In my previous blog postings, I have often noted that equipment management is an Art and a Science. In my earlier posting on starting an equipment management process improvement working group, I wrote that the task leader must understand how equipment management works, and the expected outcomes that can be measured as a result of adopting industry best practices. I received several emails on this posting, and my readers have asked me to explain what these outcomes should be, and what industry standards exist to document this process. OK, I admit, the tone of one of the emails was “you made a statement now prove it!” and I smiled at the thought of having to justify my existence.
I was wondering how to lead into this topic. It is an extensive topic that can get bogged down in the minutia of standards and documents, and can become tedious when trying to explain. When getting a certification in Equipment Management from the National Property Management Association, one has to study each and every regulation and how it applies in real life. The way I think I need to tackle this topic in my blog is to not be so serious, and to stretch this out in several postings. I want to be informative, and to give a recipe for success. As in every science, the measurement of the process gives the proof of delivery, and in this case, equipment management as a science is no different. Having guiding industry standards provides blueprints for this process, and a model to judge whether or not your process has maturity or still needs work.
So my post for today is to talk about an industry standard that has the ASTM Designation E2279 – Standard Practice for Establishing the Guiding Principles of Property Management. This standard as well as others that I am going to be describing can be ordered from the ASTM site and used directly. These ASTM standards have been developed by the E53 Committee which covers the industry standards on Property and Equipment Management. This committee is staffed by members of the National Property Management Association.
So why establish an industry standard to set “Guiding Principles?” At first thought, this appears to be redundant with each principle described in detail in other standards in this series. As most of the standards in this series go, the Standard Practice for Establishing the Guiding Principles of Property Management is only 3 pages, mostly term definition. Simply put, it is a standard to create a standard.
But in detail, this standard describes a set of guiding principles that can be applied to all factors of equipment management and describes a set of objectives that when employed stress a simplified process that encourage the adoption of best practices. The importance of developing a standard to establish a set of guiding principles is that less is more, and these objectives will foster judgment rather than “by the book” decisions. The E53 committee’s purpose in adopting this standard was to foster a problem-solving mentality within the equipment management community and encourage the use of innovative and cost effective processes. In today’s environment of changing needs and budgetary constraints, it is essential that organizations respond to these needs within the context of a good equipment management process. The economic benefits and conformance to the restricting budget is the most practical benefit of using these guidelines.
So what are the guiding principles? This standard divides these principles into three groups:
- The Management Of Equipment,
- The Utilization of Equipment, and
- The Disposal of Equipment
When devising an equipment management working group to examine your equipment management process and adopt what should be a working charter for this group, this standard should become your guiding mission statement. What should this charter look like?
Under Management of Equipment, the goals are specific and somewhat obvious:
- The Equipment Management Working Group shall establish a set of policies and a system for the acquisition, use and disposal of equipment.
- The Equipment Management Working Groups purpose is to devise and maintain a system of controls sufficient to provide assurances to management and DHS auditors that provide for limited access, recorded transactions that can be compared to existing equipment at reasonable intervals, with appropriate actions taken if there are differences.
- This working group’s responsibility is the maintenance of adequate equipment records.
- The degree in which equipment is controlled and the costs of control must be commensurate with the consequences of a shortage and the criticality of the item’s loss.
- The controls established by this working group should be based on equipment management outcomes and have associated metrics that encourage process improvement.
Under Utilization of Equipment, these goals cover how equipment is inventoried and periodically audited:
- The Equipment Management Working group shall establish procedures that encourage the best value in the long term of maintenance of equipment assets.
- This working group’s responsibility is to oversee the property system that ensures that records are maintained in an accurate manner, all controlled property is received, records established and maintained and marked to denote the level of control, ownership and other information that fulfills organization objectives.
- The Equipment working group will set up procedures to survey and identify equipment that is in excess.
- This working group’s responsibility is to set up administrative controls based on inventory results and these controls should be reassessed based on economic value of the equipment rather than acquisition costs.
- The group should project the possibility and probability of loss, damage or destruction and minimizing such occurrences is a critical and economic factor.
- Create a system of handling excess and a process of using excess equipment as the first source of supply.
Finally, under Disposal of Equipment, the working group charter should cover the goals related to surplus equipment:
- The working group should create the process of disposal of surplus equipment including the sale or internet auction of such equipment that may still have economic value, or to decide how equipment should be donated to eligible recipients.
- This group should determine when abandonment, destruction, or donation would be appropriate and to set the guidelines necessary.
- This group should administer the cost and the proceeds from the disposal of equipment, and the proceeds should offset the cost of disposal, except where prohibited by state regulation.
