Asset Life Cycle

Table of Content

An asset’s life cycle refers to the sequence of stages in overseeing its management, starting from identifying the necessity for the asset and extending through its operational lifespan until its eventual disposal.

Monitoring an asset’s life cycle varies across companies and may not always be formalized, yet it remains crucial. Its significance is determined by factors such as the asset’s replacement cost, its pivotal role within the business, and its overall dependability.

Failure to maintain assets leads to unexpected breakdowns, causing delays and emergency maintenance for companies. Properly managing asset life cycles simplifies the maintenance and administration of valuable assets, benefiting all involved parties.

Each cycle differs depending on the specific asset. For instance, a comprehensive wrench set will have a distinct life cycle compared to a large, shorter-lifespan piece of machinery. Nonetheless, the life cycle stages remain consistent across assets, allowing similar principles to apply universally.

Asset Life Cycle

 

Asset Life Cycle Stages 

Asset Life Cycle Management - Asset Life Cycle Stages | Radiant

Each asset undergoes four distinct phases during its lifecycle:

  1. Creation/Acquisition
  2. Utilization
  3. Maintenance
  4. Renewal/Disposal

Though these stages appear straightforward, effectively managing assets across these phases can pose challenges. Let’s delve into each stage and its respective objectives.

1. Create/Acquire

The initial phase involves either creating or acquiring the asset. Some companies combine these processes to craft a customized asset that precisely aligns with their requirements. This stage is prone to errors; any misconfigurations or miscalculations at this juncture can reverberate across subsequent stages, impacting the asset until it undergoes renewal or disposal, which might occur years later.

2. Utilize 

Several companies consolidate the utilization and maintenance phases within their asset life cycle, yet in reality, these represent distinct stages. This becomes especially apparent when emergency maintenance or other tasks arise, potentially requiring the asset to be offline for a considerable duration.

Ideally, assets spend the most prolonged period in the utilization phase. Conversely, if issues arise, asset utilization can become a major challenge for shop floor workers or employees.

3. Maintain best program 

In this context, maintenance encompasses all tasks conducted on the asset throughout its entire useful lifespan. This encompasses various forms of maintenance such as preventive, proactive, emergency, and time-based procedures, among others. It’s crucial to recognize that maintenance and utilization must harmonize to achieve optimal outcomes.

Effective management ensures that maintenance can usually be anticipated and planned accordingly. We’ll delve deeper into this aspect in a subsequent section.

4. Renew/Dispose

The final phase in an asset’s life cycle involves either renewing it or disposing of it. Throughout an asset’s lifespan, it gathers valuable data that can guide companies in future decisions. Unfortunately, this data is often not collected in a manner conducive to aiding executives or managers in decision-making. Companies should be cognizant of this well before reaching the renewal or disposal stages to effectively leverage this data.

While these stages may seem straightforward, companies frequently overlook several, notably proactive maintenance and initial setup. This oversight might stem from outdated policies, inadequate data, negligence toward the asset, or simple oversight. How can companies address this issue?

The solution lies in investing in asset life cycle management. When companies take this process seriously, managing these stages, and indeed the entire asset life cycle, becomes significantly smoother. Given the substantial costs associated with most assets, prioritizing this process can yield substantial returns in both the short and long term.

Asset Life Cycle Management Explained

Asset life cycle management centres around maximizing assets’ longevity without compromising functionality, relying on meticulous planning and administration.

This approach relies on four fundamental components: initial and ongoing situational assessments, asset data collection, plan formulation, and integration across all assets. However, it’s not a rigid four-step process; these components can occur in various sequences. For instance, proposed plans and testing might precede situational assessments. Data collection could serve as proof necessitating the assessment of current methods. Unlike a fixed four-step plan, these components are flexible and interchangeable in their order of execution.

Assessing the Situation

During the assessments conducted, it’s crucial to prioritize scrutiny of the assets under consideration. This phase requires consulting individuals well-versed in the specific asset, reviewing relevant paperwork or digital records tracking its history, and exploring primary sources providing valuable data about the machinery.

This stage isn’t intended for delving into aspects like workforce, management, production, or other factors unless they directly influence the asset’s life cycle. It’s particularly unsuitable for addressing ethical issues, such as inadequate training, workforce shortages, or people-centric problems.

Areas of focus should include:

  1. Historical records
  2. Current operational status
  3. Employee expertise and familiarity
  4. Insights from competitors’ assets (if accessible)
  5. Current and anticipated market value
  6. Various pertinent metrics and numerical data points.

 

Data Collection to Validate or Disprove the Hypothesis 

The prominence of big data across diverse fields is undeniable and for good reasons. It possesses the ability to confirm or refute ideas about ongoing situations and potential solutions with considerable certainty. Despite this potential, why do many companies refrain from utilizing data to interlink their assets, infrastructure, and overall strategy?

