Just like with people, as they age, assets and equipment pass through a series of stages, each with its own predictable characteristics and connected requirements. The asset life cycle is all these stages together, from procurement and installation to retirement and replacement, for any given asset or piece of equipment. Basically, it’s the life of an asset, from cradle to grave.
And just like your doctor can better treat you once they know your age, understanding the life cycle of an asset can help you maximize uptime, reduce costs, and make better decisions about when to repair or replace.
What is the asset life cycle?
Every physical asset in your facility, whether it’s a computer, a piece of heavy machinery, or safety equipment, has a life cycle. An asset’s life cycle is the different stages it goes through and the steps involved in its management, from its initial acquisition, through its useful life, and on to its eventual disposal.
Understanding the different stages of the asset life cycle can help you maintain and manage your critical assets by implementing different maintenance strategies, improving asset efficiency, and reducing costs. If you ignore your assets’ life cycles, you’re more likely to struggle with long delays, unexpected breakdowns, and reactive, emergency maintenance.
How you manage the life cycle of an asset depends on the cost of replacing the asset, its importance to the business, and its overall reliability. However, while the steps you take to manage each asset may be different, the stages of the life cycle remain the same.
What are the stages of the asset life cycle?
The life cycle of every asset has four main stages:
- Acquire or create
- Utilize
- Maintain
- Renew or dispose of
While these life cycle stages seem straightforward, in practice, understanding how to manage your assets at each stage can be complicated.
Here are some of the things you should keep in mind at each stage.
Asset life cycle stage: create or acquire
The first stage is the creation or acquisition of an asset. Depending on the importance of the asset, this can also be preceded by a planning stage. This is the very start of your asset’s lifespan when you first buy the asset or start putting it to use.
Mistakes at this stage are relatively common and can be costly. For example, you may buy an asset that can’t be used in the way you intended or has installation costs you haven’t predicted. On that point, it’s vital to consider not only the initial purchase price of the asset but also the total life cycle cost of ownership, the total cost of ownership. You need to factor in all costs associated with the asset over its life cycle, such as how quickly it depreciates and how much it costs to maintain.
Asset life cycle stage:: utilize
Once the asset is up and running, you need a plan in place to look after it. The first step is to think about the pros and cons of different maintenance strategies, including run-to-failure, preventive, condition-based, and predictive, and decide which is the best fit for that particular asset.
Ideally, utilization is the phase of the life cycle your assets live the longest because it’s where they’re helping the organization produce value.
Asset life cycle stage: maintain
Use leads to wear and tear, so you need to perform regular maintenance to keep assets and equipment up and running. Examples of maintenance can include everything from the annual servicing of a vehicle to performing upgrades to increase an asset’s productive life.
Maintenance strategies differ between businesses and even individual assets, with critical assets typically suited to preventive, predictive or condition-based maintenance, while a reactive (run-to-fail) strategy can be more cost-effective for non-critical equipment. Whatever maintenance strategy you choose, it should help you work toward:
- Reducing downtime
- Increasing asset uptime
- Minimizing the cost of repairs
- Prolonging the asset’s life expectancy
By choosing the right maintenance strategy for the asset and targeting improvement areas, your maintenance team can ensure a long, productive asset life cycle.
Asset life cycle stage: renew or dispose of
There comes a time for every asset when it’s more economical to replace it than it is to keep repairing it. At this point, the asset has reached the end of its useful life. All that’s left is to dispose of it, repurpose it, or sell it off.
If you’ve been maintaining the asset on a reactive basis and have little or no data about its performance, it can be difficult to know when the best time to replace an asset is. You either risk replacