Proper asset lifecycle management is vital to ensuring your organization runs at peak efficiency. Asset lifecycle management (also known as lifecycle asset management) is typically broken down into four stages: planning, acquisition, utilization and maintenance, and disposal.
This article covers the basics of asset life cycle management (ALM), including the stages, benefits, and best practices to follow when managing your assets.
What is an Asset Lifecycle?
An asset refers to any piece of equipment, spare part, tool, vehicle, or building that your company relies on to achieve its goals. Every tangible item your company owns has an asset lifecycle. The asset lifecycle spans from before you purchase your asset to the time of its disposal.
Tracking the health and performance of your critical assets over time can help extend asset lifespan and increase uptime. That’s the purpose of asset lifecycle management.
What Is Asset Lifecycle Management?
Asset life cycle management is a data-driven process designed to optimize your equipment’s performance and efficiency. By carefully monitoring the cost, labor, and time invested in your assets, an asset life cycle manager can effectively track the total cost of ownership.
Asset lifecycle management refers to a broad range of approaches designed to extend asset lifespan, boost efficiency, and reduce downtime. ALM is an ongoing process, which begins even before your organization acquires a new piece of equipment. By carefully managing an asset throughout every stage of its lifecycle, teams can see significant cost reductions and an overall increase in productivity.
What Are the Stages of Asset Lifecycle Management?
It is useful to think of the asset management life cycle in four different stages. At each stage, assets have different maintenance and care needs. Likewise, asset lifecycle managers have different decisions to make at each step of the process.
Stage One: Planning
Before purchasing a new asset, research possible solutions to make sure that it is compatible with your existing facility and production needs.
Decision makers will need to determine the asset’s overall value to the business. The potential value needs to be carefully weighed against the cost of ownership. This goes far beyond the asset’s sticker price: consider costs like maintenance fees, replacement parts, likelihood of machine failure, and projected degradation over time.
Teams should also assess the chances that the asset will become obsolete before it reaches the end of its useful life. The more critical the asset, the more important it is to carry out thorough research and planning before acquisition.
Stage Two: Asset Acquisition
After determining which asset best suits your facility’s needs, consider your company’s budget and the total cost of the asset. Include the costs of delivery, installation, maintenance, and disposal in your total budget before making a purchase.
During the acquisition stage, teams will need to install the new asset and check for correct alignment. Asset lifecycle managers will also need to make decisions about the new asset’s maintenance needs, inventory and spare parts, and integration with the rest of the production line.
Some key considerations during the acquisition stage include:
- Creating a preventive maintenance plan for the new asset
- Entering the new asset’s information into a maintenance management system
- Setting up asset tracking
- Determining how to collect and monitor asset health data
Stage Three: Asset Utilization and Maintenance
This is the main stage in the asset lifecycle. Throughout the utilization or operation stage managers should focus on extending the asset’s useful life and maximizing productivity, while keeping costs low.
There are a number of different proactive maintenance strategies that can help with these goals. Over the course of the asset’s life, you should generally focus on preventive maintenance and predictive maintenance rather than corrective or emergency maintenance. It’s easier, less expensive, and less time-consuming to diagnose and address potential issues before they lead to breakdowns or other unplanned downtime.
Preventive Maintenance
Preventive maintenance reduces unplanned downtime by performing maintenance tasks on a regular basis, and before an asset develops a serious fault.
Preventive maintenance is usually calendar-based. Teams carry out regular inspections, cleaning, and lubrication on a set schedule. Components like belts and valves also get changed on a regular basis. A computerized maintenance management system (CMMS) can help plan preventive maintenance schedules and track work order completion.
Preventive maintenance is an effective strategy for preventing sudden breakdowns, but it can be labor-intensive and costly. Sometimes it can lead to over-maintenance and excessive planned downtime.
Predictive Maintenance
Predictive maintenance uses a network of wireless sensors to spot potential problems with your equipment so that your maintenance team can nip those problems in the bud before they cascade into larger issues. Sensors can monitor an asset’s performance and health on a continuous basis, even while it’s operating. By tracking data like vibration levels, temperature, and oil quality, teams can stay ahead of new machine faults.
A CMMS can analyze asset health data and issue notifications when equipment shows signs of a new defect. CMMS software can even generate work orders so that maintenance teams know when to address issues. What’s more, a good CMMS also manages inventory, digitally organizes spare parts, and stores and analyzes work order history so that managers can plan maintenance tasks ahead of time.
Harnessing AI Tools
Today, more organizations are adopting artificial intelligence (AI) tools to deliver insights into asset health. Tools like Azima can diagnose hundreds of machine and component faults and create a detailed set of recommendations for maintenance teams to follow. AI programs can do this just by analyzing condition monitoring data.
AI is a time-saving solution for many teams that want to implement a predictive maintenance approach. It’s not a replacement for human technicians, but it’s a great way to support a team by enabling faster and more frequent data analysis that can inform maintenance decisions.
The bottom line: preventive and predictive maintenance can help teams achieve their goals during the utilization stage. Having the right tools, like a good CMMS and an AI-powered diagnostic engine, makes maintenance planning a breeze.
Stage Four: Asset Disposal
The final stage of an asset’s life cycle is disposal. This happens when your organization determines that the long-term value of the asset no longer justifies the cost of maintaining it. You can use a CMMS to manage obsolescence and supply the data-driven records you need to determine exactly when it makes financial sense to dispose of an asset.
Repair or Replace?
