June is a month dedicated to the environment and a good occasion to reflect on the great challenges facing the world. Hurricanes, tornadoes, global warming, glacier loss, the greenhouse effect, sea warming, and extreme weather conditions are a common problem. The United Nations has decreed June 1 as World Reef Day, June 5 is celebrated as World Environment Day, June 8 has been designated as World Oceans Day and June 17 is intended to celebrate World Day to Combat Desertification and Drought.
According to UN estimates, by 2025 the planet could lose large tracts (if not all) of living coral reefs. Reefs are “rainforests” of the sea and are home to a great variety of marine flora and fauna. For their part, the oceans are the main lungs of the planet, as they generate much of the oxygen required for life and are home to most of the Earth's biodiversity. However, every year thousands of plant and animal species become extinct due to the large amount of waste and pollutants that end up in the sea. Measures to counteract this damage have not been sufficient: large marine ecosystems have already been extinguished and greenhouse gases have increased sea levels.
Concern on this issue is genuine. Many governments are making efforts to combat this damage, and the best managed companies in the world are also the ones with the greatest commitment to environmental impact, carbon footprint reduction, proper waste disposal and cooperation with the preservation of life and social contribution. In such an environmentally sensitive month, the culture of Reliability and Asset Management become extremely relevant, especially regarding the 10 Rights of Asset Management and specifically what is known as decommissioning.
Decommissioning is one of the 10 Rights of Asset Management, and refers to the final disposal of an asset once its useful life is over and it is dismantled from its activities. Asset management is responsible for managing the entire life cycle of industrial equipment and facilities, buildings, machinery, from design to final disposal.
Those who are not familiar with the Reliability culture may not understand that all phases of an asset's useful life are absolutely important, including dismantling and waste disposal. Improper disposal techniques will impact the environment, public health, ecosystems, passing a dangerous toll on future generations. There is no room for simplistic positions on how to properly dispose of obsolete pipelines or machinery, as the culture of reliability is (elegantly) characterized by thinking both big and far into the future.
The commitment of the maintenance industry: a matter of urgency
Several places on the planet are the scenes of vast oil extraction fields, with their imposing towers rising into the air, and powerful drills opening up the ground to extract heavy crude oil. Once the oilfields are depleted, what then happens to those fields strewn with drills that no longer work? And what to do in the case of large industrial structures that have fallen into disuse due to abrupt market variations, social migrations, obsolescence, etc.? It is completely irresponsible to the environment to simply abandon these facilities without making adequate provisions for it. At a time when the planet and the environment are already suffering the consequences of environmental debts due to industrial malpractice, decommissioning is of paramount importance.
Many legal provisions and legislative frameworks exist to protect the environment from industrial waste. But, in the face of the obvious climate change we are experiencing, leading companies are going much further. Asset management is now the natural ally of organizations that not only want to be excellent and competitive, but also want to become sustainable companies whose success does not mean the destruction of the environmental heritage of future generations. Likewise, the perception of what is successful is changing as a result of an increase in social awareness about the world we live in: highly polluting companies without effective environmental resolution policies run the risk of losing market share, depreciation of their shares, damage to their reputation and loss of intangible assets such as brand power.
So, the environmental issue is not a fad, it is an urgent matter that concerns everyone. When we talk about waste, we immediately think of toxic waste and polluting substances, but assets, equipment and facilities that fall into disuse also qualify as waste. Having a proper decommissioning policy within the framework of the reliability culture will help many companies to know how to dispose of these unused assets, while offering solutions to avoid adverse impacts.
10 Rights of Asset Management
Ramesh Gulati, Reliability expert, co-wrote with Terrence O'Hanlon the book titled “10 Rights of Asset Management,” which is an effective guide to managing assets from acquisition to decommissioning. O'Hanlon, CEO & Publisher of Reliabilityweb.com and creator of the Uptime® Elements™ framework, is one of the most influential promoters and advocates of the Reliability culture worldwide. This work has served as a guide for all organizations that want to not only optimize the value of their assets, but also what to do with them once they have reached their useful life. These rights are:
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1. Specify It Right
2. Design It Right
3. Source It Right
4. Build/Fabricate It Right
5. Install/Commission It Right
6. Operate It Right
7. Maintain It Right
8. Improve/Modify It Right
9. Dispose/Decommission It Right
10. Manage It Right
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Asset management refers to the way in which each organization uses, manages and benefits from its equipment and facilities, in accordance with its primary objectives. It is an activity that occurs at the decision-making level of the organization, and is expressed in the Yellow Domain Asset Management of the Uptime® Elements™ framework. Every corporate policy has a component related to environmental and social impact that is expressed in what is known as Corporate Responsibility, as all organizations respond to a framework of law that they must comply with. The observance and compliance with the 9th Asset Law, Dispose/Decommission It Right, will allow organizations to comply with their environmental and social commitments, avoiding fines, damage to public image, lawsuits and many other problems. Proper asset decommissioning is part of responsible management.
When and how to make the decision?
There are several factors that influence the decision to disincorporate an asset. The most frequent are that the equipment no longer works and cannot be recovered, it does not meet the current needs of the organization due to obsolescence or inadequate operation, it is old and no longer meets the company's standards, among others. However, it is essential to dispose of this asset correctly, and for this purpose asset management protocols are also contemplated.
For example, a dismantled asset may have components and parts that can be used in other operating assets. On the other hand, this process not only contemplates the final disposal of the physical part of the asset and its relationship with the environment: the data involved with the asset must also be duly disincorporated, safeguarded and correctly channeled. Company data are intangible assets that also require proper disposal.
The protocols to be followed will depend on the nature of the asset: whether it will be used as scrap, whether the spare parts will be used in similar equipment, whether the equipment can be used in another plant of the same organization (for which an internal sale or similar process will be made), how to proceed with the warehouse costs generated by the spare parts of the dismantled equipment, or whether the equipment will simply be disconnected, but left in the same place it occupies (even if it is turned off). In this case, it will require proper maintenance to avoid degradation and thus contamination.
Consideration should be given to whether the assets for decommissioning have Artificial Intelligence sensors and controls, monitoring data, Digital Twin, etc. All this data should be supported by software if it is considered in the asset management plan. Otherwise, the automation department should be responsible for the removal of this data from the system, depending on the needs of the organization.
Other aspects that decommissioning considers are related to the amount of working hours allocated to the maintenance of the decommissioned equipment, the personnel dedicated to it, the inputs for maintenance (e.g. lubricants), and other aspects.
Throughout all these processes, the methodologies outlined in the Uptime® Elements™ framework, the 10 Rights of Asset Management and the Reliability culture will adequately guide professionals and organizations to properly dispose of their assets in the final stages of their useful life. Remember that your company's numbers, your goals and your KPI's will be greatly impacted by the way you manage your assets, and this impact will also extend to your surroundings, the environment, and life as we know it. Make asset management your ally and become a sustainable organization in every way.
#Decommissioning