Assets are an essential resource for operating a business. Production cannot occur without assets, and the maintenance department would have nothing to maintain if it were not for assets. Learning about asset life cycle management is important for developing a robust, comprehensive maintenance strategy, which will extend the useful life of all assets.
What is Asset Lifecycle Management?
Asset Lifecycle Management (ALCM) can be defined as a method of managing assets where managers of a facility optimize the useful life of assets through planning, acquiring, installing, maintaining, and properly recycling or disposing of assets, while saving money and improving productivity at each stage. Asset Lifecycle Management is important for improving operational productivity, efficiency, and profitability. Analyzing the necessary actions to take to reduce risks and manage costs at each stage is a key part of the ALCM process.
Organizations invest in ALCM because tracking assets’ lifecycles using the right software provides a continuous flow of data. It strengthens accountability while keeping equipment maintenance and planning on track. Erroneous data is mostly eliminated, and assets can be monitored around the clock. Automated warnings on machines reduce capital expenditure, decreasing operational expenses. The records kept of maintenance activities helps to determine when making repairs is no longer advantageous and the asset should be replaced.
Asset Life Cycle Stages
There are five key stages in an asset’s life cycle. Asset life cycle stages can be defined in multiple ways, but generally fall into the stages described below. Before the first phase of an asset’s life cycle begins, the need for the asset is discovered. The life cycle of an asset continues until the asset is removed from production or disposed of at the end of its useful life.
For more information about how assets are defined, read our FTMaintenance blog post, What is an Asset?
Planning for the Asset
The first phase of an asset’s life cycle is planning for the asset, which occurs when the organization’s needs aren’t being met by current assets. The procurement team might work together with multiple departments (production, fleet, customer service, etc) to determine specific needs. The purchasing department acquires the asset or assets that would meet those needs. Budget constraints should be taken into account; however, the primary focus when purchasing an asset is whether or not it will fulfill the required need for the organization.
Acquiring the Asset
When it has been determined which asset is needed, the next step is acquiring the asset. This includes researching different vendors and choosing the one that has the best product for a cost the organization can afford. Acquiring the asset includes ordering, tracking, and delivery. One the asset arrives at the organization it must be unloaded and unpackaged.
Also included in the acquisition stage is installation and deployment, which includes assembly, testing for any issues, and inspecting for defects. The manufacturer then installs the asset, and the maintenance manager gets involved to identify spare parts that will be needed later and order them right away if there are long lead times. The maintenance manager should be aware of how the asset’s spare parts will fit into inventory. When the asset has been deployed, additional testing is done to ensure the asset is running properly. Personnel are trained on how to use the asset, and maintenance technicians are trained on how to maintain the asset.
Using the Asset
The third phase in an asset’s life cycle is initial use of the asset before any maintenance is required. This, along with the maintenance phase, makes up the majority of the asset’s life cycle. During this period of time, the asset is finally put to its intended use and is expected to produce output that efficiently contributes to the profitability of the organization. It’s important to note than continued planning for the asset’s life cycle and maintenance occurs during this phase, but planning should begin before the asset is even acquired.
The amount of time an asset runs before requiring initial maintenance depends on a number of factors. These include the type of asset, how often the asset is used, how complex the asset is, what type of maintenance resources the organization has, and what type of maintenance plan is in place.
Maintaining the Asset
Once a new asset requires its first maintenance task, it enters the maintenance stage in its life cycle. There are multiple types of maintenance an organization will perform on its assets. They fall into two categories: reactive and proactive.
Corrective maintenance (CM) is a type of reactive maintenance. It is done when something goes wrong with an asset, and its purpose is to correct the problem and get the asset running properly again. This is the most common type of maintenance to be performed because no matter how simple or complex a maintenance team’s plan is, corrective maintenance must be done when needed.
Emergency maintenance is a type of reactive, corrective maintenance that is done when an asset fails completely and the problem must be corrected immediately. Emergency maintenance might involve a task that will mitigate a safety hazard or prevent damage to a product, building, or other machines.
Preventive maintenance (PM) is proactive maintenance done on a regular basis to prevent machine failure and interruptions in production. Using computerized maintenance management system (CMMS) software is a crucial component to performing PM with enough accuracy and consistency.
Preventive maintenance jobs include a wide range of tasks that can be simple and straightforward or complex, all of which are important for keeping assets in optimal condition. The types of preventive maintenance jobs a maintenance team will perform depend largely on which assets they have and the industry to which the organization belongs. A few general examples include changing the oil on a service vehicle, changing a furnace filter, lubricating machine parts, and repainting a wall of a building.
