From Wikipedia, the free encyclopedia
Enterprise asset management (EAM) means the whole life optimal management of the physical assets of an organization to maximize value. It covers such things as the design, construction, commissioning, operations, maintenance and decommissioning/replacement of plant, equipment and facilities. "Enterprise" refers to the management of the assets across departments, locations, facilities and, in some cases, business units. By managing assets across the facility, organizations can improve utilization and performance, reduce capital costs, reduce asset-related operating costs, extend asset life and subsequently improve ROA (return on assets).
The functions of asset management are taking a fundamental turn where organizations are moving from historical reactive (run-to-failure) models and beginning to embrace whole life planning, life cycle costing, planned and proactive maintenance and other industry best practices. Some companies still regard physical asset management as just a more business-focused term for maintenance management - until they begin to realize the organization-wide impact and interdependencies with operations, design, asset performance, personnel productivity and lifecycle costs. This shift in focus exemplifies the progression from maintenance management to Enterprise Asset Management and is embodied in the British Standards specification PAS 55 (Requirements specification for the optimal management of physical infrastructure assets). See Institute of Asset Management.
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What is enterprise asset management?
In capital-intensive industries such as utilities, process/discrete manufacturing, healthcare as well as real estate, physical assets (buildings, infrastructure and equipment) form a significant proportion of the total assets of the organization. These industries face the harsh realities of operating in highly competitive markets and dealing with high value assets and equipment where each failure is disruptive and costly. At the same time, they must also adhere to stringent occupational and environmental safety regulations.
It is thus important for organizations to maximize the return on investment from their asset base. Life Cycle Asset Management (LCAM) and EAM are paradigms employed to achieve that goal. Given a physical asset, the objective of LCAM is to extract maximum productivity from the asset and minimize the total costs involved in its acquisition, operations as well as maintenance. Quantitatively, the objective of asset management is to strike an optimal balance between maximizing Overall Asset Productivity (OAP) and minimizing Total Cost of Ownership (TCO). Furthermore, LCAM provides guidance on whether it is more cost-effective to continue to maintain, overhaul or replace a failing asset.
When the entire asset portfolio of the organization is considered, EAM takes over. As business and market requirements are dynamic, the output specifications for the organization’s assets change constantly (e.g., increase in output capacity due to new customers). EAM provides the framework for capital and labor allocation decision processes across the competing categories of equipment addition/ reduction, replacement, over-hauling, redundancy setup and maintenance budgets in order to meet business needs. Correspondingly, it merges the collective LCAM efforts and re-evaluates decisions based on long and short-term economic considerations at the enterprise level.
Professional bodies
Information technology enterprise asset management
ITEAM differs from EAM only in its focus on IT assets. This focus is important for a number of key reasons:
1. Organizational dependence on these assets
2. High cost, particularly of datacenter assets
3. Rapid pace of change/turn-over for assets
ITEAM focuses on both hardware and software asset management, ensuring that the organization has the ability to manage these assets throughout their life. In the case of software, there is the added component of ensuring license compliance.
Why is EAM important?
Competitive pressures force organizations to minimize asset total cost of ownership and streamline their asset management operations (these typically involve myriad activities ranging from inventory, parts and labor management to contracts and vendor management for new works). As downtimes become increasingly expensive, both in terms of lost production capacity and unfavorable publicity, organizations are compelled to maximize their asset productive life cycles via optimal maintenance programs. When EAM is used in collaboration with all other forms of service-based operations to achieve better customer retention, it is called Service Lifecycle Management (SLM).
In the event of asset failure, quick response time is critical. In recent years, stringent industry-specific environmental health and occupational safety regulations are being enforced by government oversight agencies, with industrial owners and operators responsible for compliance. Asset registers, risk registers, work planning and scheduling, life cycle costing and systematic methods for problem identification, root cause analysis and continuous improvement are increasingly seen as prerequesites for a robust asset management system.
By providing a platform for connecting people, processes, assets, industry-based knowledge and decision support capabilities based on quality information,EAM provides a holistic view of an organization's asset base, enabling managers to control and optimize their operations for quality and efficiency.
Healthcare enterprise asset management
Healthcare enterprise asset management (HEAM) presents complexities not found in most other industries. Specifically, healthcare environments have a large number of relatively small, mobile, expensive and sophisticated pieces of equipment. Further, the availability, maintenance and cleanliness of these assets directly impacts the "environment of care" and patient safety, as well as the bottom line. Finally, hospitals are highly regulated and assets must be maintained in a manner that complies with JCAHO and U.S. Food and Drug Administration(FDA) requirements. HEAM can include the following components related to assets:
1. Inventory and depreciation
2. Scheduling of repair and maintenance
3. Location and logistics (RFID or barcode powered)
4. Availability and utilization
5. Safety monitoring and incident tracking
6. Total Lifecycle Cost
7. Performance management
8. Capital planning support
HEAM provides complete visibility of the asset base across the health system, enabling active control of the planning, acquisition, tracking, maintenance and retirement of capital assets.
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