Asset Management Flashcards
What is the definition of an asset?
Any item of economic value owned by an individual or corporation
Examples of physical assets
buildings, utility infrastructure, industrial assets
Features of a physical asset:
- on balance sheet
- registered
- depreciates/ deteriorates with time
- plays some role in service
- benefits from good management
Asset management is not…
- just about maintenance
- a sub for quality management
- a project management system
- just for engineers
- just an accounting exercise
- a purely academic discipline
Asset management is…
- a mind set. See life cycle of an object or system
- approach to get best out of assets
- about understanding and managing the risk associated with owning assets
Asset management is important because it can help organisation to:
- reduce operating and capital costs
- reduce potential health impacts and safety risks
- reduce legal risks
- improve operating and regulatory performance
- minimise env. impact
What is the key to good asset managment?
- optimise benefits. Best blend of activity to benefit organisation
Asset managment is explicitly focussed on:
helping organisations to achieve their defined objectives and to determine the optimal blend of activities based on these objectives.
Asset Management total lifecycle:
- strategy
- plan
- evaluate / design
- create/ procure
- operate
- maintain
- modify
- dispose
Explain what acquire is in lifecycle
Everything that goes into planning, designing, and procuring an asset.
Ensures it is fit for purpose.
Explain what commission is in lifecycle
Covers activities of installing, creating or building the asset and ensuring it is fully functional
Explain what operate is in lifecycle
Assets provides function. Subject to monitoring, maintenance, refurbishment and potential upgrade.
Explain what dispose is in lifecycle
Often overlooked, needs to be considered.
What is the definition of risk?
Expose to the possibility of loss, injury or other adverse or unwelcome circumstance
What is the management of risk witin AM critical?
To make judgement need to understand how action will impact future performance
risk = probability x consequence