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Importance of Asset Management by James Bernard

 

I, James Bernard, have worked with multiple Asset Management groups around the world throughout my extensive career. In any organisation, asset management (AM) is vital in achieving a greater financial sustainability. The basic process of asset management involves curbing operating costs, minimising the asset maintenance, and effective management of capital. The employees also need to recognise the importance of asset management, and have the knowledge on a variety of optimisation techniques. AM best practices include a broad range of activities, but the key aspects are: Asset Planning, Setting Service Levels, Managing Risk to drive asset related decisions, Minimising Life Cycle Costs, and Managing Asset Related Knowledge. It is also about balancing Service Levels with Cost, and is extremely important to involve people throughout the organisation in the AM process instead of making it simply a staff function. It requires the right organisational arrangements to sustain gains achieved as the program evolves. Due to advancement of information technology, organisations have started using sophisticated softwares without understanding its calibrations and detailed processes involved. Using software is good but it should be limited and it should be simple to use. Asset Management cannot be performed without valuable input from experienced operations staff. No software can give us a perfect solution; in fact good quality field data is the most important information which needs to be incorporated in any asset management model/plan. The asset management team and field staff should work together in refining the asset management model and they should understand the implications of each input variable. Hence there is a great need to define a simple process in order to get an effective asset management model which can be used by all asset management practitioners. The objective of this study is to formulate a strategy which can assist us to simplify the asset management process so that the whole organisation can use it in order to get maximum benefits.

  • Strategic Asset Management

Strategic asset Management is of growing importance in order to deliver better services, enhanced corporate performance and drive forward the efficiency agenda. Asset management is a structured process that seeks to ensure best value for money from assets to serve the strategic needs of an organisation.

One of the key benefits of effective asset management is the flow-on effect it can have on other organisational processes. It can play a vital role in improving the way an organization uses its resources. It can lead to improved corporate management, as a consequence of being able to demonstrate the links between corporate and service goals with the management of assets. And it can help to increase financial accountability, particularly regarding the effective use of capital for new projects, capital release and redeployment and ensuring long-term low running costs.

The modern approach to asset management by organisations and entrepreneurs has shifted from the traditional type, which had merely involved short term planning. Today, any organisation is taking an active role in ensuring that its asset expenditures and utilities are geared towards achieving longer-term returns. Moreover, asset management is very crucial for enterprises that maintain units across various locations or those that utilise fixed assets in different departments within one unit.

  • Important consideration 
  • Involvement of top management is essential.
  • Asset management needs to be a key corporate process to ensure best services to the community.
  • Asset management can lead to the opportunities for joint projects and sharing resources with other partners beyond traditional service boundaries.
  • Active involvement of all stakeholders is necessary.
  • A systematic collection and analysis of condition data in regular intervals is essential in order to achieve a reasonable forecast. The proposed model can be applied as a first approximation with limited condition data.
  • The process suggested in this paper is extremely simple, very easy to calibrate, and can be used in complex portfolios. This framework can be further refined.
  • Incorporate planned maintenance funding to capital renewal projects where such planned maintenance coincides with renewals.
  • Verify the need for renewals closer to the time of the project to ensure the efficient allocation of funds.
  • Condition data must be of the right format otherwise, the collected data will be of little use.
  • Conclusion

Asset management is essentially a recent term to describe the long-established field of terotechnology, which is defined as “a combination of management, financial, engineering, and other practices applied to physical assets in pursuit of economic life-cycle costs”. One of the main challenges in asset management is capturing knowledge about the assets at each phase of the life-cycle and sharing this knowledge between the personnel involved in the various phases of the life-cycle. However, we cannot optimise repair and replacement dollars by simply collecting data; we must know what optimization problem we are trying to solve and organise and report that information to help inform strategic and tactical decision making.

The realm of business has become more competitive than ever, and with this knowledge, organizations need to keep pace with global competition and shifts in technology through timely and valuable asset management solutions.

 

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