Top 5 Questions to Ask Before Critical Asset Management

Asset Management has become very important over a period of time. There is a high demand for asset managers today to report on performance against key performance indicators (KPIs) such as risk and return on assets, asset utilization, etc. These things are very crucial to understand for the overall health of an organization, especially asset-intensive organizations which rely on a current and accurate view of all underlying asset information.

So, let’s have a look at the asset management definition,

To be clear, asset management has two general definitions, one is related to advisory services and the other is related to corporate finance.

In the first case, a financial services company or an advisor provides asset management by coordinating and overseeing a client’s financial portfolio, such as insurance, investments, accounts, budgets, and taxes.

when it comes to corporate finance, asset management is the process of ensuring that a company’s substantial and intangible assets are maintained, accounted for, and put to their highest and best use.

Asset management vs wealth management is a common confusion that most of the individuals have, but for your knowledge, let me inform you that wealth management is a broader perspective and asset management is a part of it.

The best asset management system is setting up maintenance tasks based on the criticality of assets that are equipped to bring operations to a grinding halt in case of failure. When maintenance is prioritized on the basis of risk, it becomes easier to allocate resources precisely while avoiding the associated consequences of sudden failures.

Here we have listed some of the questions that you need to ask before crucial asset management:

What assets you have?
You need to know the assets you have, as a reliable and comprehensive asset register is the center of all asset management activities. You should record some key information such as,

All assets should be recorded with their location
Condition of asset condition and any risks posed if they fail
Accounting for asset depreciation and replacement
Entering this critical information into the system for the first time can be challenging. Utilizing a mobility solution firmly integrated with your EAM system that is designed to completely enable asset management for maintenance workers while they’re in the field, can help this to be rapidly addressed. Field workers are able to collect data where the asset is located and perform the first inspection to provide the basis for ongoing maintenance.

What is your risk of an asset-related disaster?
Determining the level of risk of a failure related to assets is of extreme importance. Failure of assets can mean substantial financial costs from lost revenue, equipment damage, personal injury, and environmental harm.

In most of the asset-intensive industries, asset failure can result in brand damage, significant outages, regulatory fines, and customer inconvenience.

Some of the examples of asset-failure are,

A mineral or effluent processing facility failure has the potential to damage the environment on a massive scale.
An unmaintained power pole that can cause a forest fire.
A fault in a signal box could lead to a railway disaster.
An engine that is under-maintained could result in a ferry or bus accident.
These risks are as unacceptable as they are preventable, but if there is a maintenance backlog you should take immediate steps and put to solve those issues to avoid asset-failure.

What is the current condition of your crucial asset?
Overall performance in asset-intensive industries depends on the performance of critical assets, and when they are not running, your company is not making money. These assets are often spread across a wide geographic area, regulated by a field-based workforce, and subject to physical and environmental stress.

One of the important difficulties in assessing asset condition is the ability to drill down to the necessary level of detail. For example, it is not general that an energy transformer fails in entirety, but an individual part may fail. While many ERP systems can only see at assets as a unit, one of the key differentiators in an effective asset management software, EAM is that it utilizes an asset hierarchy. This enables you to look at maintenance strategies at the individual component level and roll that backup.

On which stage does an asset stand in its lifecycle?
At what stage does an asset stand in its lifecycle and what is the estimated service life of that asset is important information that asset owner should be aware of. Each asset-intensive business needs to consider the cost incurred on vital assets right from commissioning and operation to maintenance and disposal. This requires real-time tracking of the condition of an asset throughout its lifecycle timeline so that maintenance can be scheduled accordingly. Leveraging real-time knowledge of asset performance and condition over various locations makes it easy to look for impending failures and avert unnecessary expenses while ensuring assets remain up and running till the end of service life.

Are all the asset management capabilities in place?
You should have all the required asset management capabilities in place to ensure prompt and optimal maintenance of vital infrastructure assets. Having an Enterprise asset management (EAM) solution is a crucial enabler for asset-intensive organizations that wish to maximize service delivery, improve asset uptime, enhance performance and eliminate unplanned downtime. EAM software is developed to track various things such as,

The estimation of work produced by every single asset by recording all the production data at the individual level.
Maintenance related work orders.
Warranty information, dates of purchase, service contracts, specifications, and expected service life.
Inventory, purchase orders, tools, spare parts, and reserved raw materials.
These are some of the questions that will surely help you in your crucial asset management.