Risk Matters X.0
Risk Matters X.0, an ABS Consulting Podcast, explores the evolving landscape of risk and its impact on our world today and tomorrow. Join ABS Consulting experts as they dive into critical topics shaping our future—from cybersecurity and OT convergence to industrial safety and power systems reliability.
Risk Matters X.0
Asset Management: The Big Picture with Rachel Wagner
Join host Frank Morphis III and Hexagon's Rachel Wagner as they dive deep into the world of asset management. Wagner shares expert insights on moving beyond traditional maintenance strategies, addressing the challenges of data quality and creating dynamic asset management frameworks. The conversation explores how companies can build more effective programs that balance risk and opportunity, offering practical wisdom for maintenance professionals looking to drive operational excellence in today's complex industrial landscape.
This is a Risk Matters podcast with ABS Consulting, where our goal is to focus on industrial organizations and what most folks are dealing with from an asset management and risk management perspective. My name is Frank Morfis, I'm your host today and I'm honored to be joined by Rachel Wagner, who's an account executive with Hexagon. Rachel, thanks for joining us.
Speaker 2:Hey, thank you. I'm so excited to be part of the podcast. Really appreciate it.
Speaker 1:Absolutely so, to kick this off, I'd love for you to give a little background about yourself, about what you're doing, and hopefully transition into what we're going to talk about today, about what?
Speaker 2:you're doing and hopefully transition into what we're going to talk about today. Definitely so. I am an account executive, as you mentioned, at Hexagon, where we specifically focus on ways to help industrial customers find ways to effectively manage their assets. So it's a combination of software and services that we provide and we're just looking for the most effective means to help customers meet their objectives.
Speaker 1:Awesome and, as everybody would imagine, that's our goal with this Risk Matters podcast. Previously, this podcast had been focused specifically on cybersecurity and the vital role that it plays in the industrial setting cybersecurity and the vital role that it plays in the industrial setting and I think that our goal and specifically with you today, Rachel is to expand on that, to focus on other areas where we see risk play a big goal, and today, specifically, asset management. The risk that we're talking about is asset failure, something that I think everybody deals with on a daily basis, things that you and I, Rachel, talk to folks about regularly, right?
Speaker 2:Every day?
Speaker 1:Absolutely so, rachel. My goal is to share some of our thoughts, some of your insights, some of the experiences that you've had based on personal experiences, discussions with other folks, as well as some of the antidotes and stories to help bring this podcast together and make it fruitful for the listeners that we have joining us. So, as I mentioned previously, in this episode we're going to talk about asset management what it is and what it isn't, teeing up some of the things that some of those industrial customers deal with on a day-to-day basis, some of the discussions that are happening internally and some of the ways that they're working to improve in this concept. So, to pass it over to you, I want to simplify that a little bit. What do you see typically as the end goal and some of the ways that people can or are getting there?
Speaker 2:Well, thank you. Yeah, so you know, as I think about that question. I mean the end goal, the, what is actually pretty simple, pretty consistent, regardless of industry, it's the how we get there. That is a little bit more nuanced but more challenging. And you know, regardless of whatever industry that you're operating in whether it's aerospace and discrete manufacturing, power, gen, oil and gas, really doesn't matter those heavy industrial industries have spent a large capital investment on those assets and, of course, they expect them to perform. So that end goal is simple right, make sure those assets are generating value so that you can recoup that initial capital investment, and then those assets just continue to generate value until they reach some point in the future end of life or even extended end of life. So again, that end goal is pretty simple. But how they actually go about achieving that end goal this is where you start to get some variance in different customers and there's a number of strategies or a number of different ways that people try to achieve this right Extraction of value of your assets. A lot of them rely on hope and luck to get them there, believe it or not, I've seen that strategy a number of times. It is a strategy, it's just not a very good one.
Speaker 2:There's also the infamous do nothing strategy. Maybe you're on the non-plan plan. If you think about your car, how long do you think that would last if you never spent $1 on maintenance, never changed the oil, never put air in the tires, never took it in for a tune-up? Nothing Last a year, maybe two, before you're ditching it on the side of the road. If you think about the size of the investment, you're spending tens of thousands of dollars on that vehicle versus the size of the maintenance spend, which is probably something in the hundreds. Those are two very different orders of magnitude. So these are some of the trade-offs that, when you're putting in place good asset management principles, you're directly looking at the cost versus performance trade-off, for example. There's also the when we think about strategies. There's this let's let someone else tell us what our strategy should be.
Speaker 2:Strategy. This is when you're relying solely on OEM recommendations which, believe it or not, this is probably the most common strategy I've seen. This is a recommendation that's really just based on averages. So the OEM or the original equipment manufacturer of the asset is saying things like for your car, for example change your oil every 3,000 miles, rotate your tires annually, change the brakes every 30,000 miles, etc. It doesn't actually count for any variation whatsoever in things like your driving patterns or how often you operate the vehicle, maybe what the driving conditions are like Are you in a city, are you in a rural, backcountry? So those variables actually can directly influence how that car, that asset, is performing.
