Analysis and Optimization, Asset Management, CMMS, EAM, Maintenance, Parts & Inventory Management

Asset Management Fundamentals: Managing Equipment Throughout Its Lifecycle

December 31, 2025

Introduction

Asset management is a systematic approach to managing equipment, machinery, and infrastructure throughout its lifecycle, from acquisition to disposal. The goal is to achieve maximum value from your assets while minimizing costs and risks.

According to statistics, the average age of industrial equipment in the United States is the highest since the 1940s. This makes asset management more important than ever.

What is Asset Management?

Asset Management is the process of planning, organizing, and controlling all activities related to an organization’s assets to achieve its objectives. It includes:

  • Tracking assets and their location and condition
  • Scheduling and executing maintenance
  • Managing asset lifecycle
  • Making repair versus replacement decisions
  • Analyzing total cost of ownership

Asset Lifecycle

1. Planning and Acquisition

The lifecycle begins with identifying the need for an asset, studying available options, and purchasing or leasing. Decisions at this stage affect costs throughout the asset’s life.

2. Installation and Commissioning

Installing the asset correctly and training operators on it. Documenting all essential information in the asset management system.

3. Operation and Maintenance

The longest phase in the lifecycle. It involves daily operations and implementing preventive and corrective maintenance programs.

4. Upgrade and Development

Upgrading the asset to improve its performance or extend its life. May include replacing major components or adding new technologies.

5. Disposal and Replacement

When the cost of maintaining an asset exceeds its value, it’s time to replace it. This includes selling the old asset or disposing of it safely.

Elements of Effective Asset Management

Asset Register

A comprehensive list of all assets including: identification number, location, purchase date, purchase value, useful life, and asset condition.

Asset Hierarchy

Organizing assets in a hierarchical structure: Location ← System ← Equipment ← Components. Facilitates searching, tracking, and data analysis.

Maintenance History

A complete record of all maintenance work performed on each asset, including costs and previous failures.

Performance Indicators

  • MTBF (Mean Time Between Failures): Measures asset reliability
  • MTTR (Mean Time To Repair): Measures maintenance speed
  • OEE (Overall Equipment Effectiveness): Measures overall performance
  • Maintenance cost as a percentage of asset value

CMMS vs EAM

CMMS (Computerized Maintenance Management System) focuses on daily maintenance operations: work orders, preventive maintenance, inventory.

EAM (Enterprise Asset Management) is broader in scope and includes: complete lifecycle management, long-term financial planning, risk management.

Many modern CMMS systems include basic EAM functions.

Benefits of Effective Asset Management

  • Reducing unplanned downtime and production losses
  • Extending equipment life and deferring capital investments
  • Improving safety and regulatory compliance
  • Making data-driven decisions
  • More accurate budget planning

Conclusion

Asset management isn’t just about tracking equipment—it’s a strategic approach to maximizing value from your investments. Start by creating a comprehensive register of your assets, then develop a maintenance program that keeps them in optimal condition.

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