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A Business Approach for Implementing Life Cycle Management, with Al Hardy Part 4

Jackie Luo sat down with Al Hardy, author of “Covering Your Assets By Exposing The Butt-Ugly Truth,” to discuss what it takes to implement the life cycle management approach to assets. This is the fourth part of a four-part interview with Al, an industry expert who believes fiscal and physical visibility is the key to comprehensive, cost-effective equipment management.

Jackie Luo: What does it take for a company to implement the asset life cycle management approach to assets? Or better yet, what are the benefits of asset managers taking a good look at an asset’s life cycle and understanding why this is important?

Al Hardy: Consider a hospital or hospital system with high equipment density, literally hundreds-of-millions of dollars’ worth of assets, sometimes excluding the building. Implementing the asset life cycle management approach can be a massive challenge for asset managers, especially when each of those assets has some compliance issue or a risk associated with them. In some hospitals, there can be eight- to ten-thousand mobile or moveable assets alone. As we know, an asset’s life cycle has four stages: acquire, maintain, utilize and dispose. Many asset managers don’t see the value these stages have when applying the process to profit and the bottom line. My point is: If you are an asset manager, this is a project that will increase your net revenue and decrease your expenses, which increases your net profit.

What, then, is the first thing an asset manager needs to do when applying the asset life cycle management approach to their company’s assets?

The first thing there needs to be is a philosophy change. If you look at the five- or six-thousand hospitals, you’re probably not going to find an asset manager who does the entirety of life cycle asset management, managing the fiscal and physical visibility. Most asset managers probably deal with an asset ledger, which is a whole different story. You have to make sure you understand what an asset’s key  information is, and make sure your people, down to the technician level, also understand what the asset’s key  information is. This information should be input into your Computerized Maintenance Management Systems (CMMS), also known as Enterprise Asset Management (EAM) software, and make sure there’s a certain amount of consistency and standardization so you can pull that information up and look at it quarterly.

So the key to asset  life cycle management is the EAM software?

EAM is a great tool, but – and I can’t overemphasize this – the key to a successful EAM is actually the people who use it, meaning it’s more important to invest in your own people. You should invest in your maintenance technicians, your reliability engineers and your asset managers. Give them the tools they need to help them develop the processes and procedures they should know in the first place. Give them the skills they need, for instance, to increase the speed of equipment repairs. This will help you cut costs and increase profits. But you have to invest in them, or you’re never going to get the value you need. Instead, you will always be calling in consultants to do the easy stuff, when you could be training your own personnel to do it.

When, then, should you bring in consultants to help with your asset life cycle management?

If you are going to hire consultants, they should do the hard work, the heavy lifting, the work that may be beyond what your current team can accomplish. You may need to call in a consultant who can give you a quick overview of an asset management program, what its implications are and give you some general guidelines. A consultant can help you to identify the personnel within your organization that you need to be working with on this program , and if they are not familiar with the it , you can then identify how to get them up to speed.. Consultants should do the work that will, so to speak, cover your assets,,by exposing the butt-ugly truth, which of course is the name of my book.

About Al Hardy:

Al Hardy is the author of “Covering Your Assets By Exposing The Butt-Ugly Truth” and a highly-respected business consultant. His book is a testimony of real-life and real-time challenges, successes and near calamities. Al has 22 years of experience in asset management and maintenance for the healthcare industry. He is considered a thought leader because of his innovative technical and financial path from obscurity to industry recognition. He has been at the spearhead of managing acquisitions, developing business cases and leading implementation teams for cutting-edge technologies using wireless and wired networks within dynamic environments. Connect with Al on LinkedIn and check out his blog.

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