Organization-Wide Physical Asset Management. Dharmen Dhaliah
the asset management system in context within its overall range of strategic objectives and goals. This is necessary both to give the development of the system visible and distinct credibility within the organization, and to ensure that the goals of the system and the goals of the organization are correctly aligned and calibrated. The establishment of a policy is also the first step in a longer process of developing individual and specific asset management objectives for different functional areas of the organization.”
During all this time Jerry has been listening carefully while trying to capture as much as he can in his notes. Clearly he is trying his best to absorb all the information.
Darren takes notice of that and understands that maybe it is a bit too much for the young man. He looks at his watch and notices that they have been meeting in the coffee shop for more than two hours already.
Darren gets up and says, “I think that’s enough for today. I think you have enough to work on for the next two or three weeks. Don’t worry about the rest; just be patient and focus on engaging and educating your stakeholders. Next time we meet, you will tell me of your progress and how things went.”
Jerry does not say anything. He just shakes Darren’s hand and gives him a little, almost hesitant smile.
“All the best,” Darren says as he walks toward the exit.
THE STRATEGIC ASSET MANAGEMENT PLAN
For the last couple of weeks, Darren has been quite busy. On one side, he has been busy teaching the three courses he has ongoing, and, on the other side, he has been catching up with reviewing some papers his students have drafted.
At home, also, things have been quite busy for him. He tries to spend some good quality time with Debbie as much as possible, while at the same time training hard for long hours to prepare for his next triathlon. With his medium height and slim build, Darren is very fit and does not look his age at all. If it were not for his salt and pepper hair and shortly trimmed beard, he could easily be mistaken for someone in his mid-forties. He is often asked how he manages to keep up with all his activities. To tell the truth, Darren himself doesn’t have a clue at all. He just plans what he needs to do over the year and months, looks at the upcoming week, and takes it day by day. Two of his best-kept secrets are “stick to the plan” and “be consistent.” Debbie plays an instrumental role in keeping him focused and to the task, as she sometimes surreptitiously adds her dose of pressure. She knows very well how and when to do it so as to keep Darren in line. Darren is fine with Debbie’s approach and actually enjoys it, as it allows him to practice his preferred activities while staying focused and aligned. This is something that Darren has witnessed many organizations struggle with: performing all the required tasks in coordination while maintaining alignment to deliver on Strategic objectives.
Training for Ironman races has taught Darren a lot about the importance of having a vision, setting goals, developing a strategy and plan, and executing the plan according to the strategy. Also important for him is constantly measuring his performance to continuously improve while at the same time doing as much research as possible. Darren is always ready to change and to adapt while leveraging new tools and techniques to achieve the right balance, discipline, and consistency required for success.
Step 4: Strategic Asset Management Planning
It is a beautiful Sunday, a little chilly outside. Debbie and Darren just came back from their morning swimming session. They have been doing this routine for years and enjoy waking up early and having their workout. Debbie is a petite woman but very physically fit. Typical Sunday breakfast consists of lemon juice, half an avocado with honey, toasted brown bread with a boiled egg and cheese, half a banana, and a big cup of tea. They enjoy chatting and watching the news as they have breakfast. After breakfast, it is time for some household chores.
By around eleven o’clock Darren makes himself comfortable in the family room, switches on the TV, and selects a movie. He then fires up his laptop and starts catching up on some of the draft papers from his students. One of them— written by Neel, a brilliant student in his second year—caught his attention. The title of the paper is “Why Physical Asset Management Plans Fail,” and it talks about some of the reasons why organizations are not successful in implementing their asset management plans and fail to realize the best value from their portfolio of physical assets.
One of the key factors cited is a lack of strategy in organizations to operationalize their asset management plans. It talks about the importance of having an asset management strategy and asserts that organizations are in such a hurry to put together their asset management plans, they forget to consider the strategies needed to implement them. In his paper, Neel goes to great lengths to explain what an asset management strategy is and what should be included in it. He references ISO 55002’s definition of a strategic asset management plan:
Documented information that specifies how organizational objectives are to be converted into asset management objectives, the approach for developing asset management plans, and the role of the asset management system in supporting achievement of the asset management objectives.
Darren continues reading the paper, as it is really very well written and makes very much sense in the context of how organizations should be managing physical assets. Darren believes that a few sections like the ones below will be very beneficial to share with Jerry the next time they meet. The sections explain the purpose of a strategic asset management plan (SAMP):
The SAMP sets out a strategic framework that guides future assetrelated initiatives to support the organization’s strategic plan. The plan documents and specifies how the organizational objectives are to be converted into asset management objectives, the approach to develop asset management plans, and the strategies to build and support an asset management system. It helps organizations to set up a framework to be able to make fact-based decisions regarding the building, operating, maintaining, renewing, replacing, and disposing of physical assets to maximize benefits, manage risk, and provide satisfactory levels of service.
In the draft paper, Neel goes on to explain why organizations sometimes fail to implement their physical asset management plan:
Organizations spend time and money preparing fancy binders of asset management plans which end up sitting on shelves collecting dust. The plans are sometimes not executed because of a lack of strategy.
He also explains that it is important to differentiate between strategy and plan:
A business is managed through the development and execution of strategies and plans. An organization may have a plan to roll out a new product. Research, design, manufacturing, marketing, and sales will all happen at specific times according to the plan. The new product will continue to go through the same process, but behind the plan there is a strategy for the new product to be innovative, with an improved design, manufactured with the latest technology, and targeting a certain market to ensure it becomes a success. Why is the same approach not applied to managing physical assets?
Neel clarifies the confusion that exists between the terms “strategy” and “plan,” which are often mistakenly used interchangeably. He explains:
A plan is usually a list of steps taken to accomplish a goal and tackles questions like what, when, who, etc. A plan is always a good thing to have in place to be successful, but it should not be the first step in addressing a task (Figure 3.1).
FIGURE 3.1 Strategy and plan.
A strategy, on the other hand, is bigger than a plan. Strategy tackles the question of why. It has a large scope and looks at the end result as well as the many paths to the desired outcome. Strategy speaks to the reasons why, whereas the plan is focused on how.
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