Risk Management of Physical Assets Supported by Maintenance Performance Indicators

Abstract

Many asset-intensive organizations implement risk management strategies to mitigate potential hazards associated with physical asset failures, such as infrastructure deterioration or mechanical breakdown. As these physical assets’ risks can be treated with maintenance activities, properly evaluating the performance of maintenance management is of interest for risk management. Accordingly, this paper proposes a framework for the determination of Maintenance Performance Indicators (MPIs) to support the risk management of physical assets. The proposed framework included four main processes: Integrate performance evaluation guidelines, Review the maintenance management strategy, Define the performance indicators, and Assess maintenance across the MPIs. The ISO 55000 series for asset management and the Balanced Scorecard (BSC) approach were the guidelines considered. The ISO 55001 standard provides three assessment domains for performance evaluation: asset portfolio, asset management, and asset management system. The BSC approach identifies four performance evaluation perspectives that were integrated to address the requirements of one of these asset management domains. Then, the MPIs were defined for each of the performance evaluation domains in line with the maintenance management strategy toward the risk management of physical assets. Through a case study, the proposed framework was demonstrated considering the operational context of a Brazilian hydroelectric power plant. As a result, the proposed framework was shown to be consistent in systematically determining the MPIs that support risk management in organizations.

1. Introduction

Over the past, the incidence of accidents and major production disruptions in the chemical and oil and gas industries made it clear that organizations still needed to improve their capabilities to address the safety of their processes. In a systematic and proactive approach, the safety of a process encompasses the risk analysis, evaluation, and control, aiming at reducing the occurrence of accidents that may compromise process performance, including not only operational but also human, environmental and safety aspects [1].

Accordingly, the risk-based techniques that support these purposes have greatly increased over the years, reflecting increases in the technology applications covering diverse areas such as nuclear energy, bridges, airplanes, marine systems, power and chemical plants, and others [2]. As these asset-intensive industries face significant challenges related to the maintenance and risk management of their physical assets, risk management strategies can provide substantial benefits. With their integration into a risk management framework, the risk management activities are aligned across the organizations to create and protect value by managing risks, making decisions, setting and achieving objectives, and improving their performance [3].

The concept of risk was introduced in engineering system design aiming at defining the probability of occurrence of a given failure scenario and the consequences associated with that scenario [4]. According to the ISO 31000 standard for risk management, risk is defined as an uncertain event or condition that, if it occurs, impacts at least one of the organization’s objectives [3]. Thus, risks are inherent in any type of organization, and how they are handled can determine the success or failure of the organization’s operations. In other words, the development and use of risk management strategies are essential to assist managers in making appropriate decisions throughout the processes of the organization. It is through risk management that decision-makers identify, assess, prioritize, and mitigate risks to increase the probability of achieving the organization’s objectives.

In asset-intensive infrastructure industries, such as water, gas, electricity, oil, and transportation, effective physical asset management has played an increasingly important role in optimizing business performance [5]. This has put pressure on all aspects of asset management and, consequently, on the risk management of physical assets. The main risks related to a physical asset can be categorized into six main categories: physical failure risks, operational risks, risks associated with natural environmental events, risks associated with factors outside the organization’s control, stakeholder-related risks, and risks associated with the different lifecycle phases of assets [6].

Special attention should be given to the first category mentioned above, as physical asset failures, such as infrastructure deterioration or mechanical breakdown, can lead to safety, environmental, or social incidents, in addition to operational consequences. Unexpected failures can injure employees and service providers. Depending on the physical asset, a failure can be of great proportions, even impacting the environment and society. In addition, in hydroelectric power plants, unavailability events can bring loss of revenue and social impacts resulting from energy shortages.

Accordingly, failing to address risks associated with physical assets can have impacts on sustainability. In fact, the literature shows that there is a strong linkage between physical asset management (PAM) and sustainability [7]. For instance, effective risk management supports economic sustainability by reducing unexpected failures and costly repairs. It also bolsters social sustainability by enhancing the safety and reliability of critical infrastructure, which is vital for community well-being. Furthermore, risk management of physical assets is of relevance for achieving sustainability goals, including those outlined by the United Nations Sustainable Development Goals (SDGs) [8], such as ensuring access to affordable, reliable, sustainable, and modern energy (Goal 7), building resilient infrastructure (Goal 9), and promoting sustainable consumption and production patterns (Goal 12).

As these physical assets’ risks can be mitigated with maintenance activities during the asset’s operational life, maintenance management is recognized as strategic for the risk management of physical assets. Maintenance management is confronted with increasing availability, ensuring quality requirements, and controlling the safety and environmental risks associated with physical assets [9]. Evidence has shown that well-managed and well-performed maintenance can be utilized to contribute to business strategy [10], while failures in the processes can be a consequence of poor maintenance [11]. Therefore, properly evaluating maintenance performance is an essential process to support the risk management of physical assets and should not be carried out arbitrarily.

