Mike Levery

This guest editorial for Maintenance & Asset Management reflects on how terotechnology was introduced into primarily manufacturing industry in the 1970's to bring whole life principles into operation and maintenance. Whilst those principles are still evident today in production/process industries, they are missing in the utilities where asset management drives asset decision making, and maintenance forms an increasingly reactive operational service.

It has taken over a decade for asset management to become a key feature of organisational decision making in the water industry. But has it really changed the attitude of companies towards maintenance, or just become a high level investment management tool providing more informed capital investment planning? And has the regulatory review of 2009 for the period 2010 - 2015 led to operational failures due to the financial model adopted for capital maintenance expenditure?

This article, published in the January 2013 edition of the Asset Management and Maintenance Journal, examines both risk and accountability for asset and financial performance when using partnering based contracts in delivering projects as against operating and maintaining assets. There are comparisons on contractual risk, objectives and measures, and financial management which clearly identify the differences in the contractual approach.
It is almost 19 years since Michael Latham completed… Show more

This article, published in the January 2013 edition of the Asset Management and Maintenance Journal, examines both risk and accountability for asset and financial performance when using partnering based contracts in delivering projects as against operating and maintaining assets. There are comparisons on contractual risk, objectives and measures, and financial management which clearly identify the differences in the contractual approach.
It is almost 19 years since Michael Latham completed his report into the procurement and contractual arrangements in the UK construction industry in July 1994. Partnering is now an established philosophy in construction with many organisations now employing partnering facilitators to ensure that best practice is maintained. Organisations have now taken the benefits realised through project partnering and started to apply them in other areas of their business. One such area is operations. Operational partnering comes in many guises including partnering in maintenance and the supply chain, but more recently in the operation itself.
This article asks whether the principles behind project partnering are the same as those applied to operational partnering, or whether a different approach has to be made. It will directly compare well established principles in project partnering with the comparable challenges faced in operational partnering. Show less

An article and case study have been published in the August and October 2012 editions of Asset Management and Maintenance Journal, Australia's leading journal on asset management.
The application of appropriate forms of contract for the maintenance of utility networks has a major bearing on their operational and financial performance. This article looks at the application of the NEC option "C" target cost contract in this environment and the principles which require to be applied for… Show more

An article and case study have been published in the August and October 2012 editions of Asset Management and Maintenance Journal, Australia's leading journal on asset management.
The application of appropriate forms of contract for the maintenance of utility networks has a major bearing on their operational and financial performance. This article looks at the application of the NEC option "C" target cost contract in this environment and the principles which require to be applied for successful implementation. It compares this contract form with more traditional schedule of rates contracts, explaining the contract structure and philosophy, and day to day contract management.
The case study, applied in a UK water company, identifies the contract activities with their definitions and sub-activities. The target cost is structured through the completion of resource and financial plans. Contract objectives are set out with the appropriate KPI's, together with the meeting processes and information hierarchy for managing the contract. Show less

Ofwat has published its final price determination, and to no-one's surprise it is calling for improved standards of service and an overall reduction in charges. At the same time, most water companies are re-bidding their capital projects contracts together with their network maintenance contracts. How many companies have ensured that Ofwat's expectations for AMP5 are reflected in their network contract objectives?

Since the privatisation of UK utilities in the 1980s and early 1990s,
utility companies have outsourced two specific areas of their activities
– the delivery of capital projects, and the repair and maintenance
of infrastructure networks. Mike Levery, Managing Director, MCL
Consultancy, reports on risk and accountability in network contracts

Do we really understand what makes maintenance craftsmen tick? After spending over thirty years working with them in a variety of industries and market sectors I have come to the conclusion that the answer is ‘No, not really’. Chief executives often say to me that maintenance is a headache: a problem better managed by somebody else, preferably through outsourcing. They describe craftsmen as ‘a law unto themselves’ and ‘out of control’. Nothing seems to have changed much in my thirty years of… Show more

