Introduction To Physical Asset and Maintenance Management

Introduction to Physical Asset & Maintenance Management
A note from the author.
The earth is a physical asset that we as a human race are responsible to manage and the manner in which this is performed can affect us on a global scale. How we utilize the natural resources and maintain the cleanliness of the land, water and air directly affects the delicate balance and quality of life for present and future generations.
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FREEBOOK, 2014, Guido Pydde, Please Distribute Freely
Contents
Preface ............................................................................. 6 Introduction ..................................................................... 8 Physical Assets ............................................................... 11 Physical Asset Lifecycle .................................................. 16 Physical Asset Management System .............................. 17 Policy .............................................................................. 19 Plan ................................................................................ 19 Objectives ...................................................................... 20 Physical Asset Support ................................................... 21 Leadership & Stakeholder Support ................................ 23 Communication .............................................................. 24 Risk Management .......................................................... 25 Project Management ..................................................... 26
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Planning ......................................................................... 27 Engineering .................................................................... 28 Commissioning ............................................................... 29 Energy & Utility Efficiency .............................................. 30 Disasters & Emergencies ................................................ 31 Safety ............................................................................. 32 Security .......................................................................... 34 Ergonomics .................................................................... 35 Quality ............................................................................ 36 Information Technology................................................. 37 Hazardous Materials ...................................................... 38 Waste Disposal & Recycling ........................................... 40 Maintenance .................................................................. 41 Environmental Maintenance ......................................... 45 Maintenance Program ................................................... 47
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Maintenance Schedules ................................................. 54 Reactive Maintenance ................................................... 55 Computerized Maintenance Management .................... 57 CMMS Selection ............................................................. 58 CMMS Implementation .................................................. 59 CMMS Training............................................................... 62 Audits ............................................................................. 63 Internal or External Maintenance .................................. 64 Multi Divisional Maintenance ........................................ 69 Maintenance Skills ......................................................... 71 Budgeting for Maintenance ........................................... 72 Maintenance Costs ........................................................ 75 Maintenance Metrics ..................................................... 78 About The Author .......................................................... 80
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Preface
I have written this book in an attempt to convey the general concepts, principles and importance of physical asset and maintenance management. Both of these functions are in many ways taken for granted only because we dont realize or acknowledge the fact that the effects of how these functions are performed affect our everyday lives. As with many things in life, when they are operating smoothly and functioning properly, we tend not to acknowledge or think about the associated
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tasks and costs that are required to maintain these conditions. This book identifies WHAT functions and programs a physical asset management system is comprised of and WHY they are needed. However, it does not dwell on HOW these functions and programs are to be implemented. The need for them and how they are implemented will vary based on several factors such as what types of products and services an organization provides, the size of the organization and the existing infrastructure and culture.
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Introduction
The majority of us perform physical asset management related activities regularly and dont even realize it. We rely on the effective management of physical assets in our daily lives that are utilized in industries such as utilities, transportation, waste & water treatment, oil, chemical, automotive, electronic, construction, pharmaceutical, health & nutrition, real-estate, medical, food, aerospace, defense, manufacturing and entertainment. We depend on the fact that physical assets such as aircraft are managed and maintained properly so that they will not fall from the sky or a nuclear power plant reactor does not incur a meltdown. The entire infrastructure in which we live depends on
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physical asset management and how effectively and efficiently it is applied. The simple fact is that just about every organization performs physical asset related activities. The size of an organization, quantity and complexity of physical assets and type of products or services that an organization provides directly affects the extent and complexity of a physical asset management system. As with many things in life, we can choose to ignore or even reject a systematic approach as to how these activities are performed or we can choose to embrace and organize them. The organized implementation and management of a physical asset management and how this is implemented and maintained will directly and indirectly affect the success of the organization. This book will explain the different aspects of physical asset management and briefly describe the implementation of maintenance management as well. It addresses the importance of a reoccurring activity that
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significantly affects the life of many physical assets which is known as maintenance.
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Physical Assets
Lets begin with an analogy that the majority of us can relate to. Many of us own, lease or rent an automobile and a home within we live. These are both forms of physical assets. The majority of us like our physical assets to be clean, nice looking and well maintained. When we entertain friends and relatives, we like to impress them with our physical assets. A dirty home or automobile does not leave a good impression. They can look, feel and smell unpleasant or even offensive and affect issues such as safety, health and performance. When we plan
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to acquire a physical asset, we usually think about several factors such as initial cost, quality, appearance, efficiency, reliability, performance, longevity and if you are maintenance minded, maintainability. A physical asset has many stages that it passes through which define its lifecycle. This lifecycle includes stages such as acquisition, commissioning, maintenance and disposal to name a few. The planning function is usually performed during several stages of the lifecycle. Using our current analogy, let us focus on the automobile. An automobile is initially planned, designed, engineered and manufactured by the automobile manufacturer before it is sold to the public. This process includes quality control activities to ensure that a reliable product is delivered to the end user and will fulfill the defined requirements as expected. This is typically a part of the commissioning process. The customer is the one that will purchase the automobile and will be shopping around and evaluating
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factors such as price, appearance, quality, efficiency, dependability, reliability and longevity. The fact is that the initial cost or price alone should not be the only influencing factor. There is a cost which is associated with an automobiles life which is known as physical asset lifecycle cost. In many instances, the most significant cost associated with a physical assets life besides the initial investment is the cost of maintenance. Maintenance includes activities such as cleaning, repairs, inspections, servicing and periodic parts replacements. If an automobile is not maintained properly at scheduled intervals, the influencing factors which were initially considered appealing prior to the purchase will deteriorate thus affecting the value and reliability of the automobile. In another example, the buyer might purchase an automobile that has low quality ratings but the lower initial cost is appealing. However, due to the low quality rating, this type of automobile may experience significantly more component failures which affect the reliability of the automobile. In both cases, the
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lack of reliability will have a severe impact on the owner such as reactive repairs, excessive costs and inconvenience. We have clearly defined some of the important factors that influence physical assets. The analogy that we used with automobiles and homes can be directly applied to organization environments. The majority of organizations are housed in some form of a building. Additionally, organizations usually purchase, rent or lease physical assets such as computers, printers, furniture, vehicles, machinery and equipment. In many instances, there seems to be a separation of how we view and treat our personal physical assets compared to the physical assets that are utilized by our organization. In reality, the physical assets of an organization should be treated with a higher level of respect and care than our own personal physical assets. This is due to the fact that the physical assets that are utilized by the organization contribute to providing the organizations revenue, success and the income that funds our personal physical assets. So why is
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it that in many organizations this is not recognized? This may be due to the manner and the method in which physical asset management and more specifically maintenance management is viewed, understood and implemented within an organization and also understanding the associated risks of not having a system in place. The majority of organizations that embrace physical asset management have a carefully planned, defined and structured implementation of it with the accompanying strategies, plans, policies, procedures, functions, programs and supporting systems. These organizations have learned that not having a system in place affects the performance, success and competitiveness of the organization and can actually jeopardize their existence.
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Physical Asset Lifecycle

