Fundamentals of asset management

Last updated: 2022-02-25
See our solution:
Asset Management & Maintenance SolutionAsset & Maintenance Management
Was this article helpful?
31 of total 35 found this helpful.

What is technical asset management 

It is the systematic process of taking care of an asset throughout its life cycle. That is, from its acquisition, through its operation, maintenance, renewal up to disposal. Well-implemented asset management improves the quality of service from the perspective of asset users and reduces the risks arising from asset failures and unwanted downtime. It is a systematic way of working with assets, aimed at the long-term sustainability. The basic principles of asset management described here apply primarily to physical assets such as equipment, devices, appliances, machinery, tools, buildings and other infrastructure and fixed assets. The principles may also apply to certain types of intangible assets (e.g. licences, software). A completely separate chapter is the management of financial assets, which is governed and managed quite differently.      

What is the asset life cycle?

It is all the stages and processes of management over the period of ownership or use of an asset:  

  • Acquisition 
  • Operation
  • Maintenance
  • Renewal
  • Disposal (Retirement)

What does effective technical asset management involve?

  • Good asset information (technical asset register)  
  • Asset maintenance processes
  • Resolving emergency situations
  • Provision of support services and processes 

Information required for asset management 

Good asset management cannot do without good information on which to base decision-making and management. Quality information is therefore an essential basis for good asset management. If decision-making is based on poor information, management cannot be of good quality. A quality asset information base is also a prerequisite and critical point for any process automation and elimination of paperwork.  

There are many types of asset information and all of them have their importance. It is good to know why we have assets, how and when they were acquired. To have information of the supplier and to the warranty. It is also important to have information on the current condition of the asset. Where it is, who has it. Is the asset fulfilling its purpose? Is it meeting the expectations and needs of the organization? What do users require in the future? What is required by legislation (regulation)? Is it being met and how? What are we doing to maintain and improve the asset? Information about the asset can be divided into the following headings: 

How and when the asset was acquired 

  • When it was acquired
  • The documents relating to the acquisition of the asset (quotations, tenders, purchase contract, handover or installation report, etc.)
  • Warranty information and conditions of use (manuals, instructions for the use of the warranty, etc.)
  • Reasons for acquisition, purpose of acquisition - why we have the asset

What is the condition of the asset  

  • What is the current condition of the asset
  • Where the asset is located or who it is assigned to
  • How much useful life is left

How critical is the asset to our organization?

  • Is the asset critical to the organization?
  • What happens when it fails? What are the consequences of failure? What is the probability of failure?
  • What are the costs of repair and remediation?

What is the required level of quality of the asset (Level of Service) 

  • What do customers and users require
  • What is required by legislation and other regulations
  • Does the asset meet the requirements? When does it stop meeting them?

How do I look after the asset, how do I maintain it

  • What are the maintenance costs
  • What maintenance activities have been carried out on it, what is the history of the asset 
  • What are the maintenance activities, when was it last serviced

When does the asset cease to meet the needs

  • When it ceases to meet the needs of users or legal obligations
  • Planning for decommissioning and replacement
  • When it will need to be decommissioned

Asset maintenance

Maintenance is an important aspect of ensuring an asset remains in a workable and safe condition. This can apply to almost any asset from a handheld electric drill right up to sophisticated technology in a laboratory. Maintenance involves all activities relating to providing an adequate level of service and limiting down time of that asset. The ultimate goal of maintenance is reliability and safety. But it can and does save valuable time and money from potential breakdowns or failures. Asset maintenance includes inspections, repairs, testing, regular servicing, calibrations, and replacements to ensure that the asset is reusable and fit for purpose, meets requirements, and extends its useful life. There are two basic types of maintenance:

Categories of maintenance

Maintenance includes but is not limited to the following activities:

  • Cleaning
  • Inspection
  • Service
  • Calibration
  • Repair
  • Software updating
  • Refurbishment
  • Performance monitoring

There are two basic types of the maintenance

Reactive asset maintenance

Reactive maintenance effectively means reacting to existing problems, it is the repair and replacement of parts or whole pieces of equipment after a problem occurs, after something breaks down. 

Preventive, proactive asset maintenance 

Preventive asset maintenance means those maintenance activities that are carried out before a problem occurs. It can be planned or predictive (for example, based on sensors or regular monitoring to detect incipient problems) before failure occurs.  

Both reactive and preventive asset maintenance requires good information.

Resolving property emergencies

Emergencies can occur through neglect of maintenance or simply occur for a variety of reasons through no fault of your own. Asset management must be able to respond to these situations. It must be able to resolve the situation, analyse and evaluate the true (root) causes and, if possible, prevent a similar emergency situation from occurring again. Also, dealing with emergency situations requires information support - both for managing work on corrective measures and activities and for collecting information about the accident (incident). 

Computerised maintenance management system (CMMS)

A computer maintenance management system will support  teams in providing a maintenance program. They should show what is to be done and what has been done. Having a system that can provide adequate records and reports for auditing is essential to comply with any regulations and may be required in the case of a failure or event.