Asset lifecycle management is essential for businesses that require reliability and cost efficiency. Data-driven practices and proactive maintenance help maximize the longevity and usefulness of assets while optimizing performance and reducing the need for repairs.
What is Asset Lifecycle Management (ALM)?
Asset lifecycle management (ALM) is a term used to describe an organization’s process for ensuring that its assets are managed and run smoothly for as long as they are viable. Part of this management process is a variety of strategies that help improve the lifespan of assets and increase their efficiency.
Assets are useful things that an individual, business, or organization has. Some physical assets that you may have include infrastructure, facilities, equipment, capital, and people.
Meanwhile, the asset lifecycle describes the process from planning to disposal of an asset throughout its lifespan or usefulness to its owner.
There are many ways for a business to track the health of its assets. Some base their monitoring on data provided by sensors, monitoring their assets’ health and real-time performance. Monitoring also helps pinpoint when preventive maintenance or repairs are needed.
Phases of the Asset Lifecycle
An asset’s lifecycle has four main phases: planning, acquisition, operations, maintenance, and renewal or disposal.
Planning
The first stage of an asset’s lifecycle is planning. At this stage, the equipment’s current condition is assessed, and based on that information, strategies and systems are created for the future.
In planning, business owners or asset managers may determine whether their current facilities and infrastructure meet production needs or receive ample maintenance care. They also need to assess whether their assets are underperforming or obsolete in their operations.
When portions of your building, facilities, and equipment are underperforming, they must investigate or research further to determine if they need replacement or if operations can go without them.
Also, part of the planning process is ensuring that resources for your assets are available for use. This includes estimating the funding needed for replacement resources or assets.
Acquisition
After determining the new assets needed for your facility operations, the next step is acquiring them. This stage involves purchasing the assets and deciding how to transport them to your facility.
Part of this stage is managing how to procure the assets, which also involves managing the funds and setting the budget to purchase said items. Business owners and asset managers should identify the assets needed and find potential suppliers. The process also involves managing and negotiating costs and monitoring delivery times before closing the acquisition.
A correctly done asset acquisition can enhance your operation’s efficiency by streamlining the process and lowering logistics costs.
Operations
After acquiring assets, the next stage is operation and maintenance. This is the longest stage in a fixed asset’s lifecycle, as it is where it is put to use. It improves operation performance and efficiency while helping your business generate profit.
The operations stage involves using your facilities and equipment, upgrading assets, applying patch fixes, acquiring or renewing licenses, and performing audits.
In this stage, businesses and managers need to monitor the assets regularly. Through time, assets experience wear and tear, and they need to be checked for performance issues where repairs and preventive maintenance may be required.
Maintenance is vital to all operations, as it prolongs the life of your assets while keeping them dependable and efficient. Therefore, any proper asset management system should include a maintenance plan. Without it, businesses may experience unplanned equipment downtime more often than the standard. Regular maintenance also lowers your repair costs in the long run.
Disposal
Proper maintenance can extend the lifespan of assets. However, all infrastructure, facilities, and equipment have limitations as they deteriorate over time. Your assets that have reached the end of their lifespan will have observable wear and tear or stop working at some point.
When this happens, the assets can no longer meet production demands and efficiency standards. In many cases, they block operations, impeding the business’ performance. When that time comes, and the asset can’t be repaired, it may be time to dispose of it and look into buying a replacement.
Benefits of Effective Asset Lifecycle Management
ALM offers a system or structured approach to managing the lifespan of your building’s or facility’s assets. Here are some benefits of using this approach for commercial businesses:
Cost Efficiency and Budget Control
Properly managed assets are more cost-effective in the long run. Through ALM, asset managers can help business owners save money by enhancing cost efficiency through predictive and preventive maintenance. This helps minimize unexpected repair costs. Additionally, maintenance prolongs the life of assets, reducing the financial impact of frequently replacing equipment for the facility.
Better Operational Efficiency
Properly maintained building assets usually have less downtime. This is crucial for commercial facilities, which rely on continuous operations for business activities. A dependable ALM system allows facilities to run smoothly without frequent, unexpected interruptions.
Better Planning and Decision Making
Many ALM systems use digital tools and analytics to provide real-time information and insights about an asset’s condition or performance. The data in these systems lets managers and business owners make informed decisions about maintenance, repairs, upgrades, or replacements, helping optimize costs.
Helps Improve Tenant Satisfaction and Property Value
Having well-managed facilities in commercial buildings can increase tenant satisfaction since dependable systems create a comfortable and productive environment. Through ALM, building reputations may also be improved, which results in better occupancy rates and property value, thanks to having well-maintained assets.
Frequently Asked Questions:
What is the Difference Between Predictive and Preventive Maintenance?
Predictive maintenance uses data to pinpoint when to expect asset failure, while preventive maintenance is scheduled regularly to prevent failures.
How Can Asset Lifecycle Management Contribute to Sustainability in Commercial Buildings?
ALM systems help promote sustainable practices by reducing operational waste, enabling responsible asset disposal, and using energy-efficient choices.
Is Asset Lifecycle Management Only Applicable to Large Commercial Buildings?
Any facility or building, no matter what size, can benefit from ALM since it helps save operational costs while improving efficiency, regardless of the scale of your operations.
A Proactive Approach
An asset lifecycle management system can benefit large and small businesses. Implementing ALM for commercial buildings is a worthy strategic investment that improves your assets’ dependability and enhances overall operational improvement.
If you need help implementing different aspects of your asset lifecycle management system, we can help. Call 704.405.6000 or contact us online to know how we can be of service.
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