Unified Asset Management - An Effective Approach for Key Decisions on Assets
Induction, deployment, and retirement are three fundamental processes in the active life of any asset, with pivotal roles played by three different sections within an organization Finance, Operations and Maintenance. An asset means different things to these sections.
1.For Finance, it is a fixed asset that they capitalize, depreciate, and retire.
2.For Operations,it is a resource that they use to conduct operations and generate revenue.
3.For Maintenance, it is an equipment that they maintain to ensure its reliability.
Due to these diverse perspectives, an organization may endup with fragmented systems and records for tracking the financial, operational and maintenance aspects of the same asset. Unified Asset Management(UAM) is an initiative to streamline the financial, operational and maintenance aspects of an asset through seamless integration of its induction, deployment and retirement processes.
Unified Asset Induction(UAI)
1. Operations related Assets that Need Maintenance:Synchronized induction across Finance, Operations and Maintenance.
2. Operations related Assets that do not Need Maintenance:Synchronized induction across Finance and Operations.
3. Non-operations Assets that Need Maintenance:Synchronized induction across Finance and Maintenance.
4. Non-operations Assets that do not Need Maintenance:Induction in Finance alone.
UAI provides considerable savings in time and effort required for defining multiple records representing a single asset for different functions.
Unified Asset Deployment(UAD)
UAD is the process of synchronized deployment of an asset by operations based on internal and external constraints across different functions of the organization. It facilitates selection of the most suitable asset to perform a specific task and is especially significant for mobile and fleet assets.
Low performance or reduced efficiency implies higher resource or energy consumption without a corresponding increase in the output, thus increasing operational Cost and impacting profitability of the asset
Factors affecting asset deployment decisions are as below. The internal factors are mapped against the external factors to identify the right asset task fit.
1.Asset Age:Based on age, assets are classified as infant, adult and aged. Infants and aged assets should be deployed to tasks that minimize the risk of infant mortality or excessive fatigue respectively.
2.Asset Availability:This is calculated as a percentage of the total time for which an asset is available for use over its total planned operating time.Assets with low availability should not be deployed to critical tasks with stringent timelines.
3.Asset Performance:This is defined as the output of an asset over its input, where output is in terms of value or volume generated and input is in terms of resources or energy consumed. While high efficiency assets are preferred for deployment to long running or voluminous tasks, shorter or smaller tasks are usually allocated to the low efficiency assets.
4.Asset Reliability:This is measured in terms of the Mean Time Between Failures (MTBF). Tasks that warrant uninterrupted operations or have environmental or safety implications need reliable assets with high MTBF.
5.Scheduled Maintenance:Assets with current and upcoming maintenance schedules are not deployed to tasks with conflicting time lines.
1.Running Requirement:It is not recommended to expose infants and aged assets to the rigors of tasks with long running requirements.
2.Operating & Ambient Conditions: Adults assets with high availability and reliability are preferred for tasks that need to be performed under adverse operating or ambient conditions.
3.MinimumTime/Usage Between Recharges:Assets with high performance or efficiency are required for tasks that demand longer time/usage between recharges.
Unified Asset Retirement(UAR)
UAR supports effective repair vs. replace decisions on assets based on 360-degree evaluation of the health and profitability of the asset. The retirement recommendations are based on the below factors.
1.Balance Life:This can be gauged in terms of usage and years of service recommended by OEMs and adjusted for life extensions from major overhauls and refurbishing of the asset.
2.Asset Availability:Reduced availability over a period impacts utilization and hence profitability of the asset.
3.Asset Performance:Low performance or reduced efficiency implies higher resource or energy consumption without a corresponding increase in the output, thus increasing operational cost and impacting profitability of the asset.
4.Asset Output Quality:Reduction in quality of the output of the assets results into an increase in rework or wastage.This results into higher risk, increased operational cost and reduced profitability of the asset.
5.Asset Maintainability:This is measured in terms of MTTR and indicates the average time required to revive an asset from a breakdown. High MTTR leads to lower availability which impacts the utilization and hence the profitability of the asset.
6.Annual Maintenance Cost:This should not be more than a specific percentage of the Asset Replacement Value(ARV). The threshold percentage is based on the industry and type of asset. ARV takes into consideration the landed cost of a new asset and revenue from disposal of the existing asset.
UAM is an effective approach that integrates the financial, operational and maintenance aspects of an asset and enables improved profitability from it.