Risk-Based Asset Criticality with Suzane Greeman
Asset criticality plays a huge role in asset management. It is the ranking of assets depending upon the importance of every asset to the organization. When we talk about assessing that asset criticality, it means that we are determining that importance level of the assets within a particular organization. Once you know the criticality of each of your assets, you will be able to devise a methodology for risk based management of those assets. As it is a risk based process, everything related to that asset especially its history is very important for assessing the risk to that asset.
In this episode, we covered:
- What role does Asset Criticality play in asset management?
- What should we do once asset criticality is determined?
- What is value based asses determination?
- And much more!
When the asset criticality is determined, everyone has to be involved so that everyone can pitch in about their interaction with that asset. The current condition of the asset matters a lot and it allows you to predict future exposure and risk involved with the asset usage. It also involves inventory management and timely availability of spare parts. It’s true that asset failure is the most common form of risk in every organization but it has a much broader scope than that. Risk consideration and determination depends upon the objectives of the organization. What the organization values as an asset is under risk in case of any uncertainty.
So, value based asset determination helps you focus on the things that really matter to the organizations and can affect its reputation or performance. As the assets and their related are unique to every organization, criticality assessment is different for any individual organization. It is very important to keep business drivers of the organization in mind before assessing risks and asset criticality. That’s why it is always good to keep that information updated for asset criticality and ultimately asset management. The scale of the risk management also depends on the organizational objectives and therefore, needs extensive work before proceeding to statistical assessments.
For this to happen successfully, stakeholder involvement matters a lot. Asset criticality is always relative, so there are no solid numbers associated to the assets. Asset importance is looked at by comparing one asset to the other. Ranking the assets right at the start goes a long way because managed assets are always easier to pass through new processes on a journey towards better and improved asset management. A standard for asset determination eliminates a lot of issues down the road. It all comes down from senior leadership and then the multi-functional teams make sure that it is done right.
Asset criticality is part of a decision making process and helps you make smarted, informed decisions regarding your asset maintenance, budget planning, work prioritization, and work scheduling. If you are not using that valuable asset criticality data to make updated decision, then, asset criticality alone doesn’t hold aby value for the organization. Sometimes, a very valuable asset can have a very low risk value but there should always be contingencies in place in case of a sudden failure. In the end, all comes down to teamwork and smart decision making.
Suzane Greeman Links:
- Book: Risk Based Asset Management
- Greeman Asset Management Solutions Inc. (GAMSINC)
- Suzane Greeman LinkedIn
- Book: The Black Swan: Second Edition: The Impact of the Highly Improbable
- Maintrain 2019
- Book: Outliers: The Story of Success
- Book: Freakonomics: A Rogue Economist Explores the Hidden Side of Everything
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