Asset Management is essentially the answer to a very simple question:

“What do you do when important equipment breaks down?”

It’s a simple question, but answering it requires some thought. Because whether it’s a complex machine or a light bulb: you want to have a strategy to repair or replace something when it breaks. If your equipment is down and you can’t work, you’re missing out on opportunities and revenue! Asset Management is there to prevent this. The ISO definition of Asset Management is: “Coordinated activity of an organization to realize value from objects, things or entities that have actual or potential value to an organization.” Or, more simply: Asset Management is the strategic maintenance of everything that makes you money ! Whether it’s IT equipment, vehicles, heavy industrial machinery or buildings, it doesn’t matter. The principle of asset management can be applied in any industry and for any size of company.

The concept is about gaining insight into the total lifecycle of all your assets. Implementing an Asset Management system will give you a streamlined maintenance process, lower costs and less downtime. In this article, we will take you through the basic ideas so you are ready to keep your assets in top shape!

What is the difference between Maintenance Management and Asset Management?

You may have heard of CMM systems, Computerized Maintenance Management systems. These are software programs that are built to optimize your maintenance process. But what is the difference with Asset Management?

Maintenance management is just one part of asset management . Maintenance management is about maintenance schedules, work plans and inventory management. Asset management is about the entire lifecycle of your assets. This includes purchasing, contracts, HSE protocols and eventual disposal/recycling of the assets.

Asset Management and maintenance management are therefore intertwined. Asset Management only goes a few steps further.

Who is Asset Management for?

Companies that own a lot of expensive assets (machines, vehicles, buildings, etc.) benefit most from a strong asset management strategy. The transportation, energy and manufacturing industries are examples of sectors that can gain a lot from a strong asset management strategy.

That said, any business can apply the principles of asset management to optimize the lifecycle of their assets . Think about the equipment you use on a daily basis and what the consequences are if it stops working or requires maintenance. How long do you want a piece of equipment to last? How much impact will a downtime have on your business processes? The answers to these questions will determine how you should structure your asset management strategy.

The Asset Management Maturity Model

There is a model that outlines the different phases of Asset Management for companies. You can use this Asset Management Maturity Model (AMMM) to determine where you stand. There are a few variations of this model with different terms. The main purpose is to have an idea of ​​the next steps based on your current situation. The most commonly used model has five phases: chaotic, beginning, developing, controlled and optimized. We discuss the phases below.

Chaotic

If your answer to the question at the beginning of this article is “I don’t know”, then you are most likely in the Chaotic phase of asset management. You own a number of important pieces of equipment that you need for your primary business process. You hope that they don’t fail, because it takes a lot of time, money and effort to maintain or replace them. However, you don’t have a strict procedure in place for when this happens. Furthermore, you are not aware of the concept of asset management and you don’t keep track of your assets or have maintenance schedules. Repairs are reactive and ad-hoc. You don’t keep a logbook or register of your assets and maintenance.

Beginning

You have a clear idea of ​​what asset management is and how it can benefit your organization. You develop a strategy to monitor the condition of your assets. You think ahead and have the necessary knowledge in-house, or on-call, to intervene quickly. You keep a stock of spare parts. All this to minimize downtime of your assets. You may also have a clear inspection plan for your critical assets. What companies in the Beginning phase have in common is that you are starting to consistently track the information and status of your assets.

Developing

You have a consistent system to track the information and status of your assets. You go one step further and apply financial information about your assets and repair costs. Furthermore, you have a clear picture of the life cycle of your assets. You use all this information to make well-considered choices that offer the most return: namely where and when to perform maintenance and repairs and when to replace something. Because you have this data at your disposal, you are confident. In this phase, you move from a reactive asset management approach to a preventive one. You further reduce your downtime and thus increase productivity.

Controlled

You keep a close eye on your assets, have centralized your information and have further refined your asset management strategy. You have mapped out the risks and opportunities of your assets. With this information you go a step beyond simple planned maintenance. Where and when you perform maintenance is determined by automated condition monitoring, optimal efficiency and the highest return. You do not have a fixed, annual planning but use predictive techniques to automate this planning and continuously adjust it. You keep track of the condition of your assets in a smart and financially healthy way.

Optimized

You have perfected the predictive technique of your asset management strategy. You are continuously working to keep track of the status of your assets through standardized procedures and automated processes. Asset management has thus become an integral part of your daily business and is the most important factor in allocating your resources. All to achieve optimal returns. You work with clearly defined KPIs for your assets: production volume, operating hours, costs, etc. Hardly any resources are lost during the maintenance, repair and replacement of your assets.

How do you get started with Asset Management?

If Asset Management sounds like something you’d like to get involved with, here are some steps you can take to implement it in your organization.

Take inventory of your business processes, equipment and current contracts

Before you start strategizing your business and spending a lot of money on a piece of asset management software, it is important to know where you stand. First, consider your business structure, your processes, and your KPIs. What resources are crucial to your primary process and achieving your goals? Do you have existing contracts on these resources?

Prioritize your assets and procedures

You want to make an informed decision about what to invest in when you start with asset management. Ultimately, achieving an optimal return is your goal and in your primary process, some things are simply more important than others. That is where you want to invest first, of course.

Determine your initial investment for asset management

The first steps are to inventory and prioritize your processes and assets. What you want to do next is determine how much time and money you are going to invest in getting started with your Asset Management strategy. Depending on the complexity of your equipment and processes, you may choose to create a basic maintenance schedule for your most critical assets. Or you may take the time to enter every screw, bolt, purchase-lease contract, and full lifecycle of your equipment into specialized software. You know what works best for your business.

Choose an asset management system

You have made choices about your assets and investment. Now it is important to choose a software package that fits your strategy. And there are quite a few choices. Some software focuses on specific sectors, while some software is stronger in maintenance or finances, for example. Which software you choose depends entirely on the previous steps and the goals you have set for yourself. Listing all possible software is not an option, but be aware that there are a lot of different options and that there is always a system that fits your needs.

Implement your chosen solution and train your users

Regardless of which solution you choose, your next step is to take points 1 and 2 from above and apply them to your chosen package. Identifying your key assets and choosing the right software are extremely important. Even more important is training the people who will ultimately be using the software. This is a top priority! After all, they will have to work with the system and so they also need to know how. Keep in mind that the success of any new (technical) solution always stands or falls with the support of the end users.

Make smart use of data and keep improving

Now that everything is in place and you have taken your first steps on the asset management journey, your next focus is to continuously improve and optimize your process. Fortunately, most asset management packages also have reporting capabilities. These allow you to generate monthly, weekly or even daily reports based on a variety of different metrics. By using these, you can see what is going well and where there is room for improvement in your asset management strategy. Using reporting properly is crucial for climbing the Asset Management Maturity ladder!