Five Reasons You Need an Asset Management Policy

Do you have an asset management policy? If your organization relies on its assets for success, you should.

Physical assets are second only to human assets in importance. Their management impacts quality, safety, environmental compliance, production, and the bottom line. An asset management policy says how the organization will manage these valuable assets. It’s a directive from executive leadership that connects what happens in asset management to organizational goals.

If you’re not sold yet, keep reading. Below are five of the top reasons why your organization should develop a corporate policy for asset management.

1. It puts top management in the driver’s seat.

Does your organization have a safety policy? I would imagine so. Having a corporate policy for safety management is good business practice, plain and simple. With something as important as safety, top management should lead the way.

It’s the same with physical assets. They aren’t just important—they’re vital to your organization’s success. Because of this, top management should lead the way in declaring the organization’s commitment to caring for its physical assets and how it is going to do this.

An asset management policy establishes an executive mandate for how the organization’s assets will be managed. It connects corporate leadership to the asset management operation, aligning the organization from exec to tech.

2. It facilitates the development of your asset management system.

I’m not talking about an EAM software system here. I’m talking about a documented system for managing your organization’s physical assets, à la ISO 55000. Developing an asset management policy is a first step toward creating this kind of documented, structured asset management system.

A policy identifies key asset management drivers, which serve as a basis for developing asset management objectives. It also provides mandated requirements, overall intentions and principles, and a framework to control asset management. Within this framework, you can develop the rest of your asset management system: strategies and plans, processes and procedures, performance measures, and the rest.

3. It brings together business functions around a common goal.

By creating a policy, you formally establish the organization’s asset management mission. This helps to coordinate the business functions that play a role in asset management (Project Management, Maintenance, Operations, Quality, and Safety, among others). It gives them a clear directive and a common objective, enabling them to work together more effectively.

4. It aligns your organization with internationally recognized best practices.

Having an established policy for asset management isn’t just good business sense. It’s a widely accepted best practice, required by the ISO 55001 standard for asset management. Creating an asset management policy is the first step in aligning your operation with international standards. It puts you on track to achieve full ISO 55001 alignment, which opens up a wealth of potential benefits. (Just a few: better asset performance, reduced maintenance costs, lower insurance premiums, and improved reputation with stakeholders.)

5. It links your organizational strategic plan to asset management activities.

An asset management policy is the opening salvo in the effort to “get everyone on the bus” and moving in the same direction. It’s the initiating event in aligning asset management with organizational objectives.

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