In numerous instances, assets are isolated within silos. Rarely do they collaborate cohesively, and when they do, it’s often the newer or more technologically advanced assets communicating with similar counterparts. Interconnecting larger machinery, toolsets, assembly line equipment, and akin assets is an uncommon occurrence. The primary obstacle lies in the immense difficulty, in many cases, and the general challenge in most scenarios, of collecting, storing, and analyzing the data that these assets generate.

Obtaining high-quality data can be a challenge, but it’s an effort well worth undertaking. While some companies opt out of this investment, data collection stands as the only reliable method to confirm or refute hypotheses concerning your assets. Other methodologies are proficient in guiding directions or uncovering various issues, but data provides the concrete answers.

Hence, data stands as an indispensable component of asset life cycle management.

Propose and Implement Plans and Testing

A company lacking a structured asset life cycle management plan could encounter significant difficulties. This becomes especially pronounced when plans and testing unfold spontaneously without any prior planning or organization.

In such scenarios, it’s advisable to initiate by examining your company’s current policies and procedures. What already exists? What areas could be improved? Is there a need to revise policies or make specific investments to modernize the company?

Occasionally, this exploration reveals the necessity of updating or completely rewriting policies to facilitate the implementation of a plan or process. Although this might require additional time that wasn’t initially scheduled, it proves to be a valuable investment in addressing the aforementioned questions.

These inquiries mark the outset of proposing new plans and testing methodologies aimed at enhancing the optimization of asset life cycle management.

Integration Across All Assets 

It’s now time to execute your plan systematically across all your assets in an interconnected manner, which, admittedly, is quite complex. This is where a CMMS (what’s the full form of CMMS?) or an enterprise management system can yield returns far beyond the efforts invested!

This phase is likely best reserved for the final stage. The effectiveness of integrating a comprehensive plan across all assets significantly relies on the groundwork laid during the plan’s implementation.

However, the success of integration relies heavily on your current systems and their level of interconnectivity with each other.

Why Should Companies Care?

Why should it matter? What drives companies to adopt asset-specific management for their life cycles? What sort of returns on investment can be expected? And why disrupt longstanding practices that, while not flawless, still function adequately without updates?

These are all valid inquiries companies confront when contemplating substantial infrastructure changes. In this context, the rationale can be encapsulated in the three Fs: liberating resources, prioritizing reliability, and encountering failure on your own terms.

Freeing Up Resources

There exists a variety of maintenance approaches, each tailored to a business’s specific requirements. Nevertheless, enhanced reliability, leading to improved asset functionality and health, is advantageous for all businesses.

Prioritizing asset life cycles inherently moves toward a reliability-centered framework. Generally, reliability-centered maintenance emphasizes the overall output of the asset and its impact on the business. While this aligns with the goal of all maintenance practices, reliability-centered maintenance offers the most direct path to achieving comprehensive reliability.

Failing on Your Own Terms

Failure is an unavoidable aspect, yet strategies can be employed to reduce unforeseen failures and plan for failure on your own terms. Reactive maintenance and proactive maintenance represent two approaches centered around managing failure. Which approach will your assets encounter?

Asset life cycle management emphasizes maximizing overall productivity from your assets, inherently minimizing unplanned failures more effectively than many strategies. Prioritizing asset life cycles places a premium on preventing failure proactively, aiming to thwart failure before its inception.

A scheduled failure typically holds an advantage over an unforeseen one.

Asset Life Cycle Best Practices

To enhance your asset life cycle, understanding established best practices refined by companies over time is crucial. Here, we concentrate on three key practices:

  1. Evaluating current practices through audits
  2. Investigating opportunities for enhancement
  3. Reviewing existing policies

 

Audit Your Existing Practices 

It commences with a sincere evaluation of your current practices and avenues for improvement. What are the frequent stumbling blocks? What insights do your workers offer about your assets and their related practices? Where do the most significant shortcomings lie? Conversely, where do the most substantial advantages exist? Are you equipped with the necessary infrastructure, or does your overall system feel outdated and cumbersome?

Explore Ways to Improve

Following the audit, you’ll be able to identify areas for enhancement. This data will substantiate essential modifications and serve as documentation justifying the proposed and implemented changes.

Check Your Policies 

Ultimately, review your policies to determine if they impede your progress. Are they obsolete, hindering necessary improvements? What’s the rationale behind their existence, and do they require updating? Often, companies face stagnation due to restrictive policies.

It’s crucial to acknowledge that policies aim to benefit the company. However, most internal policies aren’t binding. Avoid letting policies dictate your actions, particularly those internally implemented by the company.

Conclusion

From the introduction of a new asset or its replacement, asset life cycles exert influence across every aspect of the business. When adequately upheld throughout their lifespans, assets can yield a significantly higher return on investment compared to their otherwise potential returns. Conversely, inadequate maintenance can detrimentally impact company resources and employee well-being.

Moreover, for companies keen on deploying a comprehensive maintenance solution like an Asset Operations Management system, comprehending asset life cycles becomes pivotal in crafting a preventive maintenance strategy.

Ultimately, well-managed asset life cycles serve as a powerful tool to amplify return on investment, overall productivity, employee contentment, and various other facets within the business.

 

 

 

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