Every utility deploys capital assets to serve its customers. During the asset life cycle an asset manager repetitively must make complex decisions with the objective to minimise asset life cycle cost while maintaining high availability and reliability of the assets and networks. Avoiding unexpected outages, managing risk and maintaining assets before failure are critical goals to improve customer satisfaction. To better manage asset and network performance utilities are starting to adopt a data driven approach. With analytics they expect to lower asset life cycle cost while maintaining high availability and reliability of their networks. Using actual performance data, asset condition models are created which provide insight on the asset deterioration over time and what the driving factors of deterioration are. With this insights forecasts can be made on the future asset and network performance. These models are useful, but lack the ability to effectively support the asset manager in designing a robust and cost effective maintenance strategy.
Asset condition models allow for the ranking of assets based on their expected time to failure. Within utilities it is common practice to use this ranking in deciding which assets to maintain. By starting at the assets with the shortest time to failure, assets are selected for maintenance until the budget available for maintenance is exhausted. This prioritisation approach will ensure that the assets most prone to failure are selected for maintenance, however it will not deliver the maintenance strategy with the highest overall reduction of risk. Also the approach can’t effectively handle constraints in addition to the budget constraint. For example constraints on manpower availability, precedence constraints on maintenance projects, or required materials or equipment. Therefore a better way to determine a maintenance strategy is required taking into account all these decision dimensions. More advanced analytical methods, like mathematical optimization (=prescriptive analytics), will provide the asset manager with the required decision support.
In finding the best maintenance strategy the asset manager could instead of making a ranking, list all possible subsets of maintenance projects that are within budget and calculate the total risk reduction of each subset. The best subset of projects to select would be the subset with the highest overall risk reduction (or any other measure). This way of selecting projects also allows for additional constraints, like required manpower, required equipment or spare parts, time depended budget limits, to be taken into account. Subsets that do not fulfil these requirements are simply left out. Also, subsets could be constructed in such a manner that mandatory maintenance projects are included. With a small number of projects this way of selecting projects would be possible, 10 projects would lead to 1024 (=2^10) possible subsets. But with large numbers this is not possible, a set of 100 potential projects would lead 1.26*10^30 possible subsets which would take too much time, if possible at all, to construct and evaluate them all. This is exactly where mathematical optimisation proofs its value because it allows you to implicitly construct and evaluate all feasible subsets of projects, fulfilling not only the budget constraint but any other constraint that needs to be included. Selecting the best subset is achieved by using an objective function which expresses how you value each subset. Using mathematical optimisation assures the best possible solution will be found. Mathematical optimisation has proven its value many times in many industries, also in Utilities, and disciplines, like maintenance. MidWest ISO for example uses optimisation techniques to continuously balance energy production with energy consumption, including the distribution of electricity in their networks. Other asset heavy industries like petrochemicals use optimisation modelling to identify cost effective, reliable and safe maintenance strategies.
In improving their asset maintenance strategies, utilities best next step is to adopt mathematical optimisation. It allows them to leverage the insights from their asset condition models and turn these insights into value adding maintenance decisions. Compared to their current rule based selection of maintenance projects in which they can only evaluate a limited number of alternatives, they can significantly improve as mathematical optimisation lets them evaluate trillions (possibly all) alternative maintenance strategies within seconds. Although “rules of thumb”, “politics” and “intuition” will always provide a solution that is “good”, mathematical optimisation assures that The Best solution will be found.