In this regard, this paper proposes a framework for the determination of the Maintenance Performance Indicators (MPIs) to support the risk management of physical assets. It is based on the ISO 55000 [12,13,14] series for asset management, which provides performance evaluation requirements for three assessment domains. The proposed framework also integrates the Balanced Scorecard (BSC) approach as a supporting tool to meet the requirements of one of these domains. The framework is demonstrated through a case study considering the operational context of a Brazilian hydroelectric power plant.

The main purpose of the proposed framework is to support a systematic alignment of the maintenance management objectives with the physical asset risk management objectives, demonstrating how maintenance can directly contribute to risk control and mitigation in organizations. In addition, the MPIs derived from these aligned objectives can track and point out deficiencies that should be addressed in the organization regarding risk management. Accordingly, a framework that defines the appropriate MPIs to support risk management of physical assets considering the alignment of the organizational strategy instead of arbitrary indicators is of interest for risk management in asset-intensive organizations and reiterates the scope of this paper.

The framework proposed in this paper for the determination of Maintenance Performance Indicators (MPIs) represents a novel approach in several ways. Unlike existing frameworks, the proposed method systematically integrates the ISO 55000 series for asset management and the Balanced Scorecard (BSC) approach, creating a comprehensive and multifaceted evaluation tool. This integration allows for a more robust alignment of maintenance management objectives with risk management goals, ensuring that the performance indicators are not arbitrarily chosen but are strategically aligned with organizational objectives. Additionally, the framework’s application in a real-world case study of a Brazilian hydroelectric power plant demonstrates its practical relevance and adaptability to different operational contexts. By addressing both strategic and operational levels, the proposed framework bridges a critical gap in the literature, providing a more holistic and practical tool for organizations aiming to enhance their maintenance and risk management practices.

The remainder of this paper is structured as follows: Section 2 briefly presents the asset management performance evaluation in the ISO 55000 series and the BSC approach for the measurement of organizational performance as guidelines for performance evaluation. Section 3 discusses the proposed framework for defining MPIs to support the risk management of physical assets. Section 4 describes a demonstration of the framework in a hydroelectric power plant context. Finally, Section 5 presents the final considerations regarding the proposed method and the case study.

2. Guidelines for Maintenance Performance Evaluation

Performance evaluation can be understood as an activity to assess measurable results in organizations. When used for the measurement of maintenance performance, these indicators are known as Maintenance Performance Indicators (MPIs) [15]. Therefore, performance indicators are specifically defined variables that are characterized by performance measures and are used for the performance measurement of any system or process [16]. From them, it is possible to identify nonconformities that shall be addressed as well as opportunities for improvement. Therefore, it is pertinent that organizations formally evaluate the outcomes of their main processes to monitor the accomplishment of their strategic objectives. For that, the organization may consider relevant guidelines for MPI definition.

After years of evolution of maintenance practices, the rise of the physical asset management discipline has placed maintenance management in a strategic position. However, asset management is, in essence, a multidisciplinary and complex discipline, requiring well-established and controlled processes and highly committed leadership [17]. As a broad response, the ISO 55000 series for asset management provides support to ensure the consistent performance of physical assets and maximize value generation while reducing risk and costs through an asset management system [18]. Therefore, since performance evaluation is one of its elements, the requirements for a proper performance evaluation are available and it is pertinent to investigate how this could improve maintenance management.

Regarding the BSC, it is currently one of the well-known approaches for the measurement of the organization’s performance. Since it was introduced, the BSC has been extensively investigated in the implementation of positive performance with only a few unsuccessful reports [19]. As there is a shift from the view of maintenance performance measurement from a mere budget perspective to an organizational and systematic perspective [20], BSC seems relevant to be integrated as it belongs to the strategic management practices, uses financial and non-financial information, and thereby has a much broader focus than costing practices [21].

Accordingly, both guidelines are presented in the following subsections and included later in the proposed framework for developing MPIs to support the risk management of physical assets.

2.1. Performance Evaluation within the ISO 55000 Series

Asset management is a relatively new discipline, although it has been quickly placed in the spotlight of competent organizations [22]. The introduction of the ISO 55000 series in 2014 established a new milestone for the topic and, consequently, maintenance management, contemplating four standards that cover asset management broadly [12,13,14]. This is the first official international series of standards in the asset management discipline that has reached a global consensus [23] and describes the benefits of asset management as enabling organizations to realize value from their assets in achieving their organizational objectives [24].

