Companies frequently try to develop centralized systems to manage assets of the facilities or buildings, which might include crucial data, equipment, hardware, networks, and infrastructure. Although achieving total control over such a complex environment is frequently challenging. Using the right asset management standards can help firms get closer to their objective. Budget management, analytics use, data protection, and environment optimization are all made simpler by asset management. In this blog, we will have a detailed view of asset life cycle management and how Know Your Building™ helps in Asset Life Cycle Management.
What is Asset Life Cycle Management?
It’s essential to define the term asset before delving into asset life cycle management. Any unit of property that a person or business owns is referred to as an “asset” by the general word. A pencil in someone’s desk drawer or a full office complex might both be considered assets. However, when the terms “asset life cycle” and “asset life cycle management” are used, they typically relate to a physical asset, such as a piece of equipment that needs maintenance and substantial investment to remain in top form.
The entire process of deciding whether or not an asset is needed and finally disposing of the item once it is no longer usable is referred to as the asset’s life cycle management. Facilities managers may optimize the service life of their assets and make the most of a finite lifespan by using asset life cycle management. Comprehensive asset life cycle management can increase asset reliability/decrease the likelihood of spontaneous failure, extend asset lifespans, and lower the cost of maintaining the asset over its lifetime.
Benefits of Asset Life Cycle Management
Using an organized and transparent asset lifecycle management strategy has a variety of benefits. First and foremost, in order to support future planning, an organization must be able to precisely characterize its assets, including each asset’s condition, utility, and cost-effectiveness. For instance, the team will need to be aware of the resources it has and how to use them to maximize success before committing to a new project. A business will gather a lot of data and insights by continuously monitoring the asset throughout its existence. This covers the asset’s physical state, its contribution to overall productivity and income production, its dependability, ongoing maintenance expenses, and other factors.
Extend the asset’s life
You can gain valuable knowledge about how an asset works and when asset maintenance is most efficient by monitoring its lifecycle. Create an asset lifecycle plan using this data, emphasizing the ideal maintenance schedules and methods to keep the asset in top working order. You can extend the asset’s usable life by stepping in with preventative maintenance at these crucial times. In reality, 78% of facilities report longer equipment lifespans thanks to tracking maintenance history and maximizing preventive maintenance.
When an asset life cycle management approach is effectively implemented, it lowers downtime and the need for reactive maintenance. You can manage the asset’s downtime by scheduling preventative maintenance before reactive maintenance becomes necessary. Additionally, preventive maintenance lowers the chance of unanticipated, excessive downtime brought on by reactive emergency maintenance. To prevent maintenance from impeding productivity, you can plan maintenance outside of the hours that the facility is open.
Boost facility efficiency
Better equipment quality is another advantage of asset life cycle management. Regular maintenance maintains assets in prime condition and reduces harm from negligent handling. Improved facility efficiency is the result of properly maintained equipment, longer asset lifespans, and decreased equipment downtime. Asset life cycle management relieves you and your team’s burden by assisting your facility’s operation as efficiently as possible.
A facility that is cost-effective is efficient. Cost savings are associated with all of the following advantages: Longer lifespans mean less frequently replacing equipment, which saves money. In the end, less downtime translates into higher uptime, which increases revenue. Typically, preventive maintenance is 3–9 times more expensive than reactive maintenance. Using asset life cycle management, you may significantly reduce maintenance expenses by scheduling maintenance in advance.
Asset lifecycle management provides information about your facilities that you may otherwise overlook. You can use this information to guide your decisions and create better future strategies. For instance, you will have the financial information to support your thought process and assist you in arriving at the most cost-effective solution when making important decisions like repair or replacement.
Stages of Asset Lifecycle Management
Here, at the first stage, when a need is determined, and choices are made regarding the creation or acquisition of the asset, the cycle starts. At this step, the asset has been carefully chosen, deployed, configured, and inventoried. This is a crucial first step to eradicating errors since errors might cause enormous problems later. It may take years until the asset can be replaced if the wrong asset is chosen or set up incorrectly, which will have an adverse effect on the subsequent stages. Planning has already begun as soon as you start considering ideas and researching resources that could help you address your problem. When planning, take your time and consider all of your options before deciding which asset to use.
The next stage is to purchase the asset you’ve identified as being ideal for your facility’s requirements. Acquiring involves getting the asset to your facility in addition to buying it. When creating a budget, be sure to account for additional expenses if the item needs to be installed. The asset should be registered to an asset register after it is purchased and deployed. Some organizations will only use an Excel sheet for this, while others will use a computerized asset register to record all of the equipment’s specifics. Regardless of the decision you make, the more information you have to support your choices throughout the asset’s existence, the more information you should capture about the item in your records.
3. Operation & Maintenance
You can start using the new asset now that it is in your facility! Once it’s up and running, evaluate the asset’s requirements and decide how the team can best take care of it. Determine which maintenance strategy—preventive maintenance, proactive maintenance, regular maintenance, or another—would be most advantageous for the asset. All activities performed on an asset throughout its service life are referred to as maintenance in the context of a lifecycle. This typically refers to proactive, emergency, preventative, and other types of maintenance. The majority of maintenance may be scheduled if the asset’s life cycle is properly managed and it operates as it should.
