The Strategic Importance of Asset Management Part Three: A New Framework

As the level of understanding of these areas begins to rise, so too do the expectations that managers and companies will be able to meet modern requirements.

In the past, maintenance strategy has frequently been treated in a highly reactive manner. Maintenance regimes are often created in response to machine breakdowns or incidents. Often, in the aftermath of disasters, there are public statements made demanding, or promising, "more intensive maintenance."

While the intention is laudable, the result of such reactive actions is often either non-effective or counter productive. Either way it is too late to stop the original incident from having occurred.

Managing assets needs to be done in a truly proactive approach, one that ties the management of physical assets to the corporate objectives.

A modern approach to asset management can be visualized as a series of dominoes. Each domino needs the momentum from the previous area, and then proceeds to pass this momentum to the next domino in the line. Starting at any point other than the beginning will leave some dominoes standing.

Modern asset management can be seen in the same way. Each of the dominoes represents one of the decision-making areas that are required to adequately manage assets.

The initial momentum to begin the sequence comes from the vision of a future state. This needs to clearly represent the corporate objectives and goals, and expressing how asset management can play a part in achieving these goals.

This energy is then carried forward to impact on the remaining areas of decision-making. As with the dominoes, a decision to begin in the middle of this chain reaction will omit areas important to the end result.

Perhaps more than any other management initiative, asset management is heavily driven by the corporate requirements and objectives. Yet it is often overlooked or summed up in global statements regarding "improved efficiency" or "improved quality."

One of the more recent tools in a manager's arsenal is the balanced scorecard. This proven tool has been used successfully throughout the world as a means of communicating corporate strategy, and converting strategy into results. However specific asset management goals and causality links are rarely included in corporate scorecards. Including asset management at this level of corporate objective setting, sets two powerful dynamics in motion. Firstly, it raises the level of understanding, throughout the company, of this area and its importance. Secondly, it provides guidelines for future decisions that will need to be taken regarding the following steps in the chain reaction.