How Your Asset Business Hierarchy Risk Impacts the Plant Wellness Way EAM System Design


All businesses want to remove operational risks caused by the organisation’s physical assets. Every equipment failure causes productivity and profit losses, often costing 10 to 30 times more than the maintenance cost to do the repair. A prime purpose of a Plant Wellness Way Enterprise Asset Management System (PWW EAM System) is to eliminate plant and equipment component failures and thereby eliminate consequential business and operational risks. PWWEAM ensures potential component risks are removed with actions taken across the operating asset life cycle to proactively prevent the ‘causes of the causes’ of all operational asset risks from arising.

Keywords: Plant Wellness Way, Enterprise Asset Management system, PWW EAM system, life cycle asset management, physical asset management 

Organizational problems this article helps you to address:

      • Build an Enterprise Asset Management System that ensures least operational risks.
      • Proactively identify all root causes of all plant and equipment failures and remove them.
      • Directly connect plant and equipment reliability to enterprise success and profitability.
Every organisation wants to build an EAM system that removes and prevents the risk of physical asset failure. Where operating asset risks cannot be eliminated, they need to be reduced to, and controlled at, acceptable levels of failure event consequences and likelihood.

PWWEAM life cycle asset management strategy is to drive organisational risk to zero by having zero risk of equipment failure. That means eliminating asset failure risk consequences, removing opportunities for those risk to arise, and ensuring 100% reliability so there is no failure even if risk causes are present.

The risk equation in common use in commerce and industry is the first one noted below, but it is incomplete. The complete risk equation is the second one noted under, where Likelihood is divided into its two factors: Opportunity for the risk event to arise, times the Uncertainty the risk event will happen at that opportunity.

Risk = Consequence x Likelihood (Equation 1)

Risk = Consequence x Opportunity x Uncertainty (Equation 2)

To make the full risk equation relevant to physical assets we convert Uncertainty to (1 – Certainty). Certainty is the same as Reliability, which is the chance of a thing successfully working properly.

Equation 3 is used to gauge risk for an organisation from using its operating physical assets.

Organisational Risk = Consequence x [ Opportunity x (1 – Reliability) ] (Equation 3)

Here is mathematical proof that there is a direct connection between business and organisational success and the risks carried by the parts in the machines and equipment used in an operation.

The figure below is a visual explanation of the risks posed to an organisation’s processes and operational performance from what happens to individual components and assemblies within their plant and equipment. A component failure causes the assembly it is in to fail. When the assembly fails, the operating asset it is in breaks down. Upon the asset breaking down the process stops and production stops. When the operation fails the business starts losing fortunes in profit. Thus, there is a direct connection between parts and component health to business productivity and profitability.


From this realisation—that business risk comes from equipment risk—we arrive at a simple premise: If the parts do not fail the equipment cannot fail.

And that is the purpose of a Plant Wellness Way EAM System-of-Reliability—to ensure the parts in your equipment and machines cannot fail. As shown in the image below, PWWEAM identifies the root cause failure mechanisms that destroy the parts and removes them from the life cycle.


PWWEAM gets you to break the risk connections from parts failure to business losses. Because the parts do not fail, the machine does not fail, which means the operation does not fail, and that makes the business more successful and more profitable.

There is a full explanation of how PWWEAM eliminates the business hierarchy risk from operating assets in the Industrial and Manufacturing Wellness book.

Mike Sondalini
PWWEAM System-of-Reliability
23 May 2022