What makes a good Strategic Asset Management Plan (SAMP)?

What makes a good Strategic Asset Management Plan (SAMP)?

The concept of managing physical assets has been around for a long time, but the formalisation of this into a Strategic Asset Management Plan (SAMP) is a more recent development. The evolution of SAMP into a vital survival strategy is supported by recent studies, such as those by Gavrikova, Volkova, and Burda 2020, which highlight its role in providing sustainable competitive advantages in today’s volatile environment.

SAMP is a high-level plan that lays out the framework for achieving asset management objectives within an organisation. It encompasses the acquisition, planning, and maintenance of assets, forming the backbone of a strategic asset management framework.

An effective Strategic Asset Management Plan aids strategic asset managers in maximising the value and performance of both tangible and intangible assets throughout their lifecycle. The result? A reduction in asset downtime, savings on repair costs, increased productivity, and enhanced profitability.

Choosing the right SAMP is crucial. It’s not just about having a plan; it’s about having the one that best aligns with your needs and objectives. 

By the end of this blog, you will gain insights into how to develop a strong and effective Strategic Asset Management Plan. Let’s take a closer look at understanding strategic asset management.

Understanding Strategic Asset Management

Strategic Asset Management (SAM) is a comprehensive framework for managing equipment with a focus on long-term maintenance and operational planning.  A SAM framework offers a comprehensive perspective of current asset requirements and anticipates future needs over 5, 10, or even 20+ years.

This framework equips you with the necessary data to make informed asset decisions that align with the company’s objectives, moving away from reliance on budget constraints and guesswork in managing assets.

The Significance of a Strategic Asset Management Plan

A strategic asset management plan serves as a roadmap for long-term asset maintenance, simplifying the process of assessing and optimising asset conditions. The outcome is an enhanced Return on Assets (ROA), refined decision-making processes, and efficient allocation of resources.

With the basic understanding of the strategic asset management plan, now let’s have a look at why it holds such significance.

Enhanced Decision-Making

A Strategic Asset Management Plan (SAMP) gives important details about assets, helping with decisions like when to schedule shutdowns, turnarounds, and outages (STO), deciding what repairs or replacements are most important, and managing operating expenses (OpEx). This helps to combine financial and non-financial strategies in decision-making, matching up with the organisation’s goals for managing assets.

Cost Reduction

An asset management strategy also helps keep an eye on assets that aren’t used enough, are duplicated, or are used too much. Knowing how assets are used is important for keeping equipment in good shape. For example, assets that are used too much often break down a lot and need expensive fixes. Combining planned maintenance with a Strategic Asset Management Plan (SAMP) can save money and lower the Total Cost of Ownership (TCO).

Optimal Resource Allocation

A Strategic Asset Management Plan (SAMP) helps find assets that cause slowdowns, need upgrades or replacements, and how to use available assets best to reach facility goals and objectives efficiently.

Now, let’s move on to understanding the key components involved in SAMP.

Key Components of a Strategic Asset Management Plan

SAM thoroughly explores the following areas to help maximise the return on each dollar spent.

Understanding Your Assets

This covers the comprehensive understanding of your assets, their condition, energy usage, lifespan, and location.

Determining Asset Importance

It involves evaluating the criticality of assets for smooth business operations.

Developing Maintenance Strategies

This includes creating tailored maintenance schedules for each asset.

Managing Asset Life Cycle

This is about prioritising maintenance based on factors like risk, energy consumption, and replacement cost.

Tracking Performance

This involves incorporating a maintenance process in a SAMP that monitors asset conditions and reports on asset performance.

Planning Finances

This is about using a SAMP for financial planning and maintaining an asset register for fiscal reporting.

Assessing Risks

It defines a risk tolerance policy to measure safety and environmental risks and inform contingency plans.

With the key parts of SAMP in mind, let’s now focus on the main pillars of an asset management plan.

The Five Pillars of an Asset Management Strategy

A great asset management strategy stands on five key pillars that enhance asset productivity while reducing costs:

Asset Classification

This involves systematic registration and sorting of assets based on their properties and attributes, simplifying asset management.

Centralised Asset Information

This ensures all crucial asset data is consolidated in one place. Companies often face data redundancy issues when using spreadsheets for asset management. An enterprise asset management system can enhance efficiency.

Asset Indicators

These provide real-time performance insights. Common maintenance KPIs such as mean time to repair, mean time between failures, availability, and downtime help identify the most reliable assets and those with the longest downtimes.

Maintenance Plan

This typically integrates preventive, corrective, and predictive maintenance techniques.

Asset Calibration

This involves the scheduling, planning, execution, and analysis of equipment calibrations. It’s important to set and meet due dates for both internal and external calibrations. It ensures the accuracy and reliability of your assets.

Having understood the key pillars of an asset management strategy, let’s now explore the steps involved in developing an effective asset management strategy.

Five Steps to Crafting an Effective Asset Management Strategy

As you shape or refine your asset management strategy, follow these steps to cut costs and boost asset performance:

Understand Your Organisation

Begin by grasping how your organisation functions and makes investment decisions. This understanding allows you to formulate asset management goals that align with business objectives. Present your strategic ideas to management and staff to gain their trust and support.

Assess Asset Condition

Regular asset monitoring provides vital data on the state of each asset in your facility. This information indicates whether an asset requires preventive maintenance to achieve its expected lifespan.

Create and Execute an Action Plan

The asset management initiatives you undertake collectively help you formulate an action plan. This plan should align with the current business cycle.

Monitor Your Progress

An asset management system allows you to gather data on asset performance, which can be used to fine-tune investment decisions.

Solicit Stakeholder Feedback

Hold discussions and focus groups with staff to understand their views on existing asset management processes. Their feedback can help you devise more effective solutions that meet organisational expectations.

Wrapping Up

Crafting an effective Strategic Asset Management Plan (SAMP) is a journey that requires a deep understanding of your assets, a clear vision of your organisation’s goals, and a commitment to continuous improvement.

By focusing on the key pillars of asset management and following the outlined steps, you can maximise asset productivity while minimising costs.

Remember, the journey doesn’t end with the implementation of a plan. It’s a cycle of constant review, feedback, and refinement. Here’s to a successful asset management journey!