Why Asset Management

The Why’s of Asset Management

We have already discussed what asset management is all about but why do we need it? There are four areas to identify and discuss.

• Treatment Options – Which can be expensive
• Management Environment – Which can be complex
• Industry and Facility Demands – Where sustainment of long term Performance is demanded
• Asset Life Cycle Demands – Where there is a constant drive for lower cost of ownership

Why Do We Need Asset Management – Treatment Options

There will always be an increasing demand for services from management, production, and indirectly customers. They all need more products. They need it faster and with improved quality.

Maintenance is expected to achieve the above but so often with diminishing resources, as budgets are minimized to try and maintain healthy profit margins. Machine condition is and should be the determining factor for the correct level of required maintenance. However so often the leveling becomes based on production efficiencies, which puts more pressure on maintenance activities and increases restrictions on output, as the correct leveling of maintenance activity is compromised.

In a similar way, it can be extremely difficult to maintain the required output if we are dealing with aging infrastructure.

To circumvent most of these situations requires an increasingly expensive investment.

Why Do We Need Asset Management – Management Environment

Many environments are operating with a pool of skilled but possibly aging maintenance technicians. These technicians understand the assets and their complexities, having worked with the assets for many years. Unless that knowledge base is mined and the information recorded, it will be lost to new generation technicians who may well struggle to continue to maintain the assets effectively, without that experience knowledge base to utilize. This is a huge loss of knowledge with personnel retirements

We also have expanding organizations that are continually investing in larger and more sophisticated facilities. These facilities, often automated, depend on up-to-date, accurate, and instant specialized information. Limited expenditure and restricted budgets are a result due to market resistance to price increases. 

All of these factors contribute to an increasingly complex management environment.

Why Do We Need Asset Management – Long Term Performance

The global market has expanded the marketing and sales opportunities for the industry but at the same time has increased the pressures of competition. Customers now have the benefit of looking at a global market for products and so they can now be more selective.

Service delivery, quality, and price become hugely important factors and so there is a constantly increasing demand on industry to do more with existing resources, to make every dollar count, and to make better use of capital. Industry cannot rely on reactive processes to meet these new demands, they need to concentrate their resources on moving the work environment to a proactive process in order to remain competitive.

Long-term costs need to be minimized and Asset life needs to be extended. Maintenance costs and renewal options need to be optimized and accurate long-term funding strategies need to be put in place.

All to Sustain long term asset performance

Why Do We Need Asset Management – Cost of Ownership

When it comes to strategic planning and the introduction of new initiatives, it is imperative to formulate decision-making based on accurate information. The collection and harvesting of this information is the central function of an asset maintenance management system. The system is the central cog on which the life cycle of the asset is controlled, through Acquisition, Operation, Maintenance, and Renewal.

All necessary to lower the total cost of asset ownership

The Four Why Drivers

The Four critical ‘Why’ drivers that determine the importance of Asset Management.

• Treatment Options – Which can be expensive
• Management Environment – Which can be complex
• Industry and Facility Demands – Where sustainment of long term Performance is demanded
• Asset Life Cycle Demands – Where there is a constant drive for lower cost of ownership

Having established the importance of Asset Management, now let us move on and discuss the objectives that need to be achieved.

For more information email us at info@strobe-al.co.za or visit www.strobe-al.co.za