Physical assets are one of the most important components of an organization. One cannot compromise their maintenance and upkeep, as they represent a valuable investment. Assets pass through different stages in their lifecycle and require different maintenance approaches depending on their stage.
Asset lifecycle management (ALM) is an essential process through which organizations can ensure that the assets run optimally throughout their lifecycle. Technology plays a huge role in ALM, making investing in the best enterprise asset management software essential. The article below will walk you through the concept of ALM, its different stages, and why it is important.
What Is Asset Lifecycle Management?
Asset lifecycle management, or ALM, is an approach to managing the assets in an organization throughout their entire life cycle. Through this approach, organizations can prolong the life of the assets, reduce inefficiencies, and achieve higher control over them.
ALM keeps track of every aspect of the asset, starting from its initial procurement to its usage, maintenance, servicing, and final disposal. Recently, ALM has gained considerable traction. Reports predict that ALM will reach USD 15,321.62 billion (approximately) by 2035.
With the help of an effective asset lifecycle management plan, organizations can maximize the return on investment (ROI) of each asset and improve the operational efficiency of their organization.
Importance of Asset Lifecycle Management
Maintaining assets throughout the lifecycle is important to improve their functionality and reliability. Businesses can make strategic decisions, such as when is the right time to repair or replace an asset and whether the asset is performing to its optimal capability, with the help of ALM. Let us look at how ALM helps asset-intensive businesses.
Improve Operational Efficiency:
With the help of ALM, you can improve operational efficiency. It allows you to plan in real time and schedule maintenance tasks that improve the productivity of your organization.
Anticipate Asset Failure:
Predictive and preventive maintenance is important for an organization that doesn’t want to experience unplanned downtime. With ALM, you can use real-time and historical data using sophisticated IoT sensors to anticipate and identify failures before they cause operational disruptions.
Optimize Asset-Intensive Operations:
With ALM, businesses can reduce equipment breakdown, which helps recover lost production time. This assists in optimizing asset-intensive operations and improving output.
Stages of Asset Lifecycle Management
Before we move to understanding the different stages of asset lifecycle management, it is important to understand the role of technology in this process. Keeping track of every asset through its lifecycle is a manually tiring job and highly prone to error. EAM software makes the job easier by automating the process, empowering businesses to make better decisions. In the section below, we will look at the common stages that an asset goes through in its entire lifecycle:
1. Stage 1: Planning and Acquisition
Assets have a high upfront cost and require careful lifecycle planning. So, prior to making a purchase, review the current assets you have in your organization and how the new addition is going to contribute to the existing system. Once you have an answer to the question, you can go forward with the acquisition process.
2. Stage 2: Deployment
Effective and careful deployment ensures that the asset is ready to be used. In this stage, you have to partner with relevant stakeholders to ensure that the process is smooth. A maintenance technician, for example, could verify that the new asset is safe for the other workers to use. They can conduct tests and check their overall performance to ensure that it is fully functional.
3. Stage 3: Monitoring
After asset deployment, it must also be monitored regularly to determine its ROI (return on investment). Define some KPIs and indicators that reflect the asset’s performance to monitor it.
The KPIs keep the asset aligned with the larger goal of the organization, such as improved productivity or enhanced safety. Constant monitoring also enables organizations to remain audit-ready at all times.
4. Stage 4: Maintenance
Asset maintenance is important to keep the assets running optimally at all times. This stage includes asset inspection, repair, assessment, and servicing.
In this stage, there are two types of maintenance operations: preventive maintenance and reactive maintenance. Experts suggest that for efficient asset maintenance, it is important to conduct extensive preventive maintenance.
5. Stage 5: Disposal
In this stage, asset depreciation is calculated to determine whether the asset is worth maintenance or it is better to let go of it. This stage helps you save money and effort.
Conclusion
Understanding the different stages of an asset’s lifecycle helps organizations make better decisions about it. One thing to remember here is that ALM is a tedious process. Hence, it is best to invest in enterprise asset management software that automates the process and ensures results are error-free.
(DISCLAIMER: The information in this article does not necessarily reflect the views of The Global Hues. We make no representation or warranty of any kind, express or implied, regarding the accuracy, adequacy, validity, reliability, availability or completeness of any information in this article.)
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