What is APM
What is it?
APM is a new approach to managing the performance of assets and processes,
dramatically increasing managements’ ability to drive improvements
in Returns On Investment.
Asset managers and operators are often required to balance between conflicting
objectives. They are charged with ensuring the condition of the asset,
operating it within increasingly demanding regulatory requirements, keeping
it available for use, and for using it efficiently. All of this within
capex and opex targets and ultimately achieving increasing ROI.
Until now they have had only minimal decision support from information
systems. Asset Management and Enterprise Resource Management applications
work in isolation from each other and neither makes use of the vast amount
of data stored in process level systems. Managers are forced to build
there own decision support systems, using time consuming data capture
and spreadsheets, in order to understand the cost implications of their
decisions.
Inevitably this approach to decision support is limited in scope and
effectiveness by both the time available and by the functionality of the
tools used.
APM automates the collection and analysis of data and identifies and
ranks opportunities for improvements in cost performance, in real time,
focusing management on where to make a difference, and how.
What does it do?
APM is both a management philosophy and a technology that measures the
multiple dimensions of asset operation and it’s cost efficiency
It sees four dimensions of cost in the operation of assets:
- Operating Efficiency – how do inputs and outputs measure against
the plan?
- Availability – is the asset available for use?
- Compliance- is the performance of the asset in accordance with regulations
- Integrity – is the asset degrading as a result of its use
APM understands the correlation between these dimensions and the impact
of this on the overall financial outcome of the enterprise. In this way
managers are better able to balance the apparent paradoxes involved in
increasing the value added through their efforts.
They can automatically know the answer to balancing decisions such as:
- Does operating a facility beyond its’ design specification
create more cost than the value it generates, by degrading the asset?
- Is the cost of ensuring Availability more than covered by the value
from increases in Utilisation?
- Where Compliance reduces Operating Efficiency, which is the greater
cost, failure to comply or low Utilisation?
- And explain their decisions in terms that everybody can understand-
financial impact.
How does it do it?
APM calculates the cost performance within each dimension, and for the
total operation and compares these both with the financial plan and also
other operating units. Managers are guided by both the financial impact
and by relative performance measures so that they can identify where their
efforts should be directed to achieve the biggest wins.
APM uses real time data and, from this, calculates each dimension of
cost at the unit level so that the information is available for “on
line management” as the process works. Constant monitoring of the
operating parameters enables managers to be alerted to failures to meet
set criteria or even adverse trends.
APM integrates data from financial systems, process systems, monitors
and external sources, applies the business logic through calculations
and generates Key Performance Indicators that enable relative performance
measures to be expressed in financial terms.
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