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Global Asset Sustainability is the New Norm

By Daniel Stouffer

Republish: EasyPublish™ Published: 13Sep2010 Word count: 603 Viewed: 315 time(s) Get Free Content For Your Site

It is no longer good business practice to address asset efficiency without a clear understanding of the associated energy performance. Companies around the world are rethinking their approach to asset management and moving toward a 'global asset sustainability approach'. Management teams are finding that by looking at their asset management globally they are improving their financial metrics across the board.

The ever-growing price of energy and the related security issues are driving the push for global asset sustainability. Energy prices are on a relentless rise and availability is far from assured. Companies realize that energy issues are significantly affecting their profit margins and unless action is taken, will threaten their very business viability. Additionally, the duel concerns of the environmental impact of energy consumption and the resulting greenhouse gas production has companies seeking a thorough corporate analysis of energy efficiency down to an asset level.

It is no longer good business practice to address asset efficiency without a clear understanding of the associated energy performance. Companies around the world are rethinking their approach to asset management and moving toward a 'global asset sustainability approach'. Management teams are finding that by looking at their asset management globally they are improving their financial metrics across the board.

Businesses must strive to be in a position to leverage their operations to uncover inefficiencies wherever they may be. It is no longer sufficient to look at assets purely from a conventional management perspective. Traditional approaches simply monitor asset performance against specification to see if it is performing and producing under acceptable operating conditions. This does not take into account the amount of energy that the asset consumes and this invisible cost causes a negative reallocation of budgets.

Global asset sustainability focuses on energy consumption in addition to asset availability, performance, and condition. According to the US Department of Energy, typical commercial and industrial companies in the United States spend over 80% of their non-labour operating and maintenance budget on energy as opposed to maintenance. This shows that traditional asset classification of efficiency is far from complete.

Now, let's consider global asset sustainability as an alternative way to manage assets. The new approach focuses first on the critical element of availability. It goes without saying that maximum uptime is essential if the company is to be able to generate any revenues. Next, the company must consider how each asset is performing against its specification and warranty. This dictates the return on investment and is the primary, traditional metric that companies use to determine good value.

Performance is a base metric, of course, and asset output quality is the indicator that determines how thin margins turn out. Quality control can often make the difference between dominance in the marketplace or underperforming compared with competitors.

Traditionally, organizations did not need to deal with energy consumption, which is an important feature of global asset sustainability measurements. An important first step for energy consumption research is to establish an asset baseline position. The asset baseline will show how each asset performs when running under prime conditions. Once established, the asset can be evaluated over time on an almost instantaneous basis to reveal efficiency. Even a slight variation in efficiency can account for a huge operating loss across a distributed enterprise. Thus, catching these inefficiencies quickly and adapting practices to improve efficiency can save organizations a significant amount on energy spend.

Traditional equipment evaluation practices need to be modified to include energy usage as part of a new approach to global asset sustainability. Energy is and will continue to be the largest cost liability and companies must be ready to monitor and micromanage it.

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