October - Library

those that don’t fail according to long-held views
• Extensive data is not required to take decisions on maintenance
policies.
Many of these new ways of thinking have challenged long held
i n d u s t ry views. So much so that they are often difficult for industry
professionals to easily assimilate.
They are even less likely to be understood by those outside of the
field of asset management.
As we move into the 21st century many are beginning to look
towards asset management as a source of strategic advantages. To
achieve this the organization will need to have a deep understanding
of these issues, and others like them, integrated into their thinking and
corporate cultures.
Competitive Market Forces
One of the key elements of the increasingly open global competitive
e n v i ronment is pre s s u re on costs. Pre s s u res to increase pro f i t
m a rgins, or in worse case scenarios retain profit margins under
lowering retail prices.
As one of the largest elements of both operational and capital
spending, asset management is often an obvious target for re d u c t i o n s
in this area.
Maintenance costs are high, in some cases artificially high. Not
only are they high but there is increasing pre s s u re on maintenance
costs to rise. Areas such as increased regulation, complex and
automated machinery, as well as rising costs of physical asset them
selves are pushing maintenance operators to the wire. Pressures to
do more are increasing while the pre s s u re to spend less is gre a t e r
The Strategic Importance of Asset Management
than it has ever been.
One of the major factors behind this trend is that we are more
dependent on machinery than at any time in the past. Where
p reviously we would use people to do work, today we use machinery.
This conflicting situation of pressures to increase the work done
combined with pressures to reduce the costs of doing that work, has
been one of the principal drivers behind many of the vast range of
p roduct and service “solutions” that have appeared over the past
three decades. These have generally been focussed on appealing to
this management concern over rising direct costs.
This situation has unfortunately led to more poor decisions and
misunderstandings in asset management than any other influencing
f a c t o r. The results of decisions based on these concerns alone, while
often bringing some short-term gains, are rarely sustainable and can
even be dangerous in the medium to long term.
Ad-hoc or isolated cost cutting often leads to the eradication of
skills or activities that assist in achieving production goals. In worse
case scenarios they impinge on the safe operating environments of
assets.
This does not mean that direct cost reductions are not achievable
in asset management.
Much of the maintenance that we do today either achieves very
little, or is actively counter productive. As such there is always scope
for reducing areas of re d u n d a n c y. Added to that are other areas of
i n e fficiency such as planning and scheduling, stores management and
other key areas.
The concept of direct cost reduction needs to be replaced with the
focus on reducing maintenance unit costs. This re q u i res a re d i re c t i o n
of costs from the present activities towards activities that we tru l y
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