Open-access content 13th November 2008
PAS 55 offers organisations an independent standard for asset management best practice - one which could help them to lower costs, deliver sustainability and satisfy regulators
by Noel Grinsted
20 November 2008
PAS 55 is the British Standards Institution's 'publicly available specification' for the optimised management of physical assets. PAS 55 defines assets as follows: "Assets include property, buildings, facilities, plant, machinery, vehicles etc. that have a distinct and quantifiable business function or service."
PAS 55 defines asset management as: "the optimum way of managing assets to achieve a desired and sustainable outcome at minimum total cost of ownership of the assets through their whole life cycle." Asset management recognises that often decisions to acquire new assets focus primarily on short-term issues and considerations. For example when we buy a new electrical motor for £500, do we stop to think that this is not just a decision about a £500 purchase? During its working life the motor may well consume £5,000 of electricity - ten times the cost of the motor itself, and also incur maintenance costs. Emerging legislation may soon require us to think about this much bigger expenditure.
The PAS 55 specification encourages this longer-range thinking, promoting sustainability, energy efficiency and carbon consciousness by providing clear, experience-based best practice guidelines and a detailed requirements specification for joined-up, optimised whole-life asset management equally applicable and effective in all industry sectors. Adopting PAS 55 has the potential to provide a wide range of benefits including:
- 30-50 per cent cost reductions
- raised capability and performance of assets
- delivery of high reliability environment for improved operating efficiency, quality and safety
- assured and sustainable environmental, regulatory, legal and carbon compliance
- improved image and relationships with customers, insurers, regulators and other stakeholders
- improved profitability and return on capital investment
Although not yet a legal requirement, many companies are waking up to the business benefits that compliance with PAS 55 through the adoption of life-cycle asset management thinking can bring. PAS 55 has already had a major impact on asset management thinking in central government. The government's high performing property strategy has been heavily influenced by PAS 55.
In the UK the regulator for gas and electric markets Ofgem has already mandated compliance with PAS 55 for electricity supply companies, recognising the key responsibilities these companies hold for security of supply of power for essential services while at the same time using fuel and other resources effectively and minimising carbon footprint and climate change impact.
PAS 55 follows the two-part format established by internationally recognised guidelines such as ISO 9000 for quality management and ISO 14000 for environmental management. Part 1 is the specification and Part 2 provides high-level guidelines for implementation.
PAS 55 was first published by the BSI in 2004 and is currently being updated for re-issue later this year. The UK Institute of Asset Management led the development of PAS 55 in response to demand for a specification encapsulating asset management best practice. Since it was launched, PAS 55 has attracted the attention of major companies which see asset management excellence as an essential element of their business strategy. In the UK, National Grid Transco became the first company in the world to achieve certification to PAS 55, and has spoken at public conferences on the benefits the business has gained from its adoption.
It is also being adopted rapidly by major service companies like Emcor and Amey which have seen that compliance with the disciplined management approach set out by PAS 55 helps them to raise the standard of the services they are able to deliver to their clients and helps them to win new clients. Interest and uptake of PAS 55 has spread rapidly across the world driven by the bottom-line business benefits that it delivers.
Early adopters of PAS 55 were asset-intensive businesses such as utilities and transport, where company performance, service-delivery and asset performance are seen to be closely linked. This type of close linkage is likely to continue to be the driving force for adoption, but the sectors adopting PAS 55 are expanding rapidly as more companies see the business benefits it brings. For example in the pharmaceutical sector, where regulation, process validation and current good manufacturing practice (CGMP) are increasingly creating the need for highly reliable and stable asset performance, considerable benefits can be anticipated. These include increased performance of lines and processes leading to improved customer service and enhanced relationships with regulators.
So the flow of companies wishing to prepare for PAS 55 alignment and certification will grow, and we can expect PAS 55 certification in facilities management, especially data centres and other business critical applications, to become as much a requirement as ISO 9000.
As government, regulators, insurers and other stakeholders continue to expand their understanding of the beneficial contribution good asset management can bring in terms of business performance and carbon consciousness, we can expect to see PAS 55 increasingly being mandated.
Noel Grinsted is an asset life-cycle management strategist and director of MCP Consulting and Training
Long range thinking
BSI's 'publicly available specification' PAS 55 encourages longer range thinking, promoting sustainability, energy efficiency and carbon consciousness by providing experience-based best practice guidelines and a detailed requirements specification for joined-up, optimised whole-life asset management equally applicable and effective in all industry sectors.