A physical asset is typically exposed to each of the following activities throughout its life. 1. 2. 3. 4. 5. 6. 7. 8. 9. Plan Design, Engineer Purchase, Lease, Rent, Acquire Construct, Build, Fabricate, Assemble Commission Maintain Audit, Inspect, Evaluate Rebuild, Dispose Replace
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Physical Asset Management System

It is extremely important that a scalable Strategic Asset Management Plan (SAMP) is developed that includes the involvement of stakeholders. This plan should define how physical assets are managed throughout the various lifecycle stages. A physical asset and maintenance policy must also be established that the stakeholders agree to live by.
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A thorough physical asset management system should include the following; 1. 2. 3. Policy Objectives Plan(s)
All three of these requirements should provide a consistent tone that address all of the needs of physical asset management, requirements of the organization and expectations of the stakeholders. The system should describe, define and include all of the necessary support functions and how they are utilized and integrated. It should also be periodically reviewed to ensure that it is kept up to date and continues to meet the requirements of the organization and the physical assets that are utilized. When properly structured and implemented, a physical asset management system will ensure that a maximum return on investment is achieved.
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Policy
The physical asset management policy must be documented and provide a framework for setting the asset management objectives and should include commitments by top management towards satisfying the applicable requirements and the continual improvement of the physical asset management system. This policy should be consistent with the organizational plan and other relevant policies.
Plan
The organization should develop and document a plan that will assure that the physical asset management system will achieve the original intentions of the policy and prevent or reduce undesirable effects and integrate continual improvement methods. This plan should also be consistent with achieving the organizations objectives and expectations of the stakeholders.
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Objectives
The asset management objectives should be consistent with organizational objectives and the asset management policy. They should also be measurable, monitored, reviewed and updated as needed. The organization will need to establish an infrastructure with assigned responsibilities and appropriate authorities that will accomplish, support, review and update the objectives.
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Physical Asset Support