The asset management discipline enables analytical applications to manage an asset during different stages of its lifecycle [12]. In other words, it contemplates the activities that directly impact assets such as buying, designing, building, operating, maintaining, modifying, renewing, and disposing, as well as other supportive activities [25]. Given the scope of this work, the asset management guidelines are focused and limited to the maintenance stage of the physical asset lifecycle.

Within an asset management system, performance evaluation is one of the required elements that concentrate the activities of monitoring, measurement, analysis, and evaluation. As set out in the ISO 55001 standard, organizations shall evaluate and report on the asset portfolio performance, the financial and non-financial performance of asset management, and the effectiveness of the asset management system [13]. Accordingly, performance evaluation shall occur in these three domains whose relationships are represented in Figure 1.

The performance evaluation of the asset portfolio domain is often indirect and complex. According to the ISO 55000 standard, asset data management and the transformation of these data into information are essential to measuring asset portfolio performance. On the other hand, the performance of the asset management domain should be assessed against whether the asset management objectives have been achieved, and if not, why not [12]. This shall provide information to improve decision-making in asset management and support changes in the organization (ISO, 2018 [14]).

Regarding the asset management system domain, its performance should be evaluated against the objectives set specifically for the system itself. Thus, the main purpose of evaluating this system is to determine if it is effective and efficient in supporting the organization’s asset management [12]. Additionally, organizations shall also carry out internal audits to assess whether this system complies with its formal requirements [13].

As represented in Figure 1, the asset portfolio performance directly impacts the asset management performance. That is, the performance of the asset portfolio domain contributes to the performance of the asset management level. Similarly, the asset management system domain supports the asset management domain. Accordingly, both can positively influence asset management results, which shall contribute to the achievement of organizational objectives due to their strategic alignment.

2.2. The Balanced Scorecard (BSC) for Performance Evaluation

As a well-known performance measurement approach introduced in the early 1990s, the BSC is composed of four evaluation perspectives: financial, customers, internal processes, and learning and growth [26]. According to Nachtmann et al. (2015) [27], the BSC was proposed in an attempt to resolve problems in traditional management strategies that overemphasized financial measures and prioritized short-term gains to the detriment of progress and long-term success.

As the four performance perspectives are interconnected by a chain of cause-and-effect relationships, BSC describes how the organization creates shareholder value from better customer satisfaction, driven by excellence in internal processes which are continually improved by aligning people, systems, and cultures [28]. In other words, this relationship is given from the bottom up, as presented in Figure 2. Thus, the learning and growth perspective, “D”, contributes to the internal process perspective, “C”, which contributes to the customer perspective, “B”, and finally to the financial perspective, “A”. For instance, a training program can improve employee skills and promote the improvement of internal processes. In turn, better processes contribute to enhanced customer service and can impact greater satisfaction. Then, at its last level, customer satisfaction contributes to increasing revenues and margins as it is a strategic factor of competitiveness [28].

The definition of indicators for a measurement system shall represent the organizational strategy to make a greater impact and promote long-term value creation [29]. Without the strategic alignment or the integration of the organizational strategy into the BSC, this process became merely a collection of performance indicators [27]. The BSC provides a holistic approach to performance measurement, through which organizations can translate their strategy into multiple perspective maintenance indicators [30]. In this paper, the derivation of the strategic objectives into lower management levels, such as maintenance management objectives, will integrate the proposed framework for MPI definition to support the risk management of physical assets.

Finally, it is worth mentioning that BSC does not directly address the strategic plans [31]. Its focus is on the organizational alignment of objectives at the different management levels of application and on the linking of performance indicators to the four perspectives that relate to these levels. In other words, it does not directly approach what shall be conducted to achieve these objectives, prioritizing ensuring alignment between the organizational strategy and its measured indicators.

2.3. Maintenance Performance Evaluation Based on ISO 55000 and BSC

While the BSC traditionally focuses on the strategic assessment of organizations, it has increasingly been applied to evaluate the performance of specific processes like maintenance management across various organizations. The BSC framework has proven effective in measuring maintenance performance and aligning it with broader strategic business goals. For instance, Imad Alsyouf’s study [32] demonstrated the application of BSC in a Swedish paper mill, emphasizing maintenance as a profit-generating function. This framework allowed maintenance activities to be evaluated in terms of their contribution to strategic goals, improving return on investment (ROI) and operational efficiency.

Similarly, Nachtmann et al. [27] described the development of a BSC for flight line maintenance activities in the US Air Force. Macián et al. [33] adapted the BSC approach to a proper assessment of maintenance management performance in the urban transport industry. Da Silva et al. [31] proposed a framework that integrates ISO 55000 guidelines with the BSC to define MPIs for asset management in a Brazilian hydroelectric power plant. Their method includes reviewing guidelines, aligning strategy, and defining maintenance indicators, demonstrating a systematic approach to achieving business objectives through maintenance management.

