Every organization with tangible assets must contend with the physical effects of daily operations. Asset maintenance allows a company to continue production as equipment and machinery wear and fail. Without asset maintenance, an asset’s lifespan is considerably shorter and the operational limitations of equipment and machinery are greater.
The goals of asset maintenance should align with the goals of an enterprise. Short-term profitability may be at odds with long-term reliability; shutting down production in order to maintain assets is expensive and disruptive. Corrective maintenance from run-to-failure practices often costs many times more than scheduled maintenance due to the amount of unplanned downtime involved, but in business environments that measure success — and profits — quarterly, this may be the strategy pursued.
Balancing needs against cost
All physical assets degrade or become depleted over time and with use. Maintaining assets or returning them to a desired state of functionality should be the immediate goal of asset maintenance. This motivation must be weighed against the needs of the organization or enterprise which controls the asset. For example, plant maintenance that causes too much manufacturing downtime could make a facility or asset run at a net operating loss.
An asset maintenance strategy that prioritizes short-term profitability by deferring asset maintenance until the point of equipment failure can prove more costly than a more proactive approach. In fact, the cost of unplanned downtime due to equipment failure is higher than an equal period of planned downtime; emergency stops in production lead to wasted product and unpredictable delivery schedules.
Creating and implementing asset maintenance strategies in order to fit a company’s risk profile is known as asset maintenance engineering.
Time, money, and people
The most efficient asset maintenance strategies cost around 3% of the total cost of rebuilding the plant, per year. That is, the financial cost of servicing and plant maintenance is the equivalent of buying an entirely new plant every 33 years. In addition, asset maintenance necessitates a loss of productivity as the asset is taken offline. Manufacturing downtime from planned or unplanned maintenance can cost upwards of $50,000 a minute.
The cost to the reputation of the enterprise or organization due to missed deliveries or being unable to accept orders is harder to quantify, but very real. In order to remain in business, an unreliable enterprise may be forced to compensate clients for missed contracts.
Asset maintenance also carries a high human cost to an organization, both in wages paid and safety incidents. Operating and maintaining an asset are different skill sets, and a service technician may demand a higher salary or wage for asset maintenance performed. Also, 40% of workplace accidents at facilities occur during asset maintenance, a 12x higher rate than during normal operations.
Profits and efficiency
A properly maintained asset will function for a longer period of time than one allowed to degrade. This can help defer the high replacement cost of equipment.
Fouling and wear can greatly reduce the efficiency of equipment and machinery. Asset maintenance keeps equipment functioning within the optimal design window for longer, reducing input costs.
Types of maintenance strategies
The most basic asset maintenance, corrective maintenance, simply seeks to restore functionality after a fault in operation is detected. Also known as “run-to-failure,” corrective maintenance may lead to expensive unplanned downtime as assets are serviced, repaired, or replaced following equipment failure. The safety risks to personnel from malfunctioning equipment increase the human costs as well as company liability.
For decades, the gold standard in reliability management was preventive maintenance: performing asset maintenance and servicing on a routine basis. Asset maintenance scheduled according to elapsed time or measured usage has the advantage of allowing organizations to plan for some manufacturing downtime, but the practice has many limitations. For example, approximately 80% of equipment failures occur not because of lack of preventive maintenance, but because of operation excursions that push equipment outside of acceptable operating windows. Preventive maintenance is also costly; taking assets offline according to a set schedule rather than according to need can cause unnecessary manufacturing downtime.
An asset maintenance strategy that is based on artificial intelligence recommendations is known as prescriptive maintenance or predictive maintenance. With the rapid expansion in the tools and capabilities of machine learning and artificial intelligence, the guesswork can be taken out of asset maintenance scheduling. Machine learning algorithms can be trained to recognize failure patterns by comparing historical sensor and failure data with real-time information.
What is the difference between asset maintenance and asset management?
Asset management includes the management of intangibles, such as human capital and intellectual property as well as a company’s physical assets. Asset maintenance only pertains to servicing, repairing, and replacing equipment belonging to an organization or enterprise.
What is risk-based maintenance?
Risk-based maintenance allocates asset maintenance resources according to the cost of failure of the asset. Risk-based maintenance weighs the costs of manufacturing downtime against the cost of maintaining and servicing equipment to provide a more intelligent division of attention and effort.
What is asset maintenance engineering?
Asset maintenance engineering incorporates long-term financial considerations into the entire lifecycle of an asset. Asset maintenance engineering crosses disciplines within an organization and seeks to provide more intelligently planned asset optimization.