You can do asset management without a strategic plan. It’s called “just-in-time” planning, and it is this reactive response that organizations should avoid by utilizing a more strategic approach. If we want to use asset data to inform enterprise activities, we need a pair of “what’s important” glasses first. That enterprise approach was discussed in my previous post.
Now, we need to focus on the actual THING we are attempting to manage: the asset! The “asset” in asset management is not just the object itself, but also everything we know ABOUT that asset. In many situations, asset managers are forced to make decisions about what to do with assets with little or no input, for a several reasons:
- They can’t see ALL of the assets at once, so they have an invalid scope.
- They don’t have a particular piece of information about the assets, so they need to assume some (perhaps critical) data, such as how old it actually is.
- Data about real-world behaviour is scarce, so they can’t predict failure.
- They don’t know how the asset fits into the overall system – is it active, a spare, in a critical role?
Once we have established our enterprise priorities and determined the guiding measures and outcomes we want to use in our asset management plans, we then start to fill in the blanks to ensure we are making the informed choice of what to do, when to do it, and what to do it to.
Build an Enterprise Inventory
The first step is to try and get a handle on EVERYTHING we own. Knowing WHAT we own is the basis for pretty much everything else that is important. Without an accurate inventory, how can we be sure of the true scope of our capital and operational requirements?
What Do We Own?
Assets exist in multiple source systems, and organizations can use a master data approach to bring them together in one consolidated view. The goal is to create a complete inventory of ALL of our assets, in one central space. This way we can be more confident in determining the scope of projects and plans. This inventory contains as much physical information about the asset as possible.
Where Is It?
Second, it’s good to know where our assets are physically located. Having all our point and linear assets in a GIS system will aid in filtering activities based on proximity or when we are looking for opportunities to do more in a specific location to reduce total costs. Being able to see where an asset is, and what is under or next to it is critical to define a synergistic approach to planning.
How Old Is It?
Third, we want to know how old that asset is – what’s its in-service date? In some cases, like older underground inventory, that information is lost or never existed in the first place. In those instances, we make assumptions about asset age based on other characteristics of the asset or where it is located. As we get better and better data via inspection and/or works history, that inventory will become more accurate over time.
These core physical characteristics form the foundation for starting to get our assets to “talk” to us and contribute meaningfully to the asset management plan.Working with the personnel responsible for managing the asset inventories, gaps in physical characteristics can be completed by applying assumptions to the asset inventory.
Extend Asset Data
Once we know the basics about our assets, we can start extending our knowledge with more analytical data.
What Is Its Condition?
Our first and most important piece of data is the condition of the asset. Wherever possible, we want to reference an actual inspection record. Age is NEVER the most accurate representation of this. Two assets that have the same “life” when they went into service can have dramatically different stories to tell, based on where they are. Wherever data is available, the organization can reference the latest inspected condition of an asset to reflect its true state of repair.
How Long Will It Last?
We also want to know how long each asset should last. What is its useful life? Manufacturers tell us one thing, but reality can be very different based on many other factors. Getting our engineering or works crews involved in defining how an asset will actually behave in the field, under real conditions, goes a long way to really getting a handle on our potential investment requirements.
What Is Its Organizational Value?
Ultimately, you will want to determine the actual value of that asset. Costing can be done on a unit cost basis for most assets or determined based on size or capacity. Or, there could be a detailed estimation or insurance valuation. The important thing to remember is that the real value of an asset to our organization is based not just on cost and condition, but also gets coloured by the strategic priorities of the enterprise!
Asking Our Assets Questions
So, because each asset in our inventory has an age (or approximation), how much it will cost to replace, how long it could potentially last, and what condition it is in, we can start asking questions of that asset inventory to form the basis of our plans.
We can report on the entire inventory at once, across all asset types. A base count by asset type for all assets forms the initial part of the asset management plan template.
We start by asking for a purchase history, by asset type, by replacement cost. We follow that up with a consumption profile, showing how much of our assets’ lives are used up.
Health profiles are also available now, as we can ask our inventory to give us the breakdown of assets by their condition.
We start to project things too, at this point.
We can generate a condition profile for individual assets or entire asset inventories, which shows the value or condition of assets in aggregate into the future.
Future Replacement & Repair
Using our projected remaining life, we can determine when we will need to inject CASH!
By putting everything into one place, and looking after a few basics, we are now able to get a much better handle on what the asset base is really looking like at any given time.