What is Enterprise Asset Management?

Enterprise Asset Management

What is Enterprise Asset Management (EAM)? Well, while manufacturing, production and high technology companies can vary wildly in size and turnover, they have one thing in common; they generally have a significant amount of high-value equipment.

This equipment is as varied as the size of the companies they are found in but tend to be the major part of the company’s assets, and for that reason play a large part in the companies worth, and therefore those assets need to be maintained to ensure that they are managed appropriately.

All company assets are subject to depreciation, almost from the day of purchase. They lose a certain amount of worth “out of the box” and continue to lose value while they are used by the company.

A company’s Accounts department usually use the notion of depreciation to write off the cost of an asset over its useful lifetime, however, while that might be acceptable for office equipment, it is generally unacceptable for larger and specialist equipment.

The control of these and their depreciation balanced against their continued usability rather than their core worth, and this has to be controlled by others than Accountants.

Controlling Your Assets

This is where Enterprise Asset Management (EAM) becomes important to a company, as it helps you keep track of your business assets and ensure that they continue to deliver as expected.

EAM is a system integrating techniques for holistic control and optimization throughout asset life cycles, including design, commissioning, operations and replacement.

It is generally a controlling feature mostly found as a part of industries that heavily rely on expensive and complex physical assets, such as vehicles, plants and heavy equipment, but is becoming more widely used by smaller companies too.

Prominent EAM users include the oil and gas, shipbuilding, mining, energy, government, utility, and aerospace and defense industries.

However, while the term ‘Enterprise’ generally applies to large scale companies, there is an increasing drive to use EAM in smaller, high technology companies who may use high-value equipment to create specialist products and services.

EAM is a credible means of managing the more valuable assets company, ensuring that they continue to perform as expected.  The aim of EAM is to manage assets and minimize risks and costs while maximising their business value.  EAM will often look at equipment not just from the point of view of depreciation but its ongoing maintenance needs including the potential for increased servicing, parts availability and cost, safety aspects, and legislation.

But EAM can be extended beyond the physical machinery and can be applied to many other areas of a business categories, including;

  • Physical asset and infrastructure management
  • IT service management
  • Digital asset – both electronic media and content – management
  • Fixed asset management and accounting
  • Emerging asset management

A properly run EAM framework optimizes and extends asset life cycles and reduces the Total Cost of Ownership (TCO) while maximizing Overall Asset Productivity (OAP), essentially ensuring that assets deliver maximum performance for as possible.  This, in turn, maximises the Return on Investment (ROI) for assets, which is key to any industry that operates with high-value equipment.

Software-Drive EAM

EAM balances the many disciplines such as Engineering, Production, Finance, and Quality as well as Maintenance, leading to optimum performance of your assets.

But plainly, because it covers so many aspects of a business, it is a complex subject that is best handled via bespoke software.

Enterprise asset management software is designed to handle every aspect of running a modern public works or asset-intensive organization.

Effective EAM software solutions include many strategic features, such as complete asset life-cycle management, flexible preventive maintenance scheduling, complete warranty management, portal-based software interface, and integrated mobile wireless handheld options allowing up to date information on mobile devices as needed.

Indeed, this is a business area which has been recognized as increasingly important and that alone has justified the fast development and availability of mobile devices to support Mobile enterprise asset management.

There are an increasing number of EAM software solutions available on the market, many of which can integrate with existing CMMS software to create holistic approach to controlling the assets that a company holds, regardless of where they may be around the world.

And because it they are able to include standardized processes, equipment financial data, equipment reliability, operator history, equipment transparency, and budget traceability, a full set of Key Performance Indicators (KPI’s) can be derived for management reporting purposes.  These are only a fraction of the benefits associated with asset management.

A well-designed asset management system will overlap into and improve operations, finance, HR and HSE processes as well, paying dividends in the short and long-term.

What about Cost vs Value?

EAM can have fairly substantial costs associated with its implementation – particularly if specialist software is being used to run it – and day to day running, and the Maintenance manager needs to have several good reasons to consider presenting the case for requiring it.  Such reasons could certainly include

  • It promotes cost-effective business management.
  • It reduces risk of critical asset failure and therefore overall organisational risk.
  • It provides workers with a safer work environment by giving them a safer set of processes to work with.
  • It promotes environmental, regulatory and statutory compliance as standard practice throughout the organization

The fundamental reason why organizations implement asset management software is because it makes good business sense.

All asset-intensive organizations need an ordered, structured, disciplined way of controlling assets. The face of maintenance is changing as companies seek to make the most of the equipment that they have for longer, while ensuring that it still operates in line with company expectations.

For many organizations, vehicle equipment assets and the labor needed to maintenance them represent not only significant but increasing expense too.

To succeed at running what can be an increasingly bewildering array of assets, managers cannot relay on traditional means – or even CMMS – and need effective software tools to proactively manage these costs and improve long-term planning.

Enterprise asset management software is essential for improving an organization’s operations and performance through day-to-day work order management, real-time labor tracking and future planning, like complete life-cycle analysis and capital budgeting.

If you are running maintenance in a large asset-heavy organisation then EAM is probably the answer that you are looking for, and with many software and mobile systems available there will be an option to fit your business.