An asset is defined as something that is useful or valuable to an organization. The term includes both physical and non-physical assets such as infrastructure and equipment, capital (money), and people. The asset lifecycle refers to the end-to-end process by which an asset is purchased, stored, utilized and maintained over the course of its useful life by its owner.
Organizations track the health of their assets using several methods. Many use data provided by sensors connected to the Internet (Internet of Things or IoT) to monitor asset performance in real-time. As part of an overall maintenance strategy, asset maintenance is performed regularly in order to reduce maintenance costs, extend asset life, and avoid unplanned downtime.
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Most organizations implement an asset lifecycle management approach in four core stages.
During the first stage, stakeholders assess the need for an asset, its projected value to the organization and its projected cost. They formulate a plan for how an asset will be operated and maintained and carefully consider any risks associated with the assets acquisition. Risks can vary depending on the type of asset and organization but typically include the likelihood of technological advancements that might make an asset redundant, i the likelihood of failure and/or replacement, and the availability of resources needed to operate an assett such as fuel and/or parts.
Valuation: It’s important to carefully gauge the overall value of any asset to an organization. In order to do this, decision-makers will need to take into account an assets likely length of useful life along with its projected performance over time. With the amount of information available today through the Internet of Things (IoT), one technique that is becoming increasingly valuable during the valuation part of the planning stage is the creation of a digital twin of an asset that is under consideration.
Creation of a digital twin: A digital twin is a virtual representation of an asset that allows operators to run tests and predict performance based on simulations. With a good digital twin, decision makers can know how well an asset is likely to perform under the conditions they will subject it to. According to a recent report by Mind Commerce (2), digital twin technology is likely to emerge as a business imperative in the near future, forming the foundation of businesses in the “connected IoT era” with its advanced asset monitoring capabilities.
The next stage is the purchase, transportation and installation of the asset. One of the most critical pieces to consider during this stage is how the new asset will fare within the overall ecosystem of the larger organization. As an asset is put into operation, how will it be integrated with other assets? How will it fit in to an organization's existing inventory management plan? How will its data be shared? All these questions must be answered as part of an overall plan to optimize the asset and keep it performing at peak levels.
The objective of asset lifecycle management should always be to maximize the performance of a new physical or digital asset by monitoring it for problems and performing preventive maintenance. Enterprise asset management systems, or EAMs, have fast become the preferred and most effective way of acccomplishing this.
Enterprise asset management (EAM)
EAM is a method of asset lifecycle management that combines software, systems and services to lengthen asset lifespan and increase productivity. A computerized management system, or CMMS, is a typical component of EAM that monitors assets in real-time and helps recommend maintenance when necessary. Top performing EAM systems not only monitor an asset’s performance but also maintain a historical record of its activity including critical information such as when it was purchased and how much its maintenance has cost an organization over time.
Computerized maintenance management system (CMMS)
A computerized maintenance management system, or CMMS, is a type of asset management software that maintains a database of an organization’s maintenance operations and helps extend the asset lifespan. Many industries rely on CMMS as a component of EAM as well as their overall maintenance ecosystem. These industries include manufacturing, oil and gas production, power generation, construction, and transportation.
Technological advances have made the tracking of assets and the measuring of asset performance and location in real-time a crucial part of asset lifecycle management. Types of asset tracking systems include radio frequency identifier tags (RFIDs), QR codes, WiFi and global positioning satellite (GPS).
Radio frequency identifier tags (RFID): RFID tags are small tags affixed to assets that broadcast a variety of information about them using radio-frequency signals and Bluetooth technology. They can transmit the temperature and humidity of an environament along with an assets precise indoor location and an abundance of other vital data.
WiFi enabled tracking: WiFi enabled tracking systems use a tag affixed to an asset that broadcasts information over a local WiFi network. Like RFIDs, WiFi enabled tracking is only effective as long as an asset is indoors and within range of a WiFi network.
QR codes: QR codes are a significant upgrade on their predecessor, the universal barcode. Like the barcode they can provide an abundance of information on their asset quickly and easily, but unlike barcodes they are two-dimensional and can be read by something as common as a smartphone from any angle.
