Why Utilize an Asset Life Cycle Management System?
Your business's ability to deliver on its value proposition and make a profit relies on its assets. Those assets could be machines, equipment or structures. You probably also use non-physical assets like software and intellectual property. Whichever assets your business works with, understanding their condition and performance at all times is pivotal to your success.
Asset life cycle management (ALM) is the process of monitoring your assets from the moment you plan to acquire them to the day you dispose of them. This article will explain asset life cycle management systems and how implementing one can make your business more efficient, competitive and profitable.
What Is an Asset Life Cycle Management System?
An asset life cycle management system is a solution for monitoring and managing your company's assets throughout their life cycles. For ALM purposes, an asset's life cycle begins when you identify a need for it and lasts until you renew or dispose of it.
Understanding an asset's life cycle can help you keep it performing better for longer. You will also be better positioned to plan maintenance and new asset acquisitions to minimize downtime.
For example, monitoring the life cycle of a piece of equipment like a theodolite for a surveying firm helps you schedule maintenance to extend its useful life and reduce the risk of it malfunctioning or prematurely wearing out. If you have more than one unit of a certain piece of equipment, you can plan how you utilize and maintain them to reduce the risk of several becoming unusable at once. For expensive assets, predicting when their useful life will end and planning to acquire replacements before that happens is crucial for maintaining productivity.
An ALM system has four key functions:
- Assessment: Learn as much as possible about the asset and its life cycle. Consider records of this asset and others of its kind, how it performs now, worker insights about it, its current and projected market value and other relevant metrics.
- Data management: Collect, store, sort and analyze quantitative data related to an asset's life cycle and performance.
- Planning: Create, test and refine plans for asset acquisition, maintenance, disposal and replacement.
- Integration: Integrate assessment, data management and planning across all your company's assets. Ensure plans for different assets are compatible with each other, your budget and your productivity needs.
The more assets you have, the more important ALM software becomes for executing all these functions.
Asset Life Cycle Stages
Diverse types of assets have very different life cycle durations. But almost all assets your business relies on have life cycles that go through the same four stages:
- Planning
- Acquisition
- Operation and maintenance
- Disposal and replacement
1. Planning
Your business's relationship with an asset begins in the planning stage before you procure it. This is the beginning of the asset life cycle.
Planning in the asset life cycle means identifying a need for an asset and deciding when and how to acquire it. Your existing asset life cycle data and assessments will help you project when you need to replace an asset in advance. Planning involves researching, budgeting for and scheduling procurement.
If you're expanding your asset base rather than replacing an existing asset, planning will involve projecting the value this asset will add to your business over its life span. This, balanced against the projected acquisition and maintenance costs for an asset of its kind, will inform how much you should spend on this asset.
2. Acquisition
The acquisition stage is when you procure the asset to use in your business. This will involve identifying products, shortlisting potential suppliers, negotiating price and logistics and purchasing the asset.
As soon as you have the asset, it should be recorded in a digital asset register. This could be a basic spreadsheet or a more comprehensive register in your ALM software for easy integration and analysis.
Capture as much data as possible in the asset register at acquisition for more effective management in the following stages of its life cycle. Depending on the asset, useful details include:
- Basic description
- Serial number
- Storage or operating location
- Condition
- Date of purchase
- Purchase price
- Warranty information
- Expected life span
- Current market value
- Depreciation calculation formula
Using this data, your management software can help you:
- Schedule maintenance.
- Inform maintenance workers or engineers.
- Calculate ROI over time.
- Prepare budgets for maintenance and replacement.
3. Operation and Maintenance
The operation and maintenance stage is when an asset works for you, and you keep it working. Your information about the asset will guide you in running a planned and preventive maintenance schedule. You can also create backup plans and budget for occasional reactive maintenance if the asset breaks down.- During this phase, your ALM solution helps you:
- Organize maintenance schedules.
- Triage and process maintenance requests.
- Arrange services, inspections and improvements.
- Take advantage of warranties.
- Update condition notes and service logs.
- Identify patterns in performance data.
- Calculate when to replace rather than maintain.
4. Disposal and Replacement
One of ALM's most important contributions is enabling businesses to prepare for the end of an asset's life span. At this point, depending on the asset, it is disposed of, repurposed, recycled or sold.
ALM and asset tracking solutions aid in monitoring and controlling an asset's end of life. This helps businesses become more efficient and sustainable. As environmental, social and governance (ESG) initiatives promote circular economies, the end of the asset life cycle is gaining attention in many industries.
ALM informs how you prepare for this stage. An accurate understanding of an asset's life cycle improves your ability to replace it before complete failure without wasting funds by replacing it sooner than necessary. Timing replacements correctly maximizes productivity, ROI and sustainability.
Managing Specialized Asset Life Cycles
Conventional asset life cycle management is most applicable to physical assets like equipment and machinery. There are also specialized approaches for other types of assets, including:
- IT asset life cycle management: IT ALM integrates both software and hardware IT assets. IT assets include computers, software and connected technologies. It tracks these assets through procurement, licensing, maintenance and upgrades. In its final stage, IT ALM aims to optimize upgrades to new devices and software.
- Software asset life cycle management: Software ALM has a narrower focus than IT ALM, dealing specifically with software applications. It tracks software procurement, licensing, implementation and retirement. Understanding software life cycles ensures a business uses up to date software that is aligned to its goals. This is crucial for efficiency, compliance and cybersecurity.
