Insurance and taxes
Here is a scenario to consider: I’m in the market for a new truck to add to my trucking fleet for my trucking business. The list just provided are the attributes that are most important to my purchase decision. In order for my new truck to contribute financially to the plan that I have for it, these are the characteristics that I need to look for, ensure, and guard. I do this to generate the most income from my asset.
This section is titled “Where Do Assets Come From?” We started off with a listing of possible places that an asset can physically come from. How often do our aspirations for a new asset (new or used) fail to pan out because of the compromises we make along the way when landing the new asset?
If we buy a used or surplus piece of equipment, what are the odds that the new (new to us) asset will live up to the reason we are buying it in the first place? In the truck purchase example I gave earlier, for the categories I listed, it would seem reasonable that I have real interest in specific performance deliverables. It is unlikely that a used truck would hit all the gates, exactly as I’ve listed them in my concerns. Yet I still believe this ‘new’ vehicle is going to deliver as I hoped; essentially, becoming the asset that will make the projected income that was anticipated.
Where assets come from is as critical to establishing a reasonable performance and income curve as it is practical to understand that any compromises and alterations on the ‘needs’ list of an asset will absolutely also alter the ‘deliverables’ list.
Has it ever been your experience that your company bought a used asset and expected the maintenance department to fix it up to use for allout production? How did that work out? There is nothing wrong with used equipment, but just keep in mind that a rush for the fiscal sensibility of buying used equipment doesn’t always lend itself to dovetailing perfectly into our production model. Neither does buying an off-the-shelf new item either. This is a very important dance that is done to make sure we get the right asset for the purpose.
If we are going to manage assets to make income it would make sense that we go into the proposal with the greatest level of confidence in pulling that off, if for no other reason than for the longevity of the production effort. Asset availability is equally important to asset capability.
Darrin Wikoff mentions in his work, Leader’s Guide to ISO 55001: Asset Management System Requirements, that “Availability is the result of the asset base being both Reliable—the probability of conforming to the desired function without failure—and Maintainable—the ability of your management system to restore functionality after a non-conformance has occurred.” (p. 9)
Regardless of the origin of the assets in your facility, they need to start their history at your location fulfilling the purpose they were purchased to fulfill. We manage assets to make income. If they weren’t designed to perform the work in the first place, it is likely that we will have a history of frustration and disappointment.
But who is responsible for ensuring asset capability in the first place?
Who determines what asset to purchase and when to actually get it? In your organization, who is chiefly responsible for making asset decisions? (It could be a group of people.) Write that source here:
In business, asset purchase considerations are often, if not always, determined based on a projected benefit to the company. These purchases will certainly include facility assets such as boilers, air compressors, and even plant roofs. In manufacturing and facilities industries we want to focus on capital assets that actually make our product or allow us to provide a service. Note: if you are in the facilities maintenance position, of course the facility assets themselves are the target of our study.
Regardless, these purchases are often made as part of a projected business case that was conceived well in advance. Couple that with the lead time required to design, build, and install assets and it’s apparent that any project must have the timing of a moon landing to fully capitalize on the gains that were projected much earlier. Figure 1-8 is meant to show this intercept between planning for a capital asset and actually gaining value from the asset decision.
Figure 1-8 From project planning to asset operation to disposal
The ‘who makes the decision of what assets to purchase’ is pertinent to an asset management discussion because it begs the question, “Are you more engaged with an asset’s care and use if you are intimately responsible for it?” ISO 55000 directs those adhering to this standard that an organization’s top management, employees, and stakeholders are the groups responsible for conceiving and executing what is referred to as “control activities.” These activities might include: policies, procedures, and performance measuring and monitoring techniques. This is done to identify and capitalize on opportunities and to reduce risks. Interestingly, ISO 55000, in its direction to reduce risk, indicates that risk should be lowered to an “acceptable level.” It would not be uncommon in our factories and facilities around the world to be very light on an exact understanding of an acceptable level of risk.
Ron Moore, in Making Common Sense Common Practice, put it this way when describing a scenario of payback analysis on capital equipment: “If we could reduce those production rate losses and minimize the maintenance costs by taking the advice of the people who are in a reasonable position to know what the problems are, then perhaps we could reduce future costs or increase future benefits.” (p. 127)
The ‘who makes capital asset decisions’ should be a team that is fully engaged from concept to operation. This team should be cross-functional and made up of the usual suspects:
■ Engineer
■ Maintenance leadership
■ Production leadership
■ Maintenance hourly
■ Production hourly
■ Safety
■ Purchasing
■ Storeroom
The charter for this team is simple. Take into consideration the last section on where do assets come from, and factor in that a small but effective team as previously described can have a huge impact on covering all the bases in designing equipment for the purpose intended. It is likely more possible that a team with this makeup might have a better chance of achieving a design and fielding an asset that is successful. Conversely, give thought to an asset that is completely conceived and scoped by headquarters or an engineering corps that is closed off in the corner office. Which scenario would net a better result in the long run?
Try your hand at putting some names behind the titles. In a reprint of the bullets listed previously, jot down the names of people at your facility that might be of real value to fill a position on the next capital asset design team.
| Engineer: |
| Maintenance leadership: |
| Production leadership: |
| Maintenance hourly: |
