Build a disciplined approach to Enterprise Asset Management – the strategic and operational changes you need to make for your organizations
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A disciplined approach to Enterprise Asset Management can be a source of competitive advantages for your businesses. However, it is not easy to build, implement, and sustain disciplined Enterprise Asset Management business practices. This shouldn’t be a surprise. If it is easy to do, then everyone would have done it. If it is easy to do, it will not be a source of competitive advantages for any businesses.
To build a disciplined approach to Enterprise Asset Management, an organization needs to make strategic and operational changes.
Strategically, an organization should first consolidate and elevate the enterprise asset management function. There should be a single point of accountability in the business for managing all the enterprise assets. There should be success metrics associated with the accountability. The metrics should be made visible to the C-level executives on a regular basis. Some sample metrics for measuring the success of the enterprise asset management function:
- Floor to Book and Book to Floor Discrepancy ratios when a Wall to Wall inventory audit is conducted
- Value of Overage and Shortage in the annual Inventory Audit report
The metrics should also include one that connects the success of the enterprise asset management function with the competitive of the business. For example, for a nursing home or long term care provider, it might want to track the value of equipment used by each patient. This number could demonstrate how efficient it can deliver the care.
Operationally, an organization should put in place many elements to support the enterprise asset management function:
- Training in asset management business processes and best practices
- Reporting that can facilitate problem identification and decision making
- Skilled professionals with relevant certifications (i.e. CPPM)
- Asset Management software and hardware for supporting inventory auditing
- Regular inventory audit services (bi-annual or annual)
- Support for contract phase in and close out
In order to successfully implement these strategic and operational changes, an organization should consider setting up some type of Program Management Organization, to facilitate the changes. The Program Management Organization is temporary, with a defined objective and timeline. But it is often critical to successfully implement these types of changes.