Uptime: ‘Asset Management’ Versus ‘Maintenance Management’

“I know we’ve been hearing more and more about ‘Asset Management Systems’ as described in the PAS 55:2008 specification and the emerging ISO-55000 standard. But I still don’t get it. Yes, I know sometimes they change the name of something to make us think it’s new and improved. But in my mind, maintenance management IS asset maintenance. What’s the difference?” 

That’s a great question. The person who asked it is not alone: Countless other maintenance professionals are asking the same thing. So, let’s use this month’s column to explore the similarities and the differences between “asset management” and “maintenance management.” While asset management includes everything we think of as good maintenance management practices, it goes well beyond the scope of “maintenance” as we know it.

Important definitions
The term “asset,” in this case, refers to physical items such as plants, equipment, facilities, vehicles, utility systems and infrastructure. “Asset systems” refer to a series of equipment that works together as a single system, such as a chemical process, a manufacturing process or a railroad system. Each “system” is composed of numerous pieces of equipment.

We will use the word “equipment” here as a general term when referring to physical assets of the types discussed above. 

The term “system” is a structured set of interacting, often interdependent, elements forming an integrated whole to deliver a desired result. A computerized maintenance management system (CMMS), with its numerous programs, functions, forms, tables, reports and its processes for work orders, PMs, parts, labor, planning and scheduling, is a good example of a “system.” 

For our purposes, the definition of “management” can be summed up as the organization and coordination of activities aligned with certain policies for the achievement of clearly defined objectives of an enterprise. 

Last is “reliability.” Simply stated, reliable equipment does what it is supposed to do, the first time, every time, in the prescribed operating context (or environment). In other words, “reliability” means “failure-free performance.” 

Maintenance in a business context
The primary objective of maintenance is to take care of equipment, respond to its needs and keep it in good operating condition. In a business context, however, “maintenance” is NOT the goal. The expectation of an equipment-intensive business is to have reliable equipment performing functions that lead to its business goals. Maintenance, then, is a “work process” that contributes to equipment reliability through the use of proven actions, tools, techniques and people.

When we take into account the operating context, in many cases, maintenance tasks alone cannot generally make equipment reliable. Why? Because, to put it simply, “maintenance” is not the solution to all causes of unreliability.

Unfortunately, in some organizations the Maintenance Department is seen as the sole supplier of equipment reliability because it performs preventive maintenance (PM) on equipment, then fixes it when it breaks. This “fixing paradigm” is often communicated as a customer-supplier relationship—wherein Production is the customer and Maintenance is the supplier—rather than as an organization-wide partnership, wherein reliability is central to Asset Management.

The bottom line thus far is this: Maintenance, as a department, rarely has the ability to make equipment reliable. The process of maintaining equipment, whether it is performed by maintainers, operators, engineers or contractors, cannot address all of the causes of unreliability. In many cases the ultimate remedy resides in other departments or organizations—some within the same enterprise and some outside.

There are many approaches to maintenance management that improve the efficiency and effectiveness of maintenance functions. And this is a good thing, for sure. But we’re still talking about “maintenance management.”

The life-cycles of equipment
Reliable equipment doesn’t just appear with the wave of a wand. In fact, there are many phases in the life-cycle of equipment. For the purpose of this brief article, let’s group these into four major phases:

#1. Acquisition: Design, build/buy, install, startup, commission

#2.Utilization: Performing the intended function or operation

#3. Maintenance: Maintain, repair and renew (restore)

#4. Decommissioning: Obsolescence and disposal

Two “reliability” questions to ponder here… 

• In the above four life-cycle phases, where does “reliability” begin?
• In the above four life-cycle phases, where is “reliability” sustained?

Decisions that are made during the shortest phase (#1. Acquisition) will have a life-long effect on the performance and reliability of the equipment. Reliability begins in Phase #1. When equipment is purchased on a low bid with vague specifications and little regard to life-cycle performance and/or costs, the chances of operational readiness and reliability throughout its life-cycle are highly unlikely.

The phases with the longest duration are the combination of #2. Utilization and #3. Maintenance. (They’re also the phases with the most frequent variables [human factors] that affect equipment reliability.) These two phases occur in an interdependent, but intermittent fashion. Reliability is sustained in Phases #2 and 3.

Reliability-inhibiting variables…
Let’s briefly consider some of the reliability-inhibiting variables commonly found in Phases #2 and 3:

• Semi-qualified, untrained operators and/or maintainers
• Vague operating and maintenance work instructions
• Inconsistent, non-standard methods, short-cuts or violations
• Personnel fatigue, stress, sensory limitations
• Errors (skill-based, judgment-related, misperceptions)
• Failure to correct known problems with personnel or equipment
• Insufficient personnel (Operations, Maintenance, Supervision)
• Equipment doing things it was not intended to do
• Lax routines in cleaning and inspection
• Inconsistent or deferred scheduled PM routines
• Insufficient, incorrect, unfit-for-service spare parts
• Improper lubricants and/or lubrication routines
• Conflicting priorities (Production vs. Maintenance)

Asset Management
I’ve often referred to “asset management” as “maintenance on steroids.” But that doesn’t explain what asset management really is intended to be. If you’ve made it this far, you can recognize there are more causes of unreliability, poor equipment performance and equipment-related problems that are outside the direct control of Maintenance. This is where asset management comes into play. Here are 10 major elements in an Asset Management System:

#1. Asset Management focuses on the assets that strategically add value to the enterprise, to the business—assets that the success of the business is built around. 

#2. The Asset Management Process systematically aligns all asset-related policies, procedures, functions, roles, responsibilities, activities and resources with the strategic plan of the business.

#3. A specific Asset Management POLICY communicates business imperatives related to the physical assets of said business. This POLICY, including its specific expectations and accountabilities, is deployed at the same level, by the same senior executives that deploy the Quality Management and Environmental, Safety and Health Policies of the business.

#4. Asset Management Objectives and Plans are aligned with the Asset Management Policy and strategic business plans and goals.

#5. Asset Management Controls and Enabling Processes are established to facilitate the implementation of Asset Management Plans to achieve Asset Management Objectives.

#6. Strategic equipment: When performance of equipment is vital to the function it is performing and there are no acceptable alternatives to replace the function of the equipment, it has a strategic purpose. Some pieces of equipment or equipment systems may be more critical or more at risk than others and must be managed accordingly.

#7. Implementation of the Asset Management Plans spans all four of the previously described life-cycle phases: #1. Acquisition; #2. Utilization; #3. Maintenance; and #4. Decommissioning.

#8. Performance and condition monitoring of the strategic assets, as well as the Asset Management System itself, are also performed to assure—and improve—their efficiency and effectiveness. 

#9. Periodic management reviews of the Asset Management processes and systems are routinely performed to assure that the goals of the business are being addressed and achieved.

#10. Asset Management participants include every organization, department and function, and every person (part-time, full-time, hourly, salary or contractor) that makes decisions or takes action directly or indirectly impacting the performance and/or reliability of any asset that will affect the strategic business plan of the enterprise.

With these 10 formal asset management processes in place, equipment performs as intended, operating costs decline and the return on net assets increases. MT

robertmw2@cs.com