1.3: What is an asset?
With respect to maintenance, an asset is any piece of equipment, property, or other physical item used in a facility’s operations. Ideally, assets provide some kind of benefit to the business.
As an accounting term, “asset” refers to any resource that is intended to provide a benefit to the company. Under this definition, those assets that maintenance management is concerned with would be classified as “fixed” assets—i.e. physical resources that are more or less permanent fixtures in the business’s operations.
These assets are also referred to as PPE for “property, plant, and equipment.” As such, they might include machinery, tools, land, buildings, and IT equipment.
Over time, these types of assets will depreciate in value, and that depreciation is tracked as an expense. As an asset’s value diminishes, it could impact certain maintenance decisions. For instance, if a piece of equipment needs major repairs, the cost of those repairs is compared against its current depreciated value to determine if the work is really worthwhile. In some cases, it may be best to replace an asset rather than repair it.
Types of assets
Maintenance management is concerned with several types of assets. These are described below:
Machinery such as conveyor systems, lifts, rollers, presses, fans, boilers, and automated equipment all play key roles in a plant’s operations. In many cases, the level of maintenance these assets receive directly impacts the efficiency and reliability of core processes.
Tools may be simple (hammers, screwdrivers, and wrenches) or complex (power tools). Maintenance on these assets is typically simple, and they are often easily replaced when they break.
Equipment is a catch-all term for anything used in your operations. Heavy equipment might also refer to off-road vehicles, such as tractors, forklifts, excavators, and dump trucks.
Real estate is another fixed asset that requires regular upkeep. It may be as simple as an apartment complex or as massive and complex as a manufacturing plant. Maintenance on these assets often includes cleaning, snow removal, HVAC, electrical, and plumbing.
For many businesses, land is a major asset. Public lands, such as parks, roads, and city infrastructure, may also fall under this category.
Furnishings such as desks, tables, chairs, beds, and work tables may be used to facilitate a business’s operations. For example, a hotel would rely heavily on its beds for business, while offices need desks and chairs.
Example of assets
A plant that produces automobile parts relies on numerous physical assets to conduct its operations. Many of these are mechanical assets that are core to fabricating different parts. Those assets may include:
- Conveyor systems
- CNC machines
- Metal stamping presses
- Painting machines
In addition to these machines, workers use a variety of hand tools to keep everything in good repair and to assist in production processes. Break areas and offices include various types of furniture, and the IT infrastructure of the building facilitates all computerized operations.
The building itself is an asset as well. As long as the building’s structure remains sound and its MEP (mechanical, electrical, and plumbing) remains functional, it fulfills its purpose.
The land outside the building is also important since it provides parking space and facilitates loading and unloading. Keeping these areas in good repair and free of snow and ice may not be directly related to the plant’s core processes, but they are still important. They accommodate the building’s workforce and shipment needs, both of which are vital to continued operations.
As the plant seeks to maintain reliability, each of these assets must be accounted for and prioritized. Some assets aren’t necessarily going to need any special attention, but production line equipment will generally require thorough planning.
Managing and maintaining assets
Asset maintenance management often involves tracking the following:
- Work performed on the asset
- Parts purchased
- Meter readings
These metrics are then used to make decisions about what maintenance tasks should be performed on the asset. The best approach depends on the likelihood of each potential failure, what impact those failures would have on core operations, and what they would cost to repair.
Maintenance planners and managers typically handle asset management tasks, using the above data to create maintenance plans for each asset in their operations. Decisions about when to perform repairs, how they should be conducted, and when assets are decommissioned all come down to the data and the organization’s operational needs.