Scrapping

MATERIALS &
ENGINEERING
SPARES
MANAGEMENT

Quality
Control
Supplier
Alliance
Material
Maintenance
Material
Storage
Capital
Spares
Internal &
External
Equipment
Repair
5-S in Stores
Standards

CHANGE
CONTROL,
DOCUMENTATION
& INFO SYSTEM

Change
Control
Management
Maintenance
Documentation
Maintenance
Manuals
Equipment
Manuals
Master Data
Changes

ORGANIZATION
AND STAFF

Maintenance
Organization
Structure
Four Tiers Of
Management
Roles and
Responsibilities
Job
Models/Profiles
Business
Process
Call Out
Control

PEOPLE

Principles
Development
Culture
Innovation
Synergies
Methodology
Technical
Training
Equipment
Training
Skills
Development
Action &
Workplace
Learning

OCCUPATIONAL
HEALTH &
SAFETY

Premises&
Housekeeping
Mechanical,
Electrical *
Personal
Safeguarding
Fire
Protection &
prevention
Incident
Recording &
Investigation
Health &
Safety
Organization

OUTSOURCED
SERVICES
,PROJECT
INTERFACE &
TCO

Early
Equipment
Management
Service Level
Agreements
Phase Project
Review
Outsourced
Maintenance &
projects
Interface
Total Cost Of
Ownership

115
APPENDIX C:

MAINTENANCE STRATEGY TREE

Maintenance
Strategies

Corrective
Maintenance

Preventative
Maintenance

Design out
Maintenance

Predictive
Maintenance

Condition
Monitoring

Inspections

Use based
Maintenance

Scheduled
Overhaul

Scheduled
replacement

Component
replacement

Opportunistic
Maintenance

Block
replacement

Routine services