Poor Asset Management Practices to Avoid | Prometheus Group

Common Mistakes to Avoid

Are Green Metrics Hiding Poor Asset Management Practice?

You achieve 90% schedule compliance within your maintenance organization…Great! That means you’re achieving World-Class Standards right?

While you’re killing it at face value, when you scratch the surface of this benchmark, what’s there? Could you be scheduling more work to achieve greater capacity from resources… are your assets being maintained at an optimal level under this current model?

Of course, measurement is key to performance improvements, and a “green” Key Performance Indicator (KPI) is good – that means you’re hitting the goal. But it is only good so long as the goal is relevant to broader business objectives and drives the right behaviors in the maintenance team.

It’s important to be on the lookout for dangerous KPIs – that is: targets that are misleading, misunderstood or of no value to the organization.

Achieving targets makes you look good, but unless those key metrics effectively measure asset health or reliability or stability, they’re just hiding poor performance; having targets in play that are ineffective measures of asset health can be misleading for their contribution to your objectives.

It’s also fairly commonplace to have departmental KPIs that have… just always been there. And because they’re always positive, no one asks any questions. If you’re always hitting targets without understanding how, or why, they deliver zero value to the organization.

How to Evaluate your Key Performance Indicators

It’s worthwhile to consider a review of your maintenance plan, to make sure your KPIs are built around predictive and preventative maintenance strategies and behaviors that will optimize asset stability.

A good way to look at it is: ‘measure what you treasure’; such as:

Cost savings:

• % overtime, maintenance labor
• % overtime, maintenance labor
• %Contractor Maintenance Labor costs

Equipment Reliability:

• Mean time between failures
• % Emergency work

The Maintenance Backlog:

The maintenance backlog is often a reflection of underperformance or resource constraints. Measuring this will help determine the effectiveness of your maintenance strategies.

Keep in mind, that the work done by the Maintenance group needs to support business aims and operating strategy. Ideally, maintenance performance is clearly linked to the reason your company is in business. It is also important that these KPIs are those that can be controlled by the maintenance group or nominated team responsible for meeting them.

It may be tempting to stick to those comfy, old measures – especially if you know you can confidently achieve them. However, as your organization matures, it’s important to review performance targets to ensure they encourage the right behaviors; that they contribute to business performance and process improvements, and maintenance goals that are aligned with corporate KPIs and best practice.

Challenges of Poor Asset Management

Asset management is a complex discipline, and poor practices can lead to a multitude of challenges. Some of the most common challenges include: 

• Lack of Visibility: Without clear visibility into asset conditions, organizations cannot make informed decisions about maintenance, replacement, or upgrades.
• Inaccurate Data: Poor data collection methods lead to unreliable insights, causing errors in maintenance schedules and asset lifecycle predictions.
• Limited Resources: Resource constraints often result in reactive maintenance rather than proactive planning, which can lead to more breakdowns and increased costs.
• Outdated Technology: Relying on manual tracking or outdated software systems can hinder efforts to optimize asset performance and management. 

Understanding the Costs of Poor Asset Management 

The costs of poor asset management are significant and can impact both operational efficiency and financial outcomes. These costs include: 

• Increased Downtime: Assets that are not properly maintained tend to fail more frequently, leading to more unscheduled downtime and disruptions in production. 
• Higher Maintenance Costs: Reactive maintenance is often more expensive than preventive maintenance because it requires urgent interventions, which are typically costlier. 
• Asset Lifespan Reduction: Poor asset care can lead to premature wear and tear, reducing the asset's lifespan and increasing the need for early replacement. 
• Regulatory Penalties: Failing to meet industry standards or safety regulations due to neglected maintenance can result in costly fines or legal issues. 

The Impact of Neglected Maintenance on Assets

Neglecting maintenance has a detrimental effect on asset longevity and reliability. Over time, even minor issues that go unaddressed can escalate into major failures. The consequences include: 

• Decreased Efficiency: Worn-out equipment performs at lower efficiency, requiring more energy, labor, and materials to operate.
• Safety Risks: Neglected assets, especially critical equipment like machinery or electrical systems, can pose serious safety hazards to workers.
• Loss of Competitive Edge: Organizations that experience frequent asset failures or production delays may lose their market position to competitors who manage their assets more effectively. 

Strategies for Improving Asset Management Practices

To improve asset management, you need a systematic approach that includes better data collection, strategic planning, and advanced tools to help streamline processes and decision-making. 

Mitigating Risk through Effective Asset Tracking

An essential component of good asset management is ensuring that all assets are properly tracked. This includes: 

• Real-time Monitoring: Using IoT sensors and other tracking devices to monitor asset health in real-time can help identify potential issues before they cause failures.
• Condition-based Monitoring: By tracking key parameters (e.g., temperature, pressure, vibration) of assets, you can intervene at the right time to prevent costly breakdowns.
• Asset Lifecycle Management: Understanding where each asset stands in its lifecycle can guide decisions on maintenance, upgrades, or replacements. 

Leveraging Enterprise Asset Management Software for Better Control

Enterprise Asset Management (EAM) software centralizes all asset-related data and offers tools to automate, monitor, and optimize maintenance tasks. Benefits of EAM include: 

• Comprehensive Data Management: EAM systems allow organizations to consolidate asset data into a single platform, making it easier to track, analyze, and report on asset performance.
• Improved Scheduling and Planning: With predictive analytics, EAM systems can forecast when assets will need maintenance, allowing for optimized scheduling and reduced downtime.
• Enhanced Decision-Making: EAM systems offer insights into asset performance, enabling data-driven decisions on resource allocation, maintenance strategies, and capital investment. 

Increase efficiency, safety, and your competitive edge With the Prometheus Platform

Are you ready to elevate your asset management practices? Start optimizing your assets today with Prometheus Group’s customized maintenance solutions and technology that fits your processes. Contact us to see how you can reduce costs and strengthen asset performance.