What is asset management in manufacturing?

Asset management is a general term which is relevant to every vertical. When it’s applied to manufacturing or process plants, it’s called manufacturing asset management (MAM), or plant asset management (PAM). The market for plant asset management is projected to grow from $5.5 billion in 2019 to $9.4 billion by 2024, at a CAGR of 11.3%.

Asset management for manufacturing companies concerns the entire lifecycle of plant assets, such as equipment, parts, production lines, and the plant buildings themselves. It includes making decisions about asset use, asset investment and disinvestment policies, and managing the asset portfolio. Its aim is to achieve maximum value from your physical assets, so PAM is a crucial step towards operative excellence and OEE.

Although MAM focuses on physical assets, it has a knock-on effect on human resources, financial assets, and informational assets. Effective asset management needs to integrate well with the relevant capabilities of those other assets.

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Manufacturing asset management tends to include maintenance, with the asset manager delivering assignments to maintenance teams who then provide the maintenance service, but it also goes beyond it. Maintenance is about resolving failures quickly and with minimum disruption, while asset management is about reducing failures, extending asset lifecycle, streamlining operations, and increasing efficiency across the plant.

Why does manufacturing asset management matter to process manufacturing plants?

As the process manufacturing industry becomes more competitive, and customer demand and market conditions fluctuate more frequently, process manufacturing companies need every advantage they can acquire.

MAM can help process plants to:

  • Meet rigorous safety requirements
  • Comply with the growing number of environmental impact regulations
  • Adapt quickly to changing customer demands
  • Cope with fluctuating energy costs
  • Refine maintenance scheduling to cut maintenance costs
  • Streamline production processes for greater efficiency
  • Track and manage inventory and equipment usage and location
  • Predict and budget for future asset purchases and retirement timing
  • Improve reporting for smoother auditing, budgeting, and compliance activities
  • Adapt to labor shortages and a lack of technical skills

How can process plants apply manufacturing asset management?

Successfully implementing asset management for manufacturing depends on a number of factors.

Gather your data

Asset management relies on data from IIoT devices, sensors, and manual inspection. Before you can carry out MAM, you need an effective way to gather and store historical performance data for the relevant assets, so your asset management software (AMS) has the information it needs.

Establish the right IT infrastructure

Although you could perform manufacturing asset management with Excel spreadsheets, it’s far smoother when you have the right tools. Many ERPs include some asset management capabilities, but computerized maintenance management software (CMMS) or AMS has all the features you need for successful MAM.

Review human resources

Like every initiative in the process plant, tools and devices can only take you so far. You also need the right employees in the right positions to take responsibility for your asset management plans. Asset management is part of a proactive culture of continuous improvement, so plants also need to stimulate a culture shift towards proactive decision-making and away from chasing fires.

Define asset management boundaries

You need to decide which assets will be included in your asset management system and where the boundaries will lie for manufacturing asset management policies. Asset management planning needs to include 3 dimensions: the business level of defining assets; lifecycle processes for primary assets; and the organizational level of developing and implementing policy.

How do process plants benefit from manufacturing asset management?

Process plants that embrace manufacturing asset management gain insight into asset usage, condition, and lifecycle that allows them to optimize operational efficiency and drive business growth. Asset management for process manufacturing enables plants to cut costs, improve production quality and quantity, and maximize value from assets across the company.