3-key asset management models every executive must know about

The hidden value of utilizing models to visualize ideas. The key models of asset management

How do you visualize new concepts and ideas? How does your thought flow when you are trying to process new knowledge? In many disciplines, the main tool is the models, which, through individual components of the idea and the interrelationships between them, make it easier to understand.

Similarly, the three fundamental models in asset management represent the dynamics of the processes in the discipline, the organization of the components of the asset management system, and the use of asset qualities to realize added value for the business.

In this article, we make a complete overview of the Concept Model, the Asset Management System Model, and the Capability Delivery Model component by component. But first, let’s understand what the use of models is and why we would use them in asset management.

Models and their role in Enterprise Asset Management

Asset management as a discipline has elements of art, innovation, strategic thinking, and planning. It also includes constant work with technical elements and collecting asset data. Models are key helpers when making decisions based on the collected information. The decisions themselves must align with the objectives of the stakeholders.

First of all, a model is a human construct to help us better understand abstract concepts and present them as real-world systems. Models have been developed for people’s convenience. Through them, we can more easily understand the abstract visions we are trying to present. Each model has an information input, an information processor, and an output of expected results.

“All models are wrong, but some are useful.” ~ George E.P. Box

The Asset Management Council (a membership-based, non-profit organization) has created three models to explain the ‘Why?’, the ‘What?’, and the ‘How?’ of asset management. They represent the three levels of asset management:

  • Tactical
  • Strategic
  • Operational

Namely, the Concept Model introduces strategic decision making, the System Model is dedicated to tactical decision making, and the Capacity Delivery Model is concerned with operational decision making.

What is Asset Management Modelling?

It is a complete system for managing the lifecycle of owned assets. The asset management models use different criteria to maximize:

  • productivity
  • efficiency
  • resources
How do the Asset Management Models work?

The three Asset Management Council models combine to form a comprehensive framework. It serves as a benchmark for professionals and organizations.

The Asset Management Concept Model

The Asset Management Concept Model represents mainstream thinking in the industry. It serves as a mental orientation for handling the complexity of asset management and as a framework through which the main parts of the discipline can be:

  • identified
  • documented
  • connected
  • implemented

The Stakeholder Circle guarding the Concept Model

Before we dive into the Plan-Do-Check-Act cycle, we will examine the stakeholders’ influence. They take part in all models of the Asset Management Council occupying the upper levels.

The Concept Model exists within the ‘Stakeholder Circle’. It serves as a regulator of all decisions and actions the organization performs. The stakeholders are presented as encompassing and influencing all asset management activities. The organizational decisions or activities may affect these people and their actions.

In terms of asset management, stakeholders in the organization may be internal or external. A stakeholder could be a:

  • Investors
  • Local governments
  • State governments
  • Private persons
  • Organizations
  • Partners

The stakeholders set requirements to guide the pursuit of organizational goals. This information can find place in a ‘Statement of stakeholder needs’ and must address all mandatory requirements as well as the needs of different stakeholder groups. The expectations are towards, but not limited to, the shareholders, regulators, employees, customers, suppliers, and the general public. Finally, the requirements may include:

  • criteria for decision making
  • safety and environmental issues
  • profit and financial needs
  • community expectations
  • volume and quality of the product

The Plan-Do-Check-Act Cycle for continuous improvement in Asset Management

The Plan-Do-Check-Act cycle

The diagram of the Asset Management Concept Model represents the learning and improvement cycle developed by Dr. Walter Shewhart that serves as a foundation. There are four processes as part of the ongoing cycle for improvement – ​​Plan, Do, Check, Act. Each process is also connected with one of these principles – Output Focus, Capabilities, Level of Assurance.

STEP #1: Plan. Recognize the need for change and create a plan

The cycle begins with the establishment of the need for change and asking the question “What data indicates a change is required”? Here you have to analyze the available information, acquired from various sources – key asset parameters, internal and external stakeholders, the Supply Chain, and other key points.