Depending on the size and business nature of an organization, there are several support functions and programs that may need to be put into place to ensure that the physical asset management system is complete. These include the following; Disaster & Emergency Preparedness and Recovery Energy Efficiency Engineering Ergonomics Hazardous Materials
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Information Technology Maintenance Planning Quality Risk Safety Security Waste Disposal & Recycling
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Leadership & Stakeholder Support

The majority of systems and programs that are put into place within an organization require the support of the organizations leadership and stakeholders. This is an absolute necessity. There should be an open acknowledgement and expressed interest by top management as to the need and support of these systems. It is extremely difficult and in some cases impossible for a system to exist without this support. As is the case with many systems and programs, without continual support, the system is destined to deteriorate and eventually may fail completely.
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Stakeholders need to be involved in the establishment, review and refinement of the physical asset management system as a whole. This is what provides input as to how this system will be formed and helps to ensure that important functions and requirements are addressed and included.
Communication
Physical assets are utilized for many different purposes and by many different people within organizations. Related activities should be communicated with the individuals that rely on these physical assets to accomplish their tasks and goals. In some cases these activities require negotiations or alternative solutions to
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be put into place. Nevertheless, it should never be assumed that the related activity does not require some type of planning, scheduling and notification to be performed. People tend to become much more receptive and cooperative when they are included in the decision making process and in many cases provide invaluable input. Communication usually affects the success of the required activity.
Risk Management
Identifying and addressing potential risks is a critical part of any physical asset and maintenance management system. The type of risk and the extent of the associated effects will influence the manner in which it is addressed. The cost of some physical asset failures pose such a significant risk due to the associated costs that they must be mitigated because failure is not an option. For example, many physical assets rely on electricity to function. Some of these physical assets provide life sustaining services or information and technological
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services that will cause unacceptable conditions without their continued functionality. This associated risk may be addressed by implementing a backup generator that automatically continues to provide the electricity when the main service fails. Another example is determining which components of a continually used physical asset are prone to failure and that may be very difficult to acquire. In this case spares are usually kept readily available and additional alternative solutions are carefully evaluated and may be put in place. These are both forms of risk mitigation.
Project Management
In many cases, physical asset and maintenance management require the use of project management skills or even a dedicated project management entity or group. Many types of projects are encountered and must be managed such as physical asset relocation, expansion, setup, design, engineering, construction, fabrication, assembly and installation to name just a few. These
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projects require careful planning, coordination and execution to be successful.
Planning
One of the most important activities that is sometimes overlooked in physical asset management is the continual need for effective planning. Planning should occur throughout the lifecycle of many physical assets. The planning process should include the stakeholders which are involved directly and in some cases indirectly with the physical assets. It is typically performed prior to and in many cases during each stage of physical asset management. Contributing factors such as end use, utility, space and performance requirements, costs,
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maintenance requirements and expected longevity should be considered. The lack of planning can cause unnecessary delays with additional costs and can jeopardize the effective implementation, commissioning and use of a physical asset.
Engineering
Many organizations utilize one or more forms of engineering regularly as it applies to physical asset management. Reliability engineering is a skill that is used
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in many organizations to ensure that physical assets will live up to their expectations and in many cases helps to optimize physical asset performance. Engineering functions are also utilized to comply with mandated physical asset requirements. These requirements can include fire, security, safety and health. Planned activities such as expansions, relocations, construction, fabrication, refurbishment, remodels, rebuilds, maintenance and upgrades also utilize engineering skills. Required engineering skills include but are not limited to mechanical, electrical, civil, architectural, maintenance, reliability and structural to name a few.
Commissioning
The commissioning process involves ensuring that the physical asset is ready for use. This is typically a quality and compliance related activity that involves inspections to ensure that the physical asset meets the defined requirements, standards and expectations. The inspections can include factors such as quality, health,
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safety, performance, reliability, efficiency as well as meeting mandated federal, state and local requirements. At the very least, the inspection process should involve a checklist of items that need to be inspected and verified prior to the release of the physical asset.
Energy & Utility Efficiency

Physical assets typically utilize one or more forms of energy and utilities to perform their intended function. Electricity, water and natural gas are commonly utilized. All of these have their own associated costs. New technologies and products continue to emerge that can provide significant cost savings to organizations due to increased energy efficiency. The manner in which utilities
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are distributed and utilized affect several different physical asset factors such as operating and maintenance costs, performance and longevity.
Disasters & Emergencies