Global positioning satellites (GPS): Many businesses use global positioning satellites to monitor an assets location in transit. A tracker is placed on the asset that then communicates with the Global Navigation Satellite System (GNSS) network. By transmitting a signal to a satellite, trackers enable managers can see where an asset is, anywhere on the globe, in real-time.
To properly deal with an assets’ depreciation over time, decision-makers must consider a strategy for its eventual disposal and replacement. Valuable assets can be complex and markets are always shifting so it’s important to consider the overall return on investment an asset is yielding as it nears the end of its life. Decision-makers will want to take into consideration the assets’ uptime, its projected lifespan, the shifting costs of fuel and/or spare parts needed to run it and of course the overall value of the tasks its performing for the organization when deciding whether or not to retire it.
Effective asset lifecycle management helps maximize an organizations’ return on investment (ROI) in their most valuable assets. Here are some of the benefits organizations who deploy an effective asset lifecycle management strategy can expect.
With the information collected from an asset via sensors (IoT) operators can now measure asset performance in real-time. Using this information they can repair assets before they break down, replace key parts when needed and schedule maintenance when it’s optimal for their organization. This approach, known as preventive maintenance plays a key role in an overall asset lifecycle management strategy, extending an assets useful life and optimizing its performance.
When organizations take a proactive role in both monitoring and enhancing their assets performance through regularly scheduled maintenance rather than waiting for a break down they reduce the likelihood of costly repairs and downtime. By anticipating necessary repairs and being proactive about performing them organizations can schedule maintenance when it suits them, not after an unexpected equipment failure.
According to a recent IDC survey (1), increasing operational efficiency was the top priority for organizations 2022 (51%). In order to realize this many are investing in on an asset lifecycle management strategies that use IoT capabilities and artificial intelligence to perform preventive maintenance. Rather than waiting until the end of the month or quarter to review performance numbers, operators can get data in real time and leverage it to make changes as needed, on-the-go.
Technological advances in asset lifecycle management are driving big changes and enhancing the day-to-day capabilities of organizations. Here are a few use cases of bleeding edge tech that’s being deployed in the field right now.
As AI and ML continue to evolve and become more and more advanced, they are being tasked with more complex missions across the asset lifecycle, including:
AR and VR technologies are helping organizations with asset lifecycle management by performing a variety of tasks including:
Increasingly, robotics and drones are being used to perform a variety of tasks that were previously performed by maintenance workers enabling them to re-focus their skills on higher value work for their organizations. These tasks include:
Learn about preventive maintenance which allows your organization to fix your most valuable assets before they break.
See how asset lifecycle management helps you get more value out of your assets by extending their lifespan and optimizing their performance.
Learn more about the end-to-end management of IT assets through every stage of the asset lifecycle.
Learn how the adoption of enterprise asset management tools and new strategies and processes are changing the traditional utility environment.
Unlock the full potential of your enterprise assets by using IBM Maximo Application Suite to unify maintenance, inspection and reliability systems into one platform. It’s an integrated cloud-based solution that harnesses the power of AI, IoT, and advanced analytics to maximize asset performance, extend asset lifecycles, minimize operational costs and reduce downtime.
Beauvais, Juliana, “Enterprise asset management 1.0” IDC MaturityScape, March 30th, 2022, https://www.idc.com/getdoc.jsp?containerId=US48512122&pageType=PRINTFRIENDLY (link resides outside ibm.com)
Mind Commerce (multiple authors) “Digital Twins Technology and Solutions: Cyber-to-Physical Communications and Asset Control Market Outlook and Forecasts 2020 – 2027,” March 18th, 2020, https://ibm.northernlight.com/document.php?docid=IA20200519530000020&datasource=IBM&trans=view&caller=resultslist (link resides outside ibm.com)
Stallard, Bob, “Worldwide Asset Life-Cycle Management Applications Forecast, 2022–2026” IDC Market Forecast, July 27th, 2022, https://www.idc.com/getdoc.jsp?containerId=US49423422&pageType=PRINTFRIENDLY (link resides outside ibm.com)