If you read the ASTM standard, there are a few more key points; I am only focusing only on the main ideas for each section. However all of these guiding principles are fundamental to the success of an equipment management process improvement program. By adopting an Equipment Management Process Improvement Working Group, the key benefits are that the administrative costs of equipment management are reduced and the goal of stewardship of agency equipment is supported.The use of the working group provides the necessary stakeholders a voice in this process, which results in everyone working to reduce overall work, duplicated procedures, and redundant data. Having a working group ensures that the process is monitored and as metrics are gathered, the process can be further optimized in the face of the changing budget requirements.
I know this is a bit tedious, and if you have any questions or comments, please feel free to share them with me or post them here.
In subsequent postings, I am going to cover some of the other equipment management standards and how they apply to equipment used in the EOC setting. Coming up next, what is an appropriate level of control of equipment and what is the cost values used in determining that control. We will explore what the industry standards say and how to apply it to your equipment management process.
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I introduced the concept in my previous posting that Equipment Management is a science that is governed by industry specific standards and best practices. In today’s discussion, I am going to reflect on a topic that has many interpretations and causes even the most seasoned equipment manager heartburn on occasion.
To track or not to track is answered by looking at the degree of control required, the degree of impact that the equipment has on society or at the very least the operation of the organization, and of course, the value of the equipment. There is a price threshold that many equipment managers look at, however price as a deciding point is not the only reason not to tag or track a piece of equipment or inventory. Why then would equipment that costs $100 be tracked and equipment that costs $1000 not be tracked? Let’s look at the industry standard to find our answer.
The answer is found in the ASTM standard E 2608 Standard Practice for Equipment Control Matrix This standard describes equipment control classes, equipment control levels, and their relationships. The levels of control required are used for any type of equipment or group of equipment, and is used to clarify what constitutes effective and efficient control. There is a lot of debate on how to track equipment given the new tagging technology (RFID or GPS Tags) and why you would use this type of technology vs the traditional barcode tag. Again the answer to why is the type of control that is required.
There are a number of factors that lead into a control matrix. Compliance to applicable laws and regulations is a major factor. The consequences of not complying and the negative impact on operations help to determine the degree of control. Containment is another factor if equipment must be kept within a certain geographic boundary. Continuous control defines equipment that must be tracked in real time. With this definition, the use of GPS tags will provide continuous control of equipment while mobile. What is a control matrix? Think of a table that on the top column is the level of control that is needed, from “Continuous” down to “No Control” appropriate called “Equipment Control Level”. Each row lists the consequences of Loss of control from “Security Impact” down to “No Impact” in the specification appropriately called “Equipment Control Class”. So where your equipment falls within this matrix governs how you will tag, and track this equipment aside from the monetary value of the equipment.
What types of control are specified? The standard provides five levels. At the first level is Continuous Control. Continuous Control means just that. Equipment is monitored 24x7 by human or electronic means. The use of RFID or GPS tags will provide continuous updates as to the location of this equipment. Normally this type of equipment monitored in this fashion is of such importance that community and safety is at jeopardy if this equipment goes out of control. The next level of control is Continuous Control While Mobile. What this means is that it is not necessary to track this equipment while stationary, however when the equipment is out in the field, some form of continuous tracking is required. SWAT and Mobile Command Centers, Trailers, Generators and Mobile Cell Towers are such equipment as would be first responder vehicles or CBRN equipment. The next level of control is Event Tracking. What this means is that whenever equipment is assigned or moved, this is recorded in the equipment management system. When the resource is out in the field, some form of record is kept as to who has this resource. The fourth class of control is that of Containment. This level of control ensures that equipment is kept within a designated area. Normally equipment of this class is not mobile, may be attached to some location, and does not require high tech tagging and may only need to be audited once a year. Finally the last level of control is equipment that requires no tracking or protection. As you can see, these levels of control requires a diminished amount of tracking as the level increases down to no tracking or protection.
Coupled with control are the consequences of the loss of control over that equipment asset. The standard defines five levels of control which really reflects the consequences of the loss of control from the most severe to no discernible consequence. At the highest, the consequence of loss of control for class 1 is societal safety/security impact, which has significant negative societal impacts. The next class of control is where loss of control will cause personal safety impact which does not rise to the level of societal impact. The third class of consequences is that of operational impact, which is characterized by a negative operational impact. The fourth class of consequences is that of compliance impact. This class is described as showing a negative impact by not complying with regulations. Failure of an audit by DHS can be significant, however that can be remedied. The control consequence is not as great as negative personal safety or societal safety. Finally, the last class of control is where there is no consequence or discernible impact.
