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Taking Stock at midway the Storm – Impact of COVID-19 on Physical Assets

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Taking Stock at midway the Storm – Impact of COVID-19 on Physical Assets

Cillia Molomo-Mphephu

5th October 2020

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As 2020 unfolded, developments in topics relating to advancements in the fourth industrial revolution, artificial intelligence, internet of things, regeneration of energy from industrial processes and the like heralded an era of extreme progress in the harnessing of technology to improve our life experiences.

Amidst this awe in human endeavour and ingenuity, the COVID-19 pandemic dictated that countries develop and enforce guidelines to restrict the very dispositions that make us human: touch, socialising, proximity, etc.

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Though equipment can be robust and highly resistant to many environmental conditions, the effect of lockdown forced businesses to look differently at management of their physical assets in the era of reduced human interaction.

Equipment upkeep remained significantly demanding and essential, particularly as it related to their operation. Equipment operation has what one may call latent proactive maintenance built into it. The recent period of lockdown demonstrated how non-operation of much equipment impacted on its condition.

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A case in point was how marine build-ups advanced on the hulls of wet docked vessels, or perhaps closer to home, how vehicle batteries ran low from extended period of non-operation in cases where the terminals were not disconnected from the batteries.

Railway tracks on the other hand collected build-up of obstructions from sand, weeds and other debris, while long periods of absence of those entrusted with their upkeep encouraged those with bad intentions to take advantage of the situation. As a result, we saw a spike in incidents of vandalism.

Rolling stock on the other hand demanded careful preservation and protection from theft and vandalism to ensure their good condition.

This article used the case study of rolling stock as was reported to highlight the role and impact of equipment during the pandemic.

Background

South Africa being a large country with the centre of economic activities located in its hinterland, is dependent on logistics infrastructure for movement of goods within the economy to sustain various business sectors and ultimately humanity.

This infrastructure serves a role greater than ensuring the wheels of business were turning with the advent of COVID-19, it also retained its purpose of moving people between different points in the economy.

The state of the infrastructure, therefore, became determinant of whether people were reached and the country was able to adequately respond to the pandemic.

As we have come to know, COVID-19 will unfortunately not be the last pandemic we experience, as was seen by the MERS and SARS epidemics which in recent times affected the Far East countries. This calls for vigilance as we carefully assess current experiences on infrastructure related issues for future reference.

Best Practice on equipment upkeep

With focus on passenger train services, best practice recommends that at least the following be carefully considered as indicators for their performance: Reliability, Availability, Maintainability, and Safety (RAMS).

Impact of extended downtime on rolling stock and auxiliary systems

The fact that South African passenger trains experienced extended downtime during lockdown meant that preservative activities had to take effect immediately to ensure equipment retained its integrity.  This downtime imposed external disturbances on the rolling stock and

railway network system. Arguably, these disturbances dictated temporary mission change on the Operations lever of RAMS as efforts were being redirected to increased maintenance activities. The situation with the need for maintenance was exacerbated by theft and severe vandalism of both trains and railway infrastructure.  

On-site observations at one of South African passenger rail sites confirmed that the idea of well executed condition-based maintenance was indeed far-fetched. As was reported, the entity battled with attracting and retaining technical skills even before the pandemic, whereas infrastructure was evidently in desperately poor condition. It was unclear what provision was made for emergency funding to address the pandemic-related maintenance. The above confirms the improbability that conditional maintenance in response to the pandemic-imposed lockdown was honoured by the passenger rail company.

An alternative to condition-based maintenance, particularly as it related to lockdown, would have been to retain limited train services. That would have served dual purposes, that is, as part of proactive maintenance on rolling stock and railway networks, and to ferry essential services workers to and from work.  Though the trains were not going to carry passengers to capacity, the move would have still been beneficial as the burden of executing conditional maintenance would have been avoided.

On the other hand, the services would have afforded essential services workers a seamless travelling experience using the mode of transport regular to them.

Though the impact of downtime on rolling stock could not be accurately quantified, it was however clear that train services could not be resumed earlier than the first day of alert level 3 lockdown.

Is the new normal applicable to equipment upkeep?

The COVID-19 pandemic presented the global economy with what one may call the single most unprecedented market force. It sent many economies plummeting and therefore forced companies to review their funding strategies. It is expected that companies will for the foreseeable future have to adopt a reprioritisation approach to their expenditure as a result of the burden

put on their budgets by the pandemic. Acquisition of workplace sanitisation items, and reduced production as a result of restrictions at workplaces had a negative impact on many businesses, some to a point of closure as the inability to recover fixed costs put businesses at risk.

Closure of some businesses and borders during the pandemic means companies will be forced to review supportability of their value chain going forward, including even relooking at the services that were previously outsourced, to establish if they could not be performed internally by reskilled employees.

For physical asset intensive organisations, it is expected that the new normal will demand precision for leanness as businesses will be navigating their budgetary challenges to honour the dictates of proactive maintenance.

Most physical asset intensive organisations are also labour intensive, meaning their overheads are too rigid to enable practical responses in cases of reduced demand and/or reduced production. A more sympathetic way to mitigate overheads in this case may be to reskill employees and repurpose assets, especially physical assets.

Investing in self-sufficiency amid diminishing budgets will also be the new order. Arguably, exorbitant electricity costs experienced by railway entities dictates faster pace on implementation of regeneration projects.  Reduced electricity costs will increase funding for maintenance, which is undoubtedly essential.

For the railway entities, the challenge is more severe than just allocation of funding for maintenance. It is expected that their new normal will be more aggressive stakeholder engagement strategies as efforts to discourage theft and vandalism of their infrastructure components will be advanced.

At national level, one may argue that this is an opportune time for government to relook into the Immovable Asset Register and craft future-proof strategies to manage national assets for reliability and therefore for maximum output. Alignment of new infrastructure projects and the current assets will provide for the much-needed optimisation.

Considering how border closure impacted on import of spares for many entities, the country may benefit from incentivising local businesses that can contribute meaningfully to creating local support for strategic assets. Support like local manufacturing of rail spares will impact positively on import and export activities as reliable infrastructure will enable on-time and better synchronisation of rail and shipping activities.

How well can these assets be managed should there be another pandemic

To answer this question, it is necessary to relook into how well the passenger rail companies had performed during the COVID-19 pandemic.

Reliability - All passenger train services were stopped for an extended period. How did the physical asset management strategies come into effect to ensure continued assets reliability?

Availability - Considering that the Passenger Rail Agency of South Africa has positioned itself as a leader in public transport solutions, how well was that demonstrated during the pandemic given the absolute unavailability of their services?

Maintainability – Some train corridors could not be reopened even during alert level one of lockdown due to poor condition of trains and/or railway networks, and therefore there was no output from affected assets. Is this situation salvageable? Does the entity have sufficient internal resources and external support to return the situation to normality?  

Depending on how well at least the above are answered, we will be able to ascertain preparedness or lack thereof of trains and the railway network for the next pandemic. While some of the points contained herein might not be new, the fact that implementation continues to lag behind means the conversation is still necessary.

Conclusion

The new normal brought about by the pandemic in the physical asset management space is adding to the already existing challenges that are consistent with a developing field. For developments on physical asset management, please follow our latest news on www.theCEE.co.za

Written by Cillia Molomo-Mphephu: Founder of Centre Of Engineering Excellence Pty Ltd and an advocate for the subject of Physical Asset Management

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