The use of decision-making tools in end-of-life decisions: A case study in the South African petro-chemical industry

Infrastructure assets are aging, therefore ongoing maintenance and renewal of that infrastructure has become much more significant. Sound asset management decisions that are based on a thorough understanding of the modern business context are needed. When it comes to the decision to dispose of assets, managers tend to avoid making the final decision, sometimes mothballing the asset and leaving it to self-destruct. This could cause either safety hazards at a plant or environmental neglect. In many organisations there is a clear divide between the project teams and operations teams. The project team's responsibility ends when the asset reaches beneficial operation. The operations team then becomes the “owner” of the asset. During the operational phase of an asset, decisions typically include cost, risk and performance as tradeoffs in the decision criteria. This happens in an ever changing business and technological environment. Decisions regarding the use of assets can be made at any stage of the asset life-cycle and at various levels of an organisation. The renewal or decommissioning phase of the asset life-cycle is perhaps just as important as an initial establishment decision as it is another stage that large capital amounts are committed, given the risk that a poor decision can carry a heavy penalty for many years to come. To assess whether decision-making models and tools are effectively used in industry to make asset disposal decisions, a survey was conducted within a large petro-chemical organisation in South Africa. A survey was chosen to conduct this research as the maximum feedback could then be obtained within a limited timeframe. A number of conclusions could be reached from the study with regards to the use of decision making models and tools at different departments and different levels of the organisation.