When taken as a cross reference, equipment that requires continuous control that has severe consequences if control is lost must have tags that allow real time tracking at all times. Certainly the use of RFID or GPS tags are worth the expense as the cost of loss far exceeds the cost of the tracking. Remember that a $400 laptop may contain critical data or data that is covered under HIPA regulations and if exposed would cause a significant dollar liability. This item must contain an expensive (often > than the value of the laptop) tagging mechanism. Equipment falling into the class of no discernible impact of consequence, and requiring no tracking or control can be left out of the equipment management system.
What is significant about this matrix is that it gives you the method you need to follow in order to determine the level of control that you need to place on pieces of equipment other than the value. This is the third time I have mentioned “value of equipment”. DHS has a guideline to inventory equipment greater than $5000 in monetary value. Some states lowered this value to $2000. However the equipment control matrix tells you that there are other reasons than this dollar value to control equipment. What this means is that using this control matrix as a guideline will help your working group come up with a systematic method of tagging and tracking equipment that will enhance the accuracy and capability of your equipment management program.
If you have questions or comments, please feel free to email me or post them here.
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I am about to date myself here. Back in 1986, I was working with a Westinghouse Fellow at the Software Engineering Institute at Carnegie Mellon University in Pittsburgh along with another co-worker from Baltimore. My mentor was a retired IBM Software Engineer named Watts Humphrey, who is best known for his invention, of all things, of the software license. He came to SEI and began work on The Software Process Program. He headed up this group from 1986 to 1993. A kid with learning disabilities, Watts became an engineer with five patents, 11 books and a National Technology Medal from the President. He died in 2010 at age 83 of liver cancer. His best invention was the Capability and Maturity Model. This model was originally developed as a tool for objectively assessing the ability of government contractors processes to perform a contracted software project. Humphrey based this framework on the earlier Quality Management Maturity Grid developed by Philip B. Crosby in his book "Quality is Free". However, Humphrey's approach differed because of his unique insight that organizations mature their processes in stages based on solving process problems in a specific order. Humphrey based his approach on the staged evolution of a system of software development practices within an organization, rather than measuring the maturity of each separate development process independently. The Capability and Maturity Model (CMM) has thus been used by different organizations as a general and powerful tool for understanding and then improving general business process performance.
The ASTM standard E 2452 Standard Practice for Equipment Management Process Maturity uses the standard definitions of the Capability and Maturity Model as postulated by Humphrey and his crew at SEI. The E52 committee defined this standard taking the equipment management life cycle phases and applying the metrics and the assessments of process maturity. The ASTM standard structures the equipment lifecycle from acquisition through disposal in terms of the functioning business processes for each phase and as a set of structured levels that describe how well the business process of the organization can reliably and sustainably produce required outcomes. The Equipment Management Maturity Model provides:
- a place to start
- the benefit of a community’s prior experience
- a common language and a shared vision
- the framework for prioritizing actions
- a way to define what improvement means for your organization
Sounds like a working group, no? In my previous blog posting “The Guiding Principles of Equipment Management” I listed a start of a working group charter. It is in the standard practice for Equipment Management maturity that the body of work done by this working group can be benchmarked, creating assessments of other organizational practices and successes.
The Equipment Management Maturity Model involves the following five aspects:
- Maturity Levels: a 5-level of process maturity continuum – where the uppermost (5th) level is a notional ideal state where processes would be systematically managed by a combination of process optimization and continuous process improvement.
- Key Process Areas: a Key Process Area (KPA) identifies a cluster of related activities that, when performed together, achieve set of goals considered important.
- Goals: the goals of a key process area summarize the stats that must exist for the KPA to be implemented in an effective and lasting way. The extent to which goals are accomplished is a Key Processes Indicator (KPI) that can be measured. It indicates the capacity in which the organization has established their maturity level.
- Common Features: common features include practices that implement and institutionalize a key process area. There are five features: commitment to Perform, Ability to Perform, Activities Performed, Measurement and Analysis, and Verifying Implementation.
- Key Practices: The key practices describe the elements of infrastructure and practice that contribute most effectively to the implementation and institutionalization of the KPAs.
The maturity level describes the five states of a process:
Level 1 - Initial (Chaotic)
It is characteristic of processes at this level that they are (typically) undocumented and in a state of dynamic change, tending to be driven in an ad hoc, uncontrolled and reactive manner by users or events. This provides a chaotic or unstable environment for the processes.
Level 2 - Repeatable
It is characteristic of processes at this level that some processes are repeatable, possibly with consistent results. Process discipline is unlikely to be rigorous, but where it exists it may help to ensure that existing processes are maintained during times of stress.
