How Extending Asset Lifecycles Benefits Your Business
21/07/21 | Rebecca Drewett
Understand how maximising the useful lifespan of your assets can make a big difference to the efficiency and productivity of your organisation.
Attitudes towards asset management have shifted significantly over the years. We are not too far removed from a time where the prevailing strategy was to buy cheap, wear assets out, and replace them quickly for minimal cost.
However, this approach is no longer considered financially responsible or environmentally conscious. As companies are under increasing pressure to improve performance on ever-tightening budgets, the emphasis is now on efficiency – finding ways to get the most use and value out of each asset to deliver the best possible ROI.
In this article, we’ll explore why this approach offers the best advantages to your business, and how using effective asset maintenance management software helps you maximise the long-term usability of your assets.
What is asset lifecycle management?
From core machinery, lighting and generators, to the coffee machine at the end of your office, today’s modern companies hold hundreds upon thousands of assets. All with different specifications, costs and importance, and all with unique lifecycles.
Once acquired, an asset will enjoy a period where it operates at peak performance at all times. But, as time passes, this performance will begin to decline, and will require maintenance to preserve its performance up until the point it needs to be replaced.
Asset lifecycle management therefore is the process of overseeing the lifespan of an asset from conception through to disposal, and working to get the most value and use out of it in the space between. An asset’s lifecycle is typically broken down into four stages:
Establishing the need for an asset, what value it would bring to the business, and what qualities it must possess to deliver this value.
Purchasing and installing the asset into the business, marking the start of its usable lifespan.
The longest stage of the asset lifecycle, denoting its application and continued usage, and how it is maintained during this period.
The point where the asset is no longer considered useful to the business, and is therefore either sold, repurposed, thrown away or recycled.
As noted, the longest stage of this lifecycle is the operation and maintenance of the asset in question – and is where you can make the biggest difference in how long the asset retains its use within your organisation.
The benefits of extending asset lifespans
Like anything in life, assets have an expiration date. However, an asset that is well-designed, well-operated and well-maintained will live longer than one that isn’t. And by maximising the life expectancy of assets within your company, you unlock a number of benefits over an approach that sees you frequently replacing them.
Greater ROI for your assets
Above all else, maximising the lifespan of your assets through a robust maintenance strategy means that you get more use out of the asset, stretching your investment out further.
Particularly for high-value, business-critical assets, the ability to keep these operating effectively for as long as possible ensures that you aren’t frequently spending to replace these with new versions. Over time these costs can quickly stack up, and will often far outweigh the expense of preventative maintenance works and repairs over the course of its lifespan.
Plus, this helps ensure that your business performance overall stays at a strong level for the longest possible span of time, benefitting the overall productivity and profitability of your company.
Over 30% of energy in a building is wasted as a result of poorly operating equipment (This Week in FM)
Fewer administrative headaches
When assets need to be replaced, the burden passes onto those responsible for your inventory management. The more frequently replacements are needed, the more tiresome and complicated their duties become, which may lead to oversights and mistakes that may delay the arrival of an asset, or result in more assets being delivered than necessary.
Working to maximise the lifespan of your assets means that you keep purchase orders to a minimum, relieving the pressure on inventory management. This makes their lives a lot easier, and therefore means they can work more accurately and efficiently.
Less risk of unforeseen breakdowns and downtime
Although most assets will have a recommended life expectancy listed on their manuals or specifications, this is by no means a guarantee. By sticking rigidly to these expectations and not performing maintenance to ensure the asset reaches (and possibly exceeds) this lifespan, it can increase the likelihood of an asset unexpectedly breaking down or drastically dropping in performance.
This can seriously hurt your overall business performance during the period where the asset is inoperable, and force you to spend a great deal on costly emergency repairs.
By dedicating more time to preventative maintenance work on your assets, not only will assets operate for longer, but any indications of failures can be spotted and repaired before they have the chance to seriously impact your company’s performance.
Replace based on data
Finally, building a strategy around maximising asset lifespans encourages you to determine when replacement assets are needed based on data, rather than assumptions.
By tracking the costs associated with maintaining and repairing your assets, you can ascertain when these are exceeding the costs of replacing the asset altogether. Through this information, you can help ensure that your assets deliver the maximum ROI before they become a burden on your finances, and make the disposal and replacement process more seamless and organised.
Making the most of asset maintenance management
So, now that we have established why extending asset lifecycles to their maximum benefits the ROI on investment they provide your company, how should you look after these assets to secure these advantages?
At the heart of your attempts to extend the viability of your assets is a strategy built around planned, preventative maintenance (PPM). If your approach to maintenance is too reactive, it can lead to too little being done too late, resulting in the need for expensive repairs or replacements of broken-down assets.
Similarly, a maintenance strategy that is time-based according to the recommendations behind your assets can often lead to over-maintaining your assets. While this is far preferable to performing no maintenance whatsoever, it still equates to unnecessary costs, wasted time and wasted resources.
By accurately gathering and classifying your asset data in a comprehensive CAFM solution such as Concept Evolution, you should have the information you need to plot the most suitable times to perform maintenance on them, keeping them running optimally, restricting downtime and extending lifecycles to their limits. The data used to guide these PPM schedules may include a mix of:
Date of installation
Maintenance manual recommendations
History of past inspections
By compiling and analysing this abundance of useful information in a streamlined asset maintenance management solution, your teams will be able to pinpoint when and how frequently assets should be maintained to deliver optimal performance for the longest possible time.
Furthermore, a solution like Regime Manager can distinctly define the specific maintenance rules for each of your assets, or for collective groups of the same asset. This will then automatically be distributed to the relevant engineers, ensuring that all proposed work is conducted at the dates and times recommended by your data analysis.
As a result, your organisation stands to save a lot of money by not over-spending on excessive amounts of maintenance, and will avoid losing money due to equipment becoming faulty and unusable in a short window of time.
Instead, through this software, you will enable assets to reach their full potential in terms of longevity, and in turn, ensure that your company reaps the maximum benefit and performance from each of them prior to them inevitably needing to be replaced.
For more on establishing the foundations of a comprehensive asset management strategy, check out this helpful insight.
Harness the full potential of planned, preventative maintenance
Age is just a number when it comes to asset performance. While all items have an expiration date, taking steps to extend this date to its absolute limits across your entire portfolio of assets can make a monumental difference to your balance sheets year after year.
Hopefully this has given you insight into the importance of maximising asset lifespans for your overall business performance, and highlighted how this can be accomplished by using coherent PPM schedules, grounded in robust asset maintenance management software.
Fundamentally without a reliable CAFM solution in place, maintenance becomes reactive, and as a result:
Engineers’ days become more erratic and disorganised
Downtime between failures being identified and rectified is increased
More costly repairs or replacements are required in the long term
By introducing a system like Concept Evolution to your organisation, you can instead be proactive and data-driven in how you approach asset maintenance. Consequently, your assets will perform effectively for longer, meaning you gain more value out of them before the time comes to conclude their lifecycle.
For more on how you can amplify the lifespan of your assets and make maintenance more manageable, efficient and meaningful across your company, get in touch with our friendly team today.
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