- Digital asset life cycle management: Digital ALM provides insights into the life cycle of digital assets, including media, documents and creative content. It involves managing the procurement, storage and distribution of these assets. Many digital assets also need retirement, updating or replacement over time.
- Fleet asset life cycle management: A fleet is a complex, moving asset base that requires specialized management. Fleet ALM prioritizes coordinating vehicle maintenance schedules and tracking depreciation. Its full scope includes vehicle acquisition, maintenance, fuel management, route optimization and replacing old vehicles.
If your business operates using any of these asset types, choose an ALM solution that meets your distinctive needs.
Asset Life Cycle Management Benefits
Every business depends on assets for its success. Whatever industry your business operates in, ALM offers a range of rewards.
Improving Performance
Through effective ALM, you can identify, anticipate and address areas for improvement in your assets' performance. ALM systems coordinate maintenance to minimize downtime, enhancing productivity and revenue-generating capacity.Enhancing Safety
Managing an asset's life cycle is essential for safety and compliance. ALM enables you to prevent or address any lapses in compliance with safety regulations. Proper asset monitoring and maintenance can reduce the risk of workplace accidents and injuries.Optimizing Cost-Efficiency
ALM data supports budgeting, ROI calculations and financial projections to make your spending as efficient as possible. For example, in the planning and procurement stages, ALM identifies assets to add the most value to your business and informs your price negotiations.During the operation phase, ALM schedules routine asset maintenance to prevent breakdowns that lead to costly repairs and productivity losses. This extends your assets' life spans to reduce spending over time. Finally, it gives you the data you need to replace your assets at the optimal time for total cost savings.
Facilitating Compliance
ALM gives your company the up-to-date data you need to ensure your assets remain compliant with regulatory standards. Your ALM system can help you predict compliance issues before they arise or recognize them as soon as they do.Proper maintenance minimizes the risks of compliance issues while planning and procurement support upgrading to any new assets needed to achieve compliance.
Informing Decisions
Your business decisions are as sound as the information you base them on. Implementing an ALM system will help you collect, organize and analyze the data you need for strategic decisions.ALM gives you access to real-time data updates for agile decision-making instead of waiting for monthly or quarterly reports. The more competitive your industry, the more you need this steady stream of asset performance data for efficiency gains to grow your market share and profits.
How to Implement Asset Life Cycle Management
If you're ready to implement ALM or want to get more results than your current procedures can deliver, optimizing your hardware, software and protocols for ALM is a priority. Use the following ALM best practices to enhance your business through data-driven asset life cycle insights.Use a Comprehensive Software System
Cutting-edge ALM software is essential for integrating and analyzing large asset data sets. Even if your business relies on fewer assets, a good all-in-one asset management system has many advantages over manual spreadsheets. These advantages include:
- Minimal potential for human error.
- Direct communication with internet-connected devices.
- Enhanced functions like automated data population and modeling.
- Automated maintenance scheduling and reminders.
- Speed and ease of use, even as your asset base expands.
- Compatibility with AI analysis for data-driven insights.
GIS stands out as an optimal solution for utility businesses, but GIS software is versatile and useful for many other industries, including:
- Surveying
- Mapping
- Engineering
- Transportation
- Logistics
- Telecommunications infrastructure
- Centralize Asset Information
Use a comprehensive ALM software system like a GIS solution to store all your asset information from all your sites in a single digital location. Ensure that everyone who needs this information can access it to inform their work.
Centralizing your asset data will streamline maintenance, operations, finance and purchasing for greater efficiency. It also gives you the data integration you need for optimal accuracy and productivity at every level. For example, you can coordinate equipment and building maintenance across multiple sites to keep budgets and lead times consistent.
Practice Preventive and Predictive Maintenance
ALM aims to do more than enable smart decisions based on where an asset is in its life cycle. It's also about extending asset life cycles to save costs and improve productivity. The way ALM converts insights into longer asset life cycles is through preventive and predictive maintenance:
- Preventive maintenance: This is the practice of scheduling maintenance and minor repairs to keep assets performing better for longer. Using metrics like mean time between failure (MTBF) and other insights about a particular asset, your ALM system can determine the optimal time for maintenance. Regular preventive maintenance reduces the risk of costly, unexpected failures and minimizes the impact of asset downtime.
- Predictive maintenance: This practice enhances the benefits of preventive maintenance through added real-time insights. Asset-monitoring technologies like sensors and drones feed up-to-date information about the asset into your ALM system for performance modeling through integrated AI. These predicted performance models equip you to anticipate issues with the asset before they occur. You can then schedule preventive maintenance with even more accuracy.
Experience the Rewards of Asset Life Cycle Management
If you want to implement asset life cycle management in your business, you need the right software, hardware, methods and expertise for your application. Duncan-Parnell is your partner in bringing all these elements together to create your company's ideal comprehensive ALM system.
We custom-configure GIS for Asset Management Solutions for your operation. This system is low-maintenance, affordable and allows for streamlined field-to-finish workflows. The result is a seamless ALM experience.
Duncan-Parnell will also provide all the hardware you need to integrate with your GIS software and monitor your assets, including GNSS receivers and handheld data collectors. In every state we serve, we are the exclusive dealer for Trimble, the world's leading manufacturer of the longest-lasting geospatial mapping and monitoring technologies. If you need help leveraging these ALM solutions for optimal results, our dedicated GIS Service Team is here to help you.
Contact us to learn more about our asset management solutions to enhance our operation's performance.