STEP #2: Do. Carry out the planned actions

In the second phase of the cycle – the ‘Do’-stage, the planned change begins to take place. The teams involved in carrying out the work must track and record every action on the path of change, as a specific action may be crucial for the success or failure of the new process.

In the ‘Do’ phase of the Plan-Do-Check-Act cycle you must be able to explain how you made and managed the change. This includes the step-by-step plan you followed, the major decision you made, the problems you had to face, the risk factors you had to mitigate.

STEP #3: Check. Have we realized the objectives of the plan?

Step ‘Check’ is dedicated to monitoring the progress towards the change. At this stage, the organization should keep track of the progress and effectiveness of the plan and compare the data from different stages of its implementation to conclude whether the key objectives are being fulfilled. It is extremely important to compare what you have achieved with your plan. Pay attention to whether expected and/or unexpected changes occur.

The purpose of this stage is to systematize the lessons learned and document best practices. Key questions to address during the Check-phase of the PDCA cycle include:

  • Have we achieved our organizational goals?
  • Did we do what was required of the plan to enable a smooth transition and improvement?
  • Are there any expected/unexpected consequences of the change?
  • What has been achieved and learned?
  • What recommendations can I give to management?
STEP #4: Act. Take command over any deviations found during the Check-phase

By the last stage of the Plan-Do-Check-Act cycle your organization should have managed to plan the change, prepare and execute the plan to realize that change, analyze the progress, the achievements, and describe the key outcomes.

The cycle closes with the Act-stage. The guiding question is: “How to act upon the insight gathered from the previous three stages?” There are several options available. You can decide to adopt new practices, abandon non-working techniques, and even run the PDCA-cycle again to gather more knowledge before deciding on your next steps.

While evaluating the outcome of your Plan-Do-Check-Act cycle, you may conclude that there isn’t any significant change present. In that case, dedicate time to find the root-cause for this. Why is there no major transformation present in your enterprise? Besides all possible reasons, it is possible that you weren’t collecting the right type of data?

The core activities associated with the ‘Act’-stage are:

  • Clean and organize the collected data
  • Analyze it and document the conclusion
  • Based on the results, edit the initial plan or build a new one from scratch
  • Decide whether to run through the Plan-Do-Check-Act cycle to carry out another change; continue expanding on your actions up to now; take a break before performing either of the previous two actions

The Shewhart system requires continuous improvement of one process until all variations in results are minimized. Organizations that perform successful asset management plan, check and act on deviations a lot. On the other hand, organizations that fail in asset management almost forget about the planning part. They spend a lot of resources on the first two stages and neglect to Check and Act.

The four principles and the four fundamentals of asset management

The principles and the fundamentals of Asset Management

The four principles of asset management are a synthesis of the objectives that stakeholders set for themselves. These are:

  • Output Focus
  • Capabilities
  • Level Assurance
  • Learning organization

Going further, ISO defines the fundamentals of asset management in the ISO 5500X set of standards. The fundamentals are Value, Alignment, Leadership, Assurance. Assets have potential or actual value to the organization. They exist to provide this added value to the business and its stakeholders.

The management of assets aims to transform organizational goals into technical and financial solutions, plans and activities by utilizing assets’ capabilities. That is, they create an alignment. Asset management provides assurance that assets will fulfil their intended purpose, and leadership and workplace culture are critical to realizing value. The absence of any of these essential elements leads to a reduction in the value that the assets carry.

First principle of asset management – Output Focus

Every organization and its assets must be dedicated to achieving certain results. This is the aim of the first principle of the Concept Model – to help provide an answer to the question: “What is the used asset for?”

The focus falls on the provisioning of target output. It must be consistent with the organization’s objectives. These business goals are usually set out in external agreements that the organization is committed to achieving.

Output can be defined in different ways, but it always affects another principle: capabilities. Methods of measuring results have to be coordinated so that it is clear if the production or service has been delivered.

