The Path to Optimization – The Laws of Asset Management Part 3

If you’ve had a chance to review the previous articles on the Laws of Enterprise Asset Management (EAM), you have started to understand that it takes more than just technical expertise to improve operational and safety performance in your organization. In this post, we continue the EAM discussion and provide an overview for laws five through seven. Known as the laws that represent the path to optimization, let’s review them below

Skip this post now and read all of the 9 Laws of Enterprise Asset Management when you download the latest white paper.

But First, a Recap:

In case you missed the previous articles, the “Introduction to Asset Management” provided an overview of SEAM Group’s white paper, the 9 Laws of Enterprise of Asset Management and highlighted the first law: Protect People. The second article covered the laws two through four that set the foundation for asset management: Know the true goal; Obsess over the basics; and Embrace the technology. An organization is less likely to succeed at EAM without a foundation.

 

The Path to Optimization

The following laws (numbers 5-7) set the path for asset optimization.

Law #5 – Focus on returns, not costs.

It’s not uncommon to hear, “We need to reduce costs,” and, “We need to do more with less.” The problem with the actions that follow is sometimes cutting costs has expensive consequences, such as asset breakdowns and safety incidents. This is why it’s important to focus on returns, and to consider any funds to be investments instead of costs. If a project costs $250,000 or the like, think about whether or not it has a high rate of return and how that could benefit your organization in the long-term.

Law #6 – Optimize the critical path.

Assets that create the most constraints are considered to have a much higher level of importance or “criticality.” The most effective enterprise asset management strategies will assign a higher priority to these type of assets in order to improve overall operations.

For example, assume a bottling facility has three machines that stamp out bottle caps compared to one machine that labels the bottles. The machines that stamp out the bottle caps can perform the work at a much faster rate than the labelling machine. However, the dependence on the labelling machine is significant, and therefore, is considered at a high criticality. The machine will be identified as a priority in an EAM strategy in order to continue operation and improve production without compromising safety.

Law #7 – Foresee the catastrophe.

In a world that prizes glass-half-full thinking, it’s not easy being the person who points out all of the worst-case scenarios. And yet, that’s the charge of a good asset manager. Knowing how to keep things running requires anticipating the “rare but predictable” events that could cause extended downtime for their enterprises. Therefore, asset managers must always be assessing the system’s vulnerabilities and asking themselves, “What can go wrong? What is the likelihood of that happening? And, what are the consequences if it does happen?” The reward of mastering this science is seeing a contingency plan work well in the off chance it’s needed and seeing the system continuing to run smoothly when it could otherwise have been brought to a halt.

The Complete List of EAM Laws Available Now

There are two more laws left to discuss, but you don’t have to wait for the next post to be published when you download the full white paper the 9 Laws of Enterprise Asset Management. Learn the core principles behind asset management all in one place and start applying them to your EAM strategy for improved performance across your organization.

Need an expert to help develop your strategy and guide your optimization efforts? Learn more about SEAM Groups’ EAM services and contact us to discuss your needs.

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