Keep one step ahead of the competition

Published:  14 March, 2019

Kevin Price from Infor examines the importance of standards in optimising asset management.

The air of economic uncertainty that surrounds businesses the world over means it’s vital for organisations to get themselves in the best shape possible to withstand any future problems, securing business efficiencies wherever possible. One potential source of efficiency savings is the increasingly important area of enterprise asset management, with businesses readily seeking to optimise their assets to maximise performance across the board, securing gains on the bottom line and providing the competitive advantage that’s vital in today’s turbulent business climate.

Enterprise Asset Management (EAM) programmes have been instrumental in driving business action, maximising not only the availability, but also the reliability and performance of assets, minimising that all-important total cost of ownership. But, to be truly effective, asset management strategies must be continually reviewed and evaluated, taking into consideration not only internal change, but external factors too. More and more businesses are waking up to the fact that asset management relies upon the standardisation of practices and processes to maximise its success and are therefore adopting ISO standards to help drive the adoption and effectiveness of asset management programmes.

Standard expansion

The most widely adopted standard for asset management is the ISO 55000 series, adopted by many businesses which recognise the importance of standardising the way they manage their assets and asset data. This is closely followed by ISO 50001, a standard which sets out best practice for energy use by organisations, through the establishment of a dedicated energy management system. It involves setting out a policy, setting targets and using data to gain insight, made decisions and measure energy performance against these targets, with a view to continual improvement.

But some businesses, for now mostly those who are running expensive assets in uptime critical industries, such as process manufacturing, power generation and oil & gas, have started to adopt ISO 14224, a standard which originates from the oil & gas industry, but is increasingly relevant for other industries operating against an increasingly globalised, 24/7 business landscape.

ISO 14224 calls for organisations to establish a systematic and reliable way to not only collect but also to exchange reliability and maintenance data for equipment, facilitating the exchange of information between parties and helping to shape a pragmatic and effective asset management programme.

ISO standards in asset management are ultimately intended to prevent loss of revenue as well as incidents that could damage people and the environment. However, with the notion of the extended enterprise leading to larger organisations on a global scale, all linked by increasingly complex supply chains, as well as the prevalence of Big Data and the factory of the future concept paving the way for increased automation in industry, there are more and more practical and mission critical reasons why organisations want to standardise the way they manage their assets.

Management on board

Traditionally, operational decisions have been made at the facility level, whereas strategic and financial calls have been the domain of the executive team, a disconnect which often results in board level neglect of asset management as it can be viewed as a shop-floor issue. In reality, a lack of buy-in from senior managers can inhibit the realisation of the savings to be made through effective asset management, meaning that asset management engagement from top-down is crucial.

The adoption of ISO standards for asset management facilitates that vital boardroom focus, putting accountability and overall responsibility for effective asset management into the hands of senior managers, and putting the framework in place to highlight the very real financial and operational gains to be made via an optimised asset management programme. As businesses actively seek to better align manpower, equipment and resources to achieve that all-important competitive advantage, the putting in place of a robust asset management programme is one of the best places to start.

No more silos

It’s not just board-level buy-in that standards can ensure, but company-wide buy-in as well. More often than not, EAM programmes exist in silos, managed by different individuals and departments, where, if communications are lacking between all those involved, it’s extremely difficult to optimise asset management. ISO 55000 encourages better communications within the organisation when it comes to asset management, with ISO 14224 going one step further by facilitating the exchange of data between all interested parties.

By removing the siloed approach, organisations can gain a comprehensive, holistic view of asset integrity for the entire business, aligning processes and resources to put the emphasis on total business impact as opposed to localised, short term, often competing priorities. Standards have the ability to inject some much-needed discipline to asset management throughout the business, increasing cooperation among all areas of the business, from board to shop floor, enabling organisations to make decisions in the best interests of the business, in line with the strategic vision for the company.

Global benchmarking

Standardisation also has a crucial role to play when it comes to optimising asset management across multiple sites. With standards in place, businesses can set the benchmark for performance across all locations, a welcome ability in an increasingly globalised business world. As well as facilitating a sound understanding of what is and isn’t working in one site, the adoption of asset management standards provides asset visibility across multiple plants and locations, bringing previously hidden asset management insights to light and encouraging best practice across multiple plants and locations by benchmarking with other sites in the organisation.

This benchmarking can help to de-risk a business as well, both operationally and financially. An asset issue in one location can be prevented from happening in other sites as steps can be taken to mitigate against it before it even has a chance to take hold, with the provision of enhanced asset oversight greatly reducing the potential for failure or mishap in other locations. Similarly, when it comes to suppliers, if there is an issue with a supplier to one particular facility, asset management information can be again used as a company-wide benchmark, enabling a direct comparison to be made with alternative suppliers elsewhere in the business.

External communications

Not only beneficial from an internal communications point of view, the adoption of asset management standards aids communications with external agencies and other interested parties, acting as an important method of communicating the effectiveness of asset management programmes. Having internationally recognised standards in place can help convince regulators, stakeholders and customers that a business is following best practice not only in terms of asset management, but due to the comprehensive nature of the standards, best practice in safety, risk mitigation, reliability and profitable asset operation as well. The ability to specifically demonstrate how a business is using an ISO standard, highlighting efficiencies brought about via standardisation, can also inspire confidence in investors, convincing them that investments in asset maintenance and management is money well spent.

With modern asset management programmes having outgrown the spreadsheet-based records of old, with no spreadsheet in the world capable of capturing, let alone processing the immense amounts of data involved in today’s business operations, the need to adopt standards in asset management has never been more pressing. Adherence to the right standards can have a dramatic and direct impact on the bottom line, keeping businesses one step ahead of the competition and standing them in good stead to weather any future economic storms.

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