Companies are constantly challenged by how to adapt their asset management standards practices to the volatility, uncertainty, change and ambiguity in today’s business environment.
To address these challenges, the International Standards Organization (ISO) developed the ISO 55000 series (55000, 55001, and 55002) of international standards covering the management of assets of any kind. The ISO 55000 series describes what a company should do to maximize the value of its assets on a sustainable basis.
In this article, we’ll share the role that the ISO 55000 asset management standards play in formulating a best-in-class asset management plan for industrial maintenance in asset-intensive companies that use SAP EAM.
Why is having an overall ISO 55000 asset management plan important?
“The most important benefit of asset management is that it provides a structured framework for investment planning that delivers the most cost-effective solutions for delivering acceptable levels of service over the entire asset life-cycle at minimal risk.”
– Definitions and Benefits of Asset Management
Proper asset management practices require protecting the assets that provide value to your company. ISO 55000 defines assets as any “item, thing or entity that has potential or actual value to an organization”. Assets include material assets such as machinery, equipment, furniture and vehicles, as well as intangible assets like patents, licenses and intellectual property.
An ISO 55000 asset management plan outlines how a company obtains value from its assets by optimizing performance, risks, and costs across the asset lifecycle. The plan defines the activities needed to classify, analyze, control, and measure the effectiveness of asset maintenance strategies. ISO 55000 combines organizational goals and structure with the process, data, technology, and auditing tools to maintain effective operations.
A comprehensive IS0 55000 asset management plan allows companies to make incremental improvements to their asset management strategies. As a result, companies improve performance, enhance customer satisfaction, save money and eliminate unnecessary efforts, while delivering increased value to their customers, investors and stakeholders.
Advantages of Applying ISO 55000 Standards to Enterprise Asset Management (EAM)
While an asset management plan can improve many areas of a business, EAM can particularly benefit by applying the principles of the ISO 55000 standards. EAM involves the management and maintenance of a company’s physical assets, from production equipment to power lines during the complete lifecycle of those assets. The failure to appropriately manage and maintain these assets can cause poor equipment performance, unplanned downtime, unnecessary work, and a shortage of maintenance parts and resources.
Getting Started: Data Capture and Data Quality are Key
The easiest way to get started with building an ISO 55000 asset management plan, especially for EAM, is to gather all existing preventive maintenance plans, asset records, and previous analyses of failures. Data capture and data integrity are key to building and continually improving an Asset Management Plan. The greater the amount of information collected about equipment performance and activities, the more useful the data will ultimately be.
Your SAP EAM software is an important resource for this endeavor if the data is structured well for analysis. A Mobile EAM software solution can supply the ongoing structuring of data by capturing important details such as failure types, repair task time estimates and meter readings.
While these data inputs are extremely valuable, the raw data itself does not tell you how to respond, what procedure to follow, and who is responsible. However, creating an ISO 50000 management plan based on this data will provide the strategic direction needed to react to notifications and perform repairs efficiently.
Building the Asset Management Plan
These ISO 55000 series of standards are all highly relevant for EAM and together create the Asset Management Plan:
While the ISO 55000 asset management plan series may have some differences depending on the type of company and assets, the following sections are normally included.
- Plan Overview – Defines the assets in the plan, how the performance of these assets relates to your company’s objectives, the stakeholders involved with the plan, and how the plan relates to other company plans or standard practices.
- Levels of Service – Describes how the assets should be performing and to what condition. Details on both current and targeted levels of service is necessary to identify gaps to be addressed in other sections of the asset management plan.
- Future Demand – Provides details of forecasted growth and asset utilization, including demand drivers, impact of demand changes on assets, as well as contingency and investments needed to meet the demand forecast.
- Asset Lifecycle Management – Summarizes how assets will be managed and operated at the service level outlined, while optimizing risk and costs. This is the most important part of the plan and includes the following sub-sections:
- Background Information – Provides basic asset information including age, size, capacity, performance, current condition, current value and asset history.
- Risk Management Plan – Identifies and evaluates risks based on consequences, probability and detectability to determine the impact to service levels, as well as define mitigations.
- Operating Plan – Outlines operating strategies and methods used to meet service levels, prioritization of operating tasks and planned operating costs forecasts.
