What is asset performance management?
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What is APM?

Asset performance management (APM) is a strategic approach to managing assets that companies use in their daily business operations. Enterprises rely on APM to optimize the performance of their most valuable assets including buildings, equipment, vehicles, software and technology.

Top-performing APM solutions combine software and asset management best practices to increase the performance and reliability of everything from a smart office building to a fleet of transport vehicles.

Using cutting-edge capabilities like predictive maintenanceAI-enhanced analytics and remote monitoring, APM helps reduce the likelihood of equipment failures, enhances asset reliability and increases the length of asset lifespans without adding unnecessary costs.

What is an asset?

An asset is anything useful or valuable to an organization. The term can include both physical and non-physical assets such as infrastructure and equipment, capital (money) and people. Simply put, an asset is anything a company owns and uses to run its business.

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What’s the difference between ALM and APM?

Asset lifecycle management (ALM) is the process by which asset-intensive organizations keep their assets running smoothly throughout their lifespan. Asset performance management (APM) is a strategic approach that companies use to maximize asset performance.

While both approaches deal with asset health and performance, ALM focuses on all stages of the asset lifecycle, including the planning, utilization and decommissioning stages, while APM focuses exclusively on asset performance during the utilization phase. 

The benefits of APM

Organizations of different sizes and industries use APM as part of their overall asset strategy for various reasons, including reducing the likelihood of asset failures, decreasing unplanned downtime and minimizing their maintenance costs. Modern APM solutions also generally improve compliance capabilities, equipment diagnostics capabilities, asset connectivity and maintenance ecosystems.

Here are some of the benefits organizations deploying effective APM typically see.

1. Less unplanned maintenance

When organizations strategically monitor the health and performance of their most valuable assets, they reduce their operational costs and decrease the likelihood of breakdowns that might result in unplanned maintenance. By deploying preventive and predictive maintenance tactics, they can improve their forecasting capabilities and schedule repairs when it suits them—not after an unexpected failure.

2. Reduced maintenance costs

Maintenance tasks are essential to preserving the health and productivity of an organization’s assets. However, their cost can vary greatly and can impact the organization’s profitability. Improvements in decision-making capabilities generated by a strong APM approach help organizations avoid performing excessive and unnecessary maintenance.

3. Improvements in asset uptime

Using AI and machine learning (ML) capabilities to deploy predictive and preventive maintenance, modern APM solutions deliver improvements in asset availability and asset condition. Operators assisted by these new technologies are better able to recommend repair strategies that help reduce costly downtimes for assets the company relies on.

4. Greater operational efficiency

Many asset-rich organizations today use Internet of Things (IoT) capabilities and artificial intelligence (AI) as part of an overall APM strategy to help them spot opportunities for greater efficiency. In the past, business leaders had to wait until the end of the month or quarter to review performance numbers, but today they can get the same data in real time. In a 2022 case study, 51% of organizations said they would prioritize increasing operational efficiency over their other initiatives.¹ 

How to build an effective APM program

Today’s top performing APM solutions use software, tools and a data-driven approach to help organizations achieve their digital transformation initiatives. APM software solutions help business leaders construct a unified strategy, increase their risk management capabilities and deliver operational excellence. Here are three steps to building an effective APM program inside your organization.

1. Identify your most critical assets

Effective APM begins in the first stage of the asset lifecycle: planning. Before an asset is even acquired, decision-makers need to think about how operating and maintaining it fits into their broader operations. To do this, they need to assess the asset’s value.

Asset valuation varies greatly between organizations and industries. For example, in a food delivery business, the health and performance of vehicles used to transport goods is going to be critical. However, for a software company , while it might own a fleet of vehicles it uses from time to time, the health and performance of the vehicles is not critical to its everyday business operations. Therefore, these two organizations would value the same asset differently. When you’re starting to form your APM, choose assets that are critical to business operations first. You can address the condition of your lower priority assets later.

One technique that has become increasingly valuable in APM is the 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 plan to subject it to. Digital twins help operators and maintenance leaders spot performance issues and gain insights into possible improvements to maintenance plans. 

2. Deploy asset performance management software with condition monitoring capabilities

When monitoring asset performance as well as the automation of critical asset workflows, APM software, such as an enterprise asset management (EAM) system, is crucial to executing an effective strategy. EAM combines software and services to help organizations maintain, control and optimize their operational assets.

