If your company operates multiple assets and important pieces of equipment, proper asset management is an absolute must if you want to keep an overview. How many assets do you own, how much are they worth, and what costs are associated with them? How often were your assets repaired, and what piece of equipment caused the longest downtime? If you can’t immediately answer these questions, your asset management strategy could do with an upgrade.
This article explains what an asset management strategy is and how you can create a successful asset management policy for your business. By doing so, you’ll get a better, more in-depth understanding of your equipment and profit from all the benefits that come with asset management.
Key Takeaways
- An asset management plan is a strategic approach to your company’s asset management.
- Asset management aims to increase your company’s profitability and productivity by reducing downtime and repair costs through preventive maintenance.
- Your asset management strategy should be based on the types of assets your company operates and your company’s individual needs and objectives.
- A software asset management strategy or asset management system can improve your management plan and keep track of your most important equipment for you.
What Is an Asset Management Strategy?
To understand what an asset management strategy is and how you can create one for your own company, we first need to look at the term “assets”. For you and your business, an asset is a resource of economic value, which can be material or immaterial. Immaterial – or intangible – assets can include licences or patents, whereas material – or tangible – assets can include land, buildings, office supplies, vehicles, machines, and other types of equipment. Asset management, also known as wealth management, is the process of planning, acquiring, managing, maintaining, tracking, and disposing of assets that include an asset’s entire lifecycle. The goal of asset management is to increase a company’s wealth, productivity, and profitability.
What Is Strategic Asset Management (SAMP)?
If you want to maximise your company’s success and minimise the risks that are associated with your equipment, you need to develop an asset management strategy that your business and your employees can follow. Strategic asset management, SAMP for short, sets up a framework for the long-term management of your assets instead of planning for short-term needs and budgets. If you have a plan for where you want your company to be in 5, 10, or 20 years, your strategic asset management should reflect your goals.
The Asset Management Strategy Development Process
Determine Critical Assets and Equipment
Which assets would have the biggest impact on your business in case of failure or downtime? If an outage or breakdown would have major consequences for your company and productivity, this piece of equipment or asset is critical. Sometimes, the natural instinct is to classify every single asset as important, but this would bring your company back to square one in terms of determining your critical asset. “If everything is important, then nothing is,” said Patrick Lencioni. First, your company needs to find a criticality assignment process and ranking system that includes your most important criteria, such as your mission and values, to figure out which assets can truly be considered critical.
Prioritise Your Assets
Once you have set the right criteria for your company’s needs and determined a criticality assignment process, it is time to rank and prioritise your assets. Your priority assets aren’t necessarily the ones that are used most often, but those most critical to your production process. Prioritising your asset also involves taking a closer look at their statistics. How much downtime is associated with a certain piece of equipment? How often does it need to be repaired? What maintenance tasks are performed most often, and how much does it cost your company to maintain the asset? How does it impact the production process? With the right risk management plan, you can determine the cause of potential problems, aim to eliminate downtime and reduce the maintenance cost of your critical assets.
Develop an Asset Management Plan
There are different types of asset management strategies, including digital asset management or financial asset management. Depending on your company and what types of assets you want to manage, you have to develop an asset management strategy that suits your business. First, you need to determine your asset management objectives. Do you want to increase productivity? Reduce downtime? Be more cost-efficient? Your goals along with the types of assets you intend to manage set the foundation for your strategic asset management. A plan should include your prioritised equipment, which resources are needed, how much time will be spent on your assets, and who will be responsible for what field. Your asset management strategy should consider the means of capturing your success, implemented improvements, and the outcome.
Support and Buy-In for the Asset Management Program
Proper asset management should be a team effort, which is why it is important to involve your staff in any asset management strategies that you want to see implemented. Machine operators, technicians, foremen, and managers need to be in the loop if you wish to improve your asset management. Operators and technicians usually know the assets best, whereas foremen and managers need to be aware of asset management procedures to plan and organize daily workflows accordingly. If you communicate your asset management objectives and strategies and show your employees how they, too, will profit from the asset management program, everyone can work together to implement the strategies.
Evaluate Data
One key advantage to a strategic asset management plan is the data your company collects as a result. Depending on your types of assets and your management strategies, this can include runtime, downtime, GPS coordinates and travelled distances, repair requests, work orders associated with your assets, and maintenance costs. Even before you implement your strategy, the data you have will give you a direction for your asset management plan. By evaluating existing procedures and taking note of occurring breakdowns, repairs, and the associated costs, you will know where to start and how to improve your asset management in the future.
Review and Revise the Asset and Maintenance Strategy
You are likely already using a type of maintenance strategy – sometimes without even knowing. Most of the time, when a company claims to not have a strategy, that strategy is called corrective or reactive maintenance. In that case, a business will wait for an asset to break before working to repair it. If you have been using this asset management strategy example or a different type of asset management, now is the time to review it and determine how successful it was in reducing downtime and costs. By utilising the data you have gathered over the years, you can develop statistics to help you improve your asset management, for example, by switching to preventive or predictive maintenance.
Have the Right People Available
As mentioned before, even the best asset management strategy only works if your whole team is on the same page. That is why you should already consult your employees during the process of developing an asset management strategy because operators and technicians usually know your assets inside out. These people are the ones you want on your team when coming up with your strategic asset management plan. If you run a large company with a vast array of assets, hiring an asset manager to oversee the process will help with the implementation of your new strategy.
Monitor and Communicate Your Results
No asset management strategy, no matter how good, will deliver results overnight. You are looking at a long-term strategy which will take months to pay off and that is something you and your employees should be aware of to avoid frustration and keep expectations realistic. Especially in the early stages, a new strategy might seem to cost more time and money, which you should communicate to your operators and technicians if you want to see results in the future. On top of that, analytics tools can help keep track of your successes, show you where your new strategy is already paying off, and which areas might need some improvement. Looking at how the new asset management strategies change downtime and repair costs over time is a great indicator of how successful your strategy really is.
Using the ISO 55000 for Creating a Strategic Asset Management Plan
According to ISO 55000, a strategic asset management plan includes “documented information that specifies how organisational objectives are to be converted into asset management objectives, the approach for developing asset management plans, and the role of the asset management system in supporting achievement of the asset management objectives”. That means it is more important to determine how your assets should be managed than what needs to be managed. While developing an asset management strategy according to ISO 55000, you should therefore consider the details and write them down in your strategic asset management plan.
Benefits of Strategic Asset Management
If you are still wondering whether implementing a new asset management strategy is worth it, you should take a look at some of the benefits that come with having a strategic asset management plan:
1. Boost Productivity and Profitability
Proper asset management can help you identify bottlenecks that slow down your entire production process. It also prevents unexpected downtime and lengthy repairs, thereby keeping your machines in top shape, which can improve your productivity and profitability by creating a smooth workflow.
2. Improve Customer Satisfaction
The same smooth workflow also has an impact on customer satisfaction and can help reduce customer complaints. If you don’t have to worry about your production process because it is running as it should, you can focus more on your customer support and fulfil customer demands at greater speed.
3. Reduce Repair Costs
Preventive maintenance should be the cornerstone of your asset management strategy so that your equipment is kept in the best shape at all times. If your machines are serviced at frequent intervals, breakdowns become less likely, and you avoid more lengthy, costly repairs.
4. Plan More Easily
Knowing which assets you own, how the asset lifecycle works, and whether new acquisitions are needed makes planning for the future a lot easier thanks to asset management. Analysing your data will give you a good impression of how efficient you are, what machines might soon need replacements and where an additional asset might be beneficial in the future.
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The Role of EAM & CMMS Software
An asset management system or software can greatly support and improve your asset management. An Enterprise Asset Management (EAM) software or Computerised Maintenance Management System (CMMS) like ToolSense will keep track of your assets for you. You can integrate any existing equipment into the platform with a simple-to-use Excel import and track your runtimes, breakdowns, repairs, or GPS coordinate in a few easy steps.
ToolSense combines asset management, maintenance management, and work order management into one platform that all employees can use after only a brief introduction. It is also cloud-based and fully mobile-compatible so that your operators, drivers, managers, and office staff can work from anywhere while the analytics tools deliver your most important data for your decision-making process. Additionally, you can store images, videos, invoices, custom checklists, and warranty information related to your equipment in your asset’s lifecycle folder which keeps your most important information in a single, easily accessible place. A software asset management strategy is the modern approach to asset management.
How ToolSense Improves Your Asset Management
Conclusion
Strategic asset management is a must if you want to make the most out of your equipment and keep it up and running smoothly throughout its entire lifecycle. While initially costly and time-consuming, a good asset management strategy can save your company a lot of time and money in the long run. If you want to create a smooth workflow, reduce your machine downtime, and maximise your company’s productivity, an asset management plan will help you achieve your business goals. Our ROI calculator dives deep into your current processes & calculates how much you could save with the ToolSense Asset Operations Platform.
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FAQ
An asset management strategy describes the strategic approach to asset management within a company. It includes acquisition, planning, maintenance, and the production process.
Asset strategic management within a business is the strategic approach to purchasing, planning, and maintaining all its assets.
A company’s asset management policy is a documented scheme that involves the acquisition, planning, and maintenance of all its assets.
A documented plan of all of a company’s assets, their acquisition, planning, maintenance, and use during the production process is called a strategic asset management plan.
You can improve your company’s asset management by employing a dedicated asset manager and utilising asset management software like ToolSense that will keep track of all your assets for you.