Chapter 3.1 - Apply whole-life asset management principles in a range of sectors and industries Flashcards
Whole life asset management
Process of evaluating the total price and all associated costs of a product to make an informed decision as to which option will provide the organisation with the best value for money option
Whole life costing
In depth costing analysis used to help buyer determine the end-to-end cost of providing a service, manufacturing and procuring a product
Fixed assets
An accounting term used to describe items acquired by an organisation which are not routinely sold but used within the organisation. Typical examples are land and buildings, fixtures and fittings, office and warehouse equipment. Fixed assets are also known as non-current assets
Discounted cash flow
An investment appraisal method based on future cash flows and the time value of money
Name 4 ways whole life asset management can help organisations
- Encourages procurement to consider cost elements beyond just the initial purchase price, and ensures the costs are examined for a long-term perspective
- Forces procurement to consider the impact of the purchase, hire or lease of an asset, item or service may have on other functions
- WLAM can also account for discounted cash flow
- Forced to consider environmental aspects of asset management, in relation to the sale and responsible disposal of waste materials required over its use and maintenance, in addition to end of life options available for the asset itself
Name the 9 steps in the CIPS WLAM cycle
- Analysis of historic performance
- Lessons learned feeds into identification of needs/specification
- Pre-acquisition costs
- Acquisition costs
- Installation and commissioning costs
- Operating costs
- Maintenance costs
- Performance / Downtime monitoring
- End of life disposal / recycling
Name 14 examples of value
- finance
- economics
- marketing
- operations
- maintenance
- through life performance
- sales
- ethics
- sustainability
- obsolescence
- environmental
- quality
- IT
- disposal
Name 8 elements to consider from the CIPS WLAM cycle
- Identify need / objectives / risk
- procurement
- construction
- commissioning
- deterioration / maintenance
- condition performance monitoring
- decommissioning
- renewal / replacement
Give 5 examples of why a need has developed
- Current asset is becoming unfit for purpose
- Competition in the marketplace
- Raised/reduced demand
- Regulations / legislation
- Financial concerns
Name 5 factors linked to risk
- Downtime
- Lost sales/revenue
- Associated costs
- Incompatibility
- Resistance
Mass production
Continuous production of standard products that can benefit from economies of scale
What does construction mean in terms of WLAM
The designing and manufacturing of the asset
Commissioning
Bringing something new into working condition
Name 6 costs included in commissioning an asset
- Installation
- Training
- Insurance
- Testing
- Operational efficiencies/performance
- Quality
Name 5 things that training is likely to include
- Operational capabilities
- Health and safety
- Accountability
- Risk assessment
- General maintenance
Name 4 specified losses within insurance
- Fire
- Theft
- Accidental damage
- Force Majeure
Insurance premium
Amount per annum the insurance costs an organisation
PAT (portable appliance testing)
A process in some countries where electrical are safety checked
Name 5 types of test you may need to run to ensure equipment is working effectively
- Virtual tests
- PAT
- Health and safety test
- Emissions test
- Production run
Name 5 examples of operational efficiencies
- Electrical consumption
- Products produced per minute
- Miles per gallon
- Noise levels
- Pollution levels
Is cost attributable to both good and poor quality
Yes
Name 6 maintenance costs that need to be accounted for
- Reliability
- Price of spare parts
- Availability of spare parts
- Skilled technicians or engineers
- Frequency of service requirements
- Downtime due to maintenance
What is the purpose of calculating the depreciation of an asset
To give the organisation a fair and current view of what the asset is worth at a particular time
Up time
The time in which an asset is performing or functioning effectively