De-Almeida-e-Pais et al. [34] developed a tool to measure the performance of a Strategic Asset Management Plan (SAMP) using the BSC, underscoring its role in aligning asset management objectives with organizational goals. This study confirms the utility of BSC in asset management but does not explicitly combine it with ISO 55000 for risk management. Furthermore, the BSC can be applied to support safety-related decision-making by deriving safety aspects to assess from its perspectives [35].

On the other hand, several studies have investigated the impact of ISO 55000 on organizational performance, highlighting its benefits in improving financial performance, decision-making, and operational efficiency. For instance, research by Alsyouf et al. [36] evaluated the impact of ISO 55000 on UAE firms, confirming positive effects across multiple performance metrics. However, while these studies affirm the advantages of ISO 55000, they often lack a systematic integration with BSC for maintenance and risk management.

Da Silva and Souza [37] further elaborated on a maintenance management framework (MMFAM) based on ISO 55000 series guidelines, which uses the Business Process Model and Notation (BPMN) to translate technical requirements into actionable maintenance processes. This approach enhances the understanding and implementation of ISO 55000 in maintenance management. Recently, Ge et al. [38] proposed an adaptable end-to-end maintenance performance diagnostic framework, which emphasizes the need for rigorous data collection and analysis to ensure the validity and reliability of maintenance performance metrics. This framework supports maintenance performance diagnostics at various levels, contributing to better maintenance outcomes and risk management.

Existing literature indicates the individual strengths of ISO 55000 and BSC in asset and maintenance management but lacks comprehensive studies combining these methodologies systematically for risk management purposes. The proposed framework fills this gap, offering a novel approach to aligning maintenance performance with organizational objectives and enhancing risk management practices.

3. The Proposed Framework

As previously mentioned, this paper proposes a novel framework for the definition of the Maintenance Performance Indicators (MPIs) to support risk management of physical assets, as detailed and presented in Figure 3. It is particularly suitable for asset-intensive organizations where the reliability and performance of physical assets are critical. The framework is composed of four main processes: “Integrate performance evaluation guidelines” (I), “Review maintenance management strategy” (II), “Define the performance indicators” (III), and “Assess maintenance across the MPIs” (IV).

It is worth mentioning that the framework was modeled using the Business Process Model and Notation (BPMN) as it is an international standardized graphical notation for process modeling. According to Object Management Group, the BPMN creates a bridge for the gap between the business process design and process implementation that is readily understandable by all business users [39]. In the following subsections, each of the four processes of the framework is properly discussed for better comprehension.

3.1. Integrate Performance Evaluation Guidelines

The first process of the framework does not have a periodic start event. Unlike the other processes, it is performed only once and serves as a setup for the following processes. It starts by considering two important performance evaluation guidelines as support: the ISO 55000 series for asset management and the BSC approach. While the former represents a new paradigm for maintenance management, the latter is a traditional and widely used approach to the evaluation of organizational performance.

As shown in Figure 3, both guidelines are considered to determine the domains and perspectives for maintenance performance evaluation to support risk management of physical assets. In this paper, the proposed integration of both guidelines is presented in

Table 1. Domains and perspectives for maintenance performance evaluation.

	Domains	Maintenance Domains	Perspectives
I	Asset portfolio	Equipment and systems	Performance
II	Asset management	Maintenance management	Financial
			Customer
			Internal process
			Learning and growth
III	Asset management system	Risk management system	Effectiveness
			Compliance

.

The determination of the domains followed the requirements of the ISO 55000 series that specifies performance evaluation in three assessment domains: asset portfolio, asset management, and asset management system [12]. As these domains are oriented to asset management, specific maintenance domains were derived in line with the scope of this framework. For instance, instead of covering all the stages in the physical asset lifecycle, the asset management domain is limited to maintenance management. In the same way, it is proposed to address the performance evaluation of equipment and systems to the asset portfolio domain as well as the risk management system to the management system domain.

Regarding the perspectives, they were determined by considering the ISO 55000 series and BSC approach guidelines. The maintenance domains I and III were directly derived from the ISO 55000 series guidelines. On the other hand, for the maintenance management domain, the four perspectives of the BSC were integrated to meet the ISO 55000 guidelines that require financial and non-financial performance for this domain.

It is worth mentioning that the determination of domains and perspectives is not limited to the approach presented in Table 1. Depending on the context of the organization, other decisions can be taken when considering the guidelines from the ISO 55000 series and the BSC. In this work, the approach presented in Table 1 will be considered as input for the other processes and also as a reference for the case study.