Second principle of asset management – Capabilities

The essence of asset management lies not in the physical asset itself, but its capabilities. As per ISO 55000, “Assets exist to provide value to the organization and its stakeholders.” The capabilities are the means through which an asset can bring this value.

An asset perceives the ability a person assigns to it. For example, chairs are made to serve as seating. However, stakeholders can use them instead of a ladder when replacing burned-out lightbulbs. Thus, the purpose they serve changes and also the capabilities they provide to fulfil the objective also do.

Finally, asset capabilities have three aspects. The first one is related to the capabilities of the assets. The second aspect is related to people and their competencies and skills. They are also defined as capabilities. Third are the devices, equipment, and processes owned by the organization.

Third principle of asset management – Level of Assurance

The third basic principle is the Level of Assurance estimating what is the likelihood that an asset (will) fail to meet organizational goals under certain conditions while also maintaining the balance between risk, finance, value, and quality.

The level of assurance is associated with risk. The probability that when X happens, Y will follow. Risk is a key concept in asset management, and according to some, the most important of all. In the context of asset management, it can result from many different causes. Some of the risks that affect asset’s productivity are:

  • Financial markets
  • Unsuccessful projects subject to legal action
  • Regulatory failures
  • Accidents
  • Natural disasters
  • Human mistake

We can conclude that risk is directly related to the value that the asset produces. Level of assurance exists “under certain conditions.” Asset management strives to optimize the relationship between cost, risk and outcome against the desired performance of assets, to achieve the organizational objectives.

Fourth principle of asset management – Learning Organization

The fourth basic principle of asset management is the Learning Organization. It is the most influenced principle of the four by workplace culture and management style. This principle is an evolution of a set of business attitudes and aspirations that transforms the assets from a bunch of equipment and processes to property of the people.

This is the most challenging principle to “infuse” into the mindset of the people of the organization. Members of a learning organization are always looking for a way to:

  • Grow and develop
  • Increase productivity
  • Improve the process
  • Increase product/service quality

The people in such an organization consciously claim ownership of the assets and actively participate in the decision-making process.

Let’s review: The Asset Management Concept Model

When we unite the Stakeholders Circle and the four principles of asset management through the Plan-Do-Check-Act process, we get the asset management Concept Model. In summary, the mechanism of the model consists of four main steps: 

  1. The Output Focus translates the organization’s goals into technical and financial decisions, plans, and actions. 
  2. Capabilities are required to perform the desired actions. Through them, assets fulfill their primary task – to provide value. 
  3. Asset management provides a level of assurance that assets will complete their assigned tasks. 
  4. The learning organization helps by improving and refining the work process. It is always seeking and developing more effective ways to work. 

The mechanism operates thanks to the Plan-Do-Check-Act process. Within the models of asset management, the Concept Model is the process of reviewing and improving the plan. The next step to mastering Asset Management is the System Model.

The Asset Management System Model

The Asset Management System Model

The Asset Management Concept Model describes how things happen when managing assets. The Asset Management System Model illustrates what happens when people operate assets. ISO 55001 defines only the requirements for the asset management system. The System Model is the guide to ‘assembling’ the parts of an asset management system and establishing a connection between them.

Let’s use the hierarchy in the organization to imagine the system in a work environment as well. Senior managers guide divisional managers in asset management. The latter supervise the members of the teams who perform the technical, operational and maintenance tasks required to keep the asset running.

Besides, the Asset Management System Model depicts the relationship between stakeholders’ needs and organizational goals to the asset management goals. In order to get a more complete idea of ​​the mechanism of the model, we will also study the Organizational Systems Model illustrating the interrelationship between different organizational management systems.

The core of the Asset Management System

An asset management system is a collection of the elements of an organization. They are connected to each other and interrelate. Asset management interacts with many functions of the organization while also assets can perform more than one function. The Asset Management System provides a means of coordinating the contribution and interaction between these functional units within the organization.

An asset management plan can enable an organization to create a link between its management system and various technical requirements. These requirements are set out in ISO standards as well as in international, regional and national levels of standardization.

