How does your organization differentiate between asset management, and maintenance and reliability?
Early in the discussions around asset management, some organizations simply renamed their Maintenance and Reliability departments to Asset Management departments, even though they continued to do the same tasks and activities they always did.
Taking a look at the GFMAM documents on the subject (see: www.GFMAM.org), as GFMAM has documents for both Asset Management and Maintenance Management.
In the GFMAM “The Maintenance Framework” document, Maintenance is defined as: “…a combination of all technical and administrative actions, including supervision actions, intended to retain an item in, restore it to, or replace it so that it can perform a required function.” The focus here is upon ensuring the asset continues to perform the required functions.
The framework includes Five Principles (Value; Efficiency & Effectiveness; Integrity; Execution; and Leadership) that provide decision criteria to drive behaviors, decisions, and actions to support excellence in maintenance. There are Seven Subject Groups: Business Requirements; Maintenance Strategy Management; Maintenance Management; Maintenance Execution; Deliverables; Continual Improvement; and Allocation of Resources.
In the GFMAM “The Asset Management Landscape” document, the definition used references the ISO-55000 definition for Asset Management as “…coordinated activity of an organization to realize value from assets.” The focus here is broader and looks to organizational value realized from the assets.
The landscape is much more complex with six Landscape Subject Groups (Strategy & Planning; Asset Management Decision-Making; Lifecycle Delivery; Asset Information; Organization & People; and Risk & Review) containing 39 Landscape Subjects in those six groups. Experience has shown and GFMAM warns that the division into the 39 Landscape Subjects is arbitrary and that Asset Management needs to be viewed as a holistic approach.
Overlap Between Asset Management and Maintenance Management
Three of the Asset Management Landscape Subjects are Operations & Maintenance Decision-Making; Maintenance Delivery; and Reliability Engineering. These subjects are part of what would be considered as part of Maintenance Management and Reliability, and thus a sub-set of Asset Management.
From the Maintenance Framework, both Business Requirements and Maintenance Strategy Management will get inputs from the Asset Management Landscape Subject Group of “Strategy & Planning”.
Impact on Asset Management, Maintenance, and Reliability
Generally speaking, Asset Management is more broadly business focused at the overall organizational level, and Maintenance Management is more tactically focused on maintaining the function of the assets.
Asset Management is relatively recently recognized as an important management focus, and therefore it is not fully known and often misunderstood in some organizations. It is an excellent approach to managing the business, but when applying it, it requires a long-term view (e.g. Lifecycle Value Realization) that can be missing from the organization trying to apply it. The result of the lack of long-term focus in an asset management approach is that it is unlikely to be successful.
The more you can learn and see how some of that knowledge you could apply to your organization to help it take a more holistic approach, the better the organization should perform.
For example, as part of the Asset Management and Maintenance Management strategy, it is necessary to understand the nature of the business, how the organization competes, and what the organization needs to focus upon to try to optimize the organizational performance.
- If the organization’s offering is a product or product commodity (e.g. mining, agriculture, oil & gas, etc.) where the buyer does not care from whom they purchase from, then one should focus upon regulatory compliance (safety, environment) to ensure it is able to continue to operate, then maximizing output, and finally, cost reduction.
- If however, the organization competes on a differentiated offering (e.g. product quality or functionality, product/brand image, timely service, comprehensive customer service, etc.), then it is necessary to understand how the asset infrastructure and resourcing can be optimized (e.g. precision manufacturing, flexible manufacturing for customized offerings, etc.) to support that differentiated offering.
There is much to learn from both management practices and their symbiotic relationship to improve how to make your efforts more effective.
This article is authored by Leonard G Middleton for publication and distribution as part of the Asset Management Solutions newsletters. The newsletters are distributed to a number of practitioners, including international practitioners who often have limited information available to them locally.
This is intended to be an overview of the subject written in common language with the minimal required finance and accounting jargon for asset management, maintenance, and reliability practitioners to understand how their efforts contribute to the performance of the organization. It is intended to help them communicate that message within the organization and for the maximum benefit for the organization and its stakeholders.
The author and copyright owner grants Conscious Asset permission to include this article in their Body of Knowledge.
Leonard G. Middleton is an experienced professional with many years of broad professional experience, in Canada, the US, and internationally, He has worked in a number of different roles related to maintenance, reliability, and asset management, program and project management, contracts management, outsourcing, and engineering, in industry and in his consulting roles.
His experience in asset intensive industries has reinforced his perspective on the importance of the physical assets on the operational cost structure, and with that the need to get the assets appropriate to the organizational objectives through projects, and then operating and maintaining them effectively.
Leonard has an undergraduate engineering degree (B.A.Sc.), a graduate business degree (MBA), and holds professional designations in engineering (P.Eng.), project management (PMP), and in Maintenance, Reliability, and Asset Management (CMRP, MMP, CAMA), and is an RCM Practitioner.
Leonard is a long-time member of PEMAC, having served on the national Board of Directors for multiple terms. He is an instructor in both the MMP and AMP programs and is a subject matter expert responsible for the content of two MMP modules
If you have any questions or comments, the author can be contacted at: Len@Asset-Management-Solutions.com