The 9 Laws of Enterprise Asset Management
Many organizations fail to delineate ground rules which can often hinder the advancement of operating a top-notch enterprise. A shared view on the primacy of people, yield over costs, prediction over reaction, and redundancy versus reliability as we do on the terms and definitions of a common technical document such as ISO 55000 is foundational.
In this white paper we make explicit the Nine Laws of EAM which allows an organization to be true to a set of stated values, more deliberate in unlocking the potential of optimization, and strategic in its decisions. To the degree we stay true to these principles, we simplify our mission, we become better stewards of our responsibilities, we improve uptime, and we protect and improve lives.
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EAM is designed to make life better for people – to reliably produce and deliver higher-quality products at lower prices and thereby improve people’s standard of living. That mission is abrogated if, in the process, we hurt people.
Know the True Goal
“Productivity is the act of bringing a company closer to its goal. Every action that brings a company closer to its goal is productive. Every action that does not bring a company closer to its goal is not productive.”
Obsess Over the Basics
ISO 55000 is largely concerned with the basics of EAM. “Asset management is based on a set of fundamentals,” it states. Assets are owned and operated to create value; decisions, plans, and activities should create alignment; and leadership and culture are crucial to competence management of the assets, according to the standard.
Embrace the Technology
The absence of solid technology costs more than the technology itself. That deficit spins off unintended downtime, maintenance, and – occasionally but tragically – accidents that outrun any hoped-for savings by muddling through without up-to-date applications and a cohesive strategy.
Focus on Returns, Not Costs
A good financial strategist never focuses just on the costs of assets, but on their returns. The practice of sound capital allocation begins with an assumption that money is going to be wisely invested, but invested nonetheless. The same is true of asset management.
Optimize the Critical Path
In an operation, the overall speed of production is determined by the speed of the most serious bottlenecks. The assets creating those constraints have a much higher level of importance or “criticality.” The most effective enterprise asset management strategies assign higher priority to their current “Herbies” in the facility.
Foresee the Catastrophe
Asset managers must be experts in anticipating the “rare but predictable” events that could cause extended downtime for their enterprises. This requires both a willingness and ability to be constantly thinking in catastrophic terms, to always be assessing the system’s vulnerabilities.
Ensure Reliability or Redundancy
To keep running assets on the critical path of an industrial operation they must have reliability or redundancy, or both.
Sound EAM requires employing what Kahneman would call System 2 or “slow thinking.” It requires making cold, rational calculations about whether and when to retire an asset. Save the emotions for the people who work at the facility. As for the assets, let the numbers make the decisions.
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These nine laws can help guide you in establishing a solid foundation for your Energized Asset Management program, resulting in operational excellence. Download the white paper today to learn more.