Whether you are a small or a large business, your operations will always hinge upon reliable and well-functioning assets. But how do you, as an operations manager, ensure your assets run smoothly? Do you often find yourself in a situation where you need help to assess the current state of your assets?
That’s a difficult spot to be in! Regularly assessing your assets’ performance keeps you informed of their condition and helps organize resources optimally. Let’s learn how you can do that!
What is Asset Performance Management (APM)?
Every asset is procured considering the overarching organizational goals. As a strategy, APM aims to ensure that the assets are used to their maximum potential, considering their intended use.
APM involves periodically tracking an asset’s health to avoid unexpected breakdowns. Tracking the health also includes managing an asset’s lifecycle to maintain its efficiency for long-term use. This is particularly important for fixed assets as they require huge investments and might be used for daily operations.
APM is an essential step toward prioritizing assets’ health and utilizing them in the best possible manner. It shapes an organization’s financial and operational health by enabling data-driven decision-making.
Industries requiring APM
Some industries that can rigorously leverage APM include:
1. Construction
Trackable assets: Heavy-duty machinery, such as forklifts, tractors, excavators, trucks, and bulldozers.
Need for APM: Heavy machinery is used extensively on multiple construction sites, which can lead to potential wear and tear – hampering its long-term efficiency. APM helps maintain machinery and equipment in a way that enhances their everyday use and minimizes physical damage to the assets.
2. Healthcare
Trackable assets: MRI machines, X-ray machines, ventilators, and hospital beds.
Need for APM: Healthcare deals with critical machinery that is actively tracked to ensure quality patient care. Regular APM enables clinical staff to maintain quality standards by conducting frequent checks and inspections.
3. Education
Trackable assets: Monitors, screens, Chromebooks, printers, and projectors.
Need for APM: Educational assets are used by staff and students and a halt in lectures delays the learning process. These assets need to be audited every now and then and repair requests must be processed in a timely manner to avoid equipment malfunction.
4. Manufacturing
Trackable assets: Pumps, hydraulic and mechanical equipment, and compressors.
Need for APM: Downtime in manufacturing can become a major reason for reduced profitability and ROI. Real time monitoring and predictive maintenance help prevent unexpected failures and optimize efficiency.Â
5. AV and media
Trackable assets: Monitors, lights, microphones, studio cameras, and stabilization equipment
Need for APM: AV and media use sensitive and costly equipment that needs to be properly maintained for quality results. This includes checking the lenses and batteries of the equipment on a regular basis to ensure that they are working properly. Predictive insights help increase equipment reliability which is necessary for uninterrupted broadcasting, filming, and live events.
Difference between Asset Lifecycle Management(ALM) and Asset Performance Management(APM)
ALM and APM are both two sides of the same coin. They are complementary approaches that lie under the broader category of asset management. However, they serve different purposes.
The focus of ALM is to manage the overall life of assets, from procurement to disposal. This includes ensuring an asset is used, maintained, and disposed of to maximize value.
APM is focused on keeping an asset in an optimal condition at every stage of its life to increase its life. The main aim is to reduce downtime for smooth operations and optimize the use of assets. Using APM, you can analyze how an asset has performed over time to fix errors that might be disrupting the flow of work.
The following table highlights the differences between the two:
| ALM | APM | |
| Purpose | Manage an asset’s lifecycle for optimal performance | Monitor the performance of an asset to extend its life |
| Goal | Maximize the ROI on an asset | Improve an asset’s life and reduce downtime |
| Ways to operationalize | Smartly procure, deploy, maintain, and dispose of an asset | Conduct inspections and checks |
| Example | A clinic can use the ALM approach while procuring a ventilator by assessing the need for one, then deploying it following the industrial protocol and maintaining it throughout its life. | Assessing the performance of the same ventilator overtime to meet the set performance benchmarks will count as APM |
Steps to performing quality APM
APM goes beyond monitoring equipment performance. It includes maintaining that performance to increase equipment lifespan. To implement asset performance management, it is critical to follow a series of structured steps to develop a healthy asset ecosystem.
Here’s how to improve physical asset management by assessing your assets’ performance.
1. Define key performance indicators (KPIs)
KPIs are the foundation of any strategic activity, including APM. They provide a quantitative direction to conducting asset performance management, making it easier to evaluate, in terms of numbers, whether an asset fulfilled its intended purpose. Some major KPIs include average uptime, asset utilization, and asset availability.
Set clear and concise KPIs, so you know exactly what each asset is supposed to achieve over time. Establish KPIs as the benchmark for asset performance so you can identify areas for improvement when you conduct regular inspections.Â
2. Assess current asset usage
Using data analysis tools like asset reports, you can analyze how your assets are being used. Asset usage includes identifying if the asset is being overutilized or underutilized so it can be reallocated.