3.2. Review Maintenance Management Strategy

With the completion of the first process of the framework, it is possible to initiate the second process “Review maintenance management strategy”, as presented in Figure 3. It is composed of a sequence of three activities: “Review strategic objectives”, “Align business unit objectives”, and “Derive maintenance management objectives”. It contributes to the understanding of the organization under analysis and supports the alignment of the maintenance management objectives with the strategic objectives of the organization that can be impacted by the risks associated with physical assets.

This process can be applied to different organizations following this systematic approach to review maintenance management strategy that will derive the MPIs. However, depending on the context of the organization, carrying out these three activities may require greater or lesser effort. Larger and structured organizations usually have strategic goals and objectives for their business units that are already formalized and aligned with each other. In addition, it is possible to identify which of these objectives are associated with risk management. In some cases, this detail is provided at the level of maintenance management objectives and the outputs of this process do not require additional efforts.

On the other hand, in organizations where objectives are not explicit or aligned, users of the framework will need additional effort to derive maintenance management objectives associated with the risk management of physical assets. Finally, it is worth mentioning that this second process shall be restarted according to the frequency stipulated by the organization as it is periodic. This ensures that maintenance management objectives to support physical asset risk management are always aligned with the organization’s needs and expectations.

3.3. Define the Performance Indicators

Once the “Review maintenance management strategy” process is complete, it is possible to start the “Define the performance indicators” process. This third process contemplates two sequential activities: “Derive the MPIs” and “Define the target of each MPI”. As shown in Figure 3, the process has a timer start event to ensure that the MPIs are aligned with the revised maintenance management objectives. As input, the maintenance management objectives as well as the domains and perspectives for maintenance performance evaluation, obtained in the previous process, shall be provided.

Therefore, “Derive the MPIs” is the activity in which the organization translates the maintenance management objectives into Maintenance Performance Indicators to support the risk management of physical assets. Moreover, the MPIs shall meet the domains and perspectives of maintenance performance evaluation previously established, as based on ISO 55000 requirements and BSC. Then, in “Define the target of each MPI”, the expected target for each of the MPIs is determined. For that, the user may consider the historical performance information in the organization as well as external benchmarking, regulatory issues, or expectations of stakeholders.

3.4. Assess Performance across the MPIs

The fourth and last process provides a sequence of activities that also shall be performed periodically. It is expected that the frequency for this process will be higher than that established for the two previous processes since the evaluation of the performance measured by the indicators is the main result of this framework to support the risk management of physical assets. In other words, the three previous processes establish what needs to be measured by defining the MPIs while this fourth process continually assesses performance across the MPIs.

With the results of the “Assess the MPIs over their targets” activity, the maintenance management verifies if the targets were achieved. This assessment is of importance as it indicates whether maintenance management performance met the targets for the defined MPIs related to the risk management of physical assets. That is, it is through this activity that the organization can monitor its performance in controlling the risks associated with physical assets through maintenance management. For cases where all MPI targets have been met, this process ends and waits for the next evaluation period, as represented in one of the gate’s flows in Figure 3. Otherwise, the process is directed to a sequence of two additional activities.

When one or more MPI targets are not met, the organization shall react to them to control and correct these nonconformities or address their consequences. In the proposed framework, this is performed by the “Elaborate actions to address the nonconformities” and “Forward actions to be implemented” activities. Both activities enable maintenance management to design and implement actions toward achieving the expected performance regarding the risk management of physical assets.

4. Case Study

The proposed framework was demonstrated based on a Brazilian hydroelectric power plant with around 200 MW of installed capacity and four Kaplan turbine generating units. Hydroelectric plants are of great importance in Brazil due to their predominance in the national energy matrix, providing more than 60% of the electrical energy consumed in the country [40]. Brazil has an open power market subject to regulation and inspection imposed by the National Electric Energy Agency (ANEEL), in addition to specific constitutional laws for the sector. In this way, power generation companies must fulfill their part in guaranteeing the supply of contracted energy. Noncompliance implies the application of fines and sanctions to the organization, making the occurrence of failures in the generation systems even more significant.

The hydropower power plant selected for this case study has been undergoing several processes to improve the performance of physical asset management. Nevertheless, there have recently been two failure events in consecutive years on two different generating units that have led to their unavailability for an extended period. Such characteristics make this plant an interesting case for the application of the proposed framework. Therefore, this case study application aimed to demonstrate the processes of the framework to better contribute to the understanding of its activities and the potential results considering a real operational context.

