Top performers optimize their assets. It's true in any field"sports, the arts, and business. Yet in business, optimizing performance of capital assets often plays distant runner-up to the more glamorous pursuit of topline growth. That's not surprising, given the importance of increasing sales revenue and growing a customer base. But it can be costly. Under-performing capital assets leave tremendous profit potential on the table" potential estimated to be as much as 10 percent improvement to the bottom line annually, with up to 30 percent reductions in operating costs.1
Insufficient attention to optimizing assets can also lead to operating surprises that are even more punishing. Consider the prominent pharmaceutical firm that, due to production processes deemed unsafe by the Food and Drug Administration (FDA) and its UK counterpart the Medicines and Healthcare products Regulatory Agency (MHRA), was barred from providing more than 45 million doses of flu vaccine to the United States. It lost more than $100 million in revenue, took a charge of 36 cents per share, and saw its stock price plummet more than 30 percent2"all because critical capital assets and processes in its manufacturing operations were managed inappropriately.
Or consider the public water utility whose quality-control problems in 1993 with storm run-off systems and purification processes led to almost $200 million in medical and facilities expenses, and more tragically, to more than 100 deaths.3 The disaster could have been avoided if the utility had the ability to more effectively model and predict asset performance for circumstances like those that lead to this disaster.
The solution to achieving hidden profit potential and avoiding costly operating surprises is Asset Performance Management. Asset Performance Management combines best-of-breed enterprise asset management (EAM) software with the power of cross-functional data analysis and advanced analytics. This enables organizations to make decisions that optimize not just their assets, but their operational and financial results.
WHY IS ASSET PERFORMANCE OPPORTUNITY A SECRET?
ARC Advisory Group may have said it best. "Investments in capital assets are staggering"billions of dollars invested in hundreds of plants worldwide. While the nature of the assets may differ"acquiring, maintaining, and disposing of these assets is a very serious business. A one percent improvement in performance can be worth millions annually."4
How this magnitude of profit potential could remain a secret remains a mystery, particularly in today's tough, cost-constrained operating environment. But it has a lot to do with the realities of organizational culture and the traditional role of asset management. Asset solutions have long had a visibility problem. They have traditionally been marketed to and run by an organization's maintenance personnel. Unfairly, maintenance carries a stigma, even though it is critical"accounting for as much as 50% of some organizations' operational expenses. But it is also unglamorous and has resulted in asset solutions being hidden from executive level attention. The benefits of asset solutions are no secret to maintenance managers worldwide, but those benefits have yet to percolate to the top of the executive suite.
1 Datastream
2 Dow Jones Equity News
3 Milwaukee Journal Sentinel
4 ARC Advisory Group
Insufficient attention to optimizing assets can also lead to operating surprises that are even more punishing. Consider the prominent pharmaceutical firm that, due to production processes deemed unsafe by the Food and Drug Administration (FDA) and its UK counterpart the Medicines and Healthcare products Regulatory Agency (MHRA), was barred from providing more than 45 million doses of flu vaccine to the United States. It lost more than $100 million in revenue, took a charge of 36 cents per share, and saw its stock price plummet more than 30 percent2"all because critical capital assets and processes in its manufacturing operations were managed inappropriately.
Or consider the public water utility whose quality-control problems in 1993 with storm run-off systems and purification processes led to almost $200 million in medical and facilities expenses, and more tragically, to more than 100 deaths.3 The disaster could have been avoided if the utility had the ability to more effectively model and predict asset performance for circumstances like those that lead to this disaster.
The solution to achieving hidden profit potential and avoiding costly operating surprises is Asset Performance Management. Asset Performance Management combines best-of-breed enterprise asset management (EAM) software with the power of cross-functional data analysis and advanced analytics. This enables organizations to make decisions that optimize not just their assets, but their operational and financial results.
WHY IS ASSET PERFORMANCE OPPORTUNITY A SECRET?
ARC Advisory Group may have said it best. "Investments in capital assets are staggering"billions of dollars invested in hundreds of plants worldwide. While the nature of the assets may differ"acquiring, maintaining, and disposing of these assets is a very serious business. A one percent improvement in performance can be worth millions annually."4
How this magnitude of profit potential could remain a secret remains a mystery, particularly in today's tough, cost-constrained operating environment. But it has a lot to do with the realities of organizational culture and the traditional role of asset management. Asset solutions have long had a visibility problem. They have traditionally been marketed to and run by an organization's maintenance personnel. Unfairly, maintenance carries a stigma, even though it is critical"accounting for as much as 50% of some organizations' operational expenses. But it is also unglamorous and has resulted in asset solutions being hidden from executive level attention. The benefits of asset solutions are no secret to maintenance managers worldwide, but those benefits have yet to percolate to the top of the executive suite.
1 Datastream
2 Dow Jones Equity News
3 Milwaukee Journal Sentinel
4 ARC Advisory Group
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