Strategic Asset Management: A Differentiating Strategy to Enhance a Competitive Advantage of Petrochemical Companies

Abstract

This paper presents the results of a study of the benefit of implementing Strategic Asset Management (SAM) in line with principles recommended by PAS 55. SAS can assist organisations in the petrochemical industry to enhance their competitive advantage and subsequently become profitable. A survey design methodology is employed in this study. Four business sites of the case under study in South Africa, ranging from maintenance to production disciplines were sampled. Data is collected using questionnaires that were distributed to the four manufacturing sites, and 63 responses were received. Data mining was also conducted on SAP for the determination of seven KPI’s (Key Performance Indicators). The results reveal that the majority of the KPI’s are below target. This indicates deficiencies as far as effective SAM is concerned. This is also an indication of instability in operations resulting in inability to consistently and sustainably supply the market. Most respondents believe that SAM is the responsibility of all the members of the supply chain, and also that discipline cohesion, equipment reliability, pro-active maintenance, plant stability and safety are fundamental drivers of implementing SAM and condition monitoring. During the implementation process the significantly affected factors were observed to be operations, maintenance practices and employees. Management of the change and time presented challenges during the implementation process. Risk identification techniques and risk management techniques such as root cause analysis (RCA), failure modes effects and criticality analysis (FMECA), on-line condition monitoring and reliability centred maintenance (RCM) are the most preferred techniques. Results reveal that the majority of the employees are not familiar with PAS 55 and they believe it cannot be sustained. To support SAM, adherence to OEM instructions and competency of maintenance contractors are revealed to be the most important factors. Maintenance costs and SAP based KPI’s can be used to indicate the success of SAM. The main limitation of the study is that sampling was confined to a specific location’s facilities and therefore results cannot be generalised.