Speaker 2:And so when you have a strategy that's based on nothing other than these as-designed averages, it creates a lot of opportunity for improvement. I'll just put it that way this is okay. And again, it works for a lot of customers. Again, I've seen this probably the most in all of the customers that I've talked to, where they're just using the OEM recommendations. But there's a lot of what I would say value leakage. Essentially, you're probably spending more than you need to. The reliability of the asset is probably not operating in its most optimal condition, so your strategy is not shaped around the operational context in which that asset's being operated. And then, finally, as we talk about all these different strategies, there's what I consider really true asset management strategies. It does account for variation, it is dynamic, it adjusts based on how the asset is performing in the environment that it lives in. A true asset management strategy is constantly in motion, it's changing, it's evolving, based on new information and one of the authors. Well, frank, let me ask you this have you read the book Atomic Habits?
Speaker 1:I have not. I have not read it. We talked about that previously, but I have not had the chance.
Speaker 2:Oh my gosh, okay, run, don't walk to go, read that book. It's an amazing book and very simple read, very quick read. Absolutely love it. But James Clear, the author of Atomic Habits, he says but James Clear, the author of Atomic Habits, he says success is not a goal to reach or a finish line to cross. It is a system to improve, an endless process to refine. So when we're talking about strategies, that's kind of the framework we should put these in. It's a continual process, it's continually evolving. It should be dynamic, it should reflect the operational conditions your assets are operating in. And what we're talking about here when we say asset management, we're not talking about the overnight miracles. We're not talking about the total 2x performance change overnight. We're literally just trying to improve continually over time so that you can put in place the right disciplines, the right systems to make sure that you are positioned to actually manage your assets most effectively.
Speaker 1:Yeah, that's awesome. Thank you for sharing. I think one of the things that stands out to me the most, too, is just talking about continually refining. Right, that's that's one of the most difficult things I think that we see the most is that's one of the most difficult things for an organization to do. Right, understanding the, the change management concept, even Right, so many folks don't always love to talk about being able to accomplish those goals and encouraging the buy-in from the shop floor to the to the penthouse or all the way to the top, and and what it takes to get the entire organization brought, uh, bought, into these strategies.
Speaker 2:Um, yeah, it does take a lot. I mean, change management is probably one of the hardest things to overcome. When you're talking about putting in place different systems, different frameworks to help you on a day-to-day basis, people typically resort to this is how we've always done it or this is what works, and everyone has different opinions, and so it makes it really hard to move an organization. But I think because asset management really puts in place flexibility within a framework, so it helps with change management. It helps give you some ability to move within more of a structure, more of a best practice approach to managing your assets, which helps from a change management perspective because you're not making huge changes to what people are accustomed to.
Speaker 1:Absolutely, and I think one of the key words you mentioned was it's dynamic. Right, it's dynamic from a user perspective, from a system perspective, like you hit on. User perspective, from a system perspective, like you hit on. Typically not everybody's doing things the same way, right? So it has to be manipulated to fit what your organization is doing, the focuses, what those KPIs or just performance goals look like. So I think that that's great.
Speaker 2:Yeah, exactly Awesome.
Speaker 1:So kind of not a different path, but looking at something very specific right. I'd like to talk about the difference between managing assets and asset management. Sometimes it sounds like a shifting of words, but understanding that these are two completely different concepts. When you and I were preparing for this, I think one of the ideas that we threw around was comparing it to a diet or the process of implementing a diet. Thinking of thinking of this as the difference between a lifetime of a structured diet and exercising regularly to to maintain healthiness, versus the idea of eating a salad or doing a juice cleanse the night before you go on vacation.
Speaker 1:Right, one of those very quick fix I want to look better, I want to feel better. Very slight adjustments to to your day to day for a very short term result Right, one of these takes very hard planning, it forms a habit and it puts together that structured plan that you referenced previously. And the other is simply for instant gratification right, it's super short-lived. It addresses that immediate problem and oftentimes makes you feel really good about that change in the time. I think the biggest issue is, or the biggest question is, how long does that last? Right.
Speaker 2:That's so true. It's such a such a great visual right. Because, um, I think we've, all you know, gone through periods where it's like, oh, you know, I need to go into the dentist. I, you know, need to brush my teeth three times today to to make sure the dentist doesn't notice, you know that I have a cavity or something. So it's like you're trying to put in place a quick fix, but you don't have to live with the consequences because you don't have the structure, the rigor in place to actually have a sustainable system that lets you reap the benefits over the long term. So, yeah, I think I think, to summarize exactly what you said, the difference between managing assets and asset management is just short term versus long term. It's like a short fix versus a, you know, a long standing system that you put in place. That's really the big difference there.
