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The lifecycle of an asset is a series of stages in managing assets, from "birth" to "death".
Asset Lifecycle Management (ALCM) is a method of managing assets aimed at maximizing their value by optimizing planning, acquisition, installation, operation, maintenance, and disposal. In each stage, organizations seek opportunities to improve productivity, efficiency, reliability, and profitability while reducing risks and associated costs.
Organizations invest in Asset Lifecycle Management because effective asset management can extend the value of assets beyond their useful life. Additionally, organizations that continuously collect data throughout the asset lifecycle can receive additional benefits, including making data-driven repair or replacement decisions, optimizing maintenance schedules, reducing asset management costs, and maximizing return on investment (ROI).
The stages of Asset Lifecycle Management can vary in definition but are typically divided into the following stages:
When existing assets cannot meet organizational needs, the planning stage begins. Using data from the Asset Lifecycle Management system and feedback from key stakeholders, assess asset needs, organizational current and future requirements, and start researching assets that meet those requirements.
Following planning is the acquisition stage. The focus on acquisition is on budget and financial status as this is the time to research suppliers and ultimately purchase assets. Information gathered during planning makes it easier to find suppliers that meet requirements at a manageable cost.
This stage also includes the delivery and installation of assets. Activities include assembly, setup, testing, inspection, and tracking of assets in Computerized Maintenance Management System (CMMS) software or Enterprise Asset Management (EAM) software.
Meanwhile, the maintenance team can also work with asset manufacturers to generate Bills of Materials (BOM), prepare the maintenance storeroom for new inventory items, and input spare parts into CMMS. The maintenance team can also obtain user manuals and set up preventive maintenance (PM) schedules. During installation, technicians can also attend manufacturer training to learn how to perform basic maintenance tasks.
The operation and maintenance stage constitute the majority of Asset Lifecycle Management. They are grouped because they happen simultaneously rather than consecutively like the previous stages.
During this period, the asset is put into operation and maintained or repaired as needed. Over time, the maintenance team must pay attention to how maintenance needs will change over time.
Asset Lifecycle Management's final stage is asset disposal. This usually occurs when the asset no longer provides enough value to the organization to justify the cost of maintaining it.
Depending on the type and manufacturing materials of the asset, it may be recycled or discarded. In some industries, assets may be repurposed before being completely disposed of.
Following the disposal of an asset, the lifecycle begins anew with the replacement asset. This is always a good time to determine if the organization can upgrade to a better product while minimizing costs. By analyzing data collected in the Asset Lifecycle Management, organizations can reassess how to maximize the value of the next asset.
