Why Asset Lifecycle Management is Integral to EAM
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Enterprise Asset Management, or EAM, helps businesses with the tracking, assessment, management, and optimization of the quality and reliability of their assets. EAM helps automate asset management workflows for better processes, accessibility, and deliverability. With EAM, organizations are able to have a centralized system in place. Additionally, it helps with pinpointing potential issues, having smarter asset monitoring, enabling a more streamlined infrastructure for the management of aged assets, consolidating applications vital to the operation, and maximizing the utilization of those assets within the asset lifecycle management process.
What is Asset Lifeycle Management?
Asset lifecycle management occurs when assets generated through profits are optimized throughout a lifecycle. Stringent execution of projects, comprehensive portfolio management, and efficient and effective management of those assets deliver expected outcomes.
What are the Stages of Asset Lifecycle Management?
Businesses have different lifecycles, but the underlying stages are the same. While they may vary, these are the four key stages:
Planning
Without proper planning, you won’t know how the asset is supposed to work. Your system should be analyzing the data based on the trends occurring during the lifecycle. Decision-makers of your organization should identify what needs will be covered and the value it adds.
This first stage is important across the board as it is integral to operations, revenue, and correlating with business needs.
Acquisition
The second stage is purchasing the asset after it has been identified as being one that is needed to improve operations. This also deals with the financial aspects of acquiring assets within the budget outlined during the planning stage.
Once the asset is obtained and implemented, the asset management system will be able to track its lifecycle. Tracking protocols usually include solutions like RFID, barcode labeling, or GPS.
Operation and Maintenance
Operation and maintenance are the next stages. This is also the longest phase of the lifecycle. Implementation, execution, and management of the assets are key, along with maintenance and repair.
Once this stage occurs, efficiency in operations should be realized, in addition to an increase in revenue. It is important to monitor the asset and look for discrepancies in performance that may develop. As the asset continues to operate, maintenance and repairs may become more frequent.
All assets have wear and tear. As the lifecycle continues, maintenance is crucial to extending the life and value. This includes upgrades to software or parts, any modifications, and improvements as the workplace evolves.
Depending on the business type, maintenance schedules vary between being reactive or preventive. Knowing what works best for your business can help in cutting the costs of emergency repair, reducing the amount of downtime needed, extending the life of the asset, and an increase in operational time of the asset.
Taking the time to fully assess an improvement model and plan can create levels of operational performance that are better than expected.
Disposal
Once the asset has completed the lifecycle, the organization removes it from its processes. In most cases, the asset is recycled, discarded, sold, or repurposed.
At this stage, the asset may not have value to the business, but the disposal must follow regulatory measures and work to reduce its carbon footprint. This could mean clearing all data, dismantling the piece, or both.
In some cases, assets can be recycled for additional use. Once the replacement parts are obtained, the asset is reintroduced into the process and the lifecycle starts again.
Why is Asset Management Necessary?
No business can function without knowing what goes on behind the scenes. Management of the company’s assets helps save money, time, and helps deliver revenue gains to shareholders. Here are additional reasons why asset management is a crucial function of any organization:
- Tracking
- Handling
- Recovery
- Cost savings
- Amortization rates
- Mitigating risk
- Capability
- Efficacy
- Reduction of theft
- Identification of ghost assets
What are the Benefits of Asset Lifecycle Management?
Asset lifecycle management has a few benefits that cannot be ignored:
Data Collection to Validate or Disprove the Hypothesis
Management helps collect data that validates or disproves how the asset can help generate revenue for the company. This also helps determine the real needs and value the asset can produce, assisting in making informed decisions. Unlike many organizations that separate assets by silos, having data that brings them all together to work cohesively makes a difference.
Asset lifecycle management makes it easier to restore resources and improve how IT operates within the organization. With proper planning, your team can plan, test, and implement based on real data. How will an organization know how long the asset will last if they don’t test? Policies should be reviewed on a periodic basis based on the findings to keep the asset management lifecycle on track.
Integration Across All Assets
Every asset can be realized in one place, enhancing integration for streamlined processes and value-added benefits. Managers will know the total cost of owning the asset immediately. Having all assets connected saves time and money but relies on strong infrastructure and how they work together.
Asset Lifecycle Best Practices
Having a reliable asset lifecycle in place relies on industry best practices. These are major areas:
Audit Your Existing Practices
Auditing the current policies in place can help you identify where things need to improve, what you must cut, and what can be expanded. It also shows whether you need a more advanced system in place or you need additional infrastructure.
Explore Ways to Improve
One of the best things an organization can do is to explore how they can do things better and improve upon what they already have. Equipped with the right data, companies can make changes and have the right documentation in place for implementation.
If the current policies aren’t working, it’s time to do something different. The first step is finding out where the deficiencies are. Do you have archaic policies? Is there a hindrance from requiring needed upgrades? The goal of having effective policies is to move the company forward. If your policies prohibit that, it’s time for management to make some changes.