The 10 Rights of Asset Management process is designed in such a way that ensures organizations will do the right things from the start of the need/concept right through to disposal.

INTRODUCTION

Organizations operate in a very competitive environment. To survive, they need to stay competitive and must continue to improve processes and get more value, both in the form of return from physical assets and high productivity from human assets (i.e., their people). They need both physical and human assets to be reliable in order to deliver more value to their customers while reducing TCO.

TCO includes all costs incurred during the asset’s entire life: asset acquisition (capital project), asset operation and maintenance, also known as the utilization phase, and asset disposal when the need is over.

The key to making your assets deliver high value is to make your processes robust to ensure: 

• Assets are reliable, with minimum failures. 
• People, such as operators, maintainers, etc., are engaged to take care of assets; They are:  
  • Knowledgeable and skilled to operate and maintain; 
  • Continually improving by implementing best practices. 
• TCO is kept to a minimum or at an optimum level.

ASSET LIFECYCLE PHASES AND COSTS

Asset life has three major stages, as shown in Figure 1.

1. Acquisition - Designing, building and installing; 
2. Utilization – Operations and maintenance (O&M) 
3. Disposal – Decommissioning and disposing

Figure 1: An asset's lifecycle.

After a need/concept has been established, the acquisition phase starts. The acquisition phase includes writing specifications, design and procurement of components or the asset, build/fabrication of the asset, and installation/commissioning of the asset for operation. 

The asset might be procured already designed/built as an “off-the-shelf” item or designed and built per special specifications depending on the need. 

Utilization is the key phase where the asset is operated and maintained for many years depending upon need, which may be 10, 20, 50, 80 years or more. This is the phase where you get the value from the asset.

Disposal, the asset’s last phase, is where it is decommissioned. The asset’s need is over and is either put in the warehouse for later use or disposed of safely.   

Based on experience and several subject matter experts (SMEs), the estimated average cost for these phases as a percent of the TCO are:

• Acquisition Phase – 22%, with a range of 15% to 30% based on off-the-shelf or unique design; 
• Utilization Phase (i.e., Value Delivery) – 73% O&M, with a range of 60% to 80% due to asset complexity; 
• Disposal – 5%, with a range of 3% to 10% due to asset complexity and environmental requirements.

It should be noted that 70% or more of the cost is incurred in the utilization phase. However, this cost is determined or depends on how the asset was designed, built and installed. Some cost-cutting measures during the acquisition phase can force designers and builders to use low cost, unreliable components, causing higher failures and increasing the O&M costs. Cost-cutting actions during installation and commissioning, such as not checking component alignments, not providing appropriate training to O&M technicians, or not having O&M manuals, drawings, etc., can cause higher failures or increase repair time. It has been observed that spending 15% to 25% more during the acquisition phase can reduce O&M costs by 20% to 40%, thus lowering TCO.

To ensure organizations do the right things during the entire life of the asset, they need to establish an asset management process that utilizes the “10 Rights of Asset Management.” This process involves a series of actions or steps taken to achieve lower failure rates by eliminating defects at the source and reducing the total cost of ownership.

ASSET MANAGEMENT PROCESS

The 10 Rights of Asset Management process is designed in such a way that ensures organizations will do the right things from the start of the need/concept right through to disposal. It requires that all people/stakeholders follow the process, which includes work instructions, procedures, policies, etc. The process should be repeatable with less variance and auditable.

THE 10 RIGHT STEPS TO ESTABLISH THE PROCESS ARE:

1. Specify It Right - Ensure that the right people are involved in writing requirements and specifications for the asset needed. 
2. Design It Right - Ensure that you are designing for reliability, availability, maintainability, safety and sustainability (RAMS2), including operability and to reduce TCO. 
3. Source/Procure It Right - Ensure you are procuring the components or asset to deliver the best value, not the lowest cost. 
4. Build/Fabricate It Right - Ensure that the asset is being built by skilled people using quality components. 
5. Install/Commission It Right - Ensure that the asset is installed with precision and quality workmanship to eliminate any infant mortality failures. 
6. Operate It Right - Ensure that operators are able to operate the asset safely and have been trained appropriately to take care of the asset as if they own it. 
7. Maintain It Right - Ensure that the asset is maintained with the right maintenance strategy/plan. 
8. Improve It Right - Ensure that you are applying the right tools and practices to improve asset performance on a continuing basis. 
9. Dispose of It Right - When the need is over, decommission/dispose of the asset in a clean and safe manner. 
10. Manage It Right - In this step, you need to set up a process to ensure you perform all the previous nine steps properly all the time. Also, you need to ensure that you are hiring the right people to perform all the tasks mentioned and continue to develop their skills.

Conclusion

To survive in today’s competitive environment, organizations must continue to improve processes. By doing so, they will get more value and return from physical assets and high productivity from human assets. Both physical and human assets need to be reliable in order to deliver more value to customers while reducing total cost of ownership.

In order to get more value from their assets, organizations must make processes robust and reliable so they can deliver quality products or services that make their customers happy. Implementing the 10 Rights of Asset Management process is one of the effective methods to achieve this objective.

REFERENCES

1. Gulati, Ramesh and O’Hanlon, Terrence. 10 Rights of Asset Management. Fort Myers: Reliabilityweb.com, 2017. 
2. Gulati, Ramesh. Maintenance & Reliability Best Practices. South Norwalk: Industrial Press, 2012. 
3. International Organization for Standardization.   https://www.iso.org/home.html
4. Gulati, Ramesh. Uptime® Elements Dictionary for Reliability Leaders & Asset Managers. Fort Myers: Reliabilityweb.com, 2017.