Common Mistakes in Asset Management and How to Avoid Them

Asset management is important for organizations to track, maintain, and optimize the use of their assets. However, there are several common mistakes made in asset management that can lead to increased costs, inefficient operations, safety issues and even regulatory non-compliance.

Being aware of these pitfalls and consciously avoiding them is key for any asset-intensive organization. Here are some of the most common asset management mistakes and tips on how to prevent them:

Not Having a Complete Asset Register

One of the most fundamental mistakes is not having a complete and accurate asset register. An asset register is a database containing details of each asset including its location, specifications, maintenance history, condition etc. Without this basic information, organizations struggle to make informed decisions regarding asset utilization, maintenance planning or capital investments.

The best practice is to start by creating a fixed asset register and progressively expanding it to cover minor assets as well. Regular audits must be conducted to verify assets on-site and update details. Asset tagging and management software can greatly simplify this process. If you need any professional assistance with creating the asset register, don’t hesitate to ask. It can deliver impressive returns to you in the long run.

Lack of Condition Monitoring

Many organizations fail to regularly assess the condition and performance of their assets. However, condition monitoring through inspections, testing and sensing allows early detection of problems before failures occur. It also provides data to plan predictive maintenance. For critical assets, continuous monitoring through sensors and automated analytics software is highly recommended. IDEAL condition monitoring balances cost vs risk reduction.

Inadequate Maintenance

Insufficient maintenance directly causes increased asset failures. Common reasons for inadequate maintenance include focusing only on emergency repairs rather than planned maintenance, overestimating asset health or extending maintenance intervals to cut costs. These short-term savings nearly always lead to greater long-term costs from unexpected downtime and major repairs. Organizations must have a maintenance strategy aligned to asset criticality, optimized to deliver asset availability and reliability targets at the lowest total expenditure.

Not Utilizing Remaining Useful Life

Optimizing asset lifespan requires estimating residual useful life (RUL) – the length of time an asset can continue functioning before requiring replacement. However, many organizations dispose of assets based on arbitrary age-based criteria rather than evaluating technical conditions and economic factors. This leads to premature replacements or unexpected failures. Estimate RUL considering wear, maintenance history and component lifecycles. Use this data to plan replacements and minimize wasted capital.

No Spare Parts Inventory

Lacking critical spare parts causes extended downtimes when assets fail and require repair. Lengthy lead times to procure parts also affect production losses. However, maintaining excess inventory ties up capital and requires stock maintenance. Strike an optimal balance using historical usage data and lead times for replenishment. Criticality analysis will also help earmark parts mandatory to have on hand for vital assets. Modern inventory software allows tracking stock levels and automating reorders.

Not Accounting for Asset Failure Risks

Asset failures, especially in critical equipment can severely impact operations. Organizations who ignore or underestimate these risks are frequently caught off guard by low probability but high consequence events. It is vital to identify assets where failures pose significant safety risks, environmental hazards or business costs. Perform comprehensive failure and risk analysis to understand vulnerabilities. Mitigate these through condition monitoring, preventive maintenance, redundancy and business continuity plans.

Lack of Documentation

Inadequate documentation around assets leads to lost tribal knowledge and inaccurate data when experienced employees leave. Essential documentation includes operating procedures, equipment drawings, process flow diagrams, warranty details, maintenance instructions, spares listings and more. Lack of documentation affects asset availability, maintenance quality, capital decisions and new employee onboarding. Develop documentation rules and systems to ensure all critical information is captured in central repositories for easy retrieval.

Information Silos

A core tenet of asset management is enabling data-driven decision making to minimize costs and risks. However, many organizations have information trapped in silos across people, paper records and multiple software tools. Integrating information into a central system is necessary to get a unified view of asset health and performance. This allows historical analysis, trending and forecasting to guide operational and capital investment strategies.

Complacency Over Emerging Practices

While traditional asset management focused heavily on maintenance, modern practices take a far more holistic approach. However, most companies demonstrate complacency when it comes to new technologies or practices. For sustained performance gains, organizations must actively track emerging trends in asset and data analytics and be willing to incorporate these through standards like ISO 55000. Change management is also key to drive digital and cultural transformations.

Lack of Skills and Leadership

Realizing the full potential of asset management rests critically on having personnel with the right skills and leadership commitment. Most improvement initiatives flounder due to lack of executive direction or middle management buy-in. Similarly, not investing in developing technical competencies related to reliability engineering, data science or specific asset domains severely limits capabilities. Adequate recruitment, training programs and strategic hiring are essential.

Final Words

There are clearly multiple pitfalls organizations that need to be vigilant about within asset management. Falling into these traps can significantly impair operational performance and cost companies millions in lost efficiency and unplanned downtime. However, being cognizant of these risks and dedicating focus towards modern asset management best practices can help unlock substantial rewards in cost savings and improved productivity.

The solutions are a mix of ensuring information fundamentals through asset registers, bridging information gaps with sensors and systems, integrating data for a single source of truth and placing higher emphasis on analytics. However, enabling people through skills development and leadership is equally vital to extract actionable intelligence. Adopting these measures can help organizations reach world-class standards in asset management.