How To Get The Most Performance Out Of Your Physical Assets
Success in industrial production involves maintaining high levels of productivity with minimal disruptions. In other words, successful production hinges on the performance and reliability of your physical assets.
Keeping your machinery, tools, and infrastructure in peak condition for continuous performance requires a comprehensive, multi-pronged, proactive approach to physical asset management.
Today, we will explore the various ways in which you can increase the performance of your physical assets.
What are physical assets?
Physical assets are items in material existence that have a clear economic or commercial value. Assets of this kind, owned by businesses, are also called tangible assets – as opposed to intangible assets or financial assets.
Examples of physical assets include cash, real estate, office supplies, unsold inventory, and marketable securities; while these types of assets are all considered physical assets, they are not a central focus of industrial production and maintenance.
From that perspective, the most important physical assets are the following:
These are all physical assets that contribute directly or indirectly to the business’s core activity – the production of goods. Such physical assets are generally categorized under two labels – long-term assets and operating assets.
Factors to consider when buying industrial assets
The acquisition of physical assets can have a major impact on the financial and operational status of a business. Firms have to consider the following aspects before pulling the trigger on an asset acquisition proposal.
Pricing & RoI
In many instances, this is the ultimate deciding factor when buying physical assets. You either can or can’t afford it.
Specialized machines can cost a lot of money. The impact of the purchase on the balance sheet can be quite severe, especially if the firm is forced to take on debt to finance the purchase.
In such instances, managers need a compelling reason to justify the purchase of an asset. They need to explore the impact the new asset can have on the business in terms of productivity boosts, and its overall long-term contribution to revenue generation and other future economic benefits. Consequently, other options such as leases can be explored, as well as the market value a new asset can achieve if sold as used later on.
Existing infrastructure and processes
Physical assets perform to their maximum potential when they are in sync with the company’s technical and infrastructural capabilities. During the acquisition phase, pick assets that fit existing production processes and infrastructure.
Imagine buying an asset that doesn’t fit into your facility. Believe us, you wouldn’t be the first one!
Onboarding and operating expenses
The successful purchase of an asset does not automatically guarantee returns to the business. It has to be integrated into the organization’s production process effectively. For example, if it is new machinery, employees often require additional training.
Similarly, if it is an old unused production facility, it may require refurbishment and refitting to make it ready for production. In such instances, the additional expenses required in terms of onboarding and operations may negate the benefits of its lower price tag.
This is why maintenance managers have to be aware of the limitations of their department, not just in terms of their budget, but also in the available time and skill level of their technicians.
Many physical assets come with the additional baggage of safety issues, regulatory compliance requirements, and liability insurance costs. Failure to adequately address these can result in costly fines and lawsuits. These are additional expenses that simply cannot be overlooked during the purchase of a new asset.
Ongoing maintenance costs
Can the asset be repaired and maintained in-house by the company’s technicians? How frequent/intensive is the suggested maintenance schedule? Does it require costly OEM spares? What is the status of affordable alternatives, such as aftermarket spares?
These are all important questions to consider when making a purchase decision on a new piece of equipment.
Maximizing the performance of physical assets
There is no silver bullet strategy that can guarantee optimal asset performance and utilization. Organizations have to take a focused, proactive role throughout the entire duration of asset ownership, starting right from the stage of planning and acquisition.
Going in largely chronological order, below are some of the tried and tested strategies and tactics to boost the performance of your physical assets and avoid premature depreciation.
1) Perform necessary upgrades to production facilities
This tip is geared towards technical assets like plant machinery and equipment. They usually come with detailed specifications regarding operating conditions, power requirements, mandatory safety features, and so on.
Assets put to work under deficient operating conditions are more prone to breakdowns. Ensure that existing production facilities are suitably upgraded for all newly acquired equipment to prevent avoidable wear and tear.
Most competent industrial equipment manufacturers offer a diverse array of support services to their customers. Vendors often provide vital technical assistance during the delivery and installation of equipment in production facilities.
They may also offer workshops and training modules to bring equipment operators up to speed. To execute a smooth onboarding process for new equipment, devoid of any bumps on the road, firms should fully leverage all services offered by OEMs.
Along with training, the availability of proper accessories and industrial safety equipment is essential for asset safety. Ensure that staff has full access to items like high-visibility safety overalls, footwear, helmets, gloves, eye protection, and respiratory protection equipment (RPEs).
4) Adhere to recommended operating protocols
Asset vendors/OEMs usually have operating manuals that specify ideal use case scenarios and operating protocols. It is a good idea to consider these guidelines when setting production targets. Using assets outside OEM guidelines may void warranties and result in costly repairs.
5) Avoid both extremes of asset utilization
Facilities and machines left idle for a long time will suffer damage/degradation due to underutilization. On the other extreme, constant use of assets in production will also result in faster degradation of moving parts.
Striking a balance between the two is not an easy asset management task. Still, every attempt must be made to keep both extremes to a minimum, as they both lead to depreciation. Using a competent EAM/CMMS software solution, businesses can ensure optimal utilization of all available assets.
6) Monitor operating standards on the plant floor
Asset degradation often occurs due to improper or lax operating standards during production. Inadequate attention to routine maintenance is another major contributing factor. Firms should take an aggressive stance here, enforcing strict quality and safety standards in both asset operation and maintenance.
7) Invest in IoT and other technologies
Industry 4.0 is a radical new paradigm in which firms look to achieve unprecedented levels of efficiency, economy, and productivity with the help of digital technologies. Some examples include IoT sensors, AI data analysis, and 5G-based edge computing.
Even though this asset class can come with additional legal baggage such as intellectual property or copyrights, adding them to your current assets is a sure way to keep up the pace with the industry and increase the positive on your financial statements.
Combining these intangible assets with a modern CMMS platform, firms can identify hidden signs of fatigue in assets sooner than ever. Such critical insights can further enhance the efficiency of predictive maintenance and its ability to increase asset performance.
A shift to proactive maintenance is essential to reduce unplanned downtime and improve overall asset longevity and productivity. Investing in a modern, cloud-based CMMS software solution is the first step. It is very hard to execute proactive maintenance with legacy software.
Proactive maintenance offers the best RoI in eking out optimal performance from physical assets. A modern CMMS solution like Limble is essential for the successful adoption and execution of proactive maintenance efforts.
Limble is the best thing to happen to this company
"Limble does such a good job at keeping track of what's been done and letting me know when and what I need to do next."
— Tom Jones
Little Giant Ladder Systems
Limble has completed changed the way we do maintenance
"Limble is amazing. It has revolutionized the way we handle repairs and the upkeep of our assets and facilities. We not only can keep track of work that has been done on each asset, but we are also able to track costs associated with the asset itself."
— Ethan Closson
Little Giant Ladders
Great time saver
"On average, [Limble] saves me an hour to two hours a day, depending on the workload. The biggest thing for me is being able to do things on my phone, on the fly."
— Rob Siler
I spent a long time evaluating systems I'm so glad I chose Limble
"Limble is super easy to use. For technicians receiving work orders, it requires almost no training. The app makes it quick and easy to create work orders (with pictures) from your phone. PM's are also very easy to set up. Limble is also the least expensive."
— Matt Olson FMP
Perfect for my business
"I run a coffee equipment service company and Limble is great for everything we do. We can store all of our assets and equipment and access it easily with a comprehensive list of all the work done on the equipment. Limble is by far the best CMMS on the market and I wouldn't dream of using anything else."
— Tie Groth
Over all very good
"Nice layout and easy to use. Email alerts are very useful, and the comparison between planned and unplanned is very helpful"