Asset Management
EBM024A05
Master Technology and Operations Management
Lecture 1 – Introduction to Asset Management ................................................................................................ 2
Lecture 2 – Asset lifecycle management topics ................................................................................................. 7
Lecture 3 – Risk and Integrity & Servitization ................................................................................................. 22
Lecture 4 – Operations & Maintenance .......................................................................................................... 34
COT-Case ........................................................................................................................................................ 47
1
,Lecture 1 – Introduction to Asset Management
Definition
- Asset is something that has potential or actual value to an organization
- AM is: ‘coordinated activity of an organization to realize value from assets involving a
balancing of costs, risks, opportunities and performance benefits
Asset characteristics
Assets are usually (but perhaps not always)
- Expensive
- Complex
- Engineered-to-order (ETO)
- Technology intensive
- Delivered in a project like fashion
- Service intensive
- In support of core (production) operations
‘capital goods’ → see Hicks et al., 2000
Asset hierarchies
- Assets can be managed as:
o Individual units
o Systems
o Systems of systems
- E.g. consider a boiler inside of a larger system: a boiler > a hot water system > the whole
HVAC system > the building > the campus
Asset hierarchies – Multi-unit systems
Asset management
- The NAM case is just an example
- Who manages assets in a local medium-sized manufacturing company?
o Production manager
o Technical services department
o Board of directors
- Who manages assets within AIR France-KLM
- When are ‘operations’ included in the AM function?
2
,Questions for an Asset Manager (exam → give an explanation about what a AM manager does)
The importance and nature of asset management can be expressed using questions as:
- Do you understand the risk profile associated with your asset portfolio and how this will
change over time?
- Do you understand the business consequences of reducing your capital investment or
maintenance budget by 10% over the next 5 years?
- Can you justify your planned asset expenditures to external stakeholders?
- Can you easily identify which investment projects to defer when there are funding or cash
flow constraints?
- Do you have the appropriate asset data and information to support your AM decision-
making?
- Do you know if your people have the right competences and capabilities to manage your
assets?
- Do you know which AM activities to out-source?
Asset management aims
- Maximize productivity (productive capacity)
- Maximize accuracy (the ability to produce to specified tolerances or quality levels)
- Minimize cost per unit produced (the lowest cost practical)
- Minimize the risk that productive capacity, quality, or economic production will be lost for
unacceptable period of time
- Prevent safety hazards to employees, and the public as much as possible
- Ensure the lowest possible risk of harming the environment
- Conform to national and international regulations
Value
- Crespo Marquez et at. (2020) further develop the concept of value-driven asset management
- Useful for assignment 1
- Study for the exam
Example:
3
, Reflection: a better AM definition?
- A better definition of AM thus might be (PAS55)
o Systematic and coordinated activities and practices through which an organization
optimally and sustainably manages its assets and asset systems, their associated
performance, risks, and expenditures over their lifecycles to achieve its
organizational strategic plan
Examples of AM life cycle aspects in daily life
- Thinking about the disposal fee for your refrigerator
- Comparing the maintenance costs of your car with the purchasing of a new one
- Frond-end thinking of the design of your kitchen
- …
Assets go through phases in a life (cycle)
ISO 55000 – core elements of an AM system
4
EBM024A05
Master Technology and Operations Management
Lecture 1 – Introduction to Asset Management ................................................................................................ 2
Lecture 2 – Asset lifecycle management topics ................................................................................................. 7
Lecture 3 – Risk and Integrity & Servitization ................................................................................................. 22
Lecture 4 – Operations & Maintenance .......................................................................................................... 34
COT-Case ........................................................................................................................................................ 47
1
,Lecture 1 – Introduction to Asset Management
Definition
- Asset is something that has potential or actual value to an organization
- AM is: ‘coordinated activity of an organization to realize value from assets involving a
balancing of costs, risks, opportunities and performance benefits
Asset characteristics
Assets are usually (but perhaps not always)
- Expensive
- Complex
- Engineered-to-order (ETO)
- Technology intensive
- Delivered in a project like fashion
- Service intensive
- In support of core (production) operations
‘capital goods’ → see Hicks et al., 2000
Asset hierarchies
- Assets can be managed as:
o Individual units
o Systems
o Systems of systems
- E.g. consider a boiler inside of a larger system: a boiler > a hot water system > the whole
HVAC system > the building > the campus
Asset hierarchies – Multi-unit systems
Asset management
- The NAM case is just an example
- Who manages assets in a local medium-sized manufacturing company?
o Production manager
o Technical services department
o Board of directors
- Who manages assets within AIR France-KLM
- When are ‘operations’ included in the AM function?
2
,Questions for an Asset Manager (exam → give an explanation about what a AM manager does)
The importance and nature of asset management can be expressed using questions as:
- Do you understand the risk profile associated with your asset portfolio and how this will
change over time?
- Do you understand the business consequences of reducing your capital investment or
maintenance budget by 10% over the next 5 years?
- Can you justify your planned asset expenditures to external stakeholders?
- Can you easily identify which investment projects to defer when there are funding or cash
flow constraints?
- Do you have the appropriate asset data and information to support your AM decision-
making?
- Do you know if your people have the right competences and capabilities to manage your
assets?
- Do you know which AM activities to out-source?
Asset management aims
- Maximize productivity (productive capacity)
- Maximize accuracy (the ability to produce to specified tolerances or quality levels)
- Minimize cost per unit produced (the lowest cost practical)
- Minimize the risk that productive capacity, quality, or economic production will be lost for
unacceptable period of time
- Prevent safety hazards to employees, and the public as much as possible
- Ensure the lowest possible risk of harming the environment
- Conform to national and international regulations
Value
- Crespo Marquez et at. (2020) further develop the concept of value-driven asset management
- Useful for assignment 1
- Study for the exam
Example:
3
, Reflection: a better AM definition?
- A better definition of AM thus might be (PAS55)
o Systematic and coordinated activities and practices through which an organization
optimally and sustainably manages its assets and asset systems, their associated
performance, risks, and expenditures over their lifecycles to achieve its
organizational strategic plan
Examples of AM life cycle aspects in daily life
- Thinking about the disposal fee for your refrigerator
- Comparing the maintenance costs of your car with the purchasing of a new one
- Frond-end thinking of the design of your kitchen
- …
Assets go through phases in a life (cycle)
ISO 55000 – core elements of an AM system
4
