The MACRO Project

Maintenance Cost/Risk Optimization

The European multi-industry collaboration project to collate best practices and
develop risk-based methods for the optimal maintenance of physical assets.
European Union Eureka Project EU1488

What was the MACRO project?

The MACRO project was a 3-year, £1.3 Million program of investment in the tools and methods for making better risk-based decisions about what maintenance is worthwhile and when. Leading European companies collaborated to define how to make an optimal value & business case justification for planned maintenance, These methods were designed to handle cost/risk/performance and other trade-offs, cope with incomplete information, and monetizing risks and ‘intangibles.. The results combined the best of structured thinking and range estimating methods with advanced reliability and optimization techniques into a completely new way of handling decisions and business value justification for asset interventions.

Project deliverables

MACRO was conceived to provide some standards and practical utilities for front line decision-makers. It included the application of several, individually familiar analysis techniques and generated guidance on which tools or techniques are applicable in which circumstance.

The terms of reference for the project identified two key deliverables:

A decision navigation guide that helps industrial decision-makers to identify which tools, techniques and data requirements are necessary for which decision types and operational/business circumstances.

A set of modular cost/risk evaluation and optimization software utilities, called the “Asset Performance Toolkit” (APT), designed for use with varying data quality and applicable to a wide range of industrial decision-support requirements.

Scope of optimization methods:

Project Evaluation, Asset Replacement & Life Cycle Costing

Cost/benefit evaluation and prioritising of modifications, project screening, capex/opex trade-off, repair versus replacement, life extension & refurbishment options.

Operating, Maintenance & Inspection Strategies

Reliability, performance and equipment lifespan, condition monitoring strategy and methods.

Resourcing & Materials Strategies

Spares and materials stock levels, supply chain decisions, min/max policies, logistics and warehousing strategies.

Who was involved?

Conclusions

The MACRO Project was an interesting and promising development – innovative thinking was brought together from a range of organizations, all committed to implementing cost/risk decision-making in their respective activities. Tangible results emerged early in the project.

In 1997, the paper THE MACRO PROJECT: COST/RISK EVALUATION OF ENGINEERING & MAINTENANCE DECISIONS outlined the scope of the project, the key components identified and the “Asset Performance Toolkit” that was emerging.

Download the paper here.

The principles and methodologies from the MACRO Project, now embedded within the SALVO process, continue to evolve and adapt to new challenges and technologies

The MACRO Project significantly influenced the development of the SALVO Project. SALVO builds upon the principles and lessons learned from MACRO, and these methodologies continue to be relevant and applied in today’s asset management practices. Here’s a breakdown of how these principles and lessons were integrated and continue to influence the SALVO process:

Principles and Lessons from the MACRO Project

Holistic Approach to Asset Management: The MACRO Project emphasized the importance of a comprehensive approach to managing assets, considering not just the technical aspects but also the financial, operational, and risk-related factors. This holistic perspective is fundamental in SALVO.
Data-Driven Decision Making: One of the key takeaways from MACRO was the need for robust data and analytics to drive decisions. This principle is embedded in the SALVO process, where data analysis is crucial for assessing asset performance and making informed decisions.
Risk-Based Prioritization: MACRO highlighted the significance of prioritizing actions based on risk assessments. The SALVO process incorporates this by evaluating the risk and criticality of assets to prioritize maintenance and investment decisions.
Lifecycle Cost Analysis: Understanding the total cost of ownership and the lifecycle cost of assets was a major lesson from MACRO. This is now a core component of the SALVO process, which aims to optimize the value derived from assets over their entire lifecycle.tem
Stakeholder Engagement: Effective asset management requires the involvement of various stakeholders. MACRO’s emphasis on stakeholder engagement is reflected in SALVO’s collaborative approach, ensuring that the perspectives of different stakeholders are considered in the decision-making process.

Integration into the SALVO Project

The SALVO Project took these foundational principles and further developed them into a structured methodology aimed at optimizing asset value. Some specific ways in which these principles are applied include:

Structured Framework: SALVO provides a structured framework for decision-making that incorporates the lessons from MACRO, ensuring that all relevant factors are considered systematically.
Optimization Tools: The development of sophisticated tools and models for asset management within SALVO allows for the practical application of data-driven and risk-based decision-making.
Continuous Improvement: SALVO promotes a culture of continuous improvement, encouraging organizations to regularly review and refine their asset management practices based on performance data and feedback.
Training and Best Practices: The dissemination of best practices and training programs as part of the SALVO initiative ensures that the knowledge and lessons from MACRO are passed on and implemented effectively across various organizations.

Ongoing Application

The principles and methodologies from the MACRO Project, now embedded within the SALVO process, continue to evolve and adapt to new challenges and technologies. This ongoing application ensures that organizations can achieve optimal asset performance and value in a dynamic and complex environment.

In summary, the MACRO Project’s influence on the SALVO Project is evident in the core principles of holistic management, data-driven decision making, risk prioritization, lifecycle cost analysis, and stakeholder engagement. These principles have been integrated into a structured, practical framework within SALVO, which remains a relevant and effective approach in modern asset management practices.

What the project participants and users say...

User Testimonials

"Our clients really need processes like SALVO, which provides a consistent, structured and quantified means of evaluating what to spend on their facilities, when and why."

Keith HamerGroup VP Engineering & Asset Management, Sodexo

"...the flexibility in the SALVO Process can integrate with our existing business processes. These features have proved to be a winning combination in our decision-making.

Sam GibsonInvestment Strategy Manager (Stations), Northern Ireland Electricity Networks

"SALVO is an important piece of work that should be part of every asset manager's and asset investor's toolkit"

Steve Morrisformer President, Institute of Asset Management

“Extensive searching for a solution for optimizing the asset strategy resulted in finding SALVO. The application of the SALVO Process and decision support tools, along with the knowledge of the consultant, really make them stand out and deliver results - which are fully understood by the business."

Lee McClishReliability Professional. RagingWire Data Centers