The function of the system is to determine:

  • Asset management policy
  • Asset management goals
  • The processes required to achieve these goals
  • The elements of an asset management system are a set of tools that are combined to ensure the performance of asset management activities.

The elements of the Asset Management Model

The asset management system affects the entire organization, its stakeholders and third parties involved in the added value chain. It leverages and integrates many of the organization’s activities and functions that would otherwise operate in isolation.

The Asset Management System Model has the requirements described in ISO 55001:

  • Context of the Organization
  • Leadership
  • Planning
  • Support
  • Operation
  • Performance Evaluation
  • Improvement
The Stakeholders in the System Model

Let’s recall the importance and role of stakeholders, which we introduced as a concept in the Concept Model:

The stakeholder in the asset management system is an individual or a group that experiences direct influence by the operation of the system and may influence its future development. The stakeholders define the needs and constraints of the business. Key to all models, processes, plans, and decisions, they are portrayed as a leading influence for the asset management system and organizational systems.

Leadership, Organizational Objectives and Asset Management Objectives

Senior management is responsible for:

  • the development of an asset management policy
  • setting the asset management objectives
  • the vision and values that guide the policy
  • actively practicing and promoting these values inside and outside the organization
  • maintaining alignment within organizational goals
  • the granting of power to support the asset management system
  • responsibilities, accountability, and strategies for asset management
  • providing adequate resources to support the asset management system
  • resolving conflicts threatening the internal culture of the organization and the operation of its asset management system

Once stakeholders determine the value they want to extract from the asset, their decisions must be implemented. This is where leadership is involved. It is the link between the wants of the stakeholders and the organization to create a harmonious whole.

Organizational objective refers to an overarching goal or idea that defines both the context and direction of organizational activities. Organizational goals are derived from stakeholder needs. They can be:

  1. Broad – We want to be the lead distributor in our target market for 5 years
  2. Specific – We want to reduce the COGS by 3.6% by next quarter

The asset management system model illustrates how leadership transforms stakeholder requirements into organizational goals and then into asset management goals.

Asset Management Objectives

Asset management goals are derived from organizational goals as part of the development of strategic asset management. Formally, the objectives have their place in the Strategic Asset Management Plan (SAMP). ISO 55000 states: “Documented information that specifies how organizational objectives are to be converted into asset management objectives, the approach for developing asset management plans, and the role of the asset management system in supporting achievement of the asset management objectives.” The objectives must be consistent with all other management systems and aligned with the overall business goals.

Performance Monitoring and Improvement

Performance Monitoring and the Asset Management System Model

Performance monitoring and improvement are part of any asset management system. Their role is to track the accomplishment of different goals, Key Performance Indicators (KPIs) and Key Result Area (KRAs). Monitoring and improving work consist of two parts:

  1. Monitoring the performance and improving the assets themselves against the set goals
  2. Monitoring the results and improving the management system

Monitoring and refinement can be directed to an asset to the extent that it is consistent with its objectives and management system.

Performance monitoring and improvement of asset management, monitoring and improvement can be directed at the asset itself and also at the management system itself.

The organization must periodically assess and report on the effectiveness of risk management processes and improvement processes. Subsequently, documentation should be prepared with the information from the monitoring, measurement, analysis and evaluation, which will serve as a register of the activity.

Through monitoring and measurement, it can be assessed whether the company meets the requirements of the stakeholders and whether it satisfies their expectations. When data relates to asset management objectives, continuous improvement and strategic review can prompt changes in management policy, processes and plans, and perhaps even the objectives themselves, to ensure they are met.

ISO 55001 states that an organization must determine:

  • What should be monitored and measured
  • The necessary methods of observation, measurement, analysis and evaluation to ensure valid results
  • A schedule according to which the observation and measurement will take place
  • When the results of monitoring and measurement are analyzed and evaluated
Monitoring Compliance With The Asset Management System

The management system and the goals it has set may differ due to a difference in certain conditions, new staff members or change in organizational hierarchy, or new equipment. The management system must be monitored to ensure that it meets the organizational objectives and that the decision-making processes are adequate.