For the first process, “Integrate performance evaluation guidelines”, the ISO 55000 series and the BSC approach were considered to determine the domains and perspectives for maintenance performance evaluation, as previously proposed in Table 1. Accordingly, in this case study, the asset portfolio domain covers the critical equipment and systems that are assessed through the performance perspective. The second domain refers to the maintenance management that is evaluated in the four BSC perspectives to meet the financial and non-financial assessment as set out in the ISO 55000 series. Finally, the third domain includes the assessment of the risk management system through the effectiveness and compliance perspectives.

With the performance evaluation domains and perspectives determined, the “Review maintenance management strategy” process was initiated for the case study demonstration. As proposed in the framework, this process derives the maintenance management objectives associated with the risk management of physical assets by unfolding the strategic and business unit objectives. Accordingly, defining MPIs for these objectives will ensure their contribution to the achievement of strategic objectives.

In this case study, the annual integrated reports from the organization that owns the selected hydroelectric power plant were used to review the strategic and business unit objectives. This approach was applied by da Silva et al. (2019) [41] when identifying the criteria that were in line with the strategy of the organization for a maintenance criticality analysis. From these reports, it was possible to identify strategic objectives as well as aligned power generation objectives that were related to risk management to derive aligned maintenance management objectives from them.

It is evident that an integrated report from an organization provides dozens of objectives, indicators, and results discussed. Therefore, for this case study application, three main strategic objectives that can be impacted by the risks associated with physical assets were selected and unfolded into maintenance management objectives, as shown in the first three columns of

Table 2. Deriving maintenance management objectives and MPIs from strategic objectives.

Strategic Objectives	Power Generation Objectives	Maintenance Management Objectives	Maintenance Performance Indicators	Domain	Perspective
Eliminate fatal accidents of employees and service providers	Strengthen the health and safety culture in power generation	Engage maintenance with the organization’s health and safety culture	Compliance with health and safety training plan	II	Learning and growth
			Compliance with safety protocols for maintenance activities	II	Internal process
	Manage safety risks in power generation with the support of a risk management system	Treat the safety risks associated with physical assets with maintenance activities	Compliance with the execution of maintenance plans	II	Internal process
			Number of open safety nonconformities for maintenance	III	Compliance
			Number of accidents associated with physical asset	III	Effectiveness
Reduce customer vulnerability	Improve availability in power generation	Ensure equipment is available and reliable for operation	Failure rate	I	Performance
			Asset health index	I	Performance
		Reduce recurring failures	Compliance with root cause analysis	II	Internal process
		Invest capital in maintenance projects with a higher return to availability	Payback time	II	Financial
	Meet expectations for customer satisfaction	Contribute to addressing customer demands and needs	Compliance regarding maintenance actions of customer satisfaction plan	II	Customer
			Maintenance emergency downtime	II	Customer
Eliminate accidents and environmental penalties	Prevent negative environmental impacts on power generation	Prevent negative environmental impacts on maintenance activities	Compliance with environmental impact and prevention training	II	Learning and growth
			Number of environmental improvements in maintenance	II	Internal process
		Prevent negative environmental impacts with maintenance activities	Compliance regarding maintenance actions of environmental plan	II	Internal process
	Manage environmental risks in power generation support of the risk management system	Treat the environmental risks associated with physical assets with maintenance activities	Number of open environmental nonconformities for maintenance	III	Compliance

. These objectives were related to safety, customer vulnerability, and the environment as they are topics of interest to the consulted stakeholders.

From the derived maintenance management objectives, the “Define the performance indicators” process was initiated to translate them into MPIs for the domains and perspectives through its “Define the MPIs” activity. By doing this, maintenance management is provided with MPIs that support the risk management of physical assets in the organization and the achievement of associated strategic objectives. For better comprehension in this case study, at least one indicator was proposed for each domain and perspective of maintenance performance evaluation, as can be seen in the last columns of Table 2. However, it is worth mentioning that the definition of MPIs is not limited to them.

It is noteworthy that each strategic objective can unfold into more than one power generation objective, which is the business unit level for this case study. Likewise, more than one maintenance management objective can be derived from each power generation objective. Furthermore, during the “Derive the MPIs” activity, the same MPI can be translated from more than one maintenance management objective, which is usual since MPI measures may not only impact a single objective but also corroborate the non-arbitrary nature of the proposed framework for defining the MPIs. In other words, the definition of MPIs is not by chance or following traditional indicators but through alignment with the organization’s strategy.

The relationship between the proposed MPIs to support the risk management of physical assets with the objectives can be better understood and more evident when the information in Table 2 is represented through a strategic map, as shown in Figure 4.

