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Arguably one of the most significant developments in the physical asset management world was when the ISO 55000 standard for asset management became an official ISO standard in early 2014. The relevance and international acceptance of this standard is such that it is currently being implemented by many industries as tool to ensure an efficient asset management system.

An overview of the ISO 5500x series is beyond the intent of this article, so the reader is urged to contact SAAMA for a copy of the ISO 5500x series.

As for all standards and specifications, ISO 55001 must be read and understood in its entirety. It is not a system definition, but it clearly specifies that a documented asset management system shall be developed. The ISO 55001 will help you to establish a proactive lifecycle asset management system.

The diagram below shows the salient sub-systems, presented as a stratified model to illustrate the key dimensions, as it could be applied in all asset-intensive environments:

Diagram 1: Sample asset management system as enabler of sustainable asset performance

A – Direction and guidance layer

It is recognised that the operation plays a critical role in the total business system, and must therefore be managed according to stakeholder expectations.

Keep a watchful eye on the longer-term strategic direction of the company.

A1 – General requirements and superior references: Regulatory, legal, theoretical

This sub-system essentially specifies that all superior references that are either definitive or of a guiding nature should be known, should be recorded on a central, accessible register; and that the implications of these requirements in terms of the asset management system as well as asset system should be understood and described. Items like specific statutory requirements, risk management, record-keeping, configuration management etc. come to mind.

A2 – Organisational strategic plan

The organisational strategic plan is derived from, and embodies, the company’s vision, mission, values, business policies, stakeholder requirements, objectives and the management of risk. It is sometimes called the Corporate Plan, Corporate Strategic Plan or Business Plan.

The organisational strategic plan is of particular importance to the asset management function because it provides the framework within which the asset management policy is developed. In turn, the asset management policy is the guideline approved by corporate management that describes how the asset base and its management will contribute towards reaching the organisational strategic plan.

A3 – Asset management policy, strategy, objectives and plans

The asset management policy can be described as a set of mandated requirements that are derived from, and consistent with the organisational strategic plan. It provides a framework for the development and implementation of the asset management strategy and the setting of more specific asset management objectives.

The asset management strategy translates the intent and requirements of the asset management policy into a realistic long-term action plan for both the asset system and the asset management system. This long-term plan must obviously be such that it fully supports the asset management policy in a demonstrable way. Because the asset management strategy could cover a period of many years into the future, it guides the developing of shorter-term specific objectives and plans.

Asset management objectives and plans are specific and measurable outcomes are to be achieved by specific dates. It could therefore be a mixture of specific tasks and specific performance levels at asset or asset system level. It specifies the effort required in an executable manner, and clearly shows resource and cost implications.

B – Organisation structure layer

We often accept existing, long-established organisation structures as “the way things are done around here”. But the fact of the matter is that organisational arrangements must be done single-mindedly for one and only one reason – to execute each and every business function correctly and to the required standards. This can only be achieved if the natural, logical working and inter-action of the business functions are understood and documented.

Because of the importance of this area, a function-centric organisation model, based on asset lifecycle management principles, is strongly recommended.

B1 – Do management planning for performance improvement

This sub-system is similar in nature to the setting of objectives and planning as described in A3. The reason why it is shown as separate is because we have three major forces that drive our performance:

  • The asset management policy and strategy which steer us in a certain direction, according to the organisational strategic plan. So we formulate plans that will ensure that we will meet the requirements of the organisational strategic plan over the longer-term.
  • The need to maintain a specified level of performance that meets current production or output requirements. Deviations from specified and agreed performance levels are investigated, and management plans are formulated to correct and prevent such deviations.
  • The compelling urge to actively find ways to do things better. Improvement opportunities are identified, investigated and management plans are formulated to realise these improvements.

This sub-system therefore describes how we go about the last two of the three points above – in other words correcting performance variations and meeting improvement targets.

B2 – Assess physical assets and management system performance

This is about looking at, understanding and interpreting performance measures. The concept is simply that our management attention should be driven by the correct interpretation of management information relating to the following:

  • Are we meeting the day-to-day operational requirements, and if not where should we focus attention to correct and prevent?
  • Are we meeting improvement targets?
  • Are we meeting the longer-term requirements stemming from the asset management policy and strategy?

C1 – Display asset management system performance

The main purpose of our information systems is to make performance visible – although it is all about how our assets perform, we also need to have the confidence that our asset management system is arranged such that it will enable the optimised management of the physical assets.

C2 – Display asset / asset systems performance

The object of our main focus is the asset system, or physical assets. All our management efforts should culminate in the required levels of asset availability, reliability and value preservation – safely and at an acceptable cost.

C3 – Prognostics

Prognostics is arguably a part of the previous point C2, in the sense that it is nothing but a specialised category of asset-related data. But prognostics in itself, if presented correctly, provides visibility of the true condition and expected future behaviour of the assets. It is therefore shown as a separate, somewhat specialised group of functions.