Using an asset management solution, you can generate detailed reports that highlight your asset’s usage over time. This way, you know what assets require maintenance to implement timely predictive and preventive measures. Identifying the usage patterns helps make critical decisions to reduce equipment idle time.
For instance, you might have six forklifts on your construction site – four are being used extensively and the others not so much. By creating an asset utilization report, you can identify which ones are more frequently checked out so you can send them for maintenance and use the others to perform the same task.
3. Conduct audits
Schedule regular audits to facilitate an objective evaluation of assets’ condition. Thorough asset auditing increases transparency in records by enabling organizations to flag underperforming assets. Audits also help distribute funds better, as you can quickly evaluate which assets require more attention than others.
Plan and schedule detailed audits to verify the physical assets with their digital records so you can record accurate performance levels.
4. Adjust maintenance schedules
Schedule regular asset maintenance sessions for each asset to prevent them from breaking down. Devise a plan and adjust maintenance schedules to your employees’ work schedules so there is no halt in the ongoing tasks. You can reserve the assets in advance to inform the employees of an asset’s unavailability. Early reservation helps optimize the use of assets and ensures timely maintenance without interruptions.
You can also schedule maintenance based on an asset’s condition. For instance, your facility’s air purification system might require a filter change after every 6-12 months. So, you can reserve the system beforehand and arrange for alternatives to ensure a healthy workspace. Doing so is possible using a cloud-based tracking system that can pinpoint its existing condition based on how long it has been used.
5. Implement plans for ALM
It is advisable to devise a plan for efficient ALM. The condition of your asset is dependent on the stage at which your asset is. The following table explains when your asset the condition of an asset based on its lifecycle stage:
| Stage | Condition | Performance |
| Procurement | New to excellent | No wear and tear |
| Monitoring | Medium to fair | Asset use leading to slight wear and tear |
| Maintenance | Fair to poor | Asset performance declines over time |
| Disposal | Obsolete | Asset is of no use any longer due to malfunction |
Implementing asset lifecycle management strategies supports APM as an asset’s condition determines its performance and whether it requires maintenance. Tracking asset health helps address potential performance issues faster and better.
APM’s role in transforming asset management landscape
Asset performance management has reshaped organizations’ approach to maximizing the use of their assets. According to an analysis, the global market for APM is expected to grow to $4.7 billion in 2028 from $2.9 billion in 2023, recording a whopping CAGR of 9.9%.
Cloud-based systems have a significant role in the expanding share of APM globally. Here’s how you can benefit from efficient APM using an asset performance management system.
1. Faster tracking of APM metrics
APM metrics are the foundational stones supporting asset performance tracking. The APM system you use updates these metrics in real-time, making it easier to track an asset’s functionality over time. Additionally, they provide opportunities for quantitative analysis that can be vital in making critical decisions.
Without APM as a set strategy, you might not be able to set appropriate metrics as achievable goals that can hamper your long-term operations. Imagine looking to reach a destination without directions! Setting asset management goals without asset management performance is like undertaking a directionless journey.
2. Increased risk management
With regular APM, you can quickly minimize the risks associated with unexpected equipment failures. Regular inspections and maintenance are a part of the APM strategy; implementing regular maintenance means your equipment is always up-to-date and functioning correctly.
Also, improved maintenance minimizes the risk of operational shutdowns arising due to the use of unsafe equipment. Increased equipment safety means better operational efficiency and a healthier environment for the workforce.
3. Chances of scalability
Scalability is dependent not only on increased profits but also on planned asset management. If your assets are performing well, they will enable you to generate more revenue. Well-managed assets are less likely to incur errors, minimizing the operational costs associated with emergency repair.
This frees up a considerable portion of your budget that can be utilized for other activities requiring more revenue.
4. Better asset utilization
By employing APM tactfully, you can extract data on an asset’s usage over time to make informed decisions. Based on how frequently an asset is being used, it can be reallocated to other uses.
For instance, using an asset management system, you can extract location-wise data so the operational efficiency of each location can be gauged properly. You can then decide which of your assets contribute more to meeting the location needs and which are not so that they can be assessed further. You can cut procurement costs by better utilizing the existing resources.
Proactive asset performance management for increased ROI
Asset performance management is not merely a strategic tool. It is the way forward to instill confidence in employees and give them the support they need to do their tasks hassle-free. Well-functioning assets mean more productive employees who can yield better results by focusing on meaningful tasks.
APM gears assets towards meeting not only employee needs but overall organizational needs. Timely asset monitoring is one of the several ways to conduct performance management in a structured manner. A performance asset management system – SaaS-based – is likely to be a suitable tool for this. So, what are you waiting for? Use such a system today to improve the efficiency of your assets!