- Equipment Maintenance Plan – Defines maintenance strategies and methods to meet service levels, prioritization of maintenance tasks, and maintenance cost forecasts.
- Recapitalization Plan – Outlines expenditures that do not increase the asset’s capacity but restore or renew an existing asset to its original condition.
- Capital Plan – Describes investments that create new assets or upgrade or improve an existing asset beyond its original capacity.
- Disposal Plan – Identifies how outdated assets will be disposed of, including timing and impact on cash flow.
- Financial Summary – Includes a recap of the financial activities resulting from the activities in the previous section, including a cash flow forecast.
- Continuous Improvement – Details current and future asset management practices, how the plan will be monitored, and improvement recommendations and plans.
Tracking Progress to Goals
Creating an ISO 55000 asset management plan can seem overwhelming, but the business improvements that result from such a plan make it worth the effort. Tracking progress toward meeting goals outlined in the asset management plan can provide a sense of how well the plan is working. Key metrics to keep an eye on include:
- Mean Time Between Failures (MTBF) - Measured in hours, MTBF reflects the average time an asset is functioning properly in between breakage or failure events. The higher the MTBF, typically the less downtime.
- Mean Time to Repair (MTTR) - The MTTR metric reflects the average time it takes to troubleshoot and repair a failed piece of equipment. MTTR effectively measures both the effectiveness of your maintenance operations and a machine’s ability to be repaired or maintained.
- Overall Equipment Effectiveness (OEE) - This metric focuses on the piece of equipment’s overall functionality and reliability, and thus its impact on downtime. The OEE calculation factors in machine availability, performance, and quality. In a perfect world, your OEE would be 100%.
Maintaining the Asset Management Plan
Creating an ISO 55000 asset management plan is not a one time activity, but rather a cycle of continuous improvement. An asset management plan should evolve over time. Capability gaps and opportunities for improvement will become apparent during the development of the plan. These improvement opportunities should be tackled on a regular basis and progress updated in the plan.
Moving from a preventive maintenance approach to a Reliability Centered Maintenance (RCM) approach is one way you can take action on your company’s asset management plan. Preventative maintenance is intended to prevent major failures by scheduling maintenance of assets at regular intervals. In comparison, RCM is focused on keeping machinery and assets up and running at maximum capacity while minimizing maintenance costs.
With RCM, the conditions that could result in downtime are identified for each asset and prioritized from a maintenance cost standpoint. Then you determine what specific actions provide the best return on maintenance spend to prevent possible failures from occurring. This information can then be fed back into the asset management plan as part of the continuous improvement loop.
ISO 55000 Certification
The process for ISO 55000 certification is a rigorous one. Whether your company chooses to seek formal certification is a decision that every business must make. Regardless, your company will still benefit from aligning your asset management practices with the requirements of the ISO 55000 series.
An asset management plan that aligns with ISO 55000 asset management standards will optimize the return on investment for your enterprise assets, reduce risk and improve performance. The development of the plan sets the path for managing maintenance operations, drive continual improvement, and achieve near-term and future success.
How Sigga Can Help
Here at Sigga, we have been helping asset-intensive industries with SAP EAM drive digital transformation and mobile initiatives in industrial maintenance for 20 years. Our SAP Certified EAM software improves the capture, structure, and quality of the data needed to build an asset management plan. The solutions are designed to then support the implementation and on-going measurements needed for continual improvement.
Our Mobile EAM application digitizes the entire maintenance process connecting users across your business real-time. Mobile EAM helps your technicians accurately capture the data you’ll need for your asset management plan, allowing you to create custom, mandatory inputs to capture and structure the data you need on your critical assets.
Our integrated Planning & Scheduling desktop software automates many scheduling routines with SAP EAM such as checking capacities, assigning resources, and prioritizing work orders. The software provides an easy interface to SAP data for creating and monitoring of Asset Management Plans.
Our Mobile Warehouse & Inventory solution digitalizes the workflow of stockroom personnel, from inbound to outbound transactions, with an intuitive user interface.
With our EAM products for SAP, you company can better collect the data needed to construct and manage your enterprise assets to an asset management plan. Let us help you achieve your asset management plan objectives to reach your asset performance and productivity goals.
Learn more about how Sigga and our Solutions can impact your asset management plans.