D – Business processes layer

This layer in the physical asset management model shows the major groups of functions that have to be executed by staff in order to ensure that the asset system will continuously meet output or production demands.

D1 – Design and manufacture

This forms the starting point for the lifecycle management of physical assets. As physical asset managers, we must have the confidence that we contributed maximally to the design stage in order to ensure maximum maintainability and lowest possible lifecycle cost.

D2 – Purchase assets

When the acquisitioning does not involve design and manufacturing as well, then the functions of purchasing involves much more than simply obtaining maximum production capacity for the lowest cost. Thinking about it carefully, design capacity and purchase price are far less important than on-going operability, reliability, availability and operating cost over a period of many years. One of the major inputs into the purchasing and decision-making should therefore be a comparison of expected lifecycle behaviour and requirements for the alternatives.

D3 – Install and commission assets

From a production perspective, the construction phase can be seen as preparing a production or service delivery facility for performing its intended function. However, the moment the facility starts producing, deterioration and wear also starts. There is thus an aspect of equipment installation which deals not with getting it ready to perform its intended function, but rather to ensure that it will keep on preparing its intended function. The pressure on the installation team is without exception to meet date deadlines so that output can start – but the pressure is very seldom to be ready to meet maintenance requirements when the plant is started up.

There is a very clear engineering project that should be running in parallel with the installation project, namely to prepare for the on-going “lifecycle management” activities. This process in a sense already starts with the acquisitioning of the new asset(s), in that the anticipated lifecycle behaviour is investigated, and forms an important consideration when the final decision on which item to purchase is made.

D4 – Dispose of assets

If the proper lifecycle management process has been followed, then the data associated with the asset (meaning maintenance strategies, condition data, numbering, configuration details etc.) have commercial value as well. If there is no intellectual property / competitive advantage secrets involved, and the selling of the asset to another (non-competitor) company is considered, this data should be priced as well.

Disposal of the asset often means that there are a number of stock material items that will now become obsolete. Selling these at the best possible price does not necessarily mean that they should go to the purchaser of the asset.

Disposal of the asset could also mean that there will be maintenance tools and equipment that will be obsolete.

D5 – Operate asset

An integrated (systematic, systemic) approach to physical asset management ensures that the following system elements are all harmoniously contributing to sustainable quality output:

  • The organisational model, if function-centred, culminates in the right focus on operation, supported by the right maintenance.
  • The way in which assets are operated influences wear and deterioration dramatically. From this perspective, operations and maintenance should be considered as two highly inter-dependent functions, both at shop floor and higher levels in the organisation structure.
  • Continuous sharing of knowledge between operators and maintainers should be stimulated by the right team structure.
  • The clear allocation of responsibility and accountability makes it simple to ensure that the right training and certification is provided.
  • The measurement of performance and condition as determined during a formal, on-going strategy development and improvement effort means that the right information is available to the relevant roles, at the right time.
  • Management information is certainly not something that is reserved for supervisory and management staff. On the contrary – the operators and artisans are the generators of the bulk of operating expenses. They need management information even more than senior staff.

E – Physical assets layer

This layer shows our system of functional assets, sustainably performing their intended function. The asset management system in turn pulls together all the actions that need to be done to ensure that the asset system keeps on performing to standard.

This is a good point for a somewhat philosophical remark, thinking about diagram 1 and in particular the asset system:

  • What evidence do we have that our current asset management system is suitable?
  • What will happen if the total maintenance organisation disappears overnight?
  • Is there a way in which the capabilities of the maintenance organisation can be used in such a way that we will have no more functional failures?
  • Is it possible to re-focus our maintenance effort such that the general condition of the assets will never deteriorate?

Questions like these might at first glance appear to be stupid and irrelevant; but when one starts to think about it, they lead on to an important insight:

The natural deterioration of the asset itself is the one and only factor that ultimately prescribes how the maintenance function should be organised. Once this deterioration is intrinsically understood can we feel confident that we know how the maintenance function should be designed and operated – for maintenance is simply about retarding deterioration and restoring functionality. Therefore, we must understand that it is not the locomotive or hopper that is deteriorating – one needs to focus on a more micro level. It is the specific pin, bush or bearing that wears / erodes / weakens and starts to fail. Understanding these mechanisms and rates of deterioration should determine the maintenance function.

We can therefore say that the good old tools like a complete and properly indexed asset register, sensible hardware breakdown structures down to parts level, and a well-organised technical library, fully accessible by all the staff, form one of the main pillars of a functional asset management system.


Robust asset management essentially calls for two areas of profound knowledge:

  • A deep technical / engineering understanding of the physical assets, which is a prerequisite for developing sound maintenance strategies.

A clearly documented asset management system, with performance standards set at specific function level. This goes hand-in-hand with function-level mapping to role descriptions.