Enterprise Asset Management is one of the most important functions required to drive profitability and service for organizations but what exactly is Enterprise Asset Management?
Many organizations have high value or high dollar assets that are required to build a physical product or perform a service to their customers and provide some sort of delivery for their organizations. In capital intensive businesses like these, it's very important that they manage their assets effectively and as you can imagine, the bigger the organization and the more money they have invested in assets, the more important it is that they get the most value out of and maximize the cost and value of those assets.
For example, let's imagine a construction company that invests in a crane. This is a high dollar asset that a construction company owns, this particular crane costs anywhere from thirty to fifty thousand dollars. Organizations might have trucks or manufacturing organizations have equipment and robotics on factory floors that help produce their products and so on. Many organizations have high value products and its vital to assess how we can get the most value out of those high value assets. That's really the purpose of Enterprise Asset Management, is trying to determine how we maximize the value we get out of our assets, how do we service them appropriately and how do we ultimately drive lower cost and higher profitability for our organizations.
First, it helps to understand the enterprise asset life cycle. When we think about any asset, there's a life cycle involved, first the procurement of the asset initially and then the responsibility becomes to maintain that asset. In other cases, organizations may need to build their total assets as a priority. Consider a manufacturing shop floor, where they may need to build equipment or some sort of robotics that's highly customized and engineered for their manufacturing operations. There's a whole design phase that's involved. Then building those assets once an asset is procured we have to think about how to maintain and repair and service that asset. In the case of that imaginary crane, we've got to do oil changes, we've got to do other calibrations to this asset to make sure that it doesn't break down to where we have to replace it earlier than we might if we had maintained it. The maintenance and repair process is a really important part of asset management.
Work orders and inventory management are really important because if you think about the maintenance that needs to happen on most equipment, especially less mobile equipment, such as manufacturing robotics or other equipment that's used to run a shop floor, that machinery is going to require ongoing maintenance and repair. So we're going to require ongoing work orders and service orders to help make sure that we stay on top of the maintenance and repair that's required for those assets.
In addition, you also have tools and other sorts of disparate inventory that might be used to support the maintenance and repair of those assets. Another example, when you think about utilities or power companies, a lot of them are still using overhead cables to transmit electricity and when there's repairs that need to be done they need to send field crews with tools and other inventory to fix whatever problem might happen as a result of an outage or it could be that they're doing more proactive maintenance that's going to require tools and inventory to support that job. In order to do that effectively, we need technology and processes that enable us to be able to track not only the assets but what inventory we might allocate to those assets to help fix them, to help repair them or just maintain them. That's why work orders and service order management is so important to Enterprise Asset Management.
Another large component of Enterprise Asset Management is not just the assets themselves and the equipment, materials and work orders that go with that asset but there's also the labor and human capital component. In other words, we have to assign teams to carry out repairs and maintenance. In order to do that we need to efficiently schedule people and we need to assign the inventory and the tools to those people so that they can ultimately carry out the necessary maintenance on the asset in the field.
There's a lot of cross-discipline sort of business processes that come together to support Enterprise Asset Management. Human Capital Management, scheduling and resourcing is a big part of the process and in many cases, you have certain certifications or safety requirements required for any field crew or individual that goes out to repair or do work on an asset. That's why Enterprise Asset Management is so interesting and so complex because you're not only managing physical assets but you're also managing the labor and the people and the scheduling and the certifications and skills behind it.
In order to have effective Enterprise Asset Management we need effective technology that can handle these complexities and manage all these moving parts of the process. As we mentioned earlier, we need technology that can track work orders, we need technology that can track the design and build of the asset, we need technology that can track the repairs in the service orders that might come from the field and more. All of those processes are vitally important to supporting Enterprise Asset Management. Additionally, we need to manage inventory and manage the people and the labor that are attached or associated with those Enterprise Assets.
There are multiple types of technologies that can help enable more effective Enterprise Asset Management. Standalone systems that focus solely on Enterprise Asset Management for example. IBM's Maximo is a leading Enterprise Asset Management system for example. In addition, you have ERP or Enterprise Resource Planning systems that do Enterprise Asset Management fairly effectively. These ERP systems also do other roles such as Supply Chain Management, financial and accounting customer service, Human Capital Management and other functions outside of Asset Management. ERP software solutions are generally becoming more adept and more robust in their Enterprise Asset Management needs.
Regardless of which technology or what kinds of technology you might use to enable Enterprise Asset Management, there's some emerging trends in the tech space that are really worth noting that are particularly important to Enterprise Asset Management. One such trend is the concept of predictive maintenance. Predictive maintenance is a technology and a process that enables you to anticipate when an asset might break or when the optimal time is for servicing or repairing an asset. Using the example of a utility company, like a gas or electric company, those utilities will have tons of wires and pipes and other equipment that's dispersed widely across a wide geographic area, so it's impossible that they treat all the assets in the field equally, there's going to be certain assets that are used more often or have more pressure put on them and there's other assets that are perhaps less likely to break or have repair issues. Predictive maintenance allows you to anticipate where the assets are that are most likely to need service or repair prior to them actually breaking, so predictive maintenance is an important capability that technology can provide to organizations.
In addition, Internet of Things is really transforming the way Enterprise Asset Management works. For example, devices and equipment in the field as well as in other places that can be capturing data about usage and potential problems that relays that data back to a central repository and technology that helps you anticipate where the challenges may arise, really help you see what's happening in the field, track what's happening in the field and prioritize your maintenance or repair and other Asset Management functions appropriately.
Finally, artificial intelligence is totally transforming Enterprise Asset Management. Additionally, artificial intelligence is using all the data that's being captured in the field and within other data sources to help learn and anticipate where problems might be before they become issues. These three technologies are examples of ways that new and emerging technologies are transforming the field of Enterprise Asset Management and these three technologies we just mentioned are things that are generally baked into ERP systems and standalone Enterprise Asset Management systems as well.
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