With the amount of data being generated these days via IoT, maintenance managers are relying more and more on management software like EAM equipped with AI-enhanced data analysis to help them make smarter decisions.

In addition to EAM, many APM initiatives deploy a computerized maintenance management system (CMMS) to help maintenance departments centralize vital asset information. A CMMS tells maintenance managers where an asset is, what kind of services or repairs it requires and who should perform them. A strong CMMS can make critical information about an asset immediately accessible and auditable to its operators.

3. Use preventive and predictive maintenance tactics 

Today’s most effective APM approaches rely on the ability to schedule maintenance regularly to prevent equipment breakdown and to continuously assess performance in real time. These two strategies, preventive and predictive maintenance are key to the success of many APM initiatives. 

Preventive maintenance uses regularly scheduled maintenance activities to reduce the chances of assets breaking down. Downtime is planned by using best practices and historical averages, such as mean time between failure (MTBF).

Predictive maintenance continuously assesses and reassesses an asset’s condition by using sensors that collect data about the asset in real-time. This data is then ingested by an AI-enabled EAM or CMMS where advanced data analysis tools and processes like ML identify, detect and address issues in real time.

Based on this data and the subsequent analysis, algorithms are used to build models that predict when future potential problems with a piece of equipment might arise. Predictive maintenance has been proven to lower maintenance costs, decrease asset downtime by 35-50% and increase asset lifespan by 20-40%.²

Measuring the success of your APM program

When it comes to knowing whether your APM strategy is working or not, selecting the right success metrics is critical. KPIs let you know whether a strategic approach has been successful and help business leaders understand the impact of their decisions. Choosing the wrong metric can give an inaccurate picture about an asset’s performance and cause companies to take strategic decisions that might be harmful in the long run.

Many factors influence how performance metrics are identified, including the industry your organization operates in, its size, the kinds of assets it owns and its overall business priorities. Here are a few proven methods companies use to measure the success of their APM initiatives.

Mean time between failure (MTBF)

Perhaps the most widely used metric for evaluating the success of any maintenance program is the MTBF of the assets it has been tasked with repairing. MTBF is a simple formula that calculates the average amount of time between needed repairs on a piece of equipment by dividing the total time of operation by the number of failures during that time. A maintenance department whose assets have a high MTBF is usually assessed as “strong.”  

Overall equipment effectiveness (OEE)

As well-known and widely used as MTBF, overall equipment effectiveness (OEE) (link resides outside of ibm.com) is another popular metric for measuring asset performance. It focuses on three metrics: Availability, performance and quality of equipment.

“Availability” is determined by using the actual asset production time compared to its planned production time. “Performance” measures how well the equipment performs compared to its maximum potential, and “quality” evaluates the rate of production of products deemed “good count” compared to ones it produces that have defects or require reworking. To determine the asset’s OEE score, these three factors are multiplied together.

Work-order efficiency / percentage of work completed

Two more metrics for measuring the success of an APM program are how quickly and effectively maintenance technicians close the work order tickets they’re assigned and the overall percentage of completed versus un-completed work. 

Frequency of “emergency” maintenance activities

Typically associated with long-term maintenance strategies, the frequency of emergency maintenance tasks metric provides insights into the effectiveness of a preventive maintenance program. Put simply, the better a maintenance department is at performing preventive maintenance, the rarer breakdowns requiring emergency intervention should be. 

APM solutions
Asset management IBM Maximo® Application Suite

Today’s most comprehensive asset performance management solutions are equipped with advanced technological features like IoT, AI-enhanced analytics and monitoring and cloud-based capabilities.

The IBM Maximo® Application Suite is a fully integrated platform that helps companies evolve their maintenance operations from timed scheduling to condition-based, predictive maintenance informed by real-time insights. IBM Maximo has a proven track record of helping enterprises boost asset performance, extend asset lifespan and reduce cost and downtime.

Learn more about IBM Maximo Application Suite Take a tour of IBM Maximo
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Take the next step

Unlock the full potential of your enterprise assets with IBM Maximo Application Suite by unifying 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.

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Footnotes

1 “Enterprise asset management 1.0” (link resides outside ibm.com) IDC MaturityScape, 30 March 2022.

2 “Quantifying the value of predictive maintenance” (link resides outside ibm.com)  Nucleus Research, 8 May 2023.