Auditing The Management System

The key elements of the management system must be audited every two years. The processes consist of:

  • Interviews with people in the system
  • An overview of the results the system produces
  • An overview of the artifacts produced by the system

The key to monitoring and evaluating the system is to collect data and turn it into practical information. People will set up a methodology and techniques to verify and evaluate the data. They must be accompanied by data quality requirements.

Monitoring compliance with the Asset Management System

A misalignment may occur between the management system and the objectives it was designed to achieve. The reason may be changes in company conditions, new personnel or new equipment. Continuous monitoring of the asset management system will track whether it meets organizational objectives and whether decision-making processes are adequate.

Decision Making and the Asset Management System Model

Decision Making and the Asset Management System Model

Four things characterize each decision:

  • the context of the decision
  • its objectives
  • alternatives and
  • potential risks

In the context of asset management, the decision should also refer to the objectives of the asset management plan. There are five types of decisions:

  1. Complex decisions requiring a lot of information and the participation of several types of stakeholders. They address the fundamental questions about an asset.
  2. A decision for which a recommendation is first made to take a specific action, which should be evaluated and determined whether or not to implement it.
  3. Decisions for further development of a solution
  4. Routine internal decisions
  5. Yes/No decisions

Depending on the situation and organization, decision-making may be the responsibility of individuals or vested groups. In cases where individual decision-making dominates, organizational goals and asset management are more widely understood and disseminated throughout the organization. This is because decentralized decision-making implies a higher order of agreement on the criteria used for decision-making, which derives from objectives.

The consequences of decisions must be evaluated in light of their impact on organizational goals and asset management.

Using KPIs to monitor asset management decisions

A Key Result Area (KRA) is the required level of performance for an organization to be profitable and grow. Measurement is done in terms of the KPIs required to implement the KRA.

Let’s consider the three main areas that asset management seeks to improve – cost, risk and efficiency – for the three KRAs for an asset management system. Our imaginary organization has KPIs related to each of these areas and evaluates decisions according to the impact they would have on the KPIs.

Process management, competence and commitment and organizational roles

Asset Management includes group management of the organization’s processes, competencies, and commitment due to their influence and place in the decision-making process.

Process management defines the processes that an organization must execute to achieve the defined objectives. Processes are related to repeatability and can be a financial process or a technical process. They are dependent on the people who maintain them and their competencies. In addition to the ability to implement the relevant processes, people must be empowered to perform this function.

Each staff member has a predetermined level of responsibility for the risk associated with the process. If the employee is absent, the responsibility for mitigating the risk is not determined downward, but upward. With such a change in circumstances, several questions must be addressed:

  • If team member X is absent, who takes over the decision-making process for him?
  • Who knows the process?
  • Who has the necessary competencies?
  • Who is authorized to take action?

To be empowered to make decisions a staff member must be competent and engaged. What is the reason behind this? Competence is the ability to apply knowledge and skills to achieve desired results, but no matter how competent staff are, they would not function optimally unless they are engaged. A committed team would go the extra mile for the common goal because everyone is clearly aware of the benefits of the decisions they make.

Risk Management and the Asset Management System Model

The role of Risk Management in the Asset Management System Model

Risk management is deeply tied to asset management and does not exist in isolation. It also derives from the combination of the core elements of process management, competence and commitment, and organizational roles.

Through asset management, we aim to use and maintain the asset so as to maintain the value it provides to stakeholders and the business as a whole. To do this, those engaged with the process have to understand the needs of stakeholders and the nature of the risks associated with meeting those needs and find an approach to mitigate those risks. Thus, we would ensure a safe and reliable implementation of the planned activities. Risk management provides the processes and tools to support decision-making to deliver and maintain future asset performance.

