Mike Sondalini — Thought Leader

The depreciation rate for equipment varies depending on the operational situation of the asset and the tax laws that apply to your company. The depreciation rate is more an accounting decision than an engineering one. The engineering aspect in the depreciation rate for equipment choice is deciding how long is the operating lifetime for an equipment item. 

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I want to know how we calculate the value for the depreciation rate of equipment. Want is done on other industrial sites, we apply an depreciation rate of 8 percent per year?

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 Overview the Plant Wellness Way EAM Methodology for a simple and successful Enterprise Asset Management System. Learn how to apply the Plant and Equipment Wellness enterprise asset management methodology. Follow the steps to get the best performance from your plant and equipment. Learn what systems and processes produce the optimal plant and equipment reliability results. From creating low stress component environment for lasting equipment health through to establishing the simplest and most effective business system and processes for world class asset management performance, this overview guide to the Plant Wellness Way takes you step by step in creating the outstanding asset performance needed for world class operational excellence. As with human wellness, the Plant Wellness Way requires you to build a healthy life for your machines. Learn to control your plant’s reliability by managing the stresses put on equipment parts and reducing the risk of failure so plant and equipment remains fit and healthy to produce its best performance. The Plant Wellness Way EAM methodology lets you find the ideal health conditions for your equipment and machines and makes you establish business processes and systems to achieve and maintain outstanding reliability performance. 

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To get world class operation and profits your Asset Lifecycle Management System must prevent every opportunity for defect-creation in all life cycle phases, for all your operating equipment

Every physical asset has a lifecycle starting at conception through to its eventual disposal and site remediation. In each phase of the lifecycle errors can occur that cause defects within the asset. In operations with hundreds of assets there easily can be tens-of-thousands of defects. Each defect is a risk that eventually contributes to breakdowns, losses, wastes, safety incidents during operation, and shortens the asset’s service lifetime. Eliminating thousands of defects and risks forever is what Plant Wellness Way EAM does for its users.

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Turn ISO 9001 Clauses into Your Business Quality System Specifications.

In 1987 the ISO9000 quality management series was launched; superseding the earlier BS5750 document. It has progressed from its initial product quality focus to its now customer satisfaction focus. During all its life the question of the usefulness of ISO9001 to business growth and performance has dogged it. The greatest fault of ISO9001 is its lack in setting quality performance. It mistakenly asks companies to select their own quality standards to work to. That is its single greatest problem—the lack of quality benchmarks and is the reason why it is common to hear managers call ISO 9001 a waste of time. But if you address ‘quality’ correctly in your ISO 9001 quality management system you can turn your company into a world-class performer within three years.

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 It is a mockery to use business performance indicators to manage a company or department. Using the information that shows up on the management dashboards on your screen can wreck your company. Measuring a process does not put you in control of it. A process is totally self-controlled. You always get what the process gives you. Organizational processes work well or do not because of their design.1 A business process that cannot achieve its aims is the wrong design for its purpose.

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Your views on why enterprise asset management fails intrigued me. I am currently undertaking a master’s study on “Understanding the Difficulties of Developing an Effective Planned Preventive Maintenance Regime at an underground coal mine”.

My masters is based on finding the reasons why in the mining field the other methods of maintenance methodologies such as RCM, TPM, Six Sigma, etc. do not seem to get embraced by the mining maintenance teams, and there is always a weak attempt to implement them on the part of management.

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OPERATIONAL EXCELLENCE IS A RESULT 

Operational Excellence requires a business system-of-reliability. Reliability is the chance of success, so a company built as a ‘system-of-reliability’ maximizes its operating profits and production success. The three requirements needed to create a system-of-reliability for Operational Excellence are: 

1. A defect eliminating work quality assurance system where your processes are robust and anti-fragile to disruption, and insure right-first-time results. Only if processes are built to go right every time; are anti-fragile to error; and proactively prevent causes of problems, can you reach Operational Excellence. 

2. Business-wide process innovation focused on optimizing for the highest productivity, least cost, and right quality output. Then you install the next generation of solutions for ever better productivity. 

3. Holistic, lifecycle physical asset management for stable, reliable operation with outstanding availability, highest utilization and most sustainable throughput. 

You do three phases to reach Operational Excellence the Plant Wellness Way: Design your system-of-reliability – Teach your system-of-reliability – Build your system-of-reliability. First, design a business that can be the best. Second, teach your leaders how to do the right things, rightly. Third, apply and do the right behaviours for success. 

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