ISO 55000 Brief Overview

PART 1 |   What’s in ISO 55000?

The ISO 55000 series of standards was officially released on 15 Jan 2014. There are 3 separate standards:


ISO 55000, Asset Management – Overview, Principals and Terminology
ISO 55001, Asset Management – Management Systems – Requirements
ISO 55002, Asset Management – Management Systems – Guidelines for the Application of ISO 55001

This first paper focuses on ISO 55000, arguably the “parent” document of the three. Subsequent papers will describe ISO 55001 and 55002.

Inside ISO 55000 you will find:

  • an overview of what Asset Management is
  • a description of the benefits of Asset Management,
  • a definition of “assets” as ,
  • fundamentals so that users of the standards understand why these standards are of benefit,
  • a description of the relationship between Asset Management and the Asset Management System,
  • an overview of the Asset Management System and its elements,
  • a glossary of terminology,
  • a list of other related activities that are addressed in other standards and
  • a diagram showing relationships of the key elements of an Asset Management System.

The influence of the British Standards PAS 55-1 and -2 are evident in how the document and both ISO 55001 and 55002 are structured. Of course, PAS 55 was prepared with a long-term goal that it would lead to the development of an International Standard. PAS 55 went through two iterations – an original issue in 2004 and a revision in 2008. The first issue was a very difficult read, the second easier and now the ISO is much easier to read, understand, and no doubt to apply. As a North American (Canadian) and an author I find the language and terminology used in the ISO far less confusing, more general, hence more conducive to good communication. It’s easier to read!

ISO 55000 is also generic – it can be applied in any industry or context and indeed that is its intention.

The requirement of the standard is straightforward. An organization (company, plant, mine, school board, etc.) has a portfolio of assets. It has a corporate strategy (or equivalent) that provides overall objectives for the entire organization. Those assets are intended (somehow) to deliver on part of those objectives. The Asset Management System creates the link from corporate objectives, through a number of interacting elements to establish policy (i.e.: rules), asset management objectives, and processes through which to achieve them. Asset Management itself is the activity of executing on that set of processes to realize the value (as the organization defines it) from those assets.

In PAS 55, the organizational strategic plan informed asset management policy, then strategy, objectives, and plans. ISO 55000 isn’t all that different except in how the terminology is used. Here is ISO 55000, we have strategy and objectives (corporate level) informing policy, objectives, and processes. It is more direct and it uses the word “strategy” less liberally.

ISO 55000 makes it clear that “Asset Management” is an activity (something you do) to implement the Asset Management System (something you define). The AM System is not just a computerized program as some might be inclined to believe. It may well employ computerized tools and probably needs to, but the AM System is not in itself a computerized tool or system, nor does it need to be.

Asset Management is data and information-intensive. It touches on nearly all aspects of any business, although many outside of our field probably recognize that so clearly. Under the heading of leadership, the standard points out that this is a multi-disciplinary and multi-level endeavor involving the whole organization.

There are plenty of examples of physical assets that have had a big impact on companies. For example:

  • Finances: the impact of BP’s Deepwater Horizon disaster in the Gulf of Mexico is expected to cost BP upwards of $42 billion (not to mention the human, environmental, and reputation costs);
  • The recent Lac Megantic train derailment and fire resulted in deaths, destruction of a town, and the bankruptcy of Montreal, Maine, and Atlantic Railway – its assets are now being auctioned;
  • Production: the BP refinery explosion and fire in Texas City in 2005 had a 437,000 barrel per day impact in addition to its well-documented human and environmental impacts.
  • Safety: the above examples all involve fatalities. Sadly, as engineers, our mistakes do often put humans at risk and often in large numbers. Even static civil assets can make big news like the Montreal Champlain Bridge (now being reinforced after years of decay) and the I35W bridge into Minneapolis that collapsed in 2007 killing 13 and injuring 145.
  • Public Image: BP’s image is not one of being green despite all its marketing to the contrary. One of the companies it acquired (Amoco in 1998) had also suffered irreparable damage from its disastrous oil spill (1.6 million barrels) when the ship Amoco Cadiz grounded in Normany France (1978). Today’s environmental awareness is driving hotel chains to upgrade their building portfolios to new LEEDS standards lest they risk the loss of business from a younger and more environmentally savvy clientele and even from governments who are insisting on LEEDS standards being met.
  • Environment: again, look to the above examples. Failure of even simple systems designed to keep wildlife away from waste ponds can result in both losses of wildlife and reputation. Canada’s oil sands producers have been regularly accused of neglect, even though in some cases weather has contributed to the losses.
  • Quality: mass production relies heavily on physical assets working correctly to produce within specified tolerances. Failures in those assets can impact on product quality and result in either high rates of rejects or out-of-spec products reaching the public. In 2008, Maple Leaf Foods, a Canadian food producer sold tainted meat products that resulted in 22 deaths and 57 confirmed cases of listeriosis. Not only was quality impacted, but also costs public safety and company reputation.
  • Security: in cases where high-value products are being processed, failures in physical assets can result in product loss or exposure to the risk of theft. In diamond mining operations, once diamonds are separated from the Kimberlite ore, they are usually processed in closed systems. As the world’s hardest substance they wear transport piping systems easily and spillage must be cleaned up, all diamonds recovered and the systems repaired. All of those activities require human intervention in close proximity to an extremely high-value product. Likewise, any failure in any production line will expose the product to workers, contractors, and possibly others who can take advantage of the opportunity for their own gain.

All of these examples, and there are many more, represent risks that must be managed. Good asset management entails the identification, assessment, management, and mitigation of these risks and their consequences. Risk management is one of the important corporate functions that are directly and intimately impacted by asset management activities. It is also an excellent example of where the integration of asset management with other corporate functions provides a substantial potential benefit to companies that adopt these standards.

Indeed, asset management, because of its interplay with other corporate functions, provides an excellent catalyst for the integration of those often isolated functions. Good asset management can lower a broad spectrum of risks, reduce costs, improve production and revenue-generating capacity.

ISO 55000 provides an excellent conceptual framework to achieve these improvements. It is of course a voluntary standard – there is no regulatory impetus behind it (at least not yet), but its benefits are far-reaching and potentially quite substantial. It is context-specific and sensitive, so it may not be for everyone, but for any company that has a significant investment in physical assets, it is at the very least worthy of investigation.