THE EVOLUTION OF ASSET PERFORMANCE MANAGEMENT

Asset Performance Management has the power to overcome the maintenance stigma because it has the power to change operational performance. It completes the evolution from maintaining assets to optimizing assets for higher profits and better overall performance on the bottom line.

Figure 1: Evolution of Asset Management

	CMMS	EAM	Asset Management Performance
Purpose	Automate procedures	Optimize asset performance	Optimize asset impact on operational performance
Scope	Site-by-site	Enterprise-wide	Enterprise-wide
Data	Maintenance procedures	Maintenance transactions	Performance data from Maintenance, HR, Finance, Operations, Others
Answers	When do we turn wrench? When do we order replacements?	How do we extend asset life? How do we reduce asset downtime?	How do we use asset to reduce operational costs? How does asset affect bottom-line performance?

Understanding how and why this is true requires just a brief description of how Asset Performance Management has progressed from earlier asset solutions. First-generation solutions, known as Computerized Maintenance Management Systems (CMMS), are essentially a way to automate a maintenance to-do list" when to turn the wrench on a certain piece of equipment, when to order replacement parts, and so on. The next generation, Enterprise Asset Management (EAM), focused on how to track and manage an asset's performance"how to extend the asset's life and reduce its downtime. For example, if an organization has 200 forklifts across 10 sites, and 150 are productive and 50 are not, the company can analyze maintenance transactions associated with the better-performing lifts"which manufacturer made them, when and how often they are maintained, what comprises preventive maintenance, and so on"and then use those findings to improve performance.

Asset Performance Management builds upon and extends EAM by combining asset management, maintenance and tracking with the ability to use this data to improve operational decision-making. EAM answers the question, "How do we get the most out of an asset?" Asset Performance Management answers the question, "How does the asset affect operational performance?" APM supplements enterprisewide maintenance transaction data with data from other silos in the organization-such as finance, human resources, inventory, and production-and provides the advanced analytics necessary to identify correlations and trends, thereby improving operational decisions and results.

Consider a chief operations officer with the goal of increasing production output enterprise-wide by 10% through a more efficient production process. Using Asset Performance Management, the COO might look across the organization and notice that where production lags, a high number of reactive work orders are being issued, and that where this is true, there is also a spike in the use of contracted labor. This leads to the conclusion that increased use of contract labor directly decreases both equipment (asset) efficiency and production output. Information drawn from HR, production and maintenance data enables the COO to isolate a problem, predict the impact, and decide what steps to take for improvement.