In a digital world it is critical that industries move beyond traditional asset management. In 2020, it’s time to embrace predictive analytics to strategise capital investments more effectively.
Managers responsible for asset maintenance – whether in a factory, utility or public facility – are often forced to fill multiple roles, from supervising repairs and preventive maintenance to inventorying assets and projecting their lifespan. As digitalisation sweeps through industries, balancing the multiple pressures of the job can be difficult.
Digital concepts heavily rely on equipment upgrades, such as adding sensors and IoT connectivity, pulling decision-makers in multiple directions. Analysing capital needs and prioritising investments can be a time-consuming burden for the teams which are already stretched thin. Fortunately, technology can help.
“Asset management plays a critical role in the digital revolution,” believes Mark Bannerman, Managing Director – Infor Services at iOCO, Infor’s Master Partner in Africa (operating as a Gold Partner). “Network connectivity, machine learning, Internet of Things, and Artificial Intelligence are just a few of the innovative technologies which are transforming industries. Although these technologies are largely software-driven, they also rely on equipment and machinery updates, such as embedding sensors, adding robotic arms, etc. These machinery upgrades all require capital.”
Bannerman advises considering an alternative option in 2020. Rather than looking at only the investment element of the equation, asset managers will be more holistic in their recommendations if they can view the big-picture, from Facility Condition Assessment (FCA) to Remaining Useful Life (RUL) and Estimated Replacement Cost. “The recent as-serviced history, costs of asset maintenance and any service contracts or warranties must be considered,” he adds.
In most enterprises, the cost of unexpected downtime associated with upgrade-vs-replace decisions must be a factor. The ultimate question is, “What investment options will provide the most expedient resolution, the highest level of reliability, and the least amount of disruption to operations? The other big issue at stake: cashflow. Not only should the capital needed for the investment be considered, but the impact on personnel and any interruption to fulfilling customer needs should be considered as well. It’s a complex equation.
“An advanced Enterprise Asset Management (EAM) solution paired with robust analytics will provide that type of broad perspective. It all starts with conducting an asset assessment. While this may take some investment of time up-front, the rewards will pay-off,” says Bannerman.
The first step is capturing data around the critical nature of the asset or the “value” to the organisation, and that means more than replacement costs. Managers should also note for each asset whether the technology is considered “modern” or if it has become outdated and lagging woefully behind current industry standards.
The second step is developing the ability to monitor each asset and track performance issues. This will contribute to sound financial planning. This empowers users to search the system for assets which need preventive maintenance and make sure the necessary parts and resources are available, while estimating those costs.
Bannerman believes that the most significant value will come from the power of predictive analytics. Today, innovative Business Intelligence (BI) solutions can contain powerful predictive capabilities, using algorithms and data science to identify patterns in data points and project next likely outcomes. Users can explore “what if” scenarios and obtain cost and demand forecasts.
“This glimpse of future investment needs can be evaluated against projected cash cycles, taking account forecasts for customer demand into account. Managers can then prioritise major investments when funds will be available and plan for stop-gap, bare-minimum fixes during lean periods – all while identifying time-sensitive critical issues which are high priority and demand immediate response,” he says.
The reporting generated by the EAM solution, paired with advanced analytics, allow asset managers to consolidate needs across departments or business units and negotiate for possible economies of scale or bulk purchasing. “With the view into future demands and future capital available, asset managers can make well informed recommendations. Top priorities and critical needs can be considered along with potential gains and benefits. Smart investments will yield success in 2020 and beyond,” concludes Bannerman.