Asset Management

Definition - What does Asset Management mean?

Asset management is the coordination of the management, engineering, financial and other activities applied to an organization's assets, with the aim of providing services cost effectively.

In an engineering environment, this refers to the systematic, cost-effective processes used to monitor and maintain plants and equipment. It manages an asset's life cycle from the time it is acquired to disposal, and determines the cost of ownership by tracking cost incurred during:

  • Acquisition
  • Deployment
  • Maintenance
  • Replacement
  • Upgrading
  • Disposal

Corrosionpedia explains Asset Management

Asset management processes are carried out with the aim of lowering the assets' life-cycle costs while delivering expected services and adhering to safely and other regulations.

It allows the understanding of the equipment's conditions, remaining useful life, risks and consequences of failure, practical renewal options (whether to replace, refurbish or repair) and associated costs. This enables the management to make informed decisions for sustainable performance at the lowest life cycle costs and acceptable risk.

An effective asset management plan has four main core processes:

  • Asset data - Asset inventory, condition analysis, rating, valuation techniques and replacement or upgrade cost tables
  • Maintenance management - A policy and plans that provide best minimum life cycle cost, addresses failure response plans and capital costs strategies
  • Condition assessment - Understanding the life cycle of each asset and its residual life given by expected life tables and charts, including replacement cost and date
  • Risk Management - Response to asset deterioration, based on a sound understanding of risk and failure consequences

In order to perform asset management successfully, one must know the critical assets that sustain operations and why they fail, the likelihood of failing and associated repair costs. Consequences of failure should be analyzed and assets listed by their criticality, while noting the probability of failures and business risks.

Effective asset management ensures equipment availability, reduced maintenance costs, minimum nonproductive time (NPT) and increased productivity. In industries such as manufacturing, oil and gas, and other industries where corrosion is a major contributor of metal failures, understanding the mechanism, assessment procedures and the control, are necessary in the reduction of failures and all associated risks.

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