Level 3 - Defined
It is characteristic of processes at this level that there are sets of defined and documented standard processes established and subject to some degree of improvement over time. These standard processes are in place (i.e., they are the AS-IS processes) and used to establish consistency of process performance across the organization.
Level 4 - Managed
It is characteristic of processes at this level that, using process metrics, management can effectively control the AS-IS process (e.g., for software development ). In particular, management can identify ways to adjust and adapt the process to particular projects without measurable losses of quality or deviations from specifications. Process Capability is established from this level.
Level 5 - Optimizing
It is a characteristic of processes at this level that the focus is on continually improving process performance through both incremental and innovative technological changes/improvements.
Where does your organization fit into the business process of equipment management? If your organization fits into the first 2 levels, your group stands to make significant improvement. If you fit into the highest level, well I am preaching to the converted. Most Emergency Management Organizations, including many aspects at FEMA fit into Level 3 although some (see my previous blog posting on PEP) are still at level 1 or 2.
Watts Humphrey used to tell us every week in our progress meeting: “Goals are about more than results. They’re about direction and focus. They establish priorities for required work.” When we would suggest an activity, he would always ask: “Does this activity move the team toward the goal or would something else be more effective?”
Understanding the Equipment Management Capability and Maturity model provides you with a framework to grow. It is the mark on the doorjamb that we place each year to indicate another step towards maturity and being able to function effectively in our jobs. The mature EOC equipment manager understands that need, and works towards achieving the business goals with the eye on accuracy and commitment to public safety.
Please email me if you have any questions or post your comments here.
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In my dealings with emergency management professionals in local and regional jurisdictions, I keep hearing them tell me that they have lost equipment due to lack of tools to track them once they are on loan, or don't know how much excess equipment exists so they do not have to go through the budget fight to purchase equipment that may already be sitting gathering dust. From out of the trenches, one of the equipment guys that I am connected to on Linked In, emailed me when he read my blog and asked me where I thought most Emergency Operations Centers were in their level of equipment management process maturity.
Without identifying who he is, and which EOC he works in, he told me how five 140K generators were lost after being deployed after a tornado event, and found seven months later near where they were deployed but had been moved on an ad-hoc use. The records were never updated, and the generators were found quite by accident.He ranked is agencies process maturity as chaotic as their tool of choice is an excel spreadsheet. I tried to be nice and responded that I thought that his business process was somewhat repeatable rather than chaotic, as they had used different tools, their business process is somewhat structured, can be relied upon during stress times, and that the business process is somewhat enforced. Just because the asset management system they use is email and excel, means that the record keeping can become outdated quickly, and that is why they lost the generator. He also reminded me of the difficulty that their agency had during the last DHS audit because some of the tracking of funded equipment was not present and no one knew what had happened.
At last year's UASI conference, I attended a session on surviving the DHS Audit. The stakes for failing the audit are pretty high with the DHS conducting "Reach back" audits trying to put a money value on lost equipment or equipment purchased using incorrect guidelines. So I do know that the stakes are high.
"Now", said my equipment manager, "the situation is worse. With the funding cuts, they lost some of the people, and the knowledge about equipment whereabouts and usage went with them. When I called a person who's job was cut and is still on the unemployment line who for sure, knew where the missing equipment should be, the "I don't remember" answer that I got was an indication of the growing chaos of our failed process."
I recently came across a Gartner study about the state of asset management business processes in private industries. This study pointed out exactly what we heard from the equipment management trenches. In this study Gartner indicates that up to 30% of organizations are in a ‘chaotic’ state, meaning that they do not know what they own, where the assets are located or who is using them.
Another statistic coming from the UK disaster recovery community is that according to research by KPMG, UK companies are wasting £17 billion a year because managers have not applied proper asset management concepts.
Finally other research indicates that companies are overspending by up to 40% because of underutilization, inefficient maintenance and petty theft of their assets.
I can well imagine that with budget cuts and job elimination, the knowledge transfer that a well defined equipment management process affords can be lost with the first layoff notice.
I can't answer for agencies I have not seen nor communicated with. But I do get approached by my clients and potential clients asking for help in organizing their equipment management programs, and I am seeing the same outcomes in group after group that I first come in contact with.
So I would like to get some answers to questions that are now being asked, especially during the severe reduction of funds that we are all facing.
Do we know the range of equipment utilization in emergency management agencies?
Do we know honestly what percentage of the emergency manage agencies can say they have their equipment managed properly?
I will be at the UASI Conference in Columbus next week. Come by to see me as I will be hanging around booth 600 near the entrance of the exhibit hall. I really would like to talk about these questions and come up with some answers that I can report back to this blog. If you go to this conference, stop by I would like to meet and talk to you.
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