A commonly overlooked and underestimated factor that may cause a significant financial impact to an organization is disasters and emergencies. The continued success of an organization can be dramatically affected by not being prepared for mishaps. Proper planning and implementation of the related programs provides a significant form of risk mitigation. Disasters such as fires, tornados, hurricanes and earthquakes can devastate an organizations ability to operate and provide their
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intended services and products. All mission critical systems should be evaluated and alternative solutions need to be implemented that address how a disaster or emergency will be handled and how the organization will recover. Building and property maps that show locations and waypoints are extremely useful for visitors and employees. These maps should include evacuation locations and routes.
Safety
The personnel that utilize physical assets are directly affected by the way that these physical assets are designed, implemented, maintained and used. Safety should be of major concern. Our environment can
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subject us to many hazards that are usually unintentional. People should not be subjected to an unsafe environment and conditions that could cause injury or death. An organization that has environmental dangers should ensure that appropriate measures such as personnel protective equipment, showers, eyewash stations, fire extinguishers, first aid stations, procedures, signs and work instructions have been put in place, are enforced and monitored. Organizations within the United States may also need to comply with Occupational Safety and Health Administration (OSHA) standards as they apply. This includes safety programs for operating vehicles and using hand and power tools and procedures such as Lockout/Tagout. A relatively simple concept that we should remember is the fact that people are the reason why our business succeeds and every effort should be made to keep them safe. Safety related incidences can be extremely costly and should be perceived and treated as unacceptable.
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Security
Many physical assets require that security related measures, procedures, methods and infrastructure be developed and put into place to help monitor and protect the investments. These systems may include the use of alarm, surveillance, access control and people. These measures aid in controlling activities such as vandalism, damage, theft and unauthorized access.
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Ergonomics
The manner in which physical assets are designed and implemented can have a significant impact on the user in a physical way. Repetitive motions, actions and uncomfortable positions that the user is subjected to can cause impairments that can affect the users attitude, health and ability to perform and function properly. The physical environment that the user is exposed to should be carefully analyzed and considered.
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Quality
The quality of the individual components and the construction, fabrication, assembly methods and workmanship that are utilized when creating, producing and maintaining a physical asset will directly affect factors such as reliability, dependability and longevity. Continual physical asset failures will amount to excessive costs. Poor quality will affect the success of an organization and could eventually cause it to fail. The
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majority of people have high expectations when it comes to quality. This is evident based on the success of particular product sales compared to the price and quality of similar products.
Information Technology
Computers, tablets, servers, telephones and networked systems are all forms of physical assets and are used in almost every organization in some way shape or form. The majority of organizations cannot function properly without the use of some or all of these. Data storage and retrieval is of vital importance for organizations. Many
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types of physical assets employ the use of computer and software technologies to function. These technologies are also used to acquire physical asset performance and utilization data.
Hazardous Materials
Some physical assets utilize, produce and are comprised of hazardous materials. These materials can create extremely dangerous situations that affect the environment and health of all living things. The
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organization should employ similar principles as was described in the safety section to protect people. Additionally, procedures and methods need to be implemented that address the safe handling and disposal of these materials as required by federal, state and local agencies. The organization may also need to establish Material Safety Data Sheet (MSDS) stations. These data sheets provide important information about material characteristics for handling and first aid purposes. The majority of hazardous materials require the involvement of specialized services for proper disposal.
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Waste Disposal & Recycling