Speaker 1:Absolutely. Oh, that's awesome. So my next question or next topic on this is is how do we best manage those assets, or how do we know how to best manage those assets? Is it looking at what we're doing currently? Is it comparing this to industry standards and what other folks are doing? What is your take on how to best manage assets?
Speaker 2:Yeah, so I mean, I think the best, the best illustration I can give about how to best manage assets. Yeah, so, I mean, I think the best illustration I can give about how best to manage your assets is to think of it like a playbook. Like you're the coach of a professional sports team and you're managing a team of assets and you need to figure out, or team of athletes Sorry about that Team of athletes and you're trying to figure out. Or team of athletes Sorry about that team of athletes and you're trying to figure out, how do I put, how do I, you know, get them to gold, how do I make sure that we win the game? Um, the capabilities that each of them brings to the table, in a way that I'm, you know, ultimately achieving my end goals, which is like peak performance, or you know, uh, winning the game. So, um, you know, if we think about treating our assets as if they were athletes, it kind of puts it into a different perspective. So so, frank, like, for example, I mean you coach a baseball team, right?
Speaker 1:I do yes, youth baseball.
Speaker 2:Youth baseball, oh great. So childs in their, you know, young forming years, I love it. So, you know, how do you think about managing, you know, the these kids to really leverage all of their individual strengths but to have them work, you know well, together as a team to ultimately, you know, win the baseball game, for example? Like, what are some of the things that you think about when you're coaching this team?
Speaker 1:Sure, no, that's a really good point and it's nice to think about it in a different way, such a simple way. I think most people would put that. But, to answer your question, the ultimate goal is to win the game or games. Right, we want it to be a continuous winning cycle, but I think you mentioned it Each one of those players has their own strength, right, and as the head coach or as the organizer of this team or of this group, they have to play to their strengths.
Speaker 1:There are some that swing the bat a little bit better, there are some that are good in the field, but being able to manipulate that or to set that up in a way that makes the whole group successful, right. If I was to put focus on one individual player you know that best player or the one that produces the best statistics, or whatever that may be I don't have sight of the end goal, right? I don't have sight of the team or the organization as a whole, therefore losing sight of what that end goal is right and what success looks like for my team or for my organization.
Speaker 2:Um, so it's a it's a really good way to think about that yeah, yeah, and it's exactly the same with assets, right, like if we treated our assets like a team of athletes.
Speaker 2:The the way that you think about putting in place the strategy, utilizing a playbook of sorts, which we can call asset management as our playbook. It really has the same kind of parallel image. And, yeah, I love that You're not just isolating your best player, your pitcher that is really, really good at pitching, right, well, that's great, right, but like you need you need folks that are good at shortstop and you need kids that are good in the outfield. Like you really have to understand the mechanics of not only the game and how to win, but the strengths utilized by each of those players to ultimately win the game and um and so, yeah, there's a lot of variables as coach that you're trying to figure out and you're trying to manage at the same time. And you know, one of, I would say, my favorite illustrations of good asset management in terms of athletic coaching is have you heard of the story about Dave Bra brailsford? Just curious if you've heard, yeah, yeah.
Speaker 2:So he was an elite british cycling coach and um. He essentially, you know, inherited a team of uh cyclists that had never won the Tour de France and were actually losing endorsements because they were basically exhibiting like embarrassing mediocrity. I mean, it was like below average performance across the board for all of these cyclists. And so Dave Brailsford, as head coach of this team, essentially did what you did, you know, as youth baseball coach, he deconstructed all the components of being a coach and all the things that would be required as part of his playbook. You know, he did things like redesign redesigned the seats and put alcohol in the wheels of the cycle of the um of the bicycles to increase friction. He hired a surgeon to teach all of uh the cyclists how to properly wash their hands to get rid of germs and um reduce, you know, illness and things like that.
Speaker 2:He looked at their sleeping patterns.
Speaker 2:He looked at, you know, the like cushion of their pillows and mattresses they were using. I mean very, very small, nuanced things that individually really don't make a huge impact. But he believed in what actually James Clear, from, who wrote Atomic Habits, talks about, which is the power of 1%, or the power of the aggregation of marginal gains, which essentially says if you, you know, if you improve by 1% over time, those, those 1% start to compound and then, all of a sudden, you are exponentially better than you were initially. And the result of Dave Brailsford's strategy, execution and breaking down all of these components for his team was that not only were they winning the Tour de France, but they were, you know, taking they took 70% of gold in the 2012 Olympics and they continue this trajectory for 10 years beyond that. So, from total, embarrassing mediocrity losing endorsements to, you know, absolutely dominating the Olympics and like continuing this path for 10 years beyond, I mean, it's just such a such a great illustration of just how you can compound these small, you know improvements over time.
