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Is this the year of asset management?

Jan. 27, 2005
Managing Editor Lisa Greenberg says that now is the time to wrangle up some early-year budget dollars and upgrade your asset management plan.

It’s January – the starkest of months for most parts of the country. You’ve left the warm glow of the holidays behind and are in need of something to engage you until spring’s big thaw. That won’t be for several months, which is why there isn’t a more perfect time of the year to formulate or upgrade your company’s asset management plan.

Sure, you’ve heard a lot and read a lot about the different asset-management techniques and technology out there, but for one reason or another, whether it’s the trinity of money, time, resources – or all of the above – things haven’t been rolling in the right direction. But, it’s a new year, and a new budget awaits. With a little bit of skill and finesse, you might be able to wrangle some corporate dollars to further your asset management goals.

How do you open the door to your company’s investment in asset management? Talk money. Perhaps the biggest motivation to adopt asset management is profit. Dave Krings, president of 20/20 Foresight Maintenance and Reliability Specialists, Grand Rapids, Minn., says there is a cost involved in making bad decisions. “Businesses are competing with such small margins that it’s difficult not to scrutinize the role of maintenance,” he says. Most medium- and large-size companies are using some form of asset management, he adds, and they are doing so because the software is better now than it was even three years ago. “The tools are there,” he says. So what is missing? Often it’s general management’s support, but that’s just the kind of thing you can garner by talking dollars and common sense.

You could also use other companies (perhaps your competitors) as examples. Executives are catching on in some industries. Joe Petersen, business manager of the Society for Maintenance and Reliability Professionals (SMRP), Knoxville, Tenn., says he is seeing a lot more interest in asset management, and it is becoming a part of the culture in many organizations. “Executive membership in SMRP is up for the past three years, which is a 50% increase in that type of membership,” he says. “There’s always greater competition and a need to increase reliability.” He notes a surge in the number of companies using some version of RCM, and of large manufacturing companies, 75% are trying or have tried out an asset management program.

Andy Chatha, founder and president of ARC Advisory Group, Dedham, Mass., is also witness to the increasing number of businesses owners who are thinking more strategically when it comes to maintenance. “Companies thought they got all they could from their assets, but they can get a lot more,” he says.
One way to achieve this goal is integration. Because there are so many different departments and groups within a company that buy, manage and implement equipment, management finds that it doesn’t have a good handle on assets. “They need to integrate and truly optimize them in real time,” Chatha says. “All the automation companies, such as Honeywell and Invensys, are monitoring their equipment health. Plants are the single-biggest investment. You can take performance to a whole new level.” When you hammer home to corporate that your department can minimize downtime and extend the life of assets, how could they possibly object?

If that hard sell doesn’t work, you can suggest that company executives attend a conference on maintenance and reliability to demystify the abilities of your department. Peterson points out that there were four major conferences in 2004 that were focused on maintenance, and all were well attended. “Three years ago there were only one or two conferences,” he says. “The conferences get people fired up. They [management] realize that great things are possible – but they have to stay on the diet and hit the treadmill,” he says, likening it to the oft-made resolution to lose weight. “There has to be a long-standing mission to promote maintenance excellence. Some of the larger groups have adopted it [asset management] but it never stuck. They might have cut funding and personnel and wind up where they were eight to 10 years ago.”

This kind of backsliding keeps maintenance from reaping the benefits of the initial investment. “It’s like a diet or a New Year’s resolution,” Peterson adds. “There is a very small percentage of people who, five years from now, are still hitting the treadmill. There just isn’t the follow-through.” It can be a result of not having stable upper management, or even the money to back up such an ambitious plan. “Sometimes companies are just concerned with short-term profits,” he says. “But the great majority of companies realize there are opportunities” to make a long-term difference in the health of their facilities.

So, there should be no more excuses. Make 2005 the year of asset management.

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