The majority of organizations produce waste on a daily basis. Portions of this waste such as paper, metal, plastic and organic can be recycled. Recycling makes a lot of sense. It conserves our natural resources and puts less in the landfills. Organizations should have recycling programs in place and provide the appropriate containers in designated areas for collection purposes.
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Maintenance
Much of this book is dedicated to defining the maintenance function as it relates to physical asset management. This is due to the fact that maintenance is an ongoing activity that typically has the most significant impact on a physical asset throughout the physical assets life. It affects factors such as; appearance, safety, health, comfort, efficiency, reliability, productivity, longevity, value and quality. When properly defined and implemented, a maintenance program will provide a value added service that ensures
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that the physical asset will always meet the expectations of the stakeholders. Many organizations have hundreds and even thousands of physical assets that must be cared for at regularly scheduled intervals with a multitude of involved tasks and activities. These activities can be extremely difficult to track without the use of some type of automated scheduling system. Maintenance activities can be classified into different categories. The most useful maintenance activity consists of regularly scheduled preventive measures such as cleaning and inspections. Certain physical assets have components and devices that will fail at known or approximated predictive intervals. These activities must be scheduled as well. To make matters even more complex, physical assets also experience failures that in many cases need to be addressed as quickly and efficiently as possible. This type of work is known as reactive. In many cases, reactive maintenance is the most costly form of maintenance due to the fact that it usually affects physical asset availability. In some cases the failure of
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one component can cause other components to fail as well causing a domino effect. Reactive maintenance scenarios are sometimes purposely put into place. This is due to the fact that in some instances running to failure does not have negative effects and it would be more costly to have a preventive or predictive program in place to counter the failure. The typical maintenance entity within an organization is also utilized to perform responsive projects such as expansions, upgrades and rebuilds to name a few. We have identified four types of maintenance activities that typically need to be accommodated as part of an effective maintenance program. These are Preventive, Predictive, Reactive and Responsive. A well planned maintenance program will minimize any unwanted or unacceptable reactive maintenance by implementing preventive and predictive maintenance. It is extremely important that these maintenance activities are tracked and recorded properly. The typical method for managing
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these activities is through the use of an inventory control and work order system. Many maintenance activities also require the use of supplies and materials. Consumables such as cleaning products, lubricants, paper products and spare parts for buildings, machinery and equipment usually require some type of inventory control system. Personnel protective equipment and tools are also needed to perform many maintenance activities. Many organizations utilize a tool inventory system to monitor, track and control the use of these.
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Environmental Maintenance
Based on the condition that the majority of schools, parks, stores, casinos, hotels, banks, restaurants, hospitals, airports and theaters are kept in, it is apparent that people prefer a clean, organized, manicured and comfortable environment. In many cases, environments like these contribute to positive feelings and thoughts. This type of environment also requires that regularly scheduled maintenance activities be performed. The environment in which we live affects the attitude, productivity and efficiency of people. It leaves us with positive or negative thoughts, feelings and impressions.
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We enjoy living and working in environments that promote positive thoughts and feelings. The thoroughness of an organizations maintenance activities can be easily assessed by the condition and cleanliness of their restrooms, designated eating areas and work environment. Activities such as 5S serve to organize and clean the environment whereas kaizen activities can optimize efficiency but it requires maintenance activities to maintain these established environments.
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Maintenance Program
The way in which a maintenance program functions can vary dramatically in different organizations. This is once again influenced by the size and nature of the organization. The required functions and activities can vary considerably based on the types of physical assets that are being maintained and the functions that they are utilized for. So where do we start? The success of a maintenance program relies on several factors which we will discuss in detail. Some of these factors include;
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Resources such as people, tools, materials and equipment. Available and accurate information. Work flow structure and process. Accountability and traceability. Stakeholder support.
Resources are of vital importance. Lets face it, people are your number one asset. The skills, experience and knowledge that they possess should complement the maintenance group and is a primary influencing factor towards proper maintenance program implementation and support. Collectively, and through proper guidance and support, this group is what keeps the maintenance engine running smoothly. People cant do the work properly or efficiently without the right tools, materials, parts and supplies. A properly managed, organized and regularly monitored inventory control system is a must. Dont underestimate the amount of work that is required to setup a detailed and functional inventory control
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system. Keep in mind that the objective should be to provide true traceability and accountability for the materials, parts, supplies and tools that will be used. Accurate physical asset information and documentation is extremely important. This information is used to determine a physical assets needs and requirements. Preventive and predictive maintenance schedules are typically derived through the use of this information. In many instances, maintenance activities require service, repair and support information. This information usually includes specifications, documents, drawings and manuals. The information that is collected and recorded is invaluable. It provides historical data that can be used to refine the maintenance program thus promoting continual process improvement. The following described work flow process or something that resembles this description very closely is utilized in many organizations. The maintenance work flow process typically begins with either a regularly scheduled
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maintenance activity that has already been defined or a work request that has been submitted by an individual that has a need for a task or project to be performed. In either case, a work order is created. The work order is either assigned to or accepted by an individual that will complete the work order. The work order is the heart of the maintenance program and can be quite involved. It provides the traceability for maintenance activities and typically includes a considerable amount of information such as; Assigned work order number. Original work request number. Work requestor name. Date that the work request was submitted. Date the work request is due. Type of work request Physical asset information. Type of work such as preventive, predictive, reactive and responsive.
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A detailed description of the work that is required. Work and physical asset location information. Inspection and checklists. Safety and work related instructions. Actual work that was performed including details such required skills, date that the work was performed and task durations. Services that were utilized. Material, supplies and parts that were used. Attachments such as photos and documents. Reactive work orders usually require additional information such as failure type, investigative observations, problems, symptoms and findings, root cause and recommended corrective measures.
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MAINTENANCE WORK FLOW Automatically Generated By the CMMS or Scheduled Manually Entered By The Requestor (Work Request)
Preventive
Predictive
Reactive
Responsive
Work Request
Work Order
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The work order is the tool that provides accountability and traceability of maintenance activities. The importance of detailed work order information cannot be overemphasized and in many cases is underestimated. This information provides an invaluable resource to monitor and track physical asset information and performance and aids in the performance management of maintenance personnel as individuals and as a group. As previously stated in this book, stakeholder support is an absolute must and the success of a maintenance program depends on it. Owners, investors, managers, users and maintenance personnel must understand the basic concepts of physical asset management and the importance of the related factors. A good understanding of these concepts helps to foster a partnership and sense of universal ownership of the physical assets. Concepts such as Total Productive Maintenance (autonomous maintenance) rely on the success of these relationships.
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Maintenance Schedules
The majority of physical assets require that some type of regularly scheduled preventive or predictive maintenance activity is performed. These activities should be carefully evaluated and determined. There is such a thing as too much and also not enough maintenance. Too much maintenance causes unnecessary excessive costs. On the other hand, too little maintenance can cause excessive reactive maintenance or physical asset deterioration which will also lead to excessive costs. In some cases, the balance between too much and not enough may take some time to figure out
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based on physical asset performance history. The nature and type of physical asset including any supporting information will usually aid in determining some or all of the maintenance requirements.
Reactive Maintenance
In many cases, reactive maintenance, also known as Fire Fighting, which is typically caused by a run to failure scenario is the most costly form of maintenance. Many physical assets are utilized in processes or for purposes where they cannot be easily replaced due to significant cost factors and play an important part in the image, success and reputation of the organization. It is usually in the organizations better interest to minimize or even
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eliminate reactive maintenance in these types of situations. As mentioned elsewhere in this book, in some physical asset applications, reactive maintenance cannot be tolerated at all due to the associated failure costs which can actually destroy the image and reputation of an organization and may even force them out of existence. However, there are situations where the cost of regular maintenance may be greater than the cost of physical asset replacement and the unavailability of the asset can be easily accommodated.
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Computerized Maintenance Management