Predictive and Condition-Based Maintenance
Predictive maintenance (PdM) is a proactive maintenance technique which uses real-time asset data, historical data, and analytics collected by machine sensors. The sensors collect data used to forecast when an asset may fail. PdM is performed before that point to avoid complete failure. While not every organization does regular predictive and condition-based maintenance work, many large organizations do regularly, provided they have enough maintenance resources.
Read More: What is Predictive Maintenance?
The last type of proactive maintenance, condition-based (CbM), is similar to predictive maintenance, but it is only performed when needed in response to the asset’s real condition. CbM seeks to prevent unnecessary maintenance tasks from being done. This technique identifies when an asset’s performance or condition reaches an unsatisfactory level, which is also done through data collected by machine sensors.
Read More: What is Condition-based Maintenance?
Disposing of the Asset
The last stage in an asset’s life cycle is decommissioning and disposal of the asset. In a fixed asset’s life cycle, disposal occurs when an asset has reached the end of its useful life. Depending on the type of asset and the material it’s made of, it may be recycled or thrown away. In some industries, assets are repurposed before they get disposed of completely. For example, a truck that travels to worksites becomes a plow truck that stays on the property. However, repurposing doesn’t happen often with production assets.
After an asset is disposed, the life cycle starts over again with a replacement asset. This is always a good time to determine if the organization can upgrade to a better product while minimizing costs. The maintenance department can reassess the maintenance plan for that type of asset going forward to maximize the next asset’s usefulness.
Asset Life Cycle Management
Asset Life Cycle Management includes maintenance, along with other processes. When done effectively, it can extend the asset’s lifespan, reduce the cost of maintenance, and make the asset more reliable. Other benefits of effectively managing an asset’s life cycle include a more informed decision-making process for maintenance personnel, improved facility efficiency, decreased unplanned downtime, and monetary savings. In order to receive those benefits, organizations should focus on the following areas of asset life cycle management:
- Regularly reviewing past asset records
- Keeping track of how the asset is currently operating
- Developing the experience and knowledge of technicians
- Collecting accurate and complete asset data
Asset Life Cycle Management vs. Maintenance Management
Asset Life Cycle Management (ALCM) and maintenance management are related, but distinctly different. ALCM focuses on a holistic approach to managing assets that goes beyond maintenance alone. Maintenance management is focused solely on the maintenance stage of an asset’s life cycle.
As a whole, asset life cycle management includes monitoring and evaluating how assets meet an organization’s needs at each stage, from planning to installation, use, maintenance, and disposal or retirement. Multiple departments may get involved, including production, procurement, maintenance, and accounting.
Assets are in the maintenance stage for all of their useful life, which is why adequate maintenance is so important. Maintenance management controls maintenance resources and activities needed to preserve assets or restore them to working order. Ideally, maintenance management keeps assets in optimal condition and ensures less disruption in production.
Read More: What is Maintenance Management?
Asset Life Cycle Management and CMMS Software
Data collection on your assets is crucial for successful asset life cycle management. Accurate data proves or disproves ideas maintenance technicians have about what needs to be done on the assets. The location of data storage is equally as important as data accuracy.
The data for each asset should be stored in a place where those who need to review that data can easily access it. If one software program or database has maintenance management, asset management, and production management data stored in it, but it is optimized for only one of these departments, the data storage solution doesn’t serve the organization well.
Instead, best of breed asset life cycle management software is needed for each department, and the best software will generate the most important data that each work group needs to share with other departments and systems. Multiple software programs are needed to achieve complete ALCM.
Workgroup based programs support organizations by helping each team to be more efficient. For maintenance departments, that software is computerized maintenance management system (CMMS) software.
A CMMS ensures you will get the most productive life out of your assets by collecting comprehensive maintenance data. CMMS software allows maintenance managers to keep a complete cost history of all production assets, including how much labor and how many replacement parts have been used. CMMS software displays trends in machine breakdowns, keeps track of runtime reports, and determines which machines are the most troublesome. The maintenance team will discover where most maintenance expenditures come from and why, allowing them to create better work schedules to more effectively manage maintenance needs.
Maintain your Assets throughout their Life Cycle with FTMaintenance Select
FTMaintenance Select maximizes maintenance team productivity and improves asset life. Our CMMS software supports Asset Life Cycle Management by allowing users to better manage asset maintenance. To learn more, schedule a demo with our sales team today.