Despite the increasingly digital nature of business in recent years, most organizations must still keep track of numerous physical assets, from parts and raw materials to buildings and equipment. These assets are often owned by different departments and dispersed widely across various locations and documented on numerous diverse databases.
While many organizations use enterprise resource planning (ERP) software or enterprise asset management (EAM) software to keep track of their assets, many more still rely on simple spreadsheets. These decentralized, and often ad hoc, approaches hinder critical business processes such as purchasing, distribution and inventory optimization, while also increasing time-to-market for products and services.
New digital technologies can address these challenges and help develop greater efficiencies and higher productivity, so organizations can turn their attention to reducing operating costs by optimizing their capital, human and physical assets.
Achieving excellence in physical asset management practices is particularly important, as it drives business outcomes, increases customer satisfaction and reduces costs. Asset management has also become an integral part of supporting regulatory compliance, safety, and environmental considerations.
Why Asset Management is Key to Business Success
Without proper management of asset information, critical information such as asset delivery, storage, forecasting and stock levels can all be easily missed. This also causes a lack of visibility, which prevents organizations from being able to readily answer questions like: “What is the current state of your assets? Who is using them? Where are they located?”
These unanswered questions result in higher costs and missing or misplaced goods. In many organizations, assets are spread out across many locations, departments and databases which is making it difficult to achieve a complete and trusted view.
As a result, large manufacturing and service industries are paying careful attention to their asset management, as it supports the planned and proactive maintenance functions and reduces the need to carry excess inventory and replacement equipment. For other industries, the ability to locate assets and know their condition can mean reductions in procurement or rental costs.
Capital-intensive industries rely on asset management to support business-critical functions where disruption is undesirable. For example, in process manufacturing where the metering of energy usage or rate of flow of fuel are critical to support the business operations of the customer. Operating assets at an optimum production level maximizes profits, while maintaining assets to perform at their optimum production level reduces the risk of breaching operational limits.
Coping with the Complexity of Organizational Assets
Effective asset management is often complex and difficult. Physical assets come in many forms and include transportation, IT, technical and manufacturing equipment, buildings, infrastructure, network and smart devices. They might be described by their physical characteristics, technical specifications, operational parameters, safety procedures, maintenance schedules, geographic location and data management capabilities. Non-physical assets, on the other hand, might include intellectual property (IP), capital, software and/or digital assets.
Increasingly, assets need to be related to each other in sometimes complex ways to support new types of services and enhance the ability to monitor the delivery of them. These complex relationships require modelling which is difficult to deliver using a traditional asset management system or asset registry approach.
For example, managers of safety and environmental procedures may have roles that cross existing asset management boundaries. In this scenario, managing assets would require the ability to identify with all the use cases and purposes applicable which can be difficult as today’s asset management tools tend to be siloed to particular applications. Working in conjunction with an enterprise asset management system, MDM solutions merges existing asset descriptions together and applies new use cases to bring together disparate asset types in a view specific to the user’s own management systems. For example, the development of a “catalog” of safety infrastructure located at a passenger terminal.
In another example, energy and utilities providers are introducing new services and methods of delivery to their customers. New types of interconnected assets are finding their way into the distribution network as well as the home. Even customer service professionals are relying on enhanced information management capabilities to join asset monitoring and maintenance to customer demand planning. Here, the challenge is to describe the complex relationships that exist between these assets, the provider, the distribution network and the customer, in a way that enhances service monitoring and reliability.
As assets become more instrumented, information collected from them can start to support near real-time analytics of their operating parameters for performance monitoring using predictive and preventative maintenance planning. The ability to coordinate information emanating from disparate asset sources can also add value to both existing and new infrastructures.
For example, as transportation systems become more instrumented, increased levels of security and new passenger-related services can be proposed based on things like navigation, parking, environmental, speed control and congestion information.
How Modern Technology Approaches Can Help Better Manage Assets
The challenge faced by asset managers is how to describe these new layers of asset complexity, their ecosystems and changing context and designation.
While asset management applications exist, some organizations are exploring master data management (MDM) solutions to help describe how assets relate functionally, perform and configure. One advantage of MDM is that it is designed to cross silos of systems, business units and processes in order to unite asset information in a way that supports improved decision making. MDM can help to unify and standardize views of asset information to help reduce the number of processes that an organization has to work with.
Unlike traditional asset management systems, MDM solutions allow businesses to easily collect, validate and cleanse asset data, group it into complex relationships and provide an audit trail for management and configuration to:
- Support business process consolidation through data governance—providing a single place from which trusted and comprehensive information concerning procurement, warranty recovery, geo-location, maintenance, audit, recall, technical support can be actively managed.
- Support new business paradigms of operational performance and preventative maintenance—managing asset relationships and networks, automating warrantee recovery by describing and managing network enabled assets resulting from Internet of Thing (IoT)-enabled devices. It can also uniquely identify and locate assets to reduce costs in rental and procurement and augment audit and traceability.
- Extend asset management capabilities across technical application and physical location boundaries—enhancing the value of any existing specialized asset management applications, by providing unified, normalized, corporate level asset information views to support improved decision making for procurement, deployment, maintenance, and regulatory compliance processes.
The diversity of asset types, utilization, instrumentation, and operating conditions provides information management challenges that often go beyond the scope of a single ERP or management application, particularly when dealing with subjects such as corporate level RoA reporting or regulatory compliance initiatives. Applying best practices in data governance to asset information management, can help support digital transformation, underpin new business processes and so facilitate the journey from reactive to predictive and preventative asset management.