What is manufacturing asset management?

Manufacturing asset management applies to the entire lifecycle of assets and seeks to achieve three primary goals: 

• Increase production efficiency
• Limit periods of downtime—especially unplanned downtime
• Extend the lifespan of assets

Before exploring how manufacturing asset management works, we should first define the different types of assets to be managed. Companies administer multiple types of assets through asset management solutions.

This term covers the wide-ranging tools of production a factory uses to transform raw resources into finished products.

The category starts with the traditional production equipment one normally associates with the manufacturing industry:

• Heavy machinery
• Assembly robots
• Computer numerical control (CNC) machines
• Industrial lasers
• Handheld equipment
• Assembly lines
• Conveyor belts
• Testing equipment
• Smaller items of production (for example, gears, bearings)

However, as a manufacturing facility, its physical assets also include any products created by that factory:

• Finished goods—completed products ready for distribution and sale.
• Works-in-progress (WIPs)—partially finished products still progressing through the production cycle.
• Raw materials—resources that stand ready to begin the manufacturing process.

The physical asset category also includes assets tangentially related to the manufacturing process:

• Facilities that house manufacturing operations
• Systems or trollies that shuttle goods throughout a manufacturing facility
• Cooling equipment to maintain stable operating temperatures and employee comfort
• Plumbing equipment
• Lighting equipment
• Electrical grids
• Fleet vehicles operated by the company 

IT asset management (ITAM) deals with a company’s various technology assets:

• IT servers
• CPU workstations
• Computerized maintenance management systems (CMMS)
• Industrial Internet of Things (IoT) sensors
• Employee laptops
• Company mobile devices
• Software licenses

IT assets also cover an organization’s intellectual property (IP), including any intellectual work created in support of company projects:

• Patent information
• Proprietary blueprints and plans
• Specialized manufacturing copyright
• Digital twin models used in production

You might not naturally see a company’s financial assets as being relevant to manufacturing asset management. That perspective doesn’t jibe with the reality of modern business, which is peppered with emergency situations that require immediate and large infusions of funding.

Financial assets come down to two main things:

• Liquid capital: When that massive production machine breaks down, the company needs to fund hefty emergency repairs to bring it roaring back to life. Liquid capital includes cash reserves, stocks, securities or anything else that’s easy to convert and use can help keep production facilities operating through rocky times.
• Capital investments: For larger and longer-range projects, a company needs to fund through capital investments. Projects of this scale often include the replacement of major machinery, the large-scale implementation of automation systems, facility upgrades and even employee training to help workers adapt to new machinery. 

The following are the main steps that comprise the manufacturing asset management process.

Modern techniques enable precise and comprehensive tracking of a company’s equipment—all of it.

The company can use radio frequency identification (RFID) tags, bar codes, QR codes or some combination of them all to tag these various assets. The tags carry real-time data about location, status and usage and feed this information into a centralized area called a computerized maintenance management system (CMMS).

Many companies formerly used a “run-to-failure” production model that assumed factories would operate company machinery until it suffered a mechanical breakdown.

The predictive maintenance model currently favored in facility management depends on key machinery bearing sensors equipped with Internet of Things (IoT) technology. These sensors test temperature, pressure, vibration and other attributes that are then interpreted through predictive analytics. This approach allows facilities to forecast machinery failures and fix things before they fail on their own.

It takes constant and effective asset management to keep manufacturing operations running. There’s a careful balance that must be struck between keeping enough spare parts on hand to be able to quickly make repairs and investing too heavily in spare parts.

Companies must seek that perfect balance in their approach to inventory management. 

Asset lifecycle management (ALM) tracks an asset throughout its journey of utility, which has five distinct phases: 

• Planning: The company considers the cost and benefits posed by a new piece of equipment. During this stage, the most pressing questions surround the equipment’s pricing, future performance and anticipated utility.
• Acquisition: It’s time to make the purchasing decision, including locking down the approved vendor, selecting the appropriate model, negotiating a purchase price and taking possession of the asset. 
• Deployment: After purchasing and implementing the asset, organizations must optimize machine settings and configure the asset for peak operational efficiency.
• Operation and maintenance: Industrial equipment requires routine maintenance to address standard operating wear and tear and preventive maintenance to avoid potential disruptions. Corrective maintenance is also needed to fix existing performance issues.
• Disposal: When an asset loses its functionality and it no longer makes sense to attempt repairs, maintenance teams replace that asset, sell it off or retire it from service.        

