With an effective asset management structure in place, businesses will realise many benefits, including extended asset lifespans, improved asset reliability, and reduced maintenance costs. Understanding the key stages of asset management is vital for developing a comprehensive maintenance strategy to help extend the service life of existing assets.
What is an Asset?
An asset is a valuable item or piece of property owned by an individual or company. Assets can be tangible or intangible. They include resources, inventory, estates, equipment and tools, and other valuables. However, when it comes to asset lifecycle management, we generally focus on physical assets, such as tools and equipment, that require ongoing maintenance to stay in good condition.
Asset management or asset life cycle management is a structured process that maintains and tracks an organisation’s items of value. It involves knowing what you have, its quantity, quality, and condition, which helps you plan for future assignments and fulfil business demands. Through asset management, you can account for what you have and advocate for optimal utilisation to avoid wastage. Here are the main asset management stages.
- Plan – The planning phase begins when you realise that the current assets are not meeting your business needs. When you start to research the equipment or machinery that can fulfil business needs, you’re already planning.
Your procurement staff might liaise with other departments to determine the company’s requirements. It’s recommended not to rush through the planning stage. Take your time to compare the available options to find the best match for your business and budget needs.
- Acquire – After you develop a robust plan and identify the ideal asset, you can move to the second step, acquiring the asset. This phase entails purchasing the asset, transporting it to your facility, and installing it.
- Using the Asset – After the new asset has been installed on your premises, you can start to use it. The utilisation stage is the longest of all the asset management phases. During this time, the asset is put to good use before any maintenance is needed.
Meanwhile, it’s expected to generate output that generally contributes to the company’s profitability. Remember that the period an asset operates without needing initial maintenance depends on various factors, including the type and complexity of the asset, how often it is used, and the kind of maintenance plan deployed.
- Maintenance of the Asset – Once you put the asset into use, you should start creating a maintenance plan to ensure the asset is repaired whenever the need arises. There are different types of maintenance plans a company can perform on its assets, including:
- Preventive maintenance – This is a proactive type of maintenance scheduled frequently to prevent potential interruptions or failures during production.
- Corrective maintenance – The purpose of corrective maintenance is to correct a problem to get the asset functioning as it should.
- Emergency maintenance – This is a combination of reactive and corrective maintenance often done when an asset runs into a problem that must be corrected instantly.
- Disposal of the Asset – When additional maintenance is no longer needed, you will need to dispose of the asset. It will be best to do a cost-benefit analysis to identify the costs related to extra maintenance against buying a new asset. Check if it can be resold or refurbished, and consider any environmental restrictions before eventually removing the asset.
How Best Practice Biz Can Help
Best Practice Biz offers excellent online resources that can help you learn how to properly care for your business assets. We can also help you achieve ISO 55001 Certification, which will enable you to manage your resources effectively. Contact us today to get started.