MRO Magazine

Maintenance: What changes in asset management

Asset management is not something that you ‘do’, but is rather ‘the way you do things’, and shouldn’t be thought of as a separate entity or department.


Machinery and Equipment Maintenance

March 29, 2022
By Cliff Williams

ASSET MANAGEMENT inscription coming out from an open book, creative business concept

Quite often the questions of what will change for the maintenance department if and when the organization starts doing asset management. The most accurate answer, even though it might disappoint the asker, is ‘it depends’. This is the only answer to give, as what will change totally depends the maturity of the maintenance department and the culture of the organization.

If the maintenance department is fully matured and using all of the latest techniques, technologies and tools, then likely the only thing that will change will be the reporting of their results in the format that shows support to the strategic objectives.

As a reminder of what the focus of asset management is, here is a recap of the fundamentals that underpin it and show how they will apply to maintenance.

VALUE: Assets exist to provide value to the organization and its stakeholders
Asset management does not focus solely on the asset itself, but on the value that the asset can provide to the organization. This means that the maintenance focus might need to change a little, as value is often a moving target; should we continue to spend lots of money doing a full-blown maintenance program on an asset that is losing its ability to provide value? It may be that markets have shifted, competition has forced prices down, technology has passed us by, and so there is less value being derived from the asset. Now this doesn’t mean that maintenance departments should arbitrarily stop their maintenance program for this asset, but in discussion with other departments and guidance from leadership, they can make the decision on how to proceed. This brings us to the next fundamental of asset management.

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LEADERSHIP: Leadership and workplace culture are determinants of value realization
Leadership and commitment from all levels of management are essential for successfully establishing, operating and improving asset management within the organization. Leadership creates the culture. Leadership does this by providing the correct measures for the various departments of the organization in support of the strategic objectives. These measures will in turn influence the behaviours of the departments, and thus, will create the culture of the organization; what they do, how they do it, how they measure it, and how they react to the measures. If leadership focuses on the wrong measures or allow the measures to drive the wrong actions, then they will drive the wrong behaviours.

Let’s assume that it’s been decided that one of the measures for the maintenance department is mean time to repair (MTTR). If, instead of ensuring that this drives better procedures, better planning and scheduling, better strategies to improve the understanding and monitoring for failures and so reduce repair time, leadership simply allows people to take short cuts, do ‘duct tape and gum’ repairs, or even worse, start to fudge the numbers by not following up and giving guidance, then this is certainly not going to provide value to the organization.

Leadership needs to be sure to provide the right targets to drive the right behaviours, and so, create the right culture and make sure that they follow up on ensuring this is happening. What they need to do is the next fundamental of asset management

ALIGNMENT: Asset management transforms strategic intent into technical and financial decisions, plans and activities
Asset management decisions (technical, financial and operational) collectively enable the achievement of the organization’s strategic objectives. This alignment needs to horizontal as well as vertical. We know there are other departments in the organization and not just maintenance, but we interact or talk or give feedback to them on an extremely limited basis, if at all. This definitely changes in the world of asset management, but before we talk about the changes, what is the current state?

If we look at the current model for many companies, it looks something like this, where maintenance, operations and procurement get their direction from current management and they go ahead and run their departments, often not talking to each other, and very often not having the opportunity to provide feedback or comments.

This model allows the departments to just look internally and not seek to understand how what they do influences and impacts the other departments. Procurement have been told that they need to reduce spend or reduce store holding; they simply start buying cheaper, inferior parts or arbitrarily reduce stock holding, not considering that they are now hindering the maintenance department in doing what they need to do.

Cheap parts don’t last as long and more repairs are necessary, and this in turn impacts operations ability to meet their targets, as there is increased downtime. Maintenance takes those short cuts mentioned in MTTR. This catches up with them as the repeat repairs become more frequent, forcing procurement to have to rush parts in, and again, impacting operations. Operations decide that they can’t release assets for PMs or necessary repairs, and this starts the vicious cycle all over again; more frequent repairs, more parts, more downtime.

Maintenance in the asset management world understands the impact and influence of all departments on them; HR for training and hiring the right competencies, IT for having easy to use systems that provide the requisite data, engineering for designing in reliability and maintainability etc., and how maintenance impacts and influences these other departments. Leadership ensures that the goals are arrived at collaboratively and are clearly in support of the strategic objectives, and takes into consideration these impacts and influences. This is all supposed to provide the fourth fundamental of
asset management.

ASSURANCE: Asset management requires the assurance that the assets are fit for the required purpose
The need for assurance arises from the governance process of an organization. Its origin is in the stewardship relationship between the top management of an organization, and its stakeholders guides and drives the actions of all departments of the organization to achieve the desired value.

To be able to give this assurance the maintenance department really does need to be using all of the latest techniques, technologies and tools. You are not applying the asset management way of doing things if you are in a reactive mode, or if you don’t have the information to make optimum decisions, or you don’t have the skills and competencies you need, or you have a culture where no-one trusts anyone. The techniques, technologies and tools mentioned are really not any different to those mature maintenance departments are already using, and the journey from reactive to mature is the same one, whether it is done as part of an asset management journey or just trying to be the best maintenance department you can be.

Maintenance is a critical part of asset management, but it is only a part. We definitely need the mature department that provides the best results they can, but if we don’t include, collaborate with and engage with our partners in the organization, we will not be assured that we meet the intent of asset management, which is we deliver the desired business outcomes while meeting stakeholder expectations. MRO
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Cliff Williams is author of the bestselling maintenance novel People – A Reliability Success Story. He is a maintenance and asset management educator, and a keynote speaker at conferences around the world, who believes success is achieved through people. Currently, Cliff shares his knowledge and experience as an advisor on maintenance and reliability for people and processes, and asset management with TMS asset management and is a facilitator for PEMAC’s Asset Management Program.