As you can probably imagine, if an organization has hundreds or even thousands of physical assets, the required maintenance activities can be extremely difficult to manage without the use of some type of computerized system. Computerized maintenance management has become an essential tool for many organizations. In most cases and when properly implemented, the majority of organizations find these systems indispensable and couldnt imagine functioning properly without them.
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A Computerized Maintenance Management System (CMMS) is typically based on some form of a database. Databases collect information that is typically entered by users. The database itself is usually comprised of a frontend and a backend. The frontend is what is referred to as the user interface. This is what the user sees and utilizes to enter, view and extract information to and from the backend. The backend usually consists of tables or files that the information is stored in. Some form of network connections are usually utilized to connect the frontend (user computers and tablets) to the backend (server).
CMMS Selection
The type of CMMS that is utilized is extremely important towards the continued success and efficiency of a maintenance group. A considerable amount of time and money goes into the implementation of a successful CMMS. Careful evaluation should go into physical asset maintenance requirements and the maintenance
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program itself. It is best to take some time and make a list of the type of data that the organization wants to track. The various available systems are different and internal organizational structures and requirements differ as well. Sometimes the ideally suited CMMS requires customization to meet the organizations requirements. Some forms of CMMS are quite complex and be intimidating at first. The organization and structure of the system needs to be carefully evaluated and should be user friendly due to the fact that this system will most likely be used daily by many people with many different skill levels.
CMMS Implementation
The most time-consuming part of implementing a CMMS is collecting and entering the required data. But this is also one of the most important steps. Be prepared, depending on the size of the organization and the quantity and complexity of the physical assets, it can take several months and in some cases much longer to fully
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implement a CMMS. But once implemented, the payoff is realized relatively quickly. The amount of accurate, detailed data or information that is entered into the system is extremely important and will affect the usefulness of the system. This step needs to be well planned and not rushed. It is better to enter too much data than not enough. This concept is also extremely important once the CMMS is regularly utilized. All personnel that utilize this system need to understand the importance of entering detailed information whenever using the system. The quality and usefulness of the extracted information will only be as good as the information that was originally entered. The quality of a CMMS can vary dramatically based on how it is designed. This design also affects the ease of use, maintainability and the quality of data that can be stored and extracted. The majority of CMMS systems require that the following type of data is collected and entered into the system:
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Detailed physical asset information (asset register). Physical asset categories and identification numbers. Personnel that will be using the system which includes requestors and resources. Physical asset failure types. Physical asset locations. Reoccurring scheduled preventive & predictive maintenance activities. Inventories such as materials, supplies and tools. Sources such as vendors and contractors. Skill types, resource qualifications and training information.
In many cases, the CMMS also requires that a unique numbering system is developed to identify items such as physical assets, departments and inventory items. Careful thought should go into this identification system prior to deciding what is best. It can be difficult and time
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consuming if this identification system needs to be changed later. In the event that the organization has their own accounting group, it may be wise to consult them as well. The majority of organizations utilize the CMMS data for multiple purposes including accounting. Some forms of CMMS employ a purchasing system for materials, supplies and parts. This can be advantageous for small organizations or organizations that do not have a dedicated purchasing function.
CMMS Training
Personnel training should be provided for the CMMS that is selected. A good training program usually decreases the learning curve that is required to get the CMMS up and running. At a minimum, this training should be provided to the personnel that are to configure and administer the CMMS. This training is typically extended to all of the users that will be processing work orders.
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Audits
It is difficult to determine how effective a process or system is if it is not evaluated from time to time. A good audit process accomplishes this very task. A regularly scheduled internal audit process is a must for every organization that implements a physical asset and maintenance management system. Audits aid in uncovering or finding major and minor problems. They are definitely and integral part of any continual process improvement program. The intent of the audit process is to provide a report that reveals the state and condition of the process or system. If the audited process is
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functioning properly, the report should reveal that the process or system is in complete compliance with the expected requirements. Any violations are documented and addressed with defined completion schedules and tasks.
Internal or External Maintenance