It can be a challenge deciding whether to repair or replace your assets, especially when they’re critical to your organization. A good rule of thumb is to calculate your asset’s current value, taking into account its depreciation, and then compare that to the cost of new equipment.
A CMMS can also help you take a more granular look at your asset’s value by tracking metrics like mean time between failures (MTBF) and mean time to repair (MTTR). Beyond that, CMMS software can track safety issues, inventory, and spare parts availability, and a range of other considerations that can help decision makers determine when to dispose of an asset.
Optimizing the Disposal Process
Once you’ve determined that disposal makes sense, there are a few more decisions to be reached. Managers will need to consider:
- Can the asset be resold? This will depend on factors like obsolescence, utilization, and asset health. It’s a good practice to keep records of maintenance activities throughout the asset’s lifecycle in order to increase its resale value. If the asset can’t be resold, it may be possible to sell its components or some of its materials.
- What is the proper way to dispose of the asset? If the asset or its components cannot be resold, then the next step is to determine how to discard what’s left. Depending on the materials and components, some assets are subject to strict regulations when it comes to disposal. Consider costs associated with disposal as well, since removal of certain materials can require specialized services.
- How will uninstalling the asset impact the rest of the worksite? Managers will need to plan for the labor and time needed to successfully dispose of the asset before installing the replacement.
Asset Lifecycle Management Best Practices
In order to maximize the productivity and efficiency of your most critical assets, maintenance teams should follow these asset life cycle management practices:
Monitor asset health data, organize it, and store it in a central location. Industrial Internet of Things (IIoT) tools make it easy to track key indicators of asset health, like vibration levels or temperature. A network of wireless sensors can capture that data and stream it to the cloud in real-time.
CMMS software, like eMaint, stores and organizes that data for easy analysis. When vibration levels cross a certain threshold (or when other asset data exceeds limits), eMaint automatically starts a maintenance workflow so that your teams know exactly what they need to do to correct the problem.
Get alerts whenever your critical assets show signs of a new fault. CMMS software can issue automatic notifications whenever vibration data crosses a pre-set threshold. eMaint generates work orders and organizes all the information teams need to plan and execute maintenance tasks. That means schedules, inventory, maintenance checklists, safety considerations, and more are all collected in one central location.
Build a strong preventive maintenance program. Preventive maintenance helps you stay ahead of machine failure by keeping your assets in optimal running condition at all times. A CMMS helps you plan preventive maintenance tasks and track PM completion rates.
Planning a preventive maintenance strategy is an important element in asset lifecycle management from the beginning. During the acquisition stage, it’s a good practice to enter the new asset’s details into your CMMS and determine what, if any, preventive maintenance tasks to assign to it.
Track your asset maintenance KPIs. Staying on top of important key performance indicators (KPIs), such as mean time between failures and mean time to repair, will help you see where your maintenance strategy needs to improve.
It’s a best practice to assess these metrics yourself, instead of only using the manufacturer’s guidelines. Tracking data with a CMMS can help determine these metrics and build benchmarks to measure your progress. Reporting functions can pinpoint areas where your maintenance approach is weakest so that you and your team can work toward continuous improvement.
Asset Lifecycle Strategy
Asset lifecycle management is an increasingly complex process. It’s also full of potential risks: the more you invest in your assets, the more important it is to manage them correctly throughout the lifecycle. There are a few key steps that can help any team face this challenge and reduce risks.
Standardizing Workflows
A high-quality CMMS, like eMaint, can automate work order creation and ensure that your work orders contain all of the steps and instructions teams need. Building checklists, safety measures, and even photographs into your work orders is a great way to standardize workflows so that tasks are done the right way, every time.
Once the maintenance task is complete, the resulting data can be used for root cause analysis. This helps managers fine-tune their preventive maintenance plans and improve future performance.
Tracking KPIs and Key Metrics
A CMMS also tracks and stores asset health data, work order data, and KPIs in one central location. Managers can access that data remotely, making it possible to oversee multiple worksites. The software can also generate in-depth reports to help make decisions about asset procurement, maintenance, and disposal.
The resulting data can be used to allocate resources, make inventory decisions, and create more efficient schedules — all effective ways to improve operational efficiency and asset lifecycle management.
The bottom line: asset lifecycle strategy is an ongoing process. With the right tools and the right methods, your asset lifecycle strategy can yield a wide range of benefits.
Benefits of Asset Lifecycle Management
Effective asset lifecycle management can transform your whole operation. The benefits of a good asset life cycle management program include:
- Developing a data-driven maintenance strategy that includes preventive maintenance and predictive maintenance
- Improved decision-making processes, with more data-driven insights
- Increased productivity and reduced downtime
- Improved compliance with safety and quality regulations
- Minimizing the total cost of ownership
- Greater operational efficiency
Asset Lifecycle Solutions
Effective asset life cycle management starts with the right tools. That means using sensors and other IIoT tools to monitor the health of your critical assets. It also means choosing a quality CMMS to track asset performance throughout the lifecycle.
A CMMS like eMaint gives you a wealth of insights into every stage of the asset life cycle. eMaint lets you monitor all the time and money invested into each asset so that you can weigh the total cost of ownership against productivity and output.
Increasingly, effective life cycle management includes adopting Industry 5.0 and artificial intelligence tools as well. AI tools are already helping expertise-constrained teams implement predictive maintenance strategies so that they can stay ahead of machine failure and keep their costs low.
The result? Data-driven decision-making that lets your organization make smart choices, improve ROI, and achieve far greater operational efficiency into the future.