Documents generated by the asset management systems model

  • Stakeholder decision criteria: This document should be included in the risk management plan; includes decisions approved by top management that guide decision making throughout the organization.
  • Asset management policy: The intentions and direction of an organization as formally expressed by its top management (ISO 55000)
  • Strategic Asset Management Plan (SAMP): Information that specifies how organizational objectives should be translated into asset management objectives, the approach to developing asset management plans and the role of the asset management system in supporting the achievement of asset management objectives. (ISO 55000). To be approved by the Executive Director.
  • Asset Management Plan (AMP): Information specifying the activities, resources and timing required for an individual asset or group of assets to achieve the organization’s asset management objectives. (ISO 55000) To be approved by the delegated asset manager.

The Organizational Systems Model

The Asset Management System Model ‘lives’ in a larger system – the Organizational Systems Model. It shows the relationship between the various objectives of the organization and the systems they generate.

For example:

  • The Safety Objectives of the organization have their own system
  • The Asset Management Objectives have their own system as well

The same thing applies to other types of goals – environmental, risk, quality, financial, etc. In the organizational systems model, the individual goals and their systems have to align with all the organizational goals. When combined, they must form a holistic picture of the organization.

Let’s review: The Asset Management System Model

In a summary, the Asset Management System Model develops through these dynamics:

  1. The stakeholders determine the value they want to extract from the asset(s). 
  2. Their decisions must be implemented. This is where leadership kicks in – it is the link between the wishes of the stakeholders and the organization. 
  3. The organizational objective is a goal or idea that defines both the context and direction of organizational activities. The leadership translates stakeholders’ goals to organizational objectives and then to asset management objectives. 
  4. The asset management objectives define what the assets will do, how, and why. 
  5. Monitoring and improving performance are here to track the accomplishment of different goals, KPIs and KRAs. 
  6. The decisions are the medium between planning and taking action. 
  7. Process management defines the processes that an organization must follow to achieve its goals. Competence is the ability to apply knowledge and skills to achieve the intended results. No matter how competent the staff is, they will not function at their peak unless they are engaged. The organizational roles determine who will make the decisions. 
  8. The Organizational Systems Model integrates all the goals of the organization together with their systems into one functioning whole. 

Now that we know how and why assets are managed from a system perspective, we are ready to explore guidelines for using the asset management system, developing asset management system capabilities, and developing capability solutions.

The Asset Management Capability Delivery Model

What is the Asset Management Capability Delivery Model

In the Asset Management Concept Model, we looked at the Plan-Do-Check-Act process that is at its core. In fact, PDCA has its embodiment in the essence of the Capability Delivery Model.

We will restate that the success of an organization’s asset management is contained in the capabilities of its assets. Through them we can realize the added value of the assets. How do we determine if an asset has realized business value? Depending on whether it has fulfilled the set goals of the organization.

The Capability Delivery Model depicts processes and discipline areas that a business can use, in part or in whole, to achieve organizational goals through the strategic use of physical assets. The model answers the question “How?” providing a process view of what to do in terms of delivering assets that meet organizational goals and illustrating the relationships between:

  • Demand management
  • Systems engineering
  • Configuration management
  • Acquisition
  • Operations and maintenance
  • Continuous improvement

Overall, the function of the Capability Delivery Model is to provide guidance for asset management system deployment, asset management system capability development, and capability delivery solution development.

One of the objectives of the Capability Delivery Model (or the Asset Management Process Model) is to implement the asset management principles identified in the Asset Management Concept Model while applying the continuous improvement approach contained in that model, namely the Plan-Do-Check-Act cycle.

The model identifies and implements data-driven, risk-based analytical processes. One part of them serves to define the asset management objectives necessary to achieve the organizational goals.

Demand Management

The discipline of Demand Management seeks to manage market demand, stakeholder needs, and organizational capabilities. The process of planning to achieve this balance is part of Strategic Planning.

The Asset Management Capability Delivery Model creates sustainable relationships between external and internal stakeholders while taking a proactive approach in identifying the future changes the business needs.