Having a streamlined internal maintenance group will provide the following benefits to an organization; Quick response and reduced physical asset downtime. Flexible scheduling of maintenance activities. Centralized asset management system. Reduced reactive maintenance. Managed spare parts, consumables and tools inventory control system. Schedule proactive, preventive and predictive maintenance.
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Maintenance activity traceability for historical information such as asset cost, performance and related audits. Reduced maintenance cost compared to outsourced services. Cleaner, healthier, safer environment for employees, customers and visitors. Centrally managed, contractors, vendors and services.
In some cases, quick response and reduced downtime alone justifies the need for internal support. For example, an organization could have a physical asset that costs hundreds of thousands of dollars and it is almost always utilized at near capacity. Or the situation could be that several expensive physical assets are utilized in series and depend upon each other to provide a service or product. The unavailability of any of these physical assets could present an unacceptable situation. This type of scenario could easily justify the cost of having internal
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support. Due to the type of business that an organization participates in and the associated risks which may involve life and limb, some organizations have a zero tolerance for reactive maintenance and must have an internal maintenance resource. Not having an internal maintenance support function is simply not an option for these organizations. The size of an organization and the quantity and complexity of physical assets and the associated risks are the primary contributing factors as to whether maintenance functions are provided by external or internal sources. Many small organizations absorb and perform routine maintenance functions by utilizing various personnel within the organization. In these small organizations, the physical asset and maintenance management function is actually an informal process and in many circumstances is fragmented throughout the organization. More involved or complex maintenance tasks are usually outsourced. As an organization grows and expands, maintenance demands usually increase as
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well. It is this eventual transition phase that justifies the existence of an internal maintenance group that many organizations struggle with. This is a crucial period and in many cases is not dealt with and addressed properly. The true cost of maintenance related activities will include the time that individuals have to set aside to deal with issues. Whether they are performing the tasks themselves or paying an outside source to perform the tasks for them. If an internal maintenance group is not initially structured properly, it will not function as effectively and efficiently as it should. This can lead to many problems within the organization. One of the main problems is that this group will not be adopted or accepted in a positive manner. It will not be viewed as the value added entity that it should be perceived as. In many cases, the maintenance group will be stuck in an environment where it seems to be a continual struggle to exist. This type of integration should be avoided at all costs. Prior to attempting to establish and implement an internal
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maintenance group, it is highly recommended that a professional be brought in to evaluate the organizations maintenance needs and determine the best solution. Some key issues that need to be considered are as follows; Justification based on individual physical asset maintenance requirements which will translate into labor, skill and material requirements. The system that will be used to track the work that is to be performed with labor and materials traceability. The manner in which the maintenance costs are distributed through the organization. The required leadership and stakeholder support.
Many medium to large organizations usually have a refined internal maintenance entity within them. Depending on the nature of the organization, this
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internal entity can be very sophisticated with individual departments for functions such as planning, engineering and fabrication. Many of these organizations have learned to embrace the maintenance function and realize that they could not function efficiently and effectively without it.
Headquarters
Division
Division
Division
Multi Divisional Maintenance

