Why you need Asset Health Indices
How are decisions regarding asset capital investment and operational expenses traditionally made? By listening to whoever shouts the loudest. Surely by now, when data is becoming more accessible and modeling is better understood, there is a better way. This is where we believe Asset Health Indices have an important role going forward.
Understanding where and how to spend time and resources can often be the difference between profitability and closing shop. For asset-intensive organisations it is critical to have a clear understanding of asset health. Old-school thinking will often assume a direct link between asset condition and asset health. However, when dealing with Asset Health Indices (AHI), this is not the case. Asset condition information is important, and plays a key role in determining asset health, but often lacks organisational context. Like-wise, production information can often mask underlying asset performance. Strong production teams can pick up the slack of a poorly performing asset, and weak teams can underutilize an asset in perfect condition. AHI is about attaining a multi-dimensional understanding of an asset and its importance to the organisation.
“Will this asset perform the task required of it?”
Being able to answer that question is the reason why organisations need Asset Health Indices. If an asset is near it’s end of life and still performing acceptably, why do anything more than the bare-minimum to keep it running? There are many compelling arguments for varying maintenance strategies for assets in this situation. But what those arguments usually lack is context and objectivity. A well-constructed AHI will take the asset condition, operating context and organisational objectives into account and provide clear and objective justification for maintenance and potential replacement strategies.
An AHI is not simply a KPI, it is a process. It is also not just a once-off activity. Organisations need to determine their current Health Index, then determine a strategy to drive changes. Tracking the Health Index then ensures that the strategy deployed is having the desired impacts.
Just as no two organisation’s operating contexts are the same, neither should their AHI strategy management be the same. Strategic objectives play a key role in defining what ‘asset health’ means to an organisation. This process of defining Asset Health allows AHI scores to effectively quantify an assets ability to perform the task required of it. When combined with an assessment of asset risk, maintenance and CAPEX decisions are strategic and ensure that organisation’s assets perform the tasks required of them.
Next up on this journey we start to explore the relationship between Asset Health Index and Risk. Stay tuned.