The Asset Management Principles

Source: The Water Research Foundation

The principles of asset management apply to all asset classes, such as passive assets (buildings and infrastructure), static assets (land), and active assets (mechanical, electrical, electronic, mobile plant, or equipment, software, etc).

It is only the specific techniques, practices and life spans, which apply to individual assets that are different.

What this means to most organizations, even those managing a broad cross-section of asset types, is that many of the principles of asset management are common to the organization as a whole.

Consequently, a uniform set of asset management principles can be applied to all asset groups allowing senior management to judge the relative merits of each activity or service. Asset management systems must be able to provide the outputs required across the asset life cycle.

These Asset Management Principles are briefly characterized:

1. “Value Added/Level of Service” – assets exist to deliver services and goods that are valued by the customer/stakeholder; for each consumer/stakeholder there is a minimum level of service below which a given service is not perceived as adding value.
2. “Life Cycle” – all assets pass through a discernable asset life cycle, the understanding of which enhances appropriate management.
3. “Failure” – time, usage, and the operating environment work to break down all assets; failure occurs when an asset cannot do what is required by the user in its operating environment.
4. “Failure Modes” – not all assets fail in the same way.
5. “Probability” – not all assets of the same age fail at the same time.
6. “Consequence” – not all failures have the same consequences.
7. “Total Cost of Ownership” – there exists a minimum optimal investment over the life cycle of an asset that best balances performance and cost giving a target level of service and a designated level of risk.

The challenge is to apply these principles systematically within a complex organization – through an asset management program.

NEXGEN Asset Management software provides the support you need to implement your asset management program. Including asset inventory, work orders, inspections, preventive maintenance, seamless GIS integration and management reporting. NEXGEN also manages your Asset Management Processes including risk-based capital improvement, predictive maintenance, asset lifecycle planning, and condition assessments that automatically update asset useful life. In other words, one solution is to meet both needs.