Then, through the “Define the target for each MPI” activity, a target was defined for each MPI based on the targets defined for the aligned strategic and power generation objectives as well as the maintenance management context of the organization. These reference targets utilize a combination of industry standards, regulatory requirements, and organizational benchmarks to establish acceptable targets. For instance, the target for the indicator “Compliance with health and safety training plan” and “Number of accidents associated with physical asset” were aligned with strategic guidelines regarding risk management, while the target for the indicator “Maintenance emergency downtime” was aligned with the availability target from the regulatory requirement.

It is recommended that organizations formally express how these indicators are calculated and communicate them with relevant stakeholders. However, due to the potential existence of trade secrets and sensitive information, it may not always be feasible to share all details with every stakeholder. Instead, organizations shall adopt a tailored communication strategy that differentiates between internal and external stakeholders. Accordingly, as an example,

Table 3. Example of a complete description of MPIs to support risk management.

MPI	Domain	Perspective	Description	Calculation	Target	Periodicity	Responsibility
Asset health index	I. Asset portfolio	Performance	The proportion of monitored physical assets in normal condition (%)	$={\displaystyle \frac{\begin{array}{c}number of asset in \\ normal condition\end{array}}{total number of assets}}$	>90%	Monthly	Maintenance engineering
Payback time	II. Asset management	Financial	The ratio between maintenance investment and annual return (years)	$={\displaystyle \frac{maintenance investment}{annual return}}$	<5 years	Semiannual	Maintenance management
Maintenance emergency downtime	II. Asset management	Customer	The proportion of hours due to maintenance emergency downtime (%)	$={\displaystyle \frac{\begin{array}{c}hours of maintenance\\ emergency downtime\end{array}}{total planned hours}}$	<2%	Monthly	Maintenance engineering
Compliance regarding maintenance actions of environmental plan	II. Asset management	Internal process	The proportion of completed actions regarding maintenance in the environmental plan (%)	$={\displaystyle \frac{\begin{array}{c}number of completed\\ maintenance actions\end{array}}{\begin{array}{c}total number of\\ maintenance actions\end{array}}}$	>95%	Monthly	Maintenance management and health, safety, and environment (HSE) team
Compliance with health and safety training plan	II. Asset management	Learning and growth	The proportion of the health and safety training plan completed (%)	$={\displaystyle \frac{\begin{array}{c}number of completed\\ health and safety training\end{array}}{\begin{array}{c}total health and safety \\ training\end{array}}}$	100%	Semiannual	Maintenance management
Number of accidents associated with physical asset	III. Management system	Effectiveness	Sum of numbers of accidents related to safety risks associated with physical assets (un.)	$=\sum \begin{array}{c}number of accidents\\ related to safety risks\\ of physical assets\end{array}$	Zero	Monthly	Maintenance management
Number of open environmental nonconformities for maintenance	III. Management system	Compliance	Sum of not completed environmental nonconformities for maintenance (un.)	$=\sum \begin{array}{c}not completed \\ environmental\\ nonconformities\\ for maitenance\end{array}$	Zero	Semiannual	Maintenance management and HSE team

demonstrates with some defined MPIs how their proper descriptions could be communicated within the organization.

In addition, responsibilities and the periodicity of the assessment can also be included. The proper periodicity of assessments is important to ensure the timely identification and correction of nonconformities. In this case study of a hydroelectric power plant, the exemplified frequency for the MPIs in Table 3 was aligned with the operational context and specific needs of the organization. It is worth mentioning that it can be adjusted as necessary to better track and address any nonconformities that may arise, ensuring that the performance indicators remain relevant and effective in supporting risk management.

Finally, the fourth process “Assess maintenance across the MPIs” shall be triggered according to its periodicity, as exemplified in the proposed framework as monthly. When started, it identifies which MPIs will be evaluated considering their individual periodicity, as shown in Table 3, and then assesses them across their targets. For this case study, a defined MPI that did not achieve its target during the period of study in the organization and that, at the same time, is aligned with a power generation objective that performed below expectations was selected to discuss the sequence of activities in this final process.

Based on the integrated report of the organization, it was identified that the target for operational availability of power generation was not achieved. This is an important objective of this business unit as it is aligned with the strategic objective of reducing customer vulnerability, and, consequently, improving customer satisfaction. As presented in Table 2 and Figure 4, maintenance management can contribute to it by ensuring that physical assets are available and reliable for power generation, which can improve operational availability and, consequently, prevent energy shortages for customers.

