Asset Management Plan (Part 3 of 4): 5 Ways to Unlock Value for Your Assets from an AMP

Diagram – Unlock Value from Your Asset Management Plan

1. Objective Management

As we mentioned above, many private and public asset owners increasingly move to contractual models of asset management. Contractual asset management organisations, though they may be ‘contractually compliant’, may not be able to maximise the asset value for the asset owners(s) they are supporting. The differences in the asset management capability and expectations can limit the value the contractual asset managers unlock for the asset owners.

If the asset owner seeks a potential contractual asset manager purely for the lowest cost year on year for Reactive and Corrective Work, they will lose opportunities to realise full value from their assets in terms of:

• Improving their asset condition
• More effective asset configurations
• Energy and maintainability efficiency
• Return of investment value to their key stakeholders/investors.

Therefore, Asset Owners need to build into their contracts objectives that drive a cost optimisation model which incentivises their contractual asset managers year on year improvements of their asset portfolio in terms of:

• Efficiency
• Condition
• Cost to maintain
• Configuration

Contractual Asset Managers, on the other side, can set themselves apart from the competition by investing into their organisational systems and people the capability that:

1. Achieves the asset objectives
2. Enables unlocking value to current client
3. Entices potential clients.

This goes beyond looking for the cheapest Work order (preventative/corrective) but enables the long-term value realisation of your client assets.

2. Leadership and Alignment

3. Concept, Design, Planning and Creation

Concept, design, planning and creation is about ensuring you have an asset management framework for successfully supporting the desired outcomes of your Asset Management Plan. Concept, design, planning and creation is an asset management planning process which starts with the objectives of your Strategic Asset Management Plan (SAMP). Your SAMP objectives (your asset management values) must be transparent in your AMP. Your SAMP should also be supported by your asset management framework with a clear focus on the concept and design activities in the asset management planning process that will unlock value of assets.  

An organisational concept, design, planning and creation process needs to be consistent with what your organisation wishes to achieve. For example, if you are wishing to reduce reactive work orders:  

1. Your SAMP should note this as an objective derived from the Asset Management Policy.
2. The Asset Management Framework notes the activities required to deliver this objective via the asset management planning process.  
3. The AMP has key KPI’s set to monitor this objective.  

In summary, to unlock value from your AMP, the organisational Concept, design, planning and creation needs to have the required activities within the Asset management framework to enable value to be realised. 

4. Operations and Maintenance

Operation and Maintenance is where 100% of the objectives set in the front end will (or won’t) be realised in terms of asset management value. To ensure value is realised from your Asset Management Plan at this stage, the objectives need to be set and championed in your operations and maintenance teams for:  

1. Quality and timeliness of any contractor you use to perform operations and maintenance  
2. Response times to reactive works  
3. Quality of data captured in preventative works (hour required, condition assessment)  
4. Clarity and usefulness of reporting of assets  
5. Clear operational level financial performance link to whether the expected outcome in the AMP is being achieved during operations and maintenance  

Having these operations and maintenance areas identified and actioned in your Asset Management Plan, it will make sure the desired value to be unlocked.

5. Renewal and Disposal

Unlocking value during the renewal stage is about ensuing the Asset Management Plan directs the relevant parties to do more than just replace assets for ‘like for like’, or to renew/extend a contract on same or similar terms.  

For asset renewal, by now the data you have gathered in operations and maintenance should enable you to identify:  

1. What assets are causing the most pain points in terms of reactive costs.  
2. What assets due to age lack spares or manufacturer support to maintain economically.  

For contract renewal consider what areas of your maintenance contracts are counterproductive to the asset owner and asset maintainer in unlocking value of the assets.  

Moreover, your Asset Management Plan needs to direct the key parties the steps to take during the asset disposal stage. Essentially a checklist will be sufficient to ensure the parties disposing of the asset have considered factors such as:  

1. Can the asset be reused in a different location/contract?  
2. Can the asset be recycled with monetary benefit?  
3. Have all the necessary HSE and quality requirements been met?  
4. Can the asset be written down financially?  

To act on renewal and disposal asset value opportunities, clear and effective management of change processes need to be in place. This enables all parties that are involved in or contributing to this stage to carry out the required activities effectively, so that the organisation will be more likely to receive the maximised value for the effort they put into the Asset Management Plan.