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Criticality Analysis

A method for prioritizing activities for the design, maintenance and renewal of assets.

Criticality is the combined measure of the relationship between the probability of failure (PoF) and consequence of failure (CoF) of an asset.
 


Process
Listed below are the key steps in the completion of a criticality analysis:

  • Identify the inventory of assets.
  • Assign a Probability of Failure (PoF) to each asset based on knowledge of the consumed life along a survivor curve or degradation curve.
  • Assign a Consequence of Failure (CoF) ranking to each asset based on knowledge of the significance of the failure effects.
  • Assign any weightings to reflect the owners operating standards.
  • Rank all the assets based on their criticality index (PoF x CoF x weighting).
  • Map all the assets onto a criticality matrix.
  • Identify the critical assets and the non-critical assets
  • Determine the intervention practices to manage the risk through an appropriate maintenance mix -  time-based maintenance (TbM) and condition-based maintenance (CbM).

It is a process of decomposing product or process into hierarchical components, followed by study of their failure modes and effects, and (where appropriate) their causes. 


Evaluation
Listed below are some of the merits of the criticality (risk) analysis:

  • A necessary process for the management of  bounded assets and critical assets.
  • Useful technique for prioritization in a context of budget  constraints and limited resources with competing needs.
  • Provides a compelling business case for resource allocation decisions

Listed below are some of the limitations of the criticality (risk) analysis:

  • Requires a highly sophisticated asset management team.


Criticality vs. Priority
Simplest possible definition
  • Criticality – the level of “importance” (to meet the stakeholders objectives)
  • Priority – the level of “urgency” (to satisfy the stakeholders changing needs and changing circumstances)
Adding layers:
  • Criticality applies to objects with intrinsic value:  a building, a system, an asset, a component
  • Priority applies to activities to realize the value in the objects: a project (to correct/address/meet a need/issue)
Priority has a shelf life based on contextual circumstances and proximity to a need. Criticality has a shelf life based on organizational vision/ mission/ values/ goals/ objectives.
  • Consequences of failure – measured by criticality
  • Probability of failure – measured by priority (Ie. proximity to a changing circumstances, such as physical degradation)
There are correlations:
  • We may have a “critical” asset (eg. roof) that is in good condition and therefore not a “priority” at this time.
  • We may have a non-critical building (eg. a storage shed) that is in very poor condition and also not a priority
Two examples:

      An asset
  • A fire extinguisher is deemed a “critical asset” because it is regulated by safety standards (external stakeholder)
  • The fire extinguisher becomes a “high-priority asset” when the annual inspection comes due. Once the inspection is done and the FX is certified, it is no longer high priority (the project is over)

      A building
  • The academic quadrangle is a “critical building” due to factors such as heritage status, institutional function, etc. (primarily internal stakeholders)
  • The academic quadrangle becomes a “high-priority” building (for a certain period of time) when a bunch of projects come due (filter to the top of the priority list).
Application of the analysis:
  • “How much money will we need over time period x?” – A criticality analysis to identify the projects that should occur in period n. ie, the unfunded liability
  • •    “We have $x, what should we responsibly do with it?” – A criticality analysis to help identify the projects that float to the top of a rank list. However, we can only pick the right projects if we know how they ranked against projects that do not fit into the funding envelope. Otherwise, we are simply grabbing a bunch of “priority projects” without consideration of overall criticality.
In a nutshell: Criticality is the backdrop for priority.  Defensible priorities cannot be established without an understanding of criticality.

There are certainly other ways to interpret criticality-priority.  “Critical” is often used to mean that something has become very “important”. But it has really become a priority because the probability of failure is now very close and the consequences of the failure are significant (the criticality backdrop).

Consequences of Failure (CoF) represented on the vertical (y-axis) of a criticality matrix (risk matrix).
Fig. Consequences of Failure (CoF) represented on the vertical (y-axis) of a criticality matrix (risk matrix).


I. Care is trying to re-align his building’s magnetic north and thereby use his building as a sundial to cast a shadow to identify all the critical assets
Fig.   I. Care is trying to re-align his building’s magnetic north to geodetic true north and thereby use his building as a sundial to cast a shadow that identifes all the critical assets.


Risk matrix with tiered consequences of failure.
Fig. Risk matrix with tiered consequences of failure.


I. Care is establishing priorities for the different assets but is fighting forces that necessitate periodic re-prioritization.
Fig. I. Care is establishing priorities for the different assets but is fighting the "forces" that necessitate periodic re-evaluation and re-prioritization.



The relationship between Consequences of Failure (CoF) represented on the vertical (y-axis) and Probability of Failure (PoF) on the horizontal (x-axis) of a criticality/risk matrix.
Fig. The relationship between Consequences of Failure (CoF) represented on the vertical (y-axis) and Probability of Failure (PoF) on the horizontal (x-axis) of a criticality/risk matrix.


I. Care is strategizing in order to allocate limited resources across a portfolio of buildings
Fig. Based upon the results of a criticality analysis, I. Care is  allocating the limited resources across a portfolio of buildings


See also:



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