Equipment Asset Management: 6 Key Factors for Success

Many organizations struggle to maintain high-performing equipment asset management programs, costing themselves millions of dollars in lost production and unnecessary maintenance expenditures. Those organizations lack at least one of the following key factors for successful world-class asset management.

1. Track and Justify Financial Benefits with Monetization

By capturing your efforts to improve organizational performance as a dollar value, you will be able to easily convey the value of employing condition monitoring technologies and technicians in your equipment asset management plan to all stakeholders.

Financially justify the investment for the asset management program in order to be granted approval for it. Track the results of the condition monitoring or equipment asset management program in an easily understandable manner and present these to your stakeholders in order to ensure the ongoing investment in the program.

Monetization of activities requires standardization of how and when variables (parts, labor, capital and production values) are considered. Standardization improves the repeatability and transferability of this process, which is very valuable in today’s highly dynamic economy.

Monetization also translates maintenance and reliability activity into an easily understandable common language. In terms of dollars spent or dollars saved, you can more easily communicate program wins to stakeholders, pinpoint low-hanging fruit activities, identify the most valuable next steps for your equipment asset management program and garner support for ongoing initiatives.

2. Identify and Address Bad Actors

Once the variables you must track have been determined, you need to clearly identify on an ongoing basis your organization’s “worsts.” Which asset isn’t meeting its performance standards? Which asset is displaying the most severe issue? Which asset issues are ongoing? From which manufacturer do the most asset performance issues frequently arise? Which operator might benefit the most from revisiting training material? Identifying and monetizing “bad actors” will give you an actionable list of problems to solve.

Identify and address assets at risk (potential failures). Unplanned failures that have not been identified by the condition monitoring team discredit the team’s efforts and the organization’s belief in reliability-centered practices. Unplanned failures that have been identified and disregarded may have the opposite effect.

Long-term operation of assets in a reduced performance state may normalize the poor performance of the asset to front-line employees and can have a negative effect on morale, as well as increase the probability that signs of worsening condition are overlooked, as “that piece of equipment is always performing poorly/making noise/ leaking/etc.”

Identifying and addressing bad actors will allow you to get the biggest value for your maintenance investment, both financially (increased production, reduced long-term maintenance costs, etc.) as well as in terms of culture change.

The identification of bad actors is the first step on the road to continuous improvement; resolving one bad actor will prompt further efforts to resolve the next bad actor, and so on.

3. Capture Low-hanging Fruit

Prioritizing your bad actor list by a combination of savings and ease of resolution will allow for greater captured benefit. Solving multiple bad actors quickly will create shop-floor and management buy-in to the equipment asset management program.

Address low-hanging fruit opportunities to help build momentum for your maintenance and reliability program, visibly and dramatically showing the results of your efforts.

Use low-hanging fruit as the training ground for building the skills, resources and expertise required to address more complex challenges.

It is of the utmost importance to any organizational initiative that consumes resources to show value as soon as reasonably possible. When this is done, the risks imposed by changes in management and leadership, resource restriction, etc., are lowered.

In order to transition to a more reliability-centered maintenance paradigm, the culture change within an organization must be managed. Quick wins provide an opportunity for reinforcement of the value provided by the equipment asset management program, as well as evidence to aid in the transition of late adopters and skeptics.

4. Project Tracking – Keep a Historical & Current Record of Projects

For any maintenance initiative that affects more than one asset or that will be complex to apply to a single asset, tracking the actions taken during the project, the performance of responding metrics and monetizing the results will be very important. Not only are you able to show confirmation of the expected value of the project, but you are also able to retain this history for reference in future endeavors.

Track who does what, when, why or why not in order to systemically improve based on the results attained by that group and sequence of actions.

Track responding variables to monitor progress. For example, in a contamination control project, record the number of filters or breathers installed on specific assets as well as the test results returned before and after those installations. Compiling these activities and results provides insight to the rate of progress and effectiveness of the project being undertaken.

Present the monetized value of the project progress in order to demonstrate the value of the initiative to stakeholders.

Rapid and continuous improvement can only occur when review and consideration of what has been done before and succeeded (or failed) can be referenced. Formally recording project progress also allows this history to be transferred across organizational boundaries and leveraged by successors.

Both leadership support and wide-scale organizational buy-in to a different equipment asset management perspective depend on ongoing reinforcement of the value of that initiative. Providing a history, validation of efforts and monetized value of each project support culture change and adoption of asset management thinking.

5. Eliminate Inefficiencies in Equipment Asset Management

One of the most valuable keys in proper asset management is identifying and eliminating sources of waste. Identify where defects or errors are being introduced into your equipment asset management program. Where can human error influence the quality of decisions made in maintaining assets? With regards to an oil analysis program, sample collection technique, information transcription and information setup can all impact the accuracy of test results.

Identify where duplication of work is occurring. The use of inefficient, duplicated or overlapping routes to collect predictive maintenance information may result in much time wasted. Entry of information into multiple databases or by multiple people may also be a potential source of error if not administered correctly.

Identify where unnecessary delays in activity (wait time) are occurring in the equipment asset management program. Review all condition monitoring activities for constraints in material and information flow, and act to resolve these as best possible. Use KPIs to monitor progress.

Identify where additional tools, skills or automation may reduce the labor or material costs of the same activity. Also, develop systems (checklists, KPIs, etc.) to minimize inefficiencies and monitor progress.

The fewer duplicated efforts employed in an initiative, the more resources are available for productive work. Likewise, fewer errors in an asset management program will build confidence in the program. It is not uncommon for the equipment asset management program to become the “single source of truth” with regards to some asset information, as that information is integral to the performance of condition monitoring activities. Errors can have significant downstream effects, including the execution of inappropriate or unneeded corrective maintenance activities, and the denial of warranty claims due to insufficient evidence of response.

6. Sustaining Culture Change

The most intangible of the six keys is also the most difficult to measure and greatest determinant of long-term success for your asset management program. Track and share metrics that correlate with buy-in of asset management culture:

Response time: How long does it take an issue identified by condition monitoring technologies to be acknowledged or addressed by maintenance staff?

Ease and frequency of communication: How easy is it to contact all stakeholders related to the asset management program? Are there frequent emails that are sent without response, meetings that are not attended, etc.?

Save confirmation: Are those stakeholders responsible for confirming asset management program savings willing to do so? Why or why not?

Over time the ownership of the asset management program will shift from being solely in the mind of the program champion to front-line champions and to the entire organization where “that’s just the way we’ve always done it.” Ownership opens multiple channels to curate further improvement projects that could only have been identified from certain perspectives or roles within the organization.

Putting It All Together

The challenge with sustaining progress in an asset management initiative is being able to capture all of these factors above in one single place and to make the content digestible for the audience. A combination of approaches is ideal, including a live or frequently updated electronic portal to see current metrics, and a periodic, dated and printed or digitally controlled report with some identifying mark of revision to record snapshots of progress.

A combination of high-level and high-detail views are also valuable in order to address and retain questions and concerns of the various stakeholders involved in making an asset management program successful. A high-level view lends itself to being shared and posted internally in order to support culture change and to drive awareness of the asset management initiatives that are being undertaken. A high-detail view provides insight into which decisions were made regarding asset management, why and what the results were from those decisions.

Underdeveloping any one of the six keys can reduce the impact of your organizations equipment asset management initiatives. Are you making the most of your asset management program?