Do we really understand what makes maintenance craftsmen tick? After spending over thirty years working with them in a variety of industries and market sectors I have come to the conclusion that the answer is ‘No, not really’. Chief executives often say to me that maintenance is a headache: a problem better managed by somebody else, preferably through outsourcing. They describe craftsmen as ‘a law unto themselves’ and ‘out of control’. Nothing seems to have changed much in my thirty years of working in the field of maintenance. So is it really the case that craftsmen and maintenance are ‘out of control’? Or is it that we just don’t understand what motivates craftsmen or what drives them to do an exceptional job? In this article I will examine –
• some of the reasons why we believe craftsmen and maintenance
are ‘a law unto themselves’,
• why rewards and recognition are often misread,
• what impact outsourcing has on the views of the craftsmen that do the work. Show less

Different asset management philosophies and models were developed in the 1990s, but the basic approach to their application has been the same in different market sectors. This approach may provide a long-term focus for managing assets. However, it often fails to recognise the crucial relationship between capital investment associated with maintenance on the one hand, and operational maintenance costs on the other.
This paper asks –
(a) how should maintenance be dealt with as part of an… Show more

Different asset management philosophies and models were developed in the 1990s, but the basic approach to their application has been the same in different market sectors. This approach may provide a long-term focus for managing assets. However, it often fails to recognise the crucial relationship between capital investment associated with maintenance on the one hand, and operational maintenance costs on the other.
This paper asks –
(a) how should maintenance be dealt with as part of an asset management model?
(b) what is the relationship between operating costs and capital investment that maximises financial benefits while optimising asset performance? Show less

A new business model, applicable to the operation and maintenance of the above-ground assets of the UK ‘s water industry, is proposed. It takes awider approach than merely reducing operating costs, focusing much more on delivering both
operational and capital expenditure efficiency.According to asset type, accountabilities for asset performance and responsibilities for operational performance are defined and allocated between Operator and Maintainer, and the working relationship between… Show more

A new business model, applicable to the operation and maintenance of the above-ground assets of the UK ‘s water industry, is proposed. It takes awider approach than merely reducing operating costs, focusing much more on delivering both
operational and capital expenditure efficiency.According to asset type, accountabilities for asset performance and responsibilities for operational performance are defined and allocated between Operator and Maintainer, and the working relationship between these two parties identified. The relevant financial accountabilities
for maintenance are then likewise allocated. It is concluded that in any process or production industry the philosophy of identifying whether the Operator, the Maintainer, or both, are accountable for asset performance should be the starting point for developing the O and M business model. Show less

This article will examine the background to the establishment of two of the UK’s ‘mutual not-for-profit’ companies and will consider whether lessons have been learnt as to why they failed and whether their business models are appropriate for organisations running infrastructure assets.

Network Rail has resolved to insource all its maintenance activities. Once again a single organisation will have direct control over all the work done on railway infrastructure assets. This decision presents a major challenge to the way asset management has developed since the early 1990s, particularly the progressive outsourcing of maintenance to service providers across all market sectors.

The activity called ‘maintenance’ is in turmoil: core or non-core; in-house or outsourced; integral with production/operations or a service function; reactive or planned; cost or value added? These questions are asked repeatedly, yet what may prove to be the right answers one day are not appropriate to the next day’s circumstances. Since the early 1990s, the drivers for outsourcing
maintenance have grown and there has been a pronounced shift to maintenance being a non-core activity. Yet… Show more

The activity called ‘maintenance’ is in turmoil: core or non-core; in-house or outsourced; integral with production/operations or a service function; reactive or planned; cost or value added? These questions are asked repeatedly, yet what may prove to be the right answers one day are not appropriate to the next day’s circumstances. Since the early 1990s, the drivers for outsourcing
maintenance have grown and there has been a pronounced shift to maintenance being a non-core activity. Yet there is dissatisfaction across many market sectors with the way outsourced maintenance has turned out. What initially looked like an appealing way forward has not delivered the real benefits that
were anticipated. Even so, the trend seems irreversible; successful contracting organisations of the future will have to be prepared to take on risk to ensure the client gets best value from their maintenance service. Maintenance embraces both long and short-term planning, operational expenditure and capital investment costs, and a diverse range of skill requirements for varying types of asset. Given this level of complexity, the question is: how can maintenance contracts best be developed to meet both client and supplier needs? Show less