ASSET MANAGEMENT
Mehrdad Boloorchi, P.Eng
June 5, 2017
WHAT IS ASSET
As per Section 2.3 of ISO 55000, An asset
is an item, thing or entity that has potential
or actual value to an organization.
This is purposely wider than physical or
tangible assets and can include the non-
physical or intangible assets as well.
Physical or Tangible Assets
Physical or Tangible assets usually refer to
financial resources including the stock,
bond and cash, properties, infrastructures,
machineries, equipment, and inventory
owned by the organization.
Physical or Tangible Assets
Are the backbone of a corporate and are
not available to customers.
Are at risk of damage either from naturally
occurring incidents, theft or accidents.
Are readily visible, and easy to quantify,
would be reported on the balance sheet,
Have limited application, and
Are managed through control,
Non-physical or Intangible Assets
Non-physical or Intangible assets refer to
those without a physical manifestation.
They include employee skills and
knowledge, intellectual property such as
patents, trademarks, copyrights and
licenses, trade secrets, software,
blueprints, procedures, and customer and
supplier relationships,
Non-physical or Intangible Assets
Are difficult to recognize,
Are difficult to quantify,
Are not reported on the balance sheet,
Tends to be very dynamic with a short life
span, and
Are increasingly recognized as important
assets, contributing significantly to an
organization competitiveness.
What is Asset Management
As per Section 3.3.1 of ISO 55000, Asset
Management is the coordinated activity of
an organization to realize value from assets,
Realization of value will normally involve a
balancing of costs, risks, opportunities and
performance benefits.
The term activity has a broad meaning and
can include, for example, the approach, the
planning, the plans and their implementation.
What is Asset Management System
Asset management system (AMS) refers to the
framework of policies, processes and
procedures used by an organization for
directing, coordinating, and controlling the
asset management activities. AMS includes:
The asset management policy;
The asset management objectives;
The strategic asset management plan (SAMP);
The asset management plan(s)
Strategic Asset Management Plan
(SAMP)
Documented information that specifies:
how organizational objectives are to be
converted into asset management
objectives,
the approach for developing asset
management plans, and
the role of the asset management system
in supporting achievement of the asset
management objectives
Asset Management Plan
Documented information that specifies the
activities, resources and timescales required
for an individual asset, or a grouping of assets,
to achieve the organizations asset
management objectives.
Asset Management Fundamentals
Asset management is based on a set of
fundamentals.
Value
Alignment
Leadership
Assurance
Value
Assets exist to provide value to the
organization
Asset management does not focus on the
asset itself, but on the value that the asset
can provide to the organization
The value of an asset is realized based on
a life cycle management approach. The
value today is the discounted present
value of the sum of the dividend (or
service flow) plus the future price of the
asset.
Alignment
Asset management translates the organizational
objectives into technical and financial decisions,
plans and activities.
Alignment and consistency between the
organizational objectives, the asset management
policy, the SAMP, the asset management
objectives and the asset management plan(s) is
required to assure that asset level activities
support the delivery of the organizational
objectives.
Leadership
Leadership and commitment from all managerial
levels is essential for successfully establishing,
operating and improving asset management
within the organization. This includes:
Clearly defined roles, responsibilities and
authorities;
Ensuring that employees are aware, competent,
and empowered;
Consultation with employees and stakeholders
regarding asset management.
Assurance
Asset management shall assure that assets will
fulfil their required purpose to effectively govern
an organization.
Assurance requires:
o Developing and implementing processes that
connect the required purposes and
performance of the assets to the
organizational objectives, assure the asset
capability across all life cycle stages, and for
monitoring and continual improvement;
o Providing the necessary resources and
competent personnel for demonstration of
assurance;
Relationship between Key Elements of
an Asset Management System
Benefits of Asset Management
Improved financial performance
Informed asset investment decisions
Managed risk
Improved services and outputs
Demonstrated social responsibility
Demonstrated compliance
Enhanced reputation
Improved organizational sustainability
Improved efficiency and effectiveness
Questions
References
ISO 55000, First edition, 2014-01-15- Asset
management Overview, principles and
terminology
ISO 55001,First edition, 2014-01-15- Asset
management Management systems
Requirements
ISO 55002, First edition, 2014-01-15- Asset
management Management systems
Guidelines for the application of ISO 55001
IEC, 2015-10- Strategic asset management of
power networks