Speaker 1:Yeah, absolutely. That's good, and I think that we can both attest to the fact that the organizations that we work with all are at different levels of success or at different levels of maturity in their asset management game or cycle right when they live. So that's great, thank you. I think the next question for me, and that most of the listeners are probably wondering, is you know where? Where do we start? We talked about being at different levels of maturity. We've talked about you know organizations or strategies where maybe you start in the middle or you start with what that end goal is. How do organizations actually start on this path towards effective asset management and developing that? You know air quote playbook to success?
Speaker 2:Yeah, it's such a great question. I get this question almost every day, you know, looking for recommendations and you recommendations and where do we start? Where can we have the biggest impact right away? And typically what I find is people think initially very linearly First you have to perfect your maintenance organization and your operational rhythms and your data has to be in almost perfect form for then you to be able to take advantage of more insights and better decision making with respect to asset management. Or they think I'm just not ready, I'm not mature enough, I'm too small.
Speaker 2:Asset management is reserved for these big conglomerates, these massive organizations, global organizations. But both of these misconceptions just quite frankly, aren't right. It's typically where people are grounded initially, but it's absolutely untrue. And, as you know, one of my favorite, one of my favorite authors says Douglas Hubbard says if you know almost nothing, almost anything will tell you something. That's good. So just kind of interesting, right, because it's like everyone always thinks like, oh, I need to have all this information to then first take advantage of asset management. It's just not true.
Speaker 2:So first to dispel some of those misconceptions maturity doesn't matter, size doesn't matter, data quality doesn't matter much. I will put a little caveat on much. I mean, you need to have some level of quality, but you do not need to be anywhere close to perfection, believe me. And then there's absolutely zero dependency, when putting in place an asset management framework, on the types of systems or the volume of systems you have in place already. For example, you don't have to have some sophisticated condition monitoring system or even a maintenance management system in place before you can take advantage of the best practices, the insights, the framework, the things that asset management offers.
Speaker 2:So back to your question where do we start? Well, you start with what you do have. You start with the information you have at your disposal about your assets and how they're performing today. If you want to get to a place where you're performing better, you first have to baseline where you are so you can track the progress. Of course, it doesn't take a lot of effort. It just takes time putting in, or it just takes putting in some time to put together the plan or the roadmap to get you from where you are now to, ultimately, where you want to be to hit those objectives.
Speaker 1:That's great, that's awesome and I think, typically, pivoting that right into the three big takeaways, you hit on some of those Well thinking of asset management as your playbook. You have to know where you are. You have to know the rules that you're following. You have to know, at least in general, what your end goal is right now. That is dynamic. That does change, and I think one of the coolest things that you said was that it's not about overnight miracles, right. You can't expect to flip a switch. You can't expect to make a change within your organization and it to happen overnight, right. We do not see that typically happen. So is there anything else, any final takeaways that you want to share with the folks that are listening here, that have spent their time with you?
Speaker 2:Yeah, I mean I think you hit the takeaways. Think of asset management as your playbook, like you're a coach coaching a team of athletes, but you are an operations or maintenance professional looking after a set of assets, and so you can think of asset management as your playbook or your framework to help you best manage those. So that's the big one. The second is this is not a finish line, it is not a noun, it's a verb.
Speaker 2:Asset management is about continuous improvement, refinement and what I like to say, seasoning to taste. It should be dynamic. It is not a static thing. It's not a finish line that you reach. And then, third, is there's never a bad time to start putting in place an asset management framework. I mean, if we think about the misconceptions and the I'm too big or I'm too small and my data quality isn't good enough, those typically are just roadblocks or things that you have, those in your mind to just sort of like stop progress moving forward. And so if you just think about this with an open mind and just think of asset management, asset management as that framework to build that roadmap or build that plan to get from where you are to where you want to be, it really just opens up a lot of doors and you can really start thinking about how to move and shape your organization to achieve that end goal.
Speaker 1:Absolutely. This has been fantastic. It's been a pleasure having you on the podcast, Rachel.
Speaker 2:It's been good to be back you as well. Thank you, yeah absolutely.
Speaker 1:Thanks for sharing some of your experiences and, I think, key insights into what risk and asset management are for so many different people. Don't be surprised if we have you back on here again to share some of this information.
Speaker 2:Happy to join. Thank you so much.
Speaker 1:Absolutely Well. There you have it, folks. As we continue this risk matters podcast journey, I encourage you to join us to listen to some of the longtime folks that are in this industry or have dealt with this idea of asset and risk management, and even some up-and-coming experts in the industry that have new takes and, as Rachel mentioned, a fresh taste on things. Until next time, I'm Frank Morfis. Thanks for listening.
Speaker 3:You've been listening to Risk Matters X.0, an ABS consulting podcast focused on all. Thanks for tuning in.