Asset Lifecycle Management: Optimize Your Assets

Are you struggling to keep track of your company's assets? It’s high time to acquire asset lifecycle management software. Read inside for more details.

Are you struggling to keep track of all your company's assets? Are you wondering if they’re being used efficiently? Then, asset lifecycle management might just be the solution you need. It’s a process that helps you manage your assets – from the moment you acquire them until it's time to retire or replace them.

If you try to do it manually, you’ll be wasting a lot of your employees' time everyday just to retrieve some information. So, with that said, let’s take a look at how asset lifecycle management can help optimize your business assets.

What is Asset Lifecycle Management?

Asset lifecycle management (ALM) is the process of managing the lifecycle of assets within an organization. This includes everything from planning and acquisition to operation, maintenance, and eventually, disposal.

Assets are an important part of any organization which could be both physical or non-physical. Whereas the asset lifecycle is the process by which an asset is stored and maintained by the owner until it’s not useful anymore.

By following a structured approach to lifecycle asset management, businesses can extend the life of their assets, reduce operational costs, and ensure compliance with regulatory requirements.

The Importance of Asset Lifecycle Planning

You must know that planning is one of the most crucial parts of ALM. Asset lifecycle planning ensures that every stage of an asset's life is accounted for. This means starting from procurement until the end of the asset's life. By doing so, organizations can avoid unexpected failures, reduce downtime, and optimize the asset's overall performance.

Asset management lifecycle planning also allows organizations to:

Align asset management strategies with business goals.
Forecast costs and allocate budgets more effectively.
Implement preventive maintenance programs to reduce unplanned outages.

The Asset Lifecycle Management Process

If you want your asset management process to be as efficient as possible, you need to understand key stages involved in it. These include:

Planning

In this first step companies thoroughly evaluate the need for the asset, its potential value to the organization, and its associated costs. This stage includes extensive collaboration among various stakeholders. These consist of operators, on-site managers, financial teams, procurement, engineering, and management.

Companies develop a detailed plan to understand the asset's purpose, how it will improve operations, and the estimated return on investment (ROI). This stage often involves the creation of a digital twin, a virtual representation of the asset, to simulate performance and assess risks. Many companies also use Asset Management Software (AMS) to make a better decision.

Acquisition

Once the planning is complete, the next step is acquisition. In this stage the companies focus on purchasing the asset identified during the planning phase. The procurement team conducts market research to identify the best suppliers, negotiates costs, and finalizes the purchase within the allocated budget.

The acquisition process also includes logistics such as asset delivery, on-site installation, and training for operators. A high level of coordination between the organization and the vendor is essential to ensure that the asset is integrated into the existing operations with ease.

Operation

The operation stage is the longest phase in the asset's life cycle. During this period, the asset is put to use for its intended purpose. And what could be its intended purpose? It’s contributing to business operations and generating revenue.

According to a report, companies spend 80% of their time resolving issues rather than taking proactive measures.

Operation schedules are carefully designed based on vendor instructions and safety guidelines. The main focus of the companies is to maximize asset’s performance while keeping the operational costs as less as possible.

Maintenance

Now, the next step in the asset lifecycle management process is maintenance. This step begins when the asset becomes operational and continues throughout its lifecycle. The goal of this step is to keep the asset functioning properly for as long as possible.

These maintenance strategies are divided into:

Preventive Maintenance: This strategy involves regular checks and routine servicing to prevent potential issues.
Corrective Maintenance: This second approach is implemented to resolve any issues that arise.
Emergency Maintenance: This last one occurs when the asset fails unexpectedly, requiring immediate attention to prevent further damage.

Regular maintenance can reduce machine downtime by up to 20% to 50%.

Disposal

The final stage of the asset lifecycle is disposal. When an asset reaches the end of its useful life, it is decommissioned and removed from service. The disposal strategy depends on the asset's condition, market value, and potential for reuse or recycling.

Disposal options include selling the asset, auctioning it, repurposing it within the organization, or recycling its components. A well-planned disposal strategy allows the organization to recoup some of the initial investment. It also ensures that obsolete or inefficient assets are replaced with more effective ones.

Why You Should Optimize Your Asset Lifecycle Management?

There are many benefits of optimizing your asset lifecycle management process which include:

Saves Costs: With the help of ALM you can reduce unnecessary expenses on repairs, maintenance and replacements. Regular checkups prevent costly repairs which saves you money in the long run.
Reduces Risk: Regular maintenance minimizes the risks of unexpected failures, financial losses and regulatory issues.
Increases Asset Life: You can increase the life of your assets by proper management. If you use them properly and focus on their maintenance, your assets will remain in the best of conditions for a long time so you don’t need to spend money on a new one.
Improves Decision-Making: You can make smarter decisions if you have detailed information about your assets. This info usually includes when to maintain, upgrade, or replace the assets.

Optimize Your Asset Lifecycle Management with Itefy

In the end it all comes down to how you incorporate lifestyle asset management in your business strategy. It’s also about extending the life of your assets and optimizing their performance to reduce costs. If you focus on every step of the asset management process, you can ensure that your assets continue to provide value throughout the asset lifecycle.

If you want to optimize your asset performance, use Itefy’s Asset Management System. This software is designed to meet the requirements of any industry. Worried about keeping track of your assets? Our system makes it easy to monitor usage and location for each one. Looking to extend the life of your equipment? We offer powerful tools to ensure timely maintenance.

So, start today with a free trial and experience the best asset lifecycle management.

Frequently Asked Questions

What are the 5 key stages of asset life cycle management?
The 5 key stages are planning, acquisition, operation, maintenance, and disposal. Each stage is critical for asset management as it maximizes the value of your assets.
What are the 3 pillars of asset management?
The 3 pillars of asset management are cost management, risk management, and performance management. These pillars offer a balanced approach to maximizing asset value while keeping the risks at a minimum.
Is inventory an asset?
Yes, inventory is considered an asset. It represents goods that a business holds for sale or production which contributes to the overall company's value. You can manage your inventory in the best way by optimizing asset management.

Updated August 21, 2024