After the “assess the MPIs over their targets” activity, it was identified that the MPIs “asset health index” and “maintenance emergency downtime” that impact the maintenance management objective “ensure equipment is available and reliable for operation” and, consequently, impact the power generation objective “improve availability in power generation”, as shown in Figure 4, were not accomplished. Following the “Assess maintenance across the MPIs” process, when this happens, the activities “elaborate actions to address the nonconformities” and “forward actions to be implemented” shall be triggered. For instance, the maintenance management elaborates actions to analyze root causes and review the maintenance planning of physical assets in degraded health to prevent other failures from occurring to address these nonconformities.

The maturity of the processes and activities to achieve the power generation objectives of the hydroelectric power plant also contributes to the understanding of the underperformance in these MPIs. Therefore, the power generation objectives presented in Table 2 were assessed regarding the processes and activities that are established in the organization to achieve them considering the maturity scale in

Table 4. Maturity scale of the power generation objectives.

Code	Maturity Level	Description
1	Initial	The organization has identified the need to set processes and activities to achieve the power generation objective
2	Developing	The organization has introduced the processes and activities to achieve the power generation objective systematically and consistently and can demonstrate that these are being progressed with plans in place
3	Competent	The organization can demonstrate that it has systematically and consistently achieved the power generation objective
4	Optimizing	The organization can demonstrate that it is systematically and consistently optimizing the processes and activities to better achieve the power generation objective
5	Excellent	The organization can demonstrate that it employs the leading practices in its processes and activities and exceeds or achieves the maximum expected result for the power generation objective

which is adapted from the Asset Management Maturity Scale [42]. The results of this evaluation are shown in Figure 5.

Although the organization has a maintenance management process in place that contributes to the “improve availability in power generation” objective, it is still under development. This could be improved by introducing and upgrading activities such as Fault Detection, Diagnoses, and Prognosis (FDDP) [43]; maintenance life data analysis [44]; Reliability, Maintainability, and Availability (RAM) analysis [45,46]; root cause analysis [47], and risk-based prioritization [48]. These activities, when well implemented within a maintenance management framework in line with the guidelines of ISO 55000 series [37] and supported by modern techniques and tools, can leverage maintenance performance towards the determined risk management objectives.

Finally, the use of a performance dashboard may be pertinent for better tracking and analysis of the MPIs in organizations. It can include, for instance, the measures for the MPIs by month, the aggregated result year to date, and their defined targets. The choice of the appropriate template for implementing a performance dashboard shall consider the number of defined MPIs as well as how they will be communicated to relevant stakeholders. In organizations with a large number of MPIs, it may be interesting to design individual dashboards for each assessment domain, or even for perspectives, rather than having a single dashboard that incorporates all domains simultaneously.

5. Conclusions

Performance evaluation is a crucial process in maintenance management as it can point out deficiencies to be addressed in organizations. Additionally, it also contributes to stakeholders’ understanding of the value created by maintenance management if the MPIs were properly aligned with strategic objectives of the organization. Through their results, leaders can analyze what is not performing as expected and initiate an improvement process. Since maintenance has a major impact on the risk management of physical assets, a framework for defining MPIs to support it is relevant for practitioners in the field.

In this context, the present paper proposed a novel framework for determining the MPIs to support the risk management of physical assets. A four-process framework was developed and demonstrated through a case study considering the context of a hydroelectric power plant. This makes it possible to define indicators for maintenance management evaluation in line with the strategic objectives related to the risk management of physical assets. Therefore, the MPIs can contribute to improved risk management as the leadership can track objectives and results from maintenance management in different domains and perspectives.

Through the case study, it was possible to observe that the proposed framework enables organizations to systematically determine MPIs to support the risk management of physical assets. It considers the ISO 55000 series and the BSC approach as guidelines to define the domains and perspectives for maintenance performance evaluation and ensures alignment with the strategic objectives to derive the MPIs. Moreover, following the processes of the framework, the determination of these indicators is no longer arbitrary and their assessment across targets becomes periodic.

It should be noted that as the fourth process “Assess maintenance across the MPIs” is periodic, it supports the organization to have continuous monitoring of the performance of maintenance management regarding the risk management of physical assets. Trends in MPI results can also contribute to risk management decision-making and risk assessment review. Therefore, this reiterates that MPIs can be used to support the risk management of physical assets in maintenance management.

Although the proposed framework was applied to the scope of maintenance management, it is suggested to be extended to support risk management in other stages of the lifecycle of physical assets such as operating as an opportunity for future work. Furthermore, the focus that was given to risk management could be extended to other aspects of asset management.

As a perceived limitation, the proposed framework strongly relies on the strategic objectives defined by the organization. If these strategic and business unit objectives are poorly defined or misaligned, the resulting MPIs may lack relevance and fail to effectively support risk management. Finally, the findings of this paper are expected to contribute to researchers and practitioners in the maintenance fields by providing a framework that supports the risk management of physical assets in organizations.