Asset management depends heavily on maintenance and the ability to effectively make needed repairs. The manufacturing asset lifecycle management (ALM) process prescribes four steps: 

1. Initiation and submission: It all starts with a maintenance request. This request workflow can be created through an automated preventive‑maintenance trigger. A reactive maintenance request initiated by a system operator can also generate it. The system analyzes the request and if approved, configures the necessary repair job, now formalized as a work order.
2. Planning and scheduling: Planners now flesh out the work order’s finer points. What spare parts are going to be needed? Will planned downtime be necessary? Are there any special safety protocols that must be observed? At this stage, the relevant logistical details of the repair are finalized.
3. Execution and tracking: The plan’s ready to implement and here’s the active phase, where technicians perform the requested work. Operators make the repair per work order specifications. Teams should also track how they performed the action, what materials they used and in what quantities and any downtime the work caused.
4. Documentation, closure and analysis: The operator confirms completion during the post‑completion phase, verifying that the repair was made as anticipated. The work order is then officially closed. The operator updates the equipment’s maintenance history to reflect the repair’s occurrence. Managers use the collected data to assess the strength of the company’s manufacturing asset management strategy.

Companies use manufacturing asset management to achieve the following benefits: 

• Heightened production efficiency: Boosting operational efficiency is the overarching goal of manufacturing asset management. Among its chief benefits, manufacturing asset management allows companies to reduce the occurrence and severity of production bottlenecks, optimize production schedules and streamline workflows and production lines.
• Extension of asset lifecycle: By better managing production assets, you can help ensure the ongoing viability of costly industrial equipment and as a result lower maintenance or replacement costs. This approach can also delay such expenditures so they can be absorbed more smoothly into operational budgets.
• Prevention of downtime: Unplanned downtime due to catastrophic equipment failures is poisonous to effective manufacturing asset management. When such breakdowns occur, the company keeps losing money until the situation is mitigated. Even brief unplanned downtime can cost millions, especially in more complex facilities, such as those in the automotive industry. The remedy is proactive maintenance scheduling that helps ensure maximum uptime.
• Peak operational visibility: Manufacturing asset management relies upon the use of dashboards to achieve a comprehensive view of the entire production floor and asset use. Dashboards are definite upgrades from the manual spreadsheets previously favored and they display key performance indicators (KPIs) to track and monitor progress. The data the system generates allows managers to monitor energy usage, gauge asset performance and make effective and informed decisions based on actionable insights.
• Compliance support measures: Companies are charged with providing data records regarding assets, their use and upkeep to various regulatory agencies. Manufacturing asset management helps companies with regulatory reporting.

While manufacturing asset management enhances efficiency, its use usually doesn’t come cheap or without a few operational hurdles:

• Costly implementation: A company engaging in manufacturing asset management typically needs enterprise asset management (EAM) software or CMMS software. Its choice depends on the type of operation that it runs. EAM software is more costly than CMMS software, which makes sense because EAM software incorporates CMMS capabilities and many more analytical tools. This expanded functionality applies whether the software is purchased outright or obtained through a subscription.
• Ongoing maintenance costs: Unfortunately, a company’s costs don’t end with system implementation. There will be ongoing expenses related to maintenance management, such as new hardware sensors, backup IT support and software upgrades.
• System collision: When a team introduces a new software program that tracks assets into a system composed of enterprise resource planning (ERP) or production systems, asset performance issues can occur. This data‑integration gap can result in performance data that becomes either fragmented or lost altogether (sometimes through the data’s presence on cloud‑based platforms).
• Information overload: As a company first embraces manufacturing asset management, it’s easy for staff to become swamped by an incoming sea of data related to telemetry and the Internet of Things (IoT). This influx can be especially challenging if teams haven’t fully figured out where to store such metrics for convenient access later.
• Lack of trained talent: It takes skilled workers to conduct some of manufacturing asset managements most nuanced calculations and intricate maintenance decisions. These tasks include analyzing the algorithms used in predictive maintenance and managing system software configurations.
• Resource misallocation: Can workers behave too attentively to a manufacturing asset management system? Certainly, if it leads to a facility’s equipment parts being replaced much earlier than necessary. Over-maintenance can effectively undermine any potential cost savings and lead to huge sums of company funds being wasted.