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Asset Management Fundamentals

Before we do something, everyone has the fundamentals for doing it. These fundamentals are needed for being the cantilever so as not to deviate, no exception with asset management. Asset management of your company can function well if you are meet the fundamentals principle of asset management. According to ISO 55000, asset management has 4 fundamentals. What are the four?

1. Value

To be recognized as an asset, something must have a value that benefits the company. The value of the asset that you are estimating can either actual value or potential value. The value can be tangible and intangible, and could be measured by monetary and non-monetary. Every company must decide what value of an asset has to achieve the purpose organization.

Your company must consider the intangible elements of value when decision making, like company reputation, customer satisfaction, or responsibility to environmental. You must remember! That the company value is different from the customer value that caused by company activity. A company value act as enabler and constraints. Even though every asset can contribute value to a company, but when they are connecting with another asset and becomes a big system that can produce value to a company with a bigger chance.

The common approach to design or conceptualizes the value is using value stream and value chain. Value stream focused on the value that customers or stakeholders received, while the value chain focused at the competitive advantage. At the major line, the value chain at the company is how you can add value to the input you have through the production process. The value of an asset and value chain acts together as well as has a role to support each other in completing its tasks. For example, airline companies, the value of an airplane very dependable at marketing and business operation that applied so the company could turn a profit. However, the level of value also affects business effectiveness such as customer satisfaction and loyalty.

2. Alignment (Line of Sight)

Good management asset is capable of aligning organizational purpose with management asset activity until a technical and financial decision made. This alignment often called a ‘Line of Sight’. The existence of ‘Line of Sight’ at asset management is to clear explanations and definitions, so the employees know what they have to do or contribute to achieving success.

Organizational purposes must translate into policies, strategies, and goals of asset management. That is will derive into plans and activities of asset management. The plans and activities must align too with a senior management decision, thorough strategy and plan, fact-based on reality (asset capability, asset performance, opportunity and obstacles of an asset), etc.

‘Line of Sight’ helps the employee to understand what is the need and why it is so important to the company. So, they’ll understand what are they doing and why the doing it. Not only benefit to determine priority and coordination, ‘Line of Sight’ too could stimulate creativity and innovation of employees. An employee that understands the importance of what they do in the organization often finds new ways or the better ways of achieving the goals.

3. Leadership

Leadership has an important role in asset management. Senior-level of leadership (senior executive s.d supervisor) and showed clear commitment is a crucial aspect of your company for the effectiveness of asset management. Each individual or employee sometimes judge the importance level of asset management based on who the one is responsible for that. So, for the success of the implementation of asset management that applied, the organization must ensure that leadership matters who assigned is a manager senior that has influence and authority to making progress.

These are some of the leadership roles that commonly applied:

  • Ensuring the way the company is structured and the culture of the organization are both conducive to what it is trying to achieve.
  • Controlling the direction and priorities for developing asset capabilities that needed to achieve goals.
  • Ensuring that the thought and implementation of asset management that will do is out of the box.

4. Assurance

Not only the implementation, but you also need to monitor and evaluate the implementation of the asset management you’ll do. Assurance is a combination of monitoring and auditing that implemented at the process and the result is to make sure that asset, asset system, and the operational process implemented as expected. In this case, is how assurance in asset management gives a guarantee that assets will meet the required goals.

The assurance framework itself structured for the effectiveness of implementation like ensuring that assets operated or implemented according to the plan, and consistency over time of implementation of asset management. The assurance framework must also include policies, plans, business processes, and information systems to ensuring that activity of asset management that you’ll do with other skilled employees as you are expecting.

After knowing the fundamentals of asset management, you could begin planning asset management according to regulated fundamentals. Without those fundamentals, implementation or execution of asset management could be not effective and efficient or even waste your time a lot because not having the perfect result. If there are things that you want to discuss or you are kind of thirsty of knowledge about asset management, you can try to contact the experts. Good Luck!