Another area that many organizations struggle with is when expansions are required that involve additional remote locations or divisions of the organization. The additional locations may not have the justification for an
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internal maintenance staff due to the size of the new entity. This can provide a challenge as to how this entity is maintained and managed. In many instances, remotely managed maintenance can provide the solution. The physical assets are tracked in a centralized maintenance system and maintenance personnel or outsourced services are coordinated as needed to accomplish the required maintenance activities. As the entity grows and acquires additional physical assets, it may eventually justify the existence of an internally managed maintenance group.
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Maintenance Skills
The skills that are required to perform maintenance tasks vary considerably depending on the types of physical assets that are to be maintained. The maintenance personnel in small to medium size organizations usually find themselves in situations where they have to be a jack of all trades. This type of situation usually changes as the organization grows because maintenance budgets tend to increase accordingly as do quantities of similar physical assets. This allows additional personnel to be hired with more specialized skill sets. Skills such as HVAC, machining, welding, mechanical, electrical, carpentry,
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plumbing, painting, pipe fitting, pneumatic and hydraulic are commonly employed.
Budgeting for Maintenance

Budgeting is an essential tool that is utilized to manage physical asset and maintenance management. Budget requirements can vary significantly depending on the size and nature of an organization. It is easier to formulate a maintenance budget in some industries and organizations than others. Creating a budget for the first time can be a difficult and time consuming task due to a lack of information. Many issues and influencing factors need to be considered when attempting to create a budget for the first time. One of them is the amount of
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reactive maintenance that is performed regularly and the true associated costs such as the potential lost revenue due to a lack of physical asset availability. Efforts that will mitigate these reactive costs such as preventive and predictive maintenance will also cost money to perform. The labor required to perform these tasks will need to be added to the maintenance budget. The cost of regularly used outsourced services and service contracts can be placed directly into the maintenance budget. Many service contracts do not fully implement a complete and comprehensive preventive maintenance program for physical assets. They merely provide a reactive service response when a failure occurs at a predetermined cost that covers a specific time period. Some of these service contracts may cover some materials as well. The time that is required to perform maintenance related activities by individuals within the organization and the coordination of them can also be put into this budget. Project related activities require
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labor to be performed. This labor time must be estimated and added to the maintenance budget. Regardless of the size of an organization, it is wise to track maintenance costs accurately. This historical information is used to forecast and refine the maintenance budget and is used to make decisions that affect how maintenance activities are managed. The established budget should also include cost allocations for any additional support functions or services that may be required and consumable supplies, materials, spare parts, tools and equipment that are necessary to perform maintenance and support the physical assets.
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Maintenance Costs
This is a topic that can be evaluated and applied in many different ways and is once again influenced by several factors such as the size and type of the organization, how the maintenance function is structured and the types of services or products that the organization provides. Monitoring maintenance costs begins with implementing a detailed system where these costs can be recorded. This system should have different categories, departments and areas where the costs can be assigned as they occur. In many cases, a computerized system is
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utilized for this purpose. The system should provide the ability to generate reports for labor time and material costs. These numbers can be further broken down as to which physical asset they belong to. Usually, physical assets are assigned to various departments and the system should have the ability to provide the associated costs to the affected departments and accounting.
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Maintenance Labor Distribution

Building Labor - 30% Machine - A Labor - 20% Machine - B Labor - 25% Machine - C Labor - 25% Department
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If the system is setup correctly, the accumulated labor costs can be charged to the various departments as a percentage of the total labor maintenance cost. Parts, materials and supplies are billed separately to the associated departments based on the physical assets that they were used for.
Maintenance Metrics
One of the benefits that can be extremely helpful in monitoring and managing a maintenance group is the information that can be derived and analyzed based on physical asset maintenance history. Organizations differ
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as to which key performance indicators they wish to measure. These could include indicators such as mean time between physical asset failures, failures within specific time periods, labor performance measurements, etc. Measurements such as these help in managing a maintenance group more effectively and efficiently but require that accurate information be gathered over time.
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About The Author
My career has involved the development, implementation and management of many activities and programs that are required to manage physical assets. It has spanned several different industries which has provided me with a wealth of knowledge and experience and has exposed me to many fascinating and interesting opportunities, situations, realizations and challenges. I enjoy sharing my knowledge and experience and learning from others as well. Comments can be emailed to: guido.pydde@yahoo.com
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Introduction to Physical Asset & Maintenance Management

Introduction to Physical Asset & Maintenance Management

Introduction to Physical Asset & Maintenance Management

Introduction to Physical Asset & Maintenance Management

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Physical Asset Lifecycle

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Physical Asset Management System

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Physical Asset Support

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Leadership & Stakeholder Support

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projects require careful planning, coordination and execution to be successful.

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Energy & Utility Efficiency

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Disasters & Emergencies

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Waste Disposal & Recycling

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