Effective Asset Management Practices the Age of COVID-19
As businesses across
every sector face major challenge in the age of COVID-19, we continue to hear
repeated phrases from leaders about these “uncertain times”. In most parts of
the world, large-scale capital projects are being put on hold, mining and
resource sites are going into hibernation, and companies within the oil sector
are trying to reduce or stop production altogether given the current global
oversupply. The upside is unplanned outages, which presents opportunities to
bring forward major maintenance programs for example. Also, in a very sudden
turn of events, certain assets are no longer being used for the purpose they
were designed for, which could introduce new failure patterns.
As strange as it seems, some assets have greater
rates of failure and higher costs of ownership over their lifecycle when their
outputs are lowered or shut down altogether without a proper maintenance
strategy. And this is happening across the board in Australia.
While the focus is now on
businesses identifying opportunities to overcome the current hurdles in front
of us, this is not new for those in the enterprise asset management
(EAM) game. We have been looking for certainty in clouds of
uncertainty for a very long time.
Managing complex assets is complex by its very
nature. As we find ourselves in situations that are unique for every business
and individual, we must remember that the asset decisions we make today, will
have long-term implications for businesses, employees, customers, and perhaps
even our planet tomorrow. This is why making the right decision is so
important.
To make the right decision about assets,
there is a need to balance available data against what is in the best interest
of business survival; its assets and people.
While the aviation industry
has been severely affected by COVID-19, many are using
this time as an opportunity to bring forward refurbishment and maintenance
programs to ensure their passenger planes are in the best shape when they
return to the air. This activity also has positive flow-on effects, for
employees and the wider economy. So, while faced with major challenges, there
are also opportunities for businesses in uncertain times.
So, what business opportunities and
considerations should be explored?
Prioritizing larger infrastructure projects
The infrastructure sector has a unique opportunity to
review its budget allocation and consider shifting some OpEx to CapEx. What
benefit could this have? With less activity and use of road and rail assets,
businesses could prioritize larger projects that may have been put on hold or
delayed. There may even be the opportunity to deliver these larger projects at
a lower cost.
In the current environment, there are opportunities
businesses can take advantage of, including the loosening of restrictions
around operating times, while projects may normally be required to be delivered
at quiet times, these projects could now be delivered during normal working
hours during the week and in doing so realize more savings by potentially
avoiding overtime and allowances.
Effectively prepare for shutting down and starting
back up
Around the world, the resource sector is facing a
downturn. So, when it’s no longer viable to operate at full capacity, or in
some cases requires the complete mothballing of sites and rigs, doing this
effectively requires detailed planning and quality execution. The alternative
could mean major issues and challenges when ramping sites back up, and this
could have disastrous repercussions for staff and the business.
As such, what do businesses need to consider? The
first thing to understand is the effect a shutdown will have on equipment and
machinery. Some assets for example will need to be drained of lubricants and
sealed off, others will need to be greased, oiled, and wrapped.
Businesses also need to
ensure their IT systems support the concept of
mothballing, and they have a detailed plan for starting their operations back
up. The last thing a business wants is to have delays when re-initiating a site
or rig, or to be inundated with overdue works because your systems and
processes didn’t allow you to ‘stop the clock’. In a worst-case scenario, a
business could be caught between trying to decide between essential start-up
procedures and non-scheduled maintenance tasks.
Effective preparation could present the
opportunities for businesses to bring forward overhauls, or even complete
shutdowns, with the ability to find cost-saving during the current economic
climate.
An adjustment of
manufacturing processes, and even outputs
Depending on the manufacturing operation, there could be a number of
scenarios in front of businesses. This could be similar to the resource sector
(mothballing production lines or reduced capability), or business with
opportunities to realign operations to support the fight
against COVID-19.
A realignment of manufacturing
operations includes a distiller manufacturer producing hand sanitizer, or a
material and fabric manufacturer producing face masks. While these can appear
as attractive options for these operations, businesses need to consider the
short and long-term impacts on assets.
Many of these opportunities will require
retooling, adjusted maintenance practices, and even new configurations as
assets are used for a different purpose than they were built for. Likewise, some
businesses may be operating in a 24/7 environment, which they and their assets
will not be familiar with. These are all things that need to be considered and
understood.
What does this all mean for
asset managers and owners?
We need to look, listen, and understand
our assets and the data available to us – both human and system data. We need
to leverage all the intelligence available, particularly when doing anything
different.
It goes without saying that we will
experience new and unexpected challenges. What is important, is that we ensure
we put in place revised asset management practices as soon as possible, with a
plan of how to return to “normal” later.
If we don’t think about the effect these
changes will have on our assets, we could be in for some difficult hurdles in
the future. While our initial reaction is to preserve cash and cut costs, we
also need to be aware of and understand the risks of any changes to our assets.
We must be our assets’ advocates and clearly outline both the benefits and increased
risk exposure to our management and boards.
Once you have decided on the
best strategy for your business, you need to ensure these are reflected in your
business software systems. Without this, you will introduce
additional risk to your business and your assets may not be fit for purpose in
the future. In turn, this could cost your business a great deal more, and not
just financially. The damage could extend to your business reputation and the
good faith you have developed over many years with customers.
About Us
Frontline Information
Technology is a
major ERP company in ERP Software development services and we design and give
tailor-made solutions for any company coming in a small, mid or large cap. We
develop customized solutions for industries to meet the flow and standards
practice by them in different segments.
If you are looking for a Custom ERP solution for your company, you can contact
and reach us. We are
ready to understand your needs and will give you best solution to meet up your
requirements.
Comments
Post a Comment