Each time you sit down to focus on strategic asset management (SAM), your goal is to optimize your budget as well as your resources within your asset lifecycle. Instead of reacting to issues, SAM allows you to proactively plan your budget based on expected asset maintenance and end-of-life requirements. As part of the process, you need to take in to account your budget, the condition of the assets and the people involved with both using and maintaining the assets.
At our recent conference, Virtual Dude University, Enterprise Solutions Consultant Luke Anderson of Dude Solutions walked through real-life examples of how using models with Capital Predictor can save money while often improving the condition of the facilities. By using modeling, you first build your portfolio of assets and then see the impact of changes, such as replacing or using a treatment option, on both your budget and the usability of the assets.
An example of an asset degradation curve.
In this model, you can see what happens when you do not replace an asset until the end of life.
Many organizations create a reactionary budget based on which assets failed during the year, which often means a budget shortfall and increased stress. By using modeling, you can see the impact of increasing your budget in certain years based on predicted needs, replacing assets before they fail or rolling over a budget from a previous year.While this approach isn’t as proactive and budget-friendly as using treatment options, modeling helps prevent crises and surprises.
For example, an organization can see that if they continue spending $100K a year to replace failing assets, in about 5 years the failure rate will outpace their budget. Our asset lifecycle prediction modeling software, Capital Predictor™, shows a very clear report with color-coded assets showing their life stage, illustrating a 20 to 30% failure rate of assets in 15 years and a 40% failure rate in 25 years. The organization can then see that without proactive action and strategic asset management, they will have an unusable infrastructure. to 30% failure rate of assets in 15 years and a 40% failure rate in 25 years. The organization can then see that without proactive action and strategic asset management, they will have an unusable infrastructure.
However, many organizations find that proactively using treatment options, such as rehabilitation and motor replacement, helps extend the life of their assets and makes better use of budget dollars.
While building the model in Capital Predictor, you can set specific parameters and criteria for the tool to use, including service criteria, such as condition, capacity, efficiency and compliance regulation, to determine when an asset gets fixed or replaced. Other important filters you can set are treatment filters, which include age/condition, energy efficiency, available funding, capacity and more.
By using strategic asset management and treatments, you can plan up to 20 years in the future, both in terms of budget and future goals.
And by running different scenarios of factors, treatments, replacement and cost, you can see the results that each model has on the usability and safety of your assets, as well as the impact on your budget. You can also print out detailed reports for stakeholders so they can see the consequences of their decisions, especially in terms of budget allocation.
By moving to a strategic asset management approach, your organization can both see the future and make a plan.
We hear the following benefits from operations professionals using this approach:
Through modeling with Capital Predictor, you can not only see into the future but also change it.
By mastering strategic asset management, you will have control of your assets and your budget.