Assessing Risk and Criticality in SAP Asset Performance Management

1. Risk and Criticality Assessments: A systematic approach to identify and prioritize assets based on the risk and impact of their potential failure. This process evaluates both the likelihood of failure and the consequences across various impact categories.
2. Impact Categories: These are predefined areas that could be affected by asset failure, such as production, environment, health and safety, and financial impact.
3. Risk Score: A numerical representation derived from the Risk and Criticality Assessments process that quantifies the level of risk for each asset based on the likelihood of failure and the potential consequences.
4. Risk Matrix: A visual tool used to represent and analyze the risk scores of assets, showing the likelihood of failure against the potential impact, often in a grid format.
5. Thresholds: Predetermined levels of risk scores that are used to categorize the risk level (for example, very low, low, medium, high, very high) and determine the color-coding for quick visual assessment.
6. Reliability Centered Maintenance (RCM): A maintenance strategy focused on ensuring that assets perform their required functions efficiently and safely, recommended as a follow-up action when assets fall into higher risk bands.
7. Risk and Criticality Assessments Template: A configurational tool in SAP APM that standardizes the Risk and Criticality Assessment process, including the impacts to be assessed, the dimensions of each impact, and the scales for response options.
8. Dimensions: Specific aspects or criteria within an impact category that are evaluated during the Risk and Criticality Assessment process (for example, likelihood of failure, impact on production capability).
9. Scales: In SAP APM, these define the range of possible responses for each dimension within an impact category and have associated values for risk score calculations.
10. Maintenance and Service Strategy Development by Assessment: The process that follows the Risk and Criticality Assessments, which utilizes the results to develop targeted maintenance and service strategies for the assessed assets.

A crucial early step in defining an asset maintenance strategy is performing Risk and Criticality Assessments on assets to determine which assets (technical objects) require the most focus. The results of the Risk and Criticality Assessment process then drive the appropriate risk-based maintenance and service approaches based on assessed risk and criticality.

Learn how SAP Asset Performance Management helps you manage risk and criticality assessments. Discover how to segment assets based on risk and criticality, standardize calculations, and focus on what matters most.

The Risk and Criticality Assessment process is intended to classify the risk of assessed assets by generating risk and criticality scores calculated based on standard formulas for different risk impact categories. A typical Risk and Criticality Assessment will prompt the assessor to respond to a number of questions to develop quantitative scores for both the likelihood of failure and the consequences of that failure over a number of different impact categories, such as production, environment, and health and safety.

Based on the responses to the questions, a risk score is generated for each included impact category. Those individual risk scores are then combined based on configured rules to create an overall risk score for the asset being assessed.

The generated risk scores are segmented based on defined thresholds, for example: very low, low, medium, high, very high. The risk scores are colored accordingly to give a quick visual highlight of risk level.

For impact categories with one or two dimensions, a risk matrix is displayed, with the score for the assessed asset highlighted for another quick visual indication of risk level. The assessor can also select the cell on the matrix that corresponds to the response for both dimensions instead of answering the questions using the dropdowns.

Financial risk can also be assessed for each impact category, and the resulting total financial risk across all assessed impacts is show in the summary at the top of the risk assessment along with the total risk score.

Based on configured rules, the risk scores developed during the Risk and Criticality Assessment process are used to automatically recommend a follow up action. In the example screenshot above, the total risk score falls into the "High" risk band, and the recommended follow up action is to before a Reliability Centered Maintenance (RCM) assessment.

In SAP Asset Performance Management, the process begins with the creation of a Risk and Criticality Assessment template, which defines the configuration of the Risk and Criticality Assessments that are created based on the template. One Risk and Criticality Assessment template can be used for many assessments, and different Risk and Criticality Assessments templates can be created for different kinds of Risk and Criticality Assessments.

The first key configuration within an Risk and Criticality Assessments template is to choose which Impacts to include. At least one Impact is required. Each impact will be assessed independently during the actual Risk and Criticality Assessment process, and the resulting scores are combined to create an overall risk score. As in the example above, common assessed impacts could include impacts to health and safety impacts, impacts to the environment, and impacts to production capabilities. Financial impacts can be included in each of these and are not required to be assessed on their own.

Within each Impact created for use in the template, the dimensions on which the impact will be assessed are defined. The dimensions define the questions that are asked of the assessor during the Risk and Criticality Assessment for the chosen impact. To assess impact on production, for example, two dimensions might be defined:

1. Likelihood of failure.
2. Impact on production capability.

The possible responses for each of those questions are defined in SAP Asset Performance Management as Scales. A scale needs to be defined for each assigned dimension. The scale includes a description of each possible response for a given dimension along with an associated value used in the risk score calculation.

Once the impacts are defined in an Risk and Criticality Assessments template, along with the assigned dimensions and scales, Thresholds for the risk scores need to be set. The Overall Threshold defines the criticality associated with each risk score, along with the color that represents that criticality level in the Risk Matrix and the recommended follow up action.

Thresholds can also be defined at the level of each impact. In that case, the impact level threshold defines only the color displayed in the impact level risk matrix for each impact level risk score.

Once an Risk and Criticality Assessments template has been created and released, the Risk and Criticality Assessments themselves can be created. The creator of the Risk and Criticality Assessments defines the type of risk being assessed, either current or unmitigated, along with currency to be used for financial risk.

The people filling key roles in the assessment can be assigned, such as the Reliability Engineer, Approver, etc. Next, the technical objects to be assessed are assigned, and each assigned technical object is assigned to a Risk and Criticality Assessment Template.

The assessments for each technical object can now be completed on the Assessments tab. It is also possible to export assessments to Excel to complete offline, at which point then can then be imported back into the system. Technical objects can be assessed either individually or, in cases where it is appropriate, can be assessed as a group.

Once the assessments are completed, the Risk and Criticality Assessments can be released, and the next step of the process - Maintenance and Service Strategy Development by Assessment - can be started using the recommended action from the Risk and Criticality Assessments.