Asset management for facilities and infrastructure has fallen into the leadership realm of gearheads and data managers. The result is asset management programs that are years (or decades) and hundreds of thousands (or millions) of dollars into their programs and still cannot produce realistic replacement values for their assets.
Too Much Time in the Wrong Places?
Does it matter that we have spent most of our attention on asset management systems, GIS integrations, condition assessments, and preventive maintenance programs? You bet it does. And you may have put too much time in the wrong places.
The Total Cost of Ownership
Asset management is fundamentally about the total cost of ownership. Regardless of how good your conditions are or how detailed your job plans are, there is no way to understand lifecycle costs if you do not know what your assets are worth.
Link Benchmarks to Replacement Asst Value (RAV)
The most meaningful asset management performance benchmarks are related to a percentage of replacement asset value (RAV). You are guessing at performance metrics and the total amount of resources dedicated to improving your program if you do not know your cumulative RAV. You are further lost in the wilderness if you do not know the difference between book value, insurance replacement value, and RAV as it is defined in reliability & maintenance practice.
Review Your Asset Management Program
The next time you review your asset management program, remember to spend equal time and money dedicated to establishing a consistent valuation of your assets. After all, the first three questions of asset management are related to understanding what you own, the value of what you own, and its condition. You are wasting your time if you do not understand all three equally.
Getting It Done
Getting started is often the hardest part of getting replacement asset values in your asset management database. JD Solomon Inc. provides practical solutions to get it started and inside tips to get it done efficiently. Visit our Asset Management page for more information related to asset management, reliability, risk management, and resilience.
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