A formal integrated systems approach can reduce asset management costs

Global research suggests a formal, strategic, integrated systems approach can help reduce asset management costs, provide higher security and lower risk. According to a new study concerns about plant safety, increased demand for asset availability and reliability, and environmental issues are having the most impact on organizations’ asset management strategies. The study was sponsored by Lawson and conducted by Industry Direct Ltd. (IDL)

According to a new study sponsored by Lawson Software concerns about plant safety, increased demand for asset availability and reliability, and environmental issues are having the most impact on organizations’ asset management strategies. The global study, designed to identify changing attitudes and needs of asset intensive organizations, was sponsored by Lawson and conducted by Industry Direct Ltd. (IDL). The study included 189 participants from Europe, Australia/New Zealand and the United States, representing utilities, discrete manufacturing, mining, process manufacturing and transportation industries.

The study found that concerns about the environment and other corporate social responsibility (CSR) issues are increasingly influencing strategic asset management decisions. Ninety-seven percent of survey respondents said they have at least one CSR initiative already in place. Such initiatives include improved energy management programs, ethical business practices surrounding procurement and emission reduction.

“A strategic, integrated approach to asset management can play a big role in addressing corporate social responsibility and other asset issues,” said Suzanne Benn, marketing director, Lawson. “As examples, an integrated enterprise asset management solution can help to ensure that a company’s assets operate efficiently within environmental guidelines, and a preventive maintenance program can help to lengthen the lifespan of spare parts and assets, save natural resources and reduce waste.”

A company’s view on maintenance can impact their asset management strategy, budget and the adoption of best practice techniques such as reliability centered maintenance (RCM). Among the study’s findings, many early adopters of asset strategy and policy view maintenance as a profit opportunity instead of a cost center issue. In the study, 39 percent of respondents say their company strongly believes that maintenance is a worthwhile investment.

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The study suggests that if companies do not adopt strategic asset management policies, executives in areas such as finance and procurement may not see maintenance as an investment. That view can impact the amount of budget allocated for asset maintenance. According to the thought leadership study report, results showed that more than 70 percent of respondents spend less than half of their asset maintenance budget on preventive work preferring to pursue a “fix it when broken” strategy.

Respondents that lost more than 11 percent of their production or operation time annually to unplanned downtime spend more of their maintenance budget on corrective measures. According to the study, “This tactical and reactive approach is not sustainable and companies must formalize policy and strategy for asset management to improve operational performance, as regulations increase and society becomes intolerant of failure or accident statistics.”

Reliability centered maintenance is an approach that helps develop and maintain the most effective and economically beneficial maintenance strategy for each critical asset. The study also shows that respondents that have adopted RCM spend 40 percent or more of their maintenance budgets preventing failures before they happen. Conversely, 70 percent of the respondents that spend more than 80 percent of their budget on corrective maintenance said that RCM had either a small or no role in their business.

“Based on the numbers, the study shows that progress is being made with companies moving toward an integrated systems approach to help reduce cost, provide higher security and lower their risk,” said Benn. “At Lawson, our integrated enterprise asset management solution can help organizations worldwide maximize asset availability, reduce asset lifecycle cost and deliver a better return on asset investment as well as address growing corporate social responsibility concerns.”

Interested organizations can download the full thought leadership report  “Strategic Asset Management Across the Organization Delivers a Compelling Return” and participate in the online survey by going to www.lawson.com/IOB. Respondents will receive a free online personal benchmark report that compares their answers to the overall results of the IDL study.

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