When an asset reaches the end of its useful life, it must be disposed of, put to another use, sold, or recycled. After a certain point, investing in more upkeep will no longer be wise financially, and disposal will be the best option. Conduct a cost-benefit analysis sometimes to compare the costs of investing in new equipment versus ongoing upkeep. The service deliverables should be taken into consideration when deciding whether to dispose of an asset. Everything is examined, handled, and processed before the asset is disposed of to make sure it won’t affect the environment or society. To accomplish this, the asset must have all of its data erased. Then it is disassembled piece by piece, with all the pieces that can be used again being saved and the useless parts being sent to be scrapped.
Principles and Goals of Asset Lifecycle Management
Physical assets utilized in industrial operations can range in size and scope from a single instrument or controller to a whole plant or multi-plant system. These assets represent a large investment, and it is widely acknowledged that managing each asset’s life cycle will yield the best return.
A number of interconnected, iterative processes are involved in overall asset lifecycle management (ALM).
- Programs are monitored for project performance during a project’s design and construction phases (PPM).
- Throughout the operate and maintain (O&M) phase, the procedure is centered on asset performance management.
- The total asset investment portfolio is aligned with the company’s strategic goals through asset and project portfolio management (APPM).
Such processes require a continuous exchange of information because of their interconnectedness, which is achieved by Asset lifecycle information management. PPM, APM, and APPM can access the data from ALIM since it includes data collection, management, and distribution for the asset portfolio’s design, construction, operation, and maintenance.
These procedures’ overarching goal is to increase the total net amount of possession over the asset’s lifetime. However, due to parameter interdependency, the multi-parameter optimization for this process frequently entails tradeoffs. The project expenses might be higher, for instance, if a facility is built more quickly and begins operations earlier, but the increased value of the items supplied more than makes up for this. Even while maintenance expenses can be cut, doing so is likely to lead to lower production and possibly a shorter asset lifespan. There are chances for businesses to take advantage of this possibility for global optimization. The ultimate level of optimization cannot be reached without timely, in-context, high-quality data that is transparent from the controller or sensor up.
Why is Asset Life Cycle Management necessary?
All businesses depend on their fixed assets, regardless of the industry they are in or the size of their operations. Each asset has a unique life cycle, which includes a time when it is operating at its best. However, an asset’s optimal working life reduces and requires maintenance due to natural wear and tear until the expense of repair surpasses that of replacement.
A variety of factors, such as how much a production team uses an asset, how operators use it, or even how well a maintenance plan works, might lead to its disposal.
Businesses can estimate when an asset will reach its maximum peak performance and determine how much longer it will be usable with the implementation of a successful asset life cycle management plan.
This thorough, data-driven approach to asset life cycle management makes sure that firms maintain their assets for the maximum amount of time. Some of the capabilities are,
Value of asset depreciation calculation
- Preventative maintenance techniques for buildings
- Specifying Roles of assets in operations
- Ensuring adherence to legal requirements
- Determining the cost of acquisition and replacement
- Asset integration with asset tracking systems
How does Know Your Building™ help in Asset Life Cycle Management?
1. Manage Physical and Consumable Assets inventory
For every business, especially the retail sector, there are lots of consumables that are being utilized on a regular basis which outnumber the assets of the business. Technically, inventory is calculated as assets that need to be maintained and managed. It is done by a variety of inventory management methods. Know Your Building™ helps you to seamlessly manage Physical and Consumable Assets inventory.
2. Track Assets from requisition to disposal
A business can save time and money by using asset management software to gather asset data from several places and load it onto a single system. Businesses can effortlessly track assets from requisition to disposal with the aid of Know Your Building™, thereby offering asset managers a complete picture of the asset’s lifetime.
3. Asset ID generation with unique QR code tracking
The use of QR codes is widespread, and they are undoubtedly on the rise once again. The asset management and tracking system is not an exception to this. Know Your Building™ offers asset ID generating assistance with personalized QR code tracking.
4. Assign Assets to employees or location for better traceability
Facility managers must fully understand the procedure for allocating assets to staff in order to help reduce inefficiencies and manage hazards. Businesses must implement strong asset management solutions like Know Your Building™ in order to do this. The entire onboarding and offboarding process can then start to be improved by firms through cost optimization and inventory management.
5. Manage Physical Assets AMC and Warranty details
Assets include valuable items like property, equipment, and other financial resources that belong to a person or a company. The assets can be purchased, given authority over, or endowed. On that note, effective handling of physical assets AMC and warranty information is made possible with Know Your Building™.
6. Track Asset Consumption by Department, Project or Facility
Asset tracking includes managing internal resources that must run continuously, keeping track of objects that are lent out, and keeping an eye on asset depreciation, management, and warranty agreements. Know Your Building™ helps in tracking asset consumption by modalities such as department, project, or facility.
7. Calculate Asset depreciation and track asset scrapping process
Depreciation is the methodical distribution of an asset’s depreciable value over the course of its service life. The cost of an asset, or another quantity replaced for cost, less than its residual value, is its depreciable amount. Asset depreciation is easily calculated with the aid of Know Your Building™, which also tracks the process of discarding assets.