The principles of asset lifecycle management can reduce equipment costs and improve your bottom line.


In order to remain competitive, contractors typically operate and maintain a wide array of equipment that is subjected to daily use and wear. With busy contract schedules, maintenance of machinery only becomes a priority when operators see obvious signs that equipment is malfunctioning or broken. Replacement is often simply a function of whether equipment repair bills exceed the cost of buying new equipment.

By applying the principles of asset lifecycle management (ALM) to your inventory, you can improve safety, reduce downtime, predict breakdowns, minimize the cost of maintenance, and lower overall equipment costs.

Shannon Klabnik is the regional director for MIPRO, a consultancy specializing in the implementation of Oracle’s PeopleSoft software applications, including products that assist clients in tracking and maintaining equipment assets.

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“Contractors rely on complex, specially designed machinery that operates in rugged environments across a broad range of climatic conditions,” she says. “Working in an industry that relies on the newest technology in a business environment that offers tighter and tighter profit margins, contractors are increasingly dependent on the reliability and functionality of their physical assets.”

Klabnik recommends contractors apply the principles of ALM, also known as enterprise asset management, to their businesses. Using ALM, operators always maintain a complete inventory and overview of their equipment, its condition, maintenance schedules and logs, and whether it meets all applicable regulations.

“Next-generation ALM requires the use of a software system to deal with the complexities of these challenges,” Klabnik says. “The best ALM system employs sophisticated software that enables powerful tracking and controls and an automated maintenance management process. This capability elevates the contractor from someone who simply reacts after equipment breaks down to someone in a proactive position. That increases efficiency, maximizes operational uptime, and improves the bottom line.”

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Klabnik has worked with a wide range of businesses in applying Oracle software solutions to equipment assets, but notes that the principles of ALM apply to any business, regardless of the software they choose.

She notes, however, that companies who simply declare they are adopting an ALM software package won’t necessarily reap maximum benefits.

“Probably the biggest oversight made by companies when they undertake such a project is to take all of the information from their old system and import it into the new system without starting at square one,” Klabnik says. “They look at it as just an information technology project in which existing data is moved around. The old saying, ‘garbage in, garbage out,’ applies here. If you go about adopting ALM without changing the way you manage your operational assets, you will not likely improve the way you do business.”

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Given the importance of correctly planning and integrating ALM up front, contractors need to be aware of the best practices associated with implementation and overall asset lifecycle management.

1. Plan ahead

Before implementing any new maintenance management system, operational priorities need to be clearly established. Once a company identifies its goals and outlines its priorities and expectations, it can move forward with the process of implementing a new software system to support its equipment-related business processes.

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“Professional consultants can be an important resource at this stage of the process, where they can assist by refining the details of the maintenance program and strategy,” says Klabnik. “There’s no sense in enabling sophisticated controls that don’t apply to your business.”

2. Details matter

It may not be easy to identify specific maintenance standards and metrics for all equipment, but it needs to be done right the first time. An ALM system is only as powerful as the information it possesses.

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“Even the most sophisticated tracking and coordinating software will fall short of expectations if it isn’t given the right data to track,” Klabnik says. “It takes some up-front effort to incorporate every regulation and required inspection date into the software, but once it’s done, life becomes much easier.”

At this stage, it’s also important to anticipate, evaluate and mitigate any implementation and post-implementation problems that may crop up.

“For example, consolidating replacement parts in one central location may seem like the best idea when you look at the big picture, but it might also be incompatible with your operation or existing supplier agreements, and may even create new inventory challenges,” she says. “Iron out these details before they become a problem.”

3. Taking inventory

ALM also requires a thorough inventory of equipment assets, from vehicles to jetters, trenchers, pipe lining equipment, CCTV units and easement machines. A company needs to maximize the efficiency of the system by deciding on the value of assets that are listed in order to prioritize and classify a maintenance approach and spare parts management.

“That may not always be based on the asset’s dollar value alone,” Klabnik says. “The tools associated with a jetter would certainly be on that list, but something as simple as a fire extinguisher in the right location needs to be in that database as well.”

Information should include standard maintenance procedures and schedules, approved replacement parts, costs and other critical information associated with each asset.

“If you’re discovering that a particular type of jetter continues to break down over and over, you can begin to apply a root cause analysis to it to build a problem/cause/resolution repository inside your ALM system,” says Klabnik. “With enough information, you can move from a corrective to a predictive mode. Does the equipment typically break down in winter months, or only after you’ve logged a certain number of hours? Your asset management system can tell you what sort of work and operating conditions result in that breakdown. This sort of thinking can be applied to all equipment.”

Maximizing the life span and uptime of highly specialized and expensive equipment also requires immediate access to critical information, including manufacturer support hotlines and the source of replacement parts. By including replacement part information and approved suppliers in the ALM software database, the most heavily used replacement parts can be identified and even stocked.

Automatic meters and self-generated equipment reports can also be tailored to provide information that is automatically fed into the ALM system.

“If you program operational parameters for any equipment capable of remote communication — a diesel engine for example — into the system, it can be alerted to kick out a work order every time that equipment is operating outside of predefined parameters,” Klabnik says.

4. Education and training

The grunt work of ALM — inputting new data — still requires human cooperation. Only through sustained training of all personnel can the data be captured in a consistent and meaningful way.

Educating and training the individuals who will be overseeing the new system is important, says Klabnik. However, it’s more critical that all employees who will use the system understand both how to make it work, and how to make it work for them. While powerful ALM systems can potentially deliver game-changing efficiencies, those efficiencies will only be unlocked if system users reach a level of technical and operational fluency.

5. Motivating workers

“Human nature does not tolerate additional responsibilities well,” Klabnik says. “Just because the company tells workers they need to do something new, it doesn’t make that task valuable to them. You need to get them to buy into it by showing them it can make their lives safer and help to make their jobs more secure.”

Systems that can only be accessed through a desktop keyboard may also not encourage workers to use them as often as dynamic systems that allow input using smartphones or tablets, she notes.

6. Thinking long term

While the initial design and implementation of maintenance-related business processes and a supporting ALM system require a significant investment of time and energy, realizing its full benefits requires long-term oversight. Regular follow-ups and periodic assessments and evaluation ensure that the system is functioning properly, delivering meaningful reports to personnel and delivering anticipated results.

“A coordinated approach to asset management enables a company to realize its maximum return on assets,” Klabnik says. “That value is increased with enhanced compliance capabilities and an approach that minimizes downtime, waste and avoidable expenses while providing a safe working environment. In a competitive industry, that edge may be enough to push a company operating on tight margins into the black.”


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