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What is Asset Management?
Transcript of What is Asset Management?
If you understand the changing demands,
and have the support of production, patron and logistics modelling, then Asset Management allows you to judge whether your existing asset base can cope with
So what’s all this asset management stuff all about?
Wow, so it's more than just managing maintenance then?
Tell me more!
Why is that important?
The story starts at the top table, with understanding what your stakeholders expect from your organisation and how your assets help you to meet those expectations.
It allows you to describe what your key management considerations should be.
Come with me...
Levels of Service?
It is fundamental to establish the expected levels of service to be delivered by your organisation. This defines what you are expecting from your assets over their lifetime.
And if my assets are starting to fail?
And that's important?
You keep talking about money and spending...
So what do we need to think about?
By understanding the expected levels of service to be delivered, and the likely changes in demand for those services, you can assess the risks to sustaining the delivery of these services.
Single points of failure
changes to the environment/external factors
Understanding these lets you target spending on maintaining and operating your critical assets and take cost effective mitigation actions.
Levels of Service
Where do I get information regarding all that?
But you said asset management was about making informed decisions. What do I do with all this data?
Being able to
record asset information such as maintenance history, costs, age, etc is required to be able to measure the performance of your assets, monitor their condition and make informed decisions.
Establishing the data and
reporting requirements, and the
underlying engineering and business processes, is fundamental to getting an appropriate system to support your decisions.
You use it in your planning process
To bring together the above considerations and prioritize capital, maintenance and operational expenditures going forward an Asset Management Plan (AMP) is put in place.
Capital, operational AND
maintenance... it's more than just maintenance management then?
Maintenance considerations are an important part of asset management, just not the ONLY one.
With increasing pressure to reduce maintenance spend, maintenance strategies and plans need to demonstrate value to the organisation.
Maintenance techniques, such as
Reliability Centred Maintenance (RCM), help to devise more cost effective maintenance regimes.
Adding a risk based perspective further optimises the cost-effective balance between maintenance actions and risk
to the business.
What can we do about this?
So, in a nutshell, what does asset management give me?
Produced by Ben MacLaren, 2013
It’s a strategic management
discipline that aims to deliver
the best bang for the buck
from your assets.
It gives you confidence that asset expenditure decisions support the best life cycle cost strategies for the sustained performance of your assets....
... and balances those decisions with the level of risk and cost that your stakeholders are willing to accept.
Much more! It helps you to:
back up budget talks with solid facts
boost delivery efficiency
Simply, it helps you to make better informed decisions.
Come with me...
Yeah - asset
intensive organisations face particular challenges with depreciation and long-term expected useful lives of those assets. Understanding the costs associated with owning assets and sustaining their operations is vital for whole of life decision making.
Impact of depreciation
Categorising capital and operational expenditures
Allocating costs to assets
Preparing long-term expenditure forecasts
From your business and asset information systems...
The AMP acts like a business case
that identifies the operational & maintenance activities, capital projects and associated cost to be expected to sustain the delivery of
the expected organisational
Doh! Haven't you been listening?
The capital planning process looks to optimise the capital decision making in relation to costs and time of expenditure.
What should capital planning address?
renewal, creation or purchase of new assets
Mitigate the risks to sustaining the required levels of service
Investing in assets to be held as an investment in their own right.
What should operational planning look at?
Can I ask about maintenance now?
Operational planning is undertaken to effectively utilise the assets to meet the expectations of their stakeholders.
Measuring asset utilisation
Strategies to counter over or under utilisation
Balancing demand requirements
Reducing wastage through smarter scheduling
Managing customer demand by reducing demand for over-utilised assets (or vice versa)
Defining Emergency Response Plans, Contingency Plans etc.
A good asset management system balances financial investment against the value delivered by assets over their lifetime. This involves achieving the correct balance between expenditure (maintenance, operational and capital) and the measure of return on this investment.
By Jove! I think you've got it!
So, to summarise...
Asset management lets me:
Establish and maintain a “line of sight” between my asset activities with my strategic vision and goals
Make fundamental decisions about my asset’s purpose, structure, & functions
Address & prepare for both anticipated & unexpected problems
Evaluate the current physical and financial situation of my assets
It helps me understand
What condition are my assets in?
What level of service are they expected to deliver?
What are the risks to sustained delivery?
What do I need to spend to manage those risks? and
How do I fund that expenditure?
Who should I see if I want to know more?