The Demand Management cycle begins with determining the market demand for products and/or services. Demand for the business-leading product and/or service should be mitigated or scaled. The organization must anticipate the necessary resources to achieve target demand levels and achieve business objectives. The capabilities should also be planned, i.e., the assets needed now and, in the future, to simultaneously satisfy market demand and achieve organizational goals. The cycle ends with demand forecasting.

Systems Engineering

The role of Systems Engineering in the Capability Delivery Model

The discipline of Systems Engineering seeks to develop an engineering management process that can develop and verify an integrated, lifecycle-balanced set of system solutions. They must satisfy the needs of the stakeholders. This is the so-called Processes Systems engineering ‘V’ process.

It started out of necessity and taking action to understand user requirements. Based on them, functional specifications are developed from which design specifications are derived. They evolve into plans and drawings, which the business must realize. So far, we have described the “Decomposition and Definition” part of the ‘V’ process.

After that, we proceed to the inspection of the executed plan. An assessment should be made as to how well it conforms to the original idea and diagrams. Then the elements of the system solutions are assembled and verified. The same is done for systems. At the end of the ‘V’ process, the engineering management system is demonstrated and validated. This is the second part of the process called ‘Integration and Verification’.

Thus, the systems engineering process achieves a balance by using the lowest life cycle cost as a balance between what is paid today (acquisition) versus what will be paid tomorrow (operations and maintenance, etc.), aka such as CAPEX and OPEX.

Configuration Management

The main subject of Configuration Management is the functional and physical attributes (data) of an asset system and its associated assets. The purpose of the discipline is to ensure complete and up-to-date visibility of this data for the business. The data types include functional, physical, and derived data.

The elements of Configuration Management are Configuration Identification, (Configuration) Change Management, Configuration Status Accounting.

Configuration Identification tasks the relevant stakeholders to define the product or in other words – the configuration elements. The documents that identify them must then be determined.

Change Management is concerned with the control of the above product and its accompanying documentation. In configuration change, key things to pay attention to are change requests and approvals and change notices.

Configuration Status Accounting tracks the status of all change requests and their notifications. Configuration Audits stand a bit apart from the other three elements of Configuration Management. They validate the correspondence between the information in the documents and reality. The alignment between the functional and physical data is also checked separately.

Capability Acquisition

The discipline seeks to determine how best to acquire the required business capability for the period in which that capability is needed. This is usually the period in which a specific goal must be accomplished. Capability Acquisition seeks to take a long-term perspective, focusing on reducing the asset’s life-cycle costs associated with its acquisition, while noting the need to deliver the required services/outputs and at the same time deliver the financial return (if is applicable).

Operations and maintenance

Operations and Maintenance aims to implement the related activities that the Capability Acquisition discipline defines in accordance with business needs.

Asset Management Operations

Operations require the development and execution of approved operational tasks.

Asset Maintenance

The role of Asset Maintenance in the Capability Delivery Model

The Maintenance Management model starts, like any other model, from business needs. From them comes the engineering design, according to which we determine the maintenance requirements. These two elements form the Design Authority.

With the next activity we move on to Preventive Maintenance. From the maintenance requirements, we prepare the Maintenance Plan, which defines:

  • Configuration item
  • Tasks
  • Schedules

The Equipment Register is prepared from the first. The responsible parties extract task information from the schedules. These two artifacts and the tasks from the Maintenance Plan contribute to the beginning of the Corrective Maintenance – Planning and Control unit. It passes Performance Feedback to the Engineering Design. While generating Work Orders to the Maintenance Activity.

The Corrective Maintenance cycle starts from Systems Failure, which feeds Defect Advice to Planning and Control. The P&C interacts with the Resources unit to which it communicates the organization’s Resource requirements. The second unit communicates with the Maintenance activity to ensure:

  • Availability of spare parts and consumables
  • Timely creation and fulfilment of asset requests
  • Accurate and timely planning and allocation of budgets

The cycle closes with the Maintenance Activity providing Performance Feedback to the Planning and Control.

To determine the tactics and activities for your asset maintenance, you first need maintenance goals divided into 3 groups:

  1. Preventive Maintenance
  2. Corrective Maintenance
  3. Statutory/Regulatory Maintenance

Preventive Maintenance tactics and activities include Condition Monitoring, Hard Time Activity, and Functional Testing. Their main task is the detection of defects to be referred to Planned Repair.

Corrective Maintenance deals with Repair (Standards) where Unplanned and Planned Repair exist. The second activity to Corrective Maintenance is Renewal (Cost), which again refers to Planned Repair.

Finally, Statutory/Regulatory Maintenance has only one activity – Planned Repair.

Continuous Improvement

The final component of the Capability Delivery Model Continuous improvement is a feedback loop that measures and assesses what is occurring in the delivery of operations and maintenance arrangement, feeds it back through a series of loops that redefines and improves along the way. This process is known as the Continuous Improvement Cycle.

The first part of this process is the business analysis presented as a pyramid structure. At its top are business objectives, followed by the hierarchy of assets and asset management objectives, and finally is Failure mode, effects, and criticality analysis (FMECA).

The second part is Determination of Maintenance Activities. It includes Level of Repair Assessment (LORA) and Reliability-Centered Maintenance (RCM). Condition Monitoring tasks originate from LORA, and predictive and preventive maintenance tasks from RCM.

These two types of tasks are combined in Task Analysis & Packaging, the results of which go into the third phase of the Asset Management Continuous Improvement Process – Spares and Rotable Analysis. It includes Rotable Pools and Spares Needs.

From there we move to the fourth component of the process – Maintenance and Operations Planning. It also houses the In-House and Contractor Tasks that Task Analysis & Packaging generates. As an outcome, the Continual Improvement impacts each of the six parts of the process we described.

Artifacts from the Asset Management Capability Delivery Model

Instead of a detailed summary of the key elements of the Asset Management Capability Delivery Model, we will mention the documents that derive from it. They describe the process, activities, roles, responsibilities and plans in the model design:

  • Systems Engineering Management Plan – Integrated Engineering Program Management.
  • Configuration Management Plan – how business capacity management will be done.
  • Operations Management Plan – management and provision of functions of an asset or system of assets in support of the achievement of objectives.
  • Integrated Logistics Support Plan – Required Logistics Support Activities.
  • Capital Expenditure – capital expenditure to acquire or upgrade capabilities.
  • Operating expenses – annual recurring funds to keep the operation running.
  • Safety Management Plan – activities carried out achieve approved and managed safety objectives.
  • Environmental Management Plan – the activities carried out achieve approved and managed environmental objectives.
  • Heritage Management Plan – activities undertaken achieve approved and managed heritage objectives.

The Capability Delivery Model is much more extensive than the previous two. It provides the mechanisms by which asset management can both identify and achieve the desired balance of cost, risk and performance.

Apply the three key asset management models in your organization

How to apply the Enterprise Asset Management models for maximum asset performance

In this article, we introduced you to the three main models of asset management – the Concept Model, the System Model, the Capability Delivery Model.

The Asset Management Concept Model presents the main idea of ​​the discipline, introduces you to the regulations that oversee it and sets the principles and fundamentals that guide any related activity.

Main elements of the Concept Model are:

  • The Stakeholders Circle
  • The Plan-Do-Check-Act cycle
  • The four principles of asset management
  • The four fundamentals of Asset Management

The Asset Management System Model puts all this into a structured management system, which also reflects the influence of the human factor on each of its structural elements. In macro terms, this model falls under the Organizational Systems Model.

Main elements of the System Model are:

  • Leadership, Organizational Objectives and Asset Management Objectives
  • Performance Monitoring and Improvement
  • Decision Making and the Asset Management System Model
  • Process management, competence and engagement and organizational roles

The Capability Delivery Model is the third major model in asset management that tells an organization how to use its assets to achieve organizational goals. It includes the following processes:

  • Demand Management
  • Systems Engineering
  • Configuration Management
  • Capability Acquisition
  • Operations and maintenance
  • Continuous Improvement