Asset Performance Management

What is asset performance management?

Asset performance management (APM) helps track, diagnose, and prevent critical asset failures by monitoring them in real time. It is an approach to improving asset performance by avoiding unscheduled downtime, reducing operational expenditure, improving asset utilization, and ultimately optimizing the asset lifecycle cost. Asset performance management software captures data from physical assets with the help of sensors and the industrial internet of things (IIoT) and provides real-time visibility into asset performance using powerful visualization and analytics.

Organizations invest huge amounts of capital in buying fixed assets to generate value. When assets and equipment fail, it affects the return on asset (ROA) investment. While damaged assets are a loss to the company, they also slow down the production process resulting in a cut in the overall bottom line.

Benefits of using asset performance management

Asset performance management is crucial to keeping asset health in check and improving reliability and availability while controlling operational costs. Good APM practice helps improve the longevity of the asset and keeps the workflow running smoothly.

• Longer asset life cycles: Timely asset performance checks help monitor assets smarter, predict asset failure, optimize asset health, and plan asset strategy using a data-driven methodology.
• Improved work management: The insights from APM help predict future asset breakdowns and prevent critical risks while allowing teams to eliminate many time-consuming practices, manage resources, and improve worker schedules.

• Risk prevention: APM helps reduce risk by addressing asset malfunctions before it causes injury to operators or workers due to accidental failure.
• Better top-line and happy customers: APM ensures quality production yield and on-time shipments increasing sales revenue, promoting better business relationships with dealers, and maximizing customer satisfaction.
• Deeper insights through analytics: APM software uses predictive analytics, artificial intelligence (AI), and machine learning to find trends and insights that can enable safer and more reliable operations in the manufacturing site.

Basic elements of asset performance management

A well-designed asset performance management program is the key to success on a plant floor. While designing it, operation and maintenance leaders must consider the basic elements listed below:

• Asset assessment: Before churning out an investment plan for APM, it is important to check the health and condition of existing assets. The value of any fixed asset depreciates over time, and getting rid of fully damaged assets is essential to avoid short- and long-term consequences.
• Risk prediction: Performace improvement is the system's goal, and APM must be capable of predicting risks to avoid sudden catastrophic failures. It uses predictive analytics to track asset degradations, identify risks, and help mitigate responses.
• Maintenance prioritization: APM must prioritize the maintenance schedule when required as per the asset health. Finding the right maintenance strategy is crucial to avoid over and under maintenance and achieve cost optimization.

Asset performance management strategy

Asset performance management is a crucial part of the digital transformation initiative adopted by industrial and manufacturing companies. A proper APM strategy allows people and systems to work together towards a common goal. A well-planned APM strategy is always based on the fundamental principle of inspection before investment and maintenance before replacement. An APM strategy must aim toward including the following:

• Maximize asset performance and minimize operating costs
• Improve assets reliability, ROA, and boost production
• Identify underperforming assets and adopt a condition-based maintenance strategy
• Ensure prevention of accidental hazards and monitor health and safety
• Continuous APM program innovation to achieve financial results

Asset performance management best practices

While looking at a data-driven methodology is important to create a sophisticated asset performance management program, to ensure optimum results, follow these best practices:

• Select the right software: APM uses various tools like smart devices and software to capture and contextualize data. A good APM software enables access to the correct data, helps decide an asset’s stage in the asset lifecycle journey, and suggests measures for replacement or maintenance.
• Hire skilled technicians: APM jobs are highly data critical and technical. Problem-solving and technology or computer skills are requirements in this field. With changing technology and system advancement, hiring fresh skills or upskilling should be the top strategic priority of the organizations.
• Measure ROA: ROA is an important metric to achieve the most out of APM practice. It measures how much profit a company is generating from each dollar invested in total assets over a period of time. A falling ROA means the company has failed to achieve the returns from the amount invested in the assets. 

Asset performance management vs. Enterprise asset management

Asset performance management (APM) and enterprise asset management (EAM) might overlap in terms of the features offered but are meant for entirely different tasks.

APM diagnoses asset health by capturing data using IIoT and lets operation leaders know the asset's current status. Data captured from the assets are converted into actionable insights with the help of predictive analytics, AI, and machine learning post which a decision is taken to adopt the corrective measure.

EAM is an end-to-end solution that takes care of the overall process of asset management. It intervenes at each step of the asset management process and monitors the assets lifecycle from acquisition to disposition. It helps manage asset maintenance, measure asset KPIs, track cost, and support analytics and reporting. APM is a crucial part of overall enterprise asset management.

Looking to improve maintenance efficiency alongside asset performance? Discover the best CMMS software to complement your APM strategy and keep every asset running at peak performance.