The Strategic Importance of Asset Management Part Three: A New Framework

As the level of understanding of these areas begins to rise, so too do the expectations that managers and companies will be able to meet modern requirements.

In the past, maintenance strategy has frequently been treated in a highly reactive manner. Maintenance regimes are often created in response to machine breakdowns or incidents. Often, in the aftermath of disasters, there are public statements made demanding, or promising, "more intensive maintenance."

While the intention is laudable, the result of such reactive actions is often either non-effective or counter productive. Either way it is too late to stop the original incident from having occurred.

Managing assets needs to be done in a truly proactive approach, one that ties the management of physical assets to the corporate objectives.

A modern approach to asset management can be visualized as a series of dominoes. Each domino needs the momentum from the previous area, and then proceeds to pass this momentum to the next domino in the line. Starting at any point other than the beginning will leave some dominoes standing.

Modern asset management can be seen in the same way. Each of the dominoes represents one of the decision-making areas that are required to adequately manage assets.

The initial momentum to begin the sequence comes from the vision of a future state. This needs to clearly represent the corporate objectives and goals, and expressing how asset management can play a part in achieving these goals.

This energy is then carried forward to impact on the remaining areas of decision-making. As with the dominoes, a decision to begin in the middle of this chain reaction will omit areas important to the end result.

The EAM/ERP Market

Asset management, or enterprise asset management as it is often referred to within this industry, is one of the areas where there has been a definite decay in the decision-making process.

Although this area is by far the most expensive of the current range of solutions in asset management, it is easily the most misunderstood and counter-productive in many cases.

Prior to 2003 many maintenance systems were implemented as a result of an ERP implementation. A logical follow on to what has been considered the "main game" (often financial, supply chain, or information technology related). Decisions within this area have frequently been taken, or managed, by people with little or no true depth of knowledge in the asset management arena.

Even in organizations where the importance of asset management is understood those with a background in IT or finance, or other unrelated disciplines, are often responsible for these types of projects. As well as the decisions involved in executing the projects.

As has been explained earlier, the area of maintenance management is an area that is complex and not guided by recognized "common-sense" judgements. It is not an area that is easily nor rapidly understood by those outside of the discipline. While the use of quasi-experts may be sufficient in other areas of corporate activity, in asset management the stakes are simply too high.

Even in the most cavalier of boardrooms the corporate risk associated with this dangerous practice is becoming recognized. In the years that follow 2003, as accountability continues to be a marked factor of asset management, previous decisions will increasingly need to be revisited by those with the knowledge and depth of experience to do so.

This marks a dramatic change in the structure of this market sector. Decisions regarding selection, implementation, and post-implementation management must become more focused on the true areas of asset management.

Previously "requirements" were attached to processes currently in place, or more often a proposed future state of processes. As we move forward, this will become driven more by the requirements that companies have of their physical asset base, in order to achieve strategic advantages within their markets.