The Importance of a Strategic Asset Management Plan

"If you don't know where you are going, you are certain to end up somewhere else."
Yogi Berra
Yogi’s statement is undoubtedly true. Without a plan, you will end up where you didn’t intend to be. 

When enterprise asset management (EAM) is a hot topic among manufacturing and facility leaders, it is surprising that some organizations still do not have a plan or strategy to guide their asset management efforts. They do not have an overall EAM strategy tethering boots-on-the-ground asset management activities with achieving organizational goals. As a result of this disconnect, EAM initiatives (e.g., EAM/CMMS implementations, key performance indicators (KPIs), etc.) are implemented without a strategy to guide and focus efforts. Improvements in EAM take time; without a plan, the initiatives tend to shift and drift, lose momentum, and underperform. In the end, EAM doesn’t deliver a clear and tangible ROI. 

A Strategic Asset Management Plan (SAMP) for EAM can fix this. A SAMP is your plan, your single, forward-focused vision for how managing the organization’s physical assets will help achieve goals. A SAMP connects the dots between the execs and the techs and is your compass to keep you headed in the right direction. Every operation that relies on its equipment and infrastructure performance should have a SAMP for how that will happen. Even ISO 55000, the international asset management standard, agrees.

EAM is a multi-functional discipline with many moving parts, from managing capital projects to equipment maintenance to MRO supply chain activities. Getting these functions working together in a well-oiled manner towards a common goal can be complicated. A SAMP simplifies and formalizes coordination between parts. With a SAMP, everyone knows where they are headed and how they will get there.  

Developing an EAM Strategy

A SAMP consists of actions to connect the organization’s physical assets to its goals. Here is how to develop one.  

Step One – Understand Organization Goals

A SAMP should start with goals and work backward to explain how enterprise asset management functions (i.e., maintenance, engineering, operations, MRO supply chain, etc.) will help achieve those goals. A good understanding of the organization’s goals is required, and goals are typically identified in the corporate strategic plan.

Step Two – Identify EAM Drivers

Once organizational goals are understood, the next step is identifying the EAM drivers that are instrumental in achieving goals. EAM drivers are the high-level things you’ll focus your efforts on as you strive toward realizing goals. For example, asset reliability is a key EAM driver that can significantly impact costs, and financials are typically part of an organizational goal. 

Step Three – Identify EAM Objectives

Drivers lead to establishing objectives. Objectives are what you intend to accomplish. EAM objectives must be SMART – Specific, Measurable, Attainable, Relevant, and Time-bound. For example, improving equipment availability by 3 % by January 2023 is an objective tied to the asset reliability driver. It indicates what the operation wants to accomplish, is measurable, and includes a clear deadline. All of these aspects are critical to a good EAM objective. 

Establishing objectives is the most critical part of developing an EAM strategy. Objectives lead to action plans and KPIs. Don’t shortcut this effort. When EAM objectives have not been developed, action plans and KPIs are left hanging. There is nothing to tie them to the big picture, and this mistake can return to haunt the EAM operation later. 

Step Four – Build Action Plans

These are the actions you intend to take to accomplish your objectives. Actions are the layer of the SAMP that outlines the tangible actions people in the organization will take to achieve objectives. They must be concrete and contain a deadline and a clear articulation of your actions. Your actions must align with at least one of your EAM objectives and describe how you will achieve the objective. 

For example, to improve equipment availability, you might implement the reliability module in your EAM/CMMS by January 2023 or implement predictive maintenance techniques like vibration monitoring for rotating equipment by March 2023.

Developing a SAMP involves determining actions to achieve the objectives and mobilizing resources to execute the actions. A SAMP describes how the means (resources) will reach the ends (objectives). 

A SAMP should detail roles, responsibilities, accountabilities, and timelines and make a case for the resources required to implement action plans. A SAMP is essential because the resources available to achieve goals are usually limited. A SAMP helps communicate the investment. Asking for money is always better received when a strategy is in place. 😊

Once again, alignment is key. There must be a direct correlation between the action plans and the objective. Working hard and not seeing expected results is the first sign of a broken link.  

Step Five – Identify Key Performance Indicators (KPIs)

KPIs are measurable values that show your organization’s progress towards achieving objectives. 

KPIs should contribute to achieving a specific goal or objective. If they don’t, they risk stealing attention, time, and money from KPIs that help achieve objectives. KPIs without corresponding objectives lose their punching power and become just another number.  

KPIs are a form of communication in an organization. They allow you to determine whether you’re behind, on track or have achieved your objective. They inform business leaders of the organization’s progress to date, reaching key goals. 

Please see the SAMP map below to visualize the relationship between organization goals, drivers, objectives, action plans, and KPIs. 

SAMP & EAM/CMMS

A SAMP is a big help with the software. Organizations spend millions of dollars on Enterprise Asset Management (EAM) and Computerized Maintenance Management Systems (CMMS),  services, and IoT platforms to improve reliability, minimize costs, and lower risk. These investments make sense, and technology drives data and efficiencies and plays a critical role in EAM. 

However, many EAM/CMMS technology investments are made without a supporting EAM strategy for how the technology will deliver ROI or what objectives the EAM/CMMS investment will help achieve. Nothing firmly connects what the technology will do with what the organization needs it to do. 

Investments in EAM technologies without a SAMP are action plans without a game plan. A lot of money has the potential to be spent without a clear understanding of how the technology will deliver. The EAM/CMMS implementation highway is littered with underperforming, underutilized systems that lack a game plan for their use and deployment. 

If there is no strategy linking what the technology is doing and what the organization wants to accomplish, the technology loses its purpose and focus. 

A SAMP provides direction for EAM/CMMS implementations. It specifies the EAM/CMMS deliverables and ties the technology directly to accomplishing objectives. It becomes an action with purpose.  

Wrapping Up

Enterprise Asset Management involves the management of physical assets throughout their lifecycle with the singular purpose of helping the organization realize its goals. Your SAMP is the game plan for making it happen. Without an EAM strategy that includes concrete, quantifiable, measurable goals, you have no way to effectively align resources, measure success and demonstrate results, value, and performance. 

A SAMP helps ensure that EAM delivers what it is supposed to:

  • Increase performance and uptime of the organization’s physical assets
  • Extend the useful life of the asset
  • Streamline maintenance and MRO supply chain activities
  • Minimize operational costs 
  • Comply with environment, health, and safety (EHS) initiatives
  • Enterprise-wide standard processes, KPIs, and data 

The SAMP is your north star to guide EAM value creation. The SAMP leads the EAM operation toward delivering the organization’s goals. A SAMP is your plan to make sure you don’t end up somewhere else.

Download a Free SAMP template from our EAM Library. Use it to jumpstart the development of your SAMP.

SwainSmith, LLC., helps organizations develop EAM strategies. We can help align your operation, connect the dots and realize EAM’s potential. Contact us for a complimentary consultation. Thanks for reading.

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