Using SALVO to determine what interventions are really worthwhile and when

With asset management systems, including risk management, relating to assets with a replacement value of over GBP 40 billion, Scottish Water used SALVO to make significant savings.
Evidence the decisions you make using the output of SALVO
One study yields potential savings over 1 year of GBP 1,305,000
Combine the most worthwhile activities into an optimal total programme
Contract Objectives

Scottish Water, a company providing water and sewerage services, faces major challenges – the rate of technological change, infrastructure age profiles, differing functional demands, new legislation, financial constraints and competency concerns, all combine to create a perfect storm for critical asset management decision-makers. With asset management systems, including risk management, relating to assets with a replacement value of over GBP 40 billion, Scottish water drives an investment program of over GBP 500 million per year. The SALVO Process helped Scottish Water to determine what interventions were really worthwhile, and when, in the management of aging assets. To date, Scottish Water has completed a number of these facilitated workshops and SALVO studies on a diverse range of assets and equipment, an example is detailed below.

 

Activity Description

This study set out to provide the cost-optimized frequency for undertaking a Tier 3, time-based intervention for an Inlet Archimedes screw pump – bottom bearing, taking account of any additional cost impact linked to failures in a duty/standby application. Scottish Waters’ current policy is ‘run to fail’.

An assessment was carried out to understand and determine the optimal refurbishment strategy.  Following an initial data-gathering exercise, a workshop was held to incorporate operational and local knowledge, and to validate the data. The Strategic Asset Lifecycle Value Optimisation Decision Support Tool (SALVO-DST) has been used to produce the analysis.

The maintenance curve shows that the most economic time to intervene is at year 6.  The unplanned maintenance curve increases sharply after this point indicating an increased risk of failure of the bottom bearing and consequential damage to the other components of the screw pump.

The Strategic Planner recommends that the business should plan to replace the bottom bearing at year 6.  This allows strategic alignment with the top bearing replacement at 12 years, and the 24-year lifecycles of the scroll and screed, and drive, motor, gearbox, and belt drive, allowing the business to make further savings on mobilization costs and drive further efficiencies.

 

Contract Project Outcomes

The recommendation from this evaluation is to replace the bottom bearing every 6 years.  If this recommended intervention approach is adopted then there is a 97.9% chance of the bottom bearing surviving the 6 year lifecycle.

Cost of recommended strategy over 1 year (GBP) 396,000

Based on 90 assets, the Current cost of the Yearly Program (current annualized cost per asset x number of assets)  is GBP 1,701,000.

SALVO has calculated a potential saving over 1 year (current cost – recommended cost) of GBP 1,305,000

Cost per intervention;
Based on the current strategy: 61,500 – 2,500,000
Based on the recommended strategy: 23,500

The SALVO process helps us to identify and demonstrate the optimal timing for asset replacement and helps to identify the optimum frequency for interventions. To find out how SALVO can help your organization make potential savings, contact us for a free initial consultation.

 

“The SALVO Process has helped us to identify and demonstrate the optimal timing of asset replacement and the optimal frequency for maintenance interventions. The outputs from SALVO are key components of our Asset Masterplans: we are now in the best place we have ever been”

Geoff Aitkenhead
Asset Management Director, Scottish Water, UK

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John Woodhouse

With 30 years’ experience in utilities, oil & gas, transport and other sectors, John is one of the most widely known experts in integrated asset management projects for some of the largest companies in the world.

John is a Founder and Life Fellow of the IAM; he has written 4 books, chaired the development of BSI PAS55 and represents the UK on the ISO55000 committee.

He also led the international MACRO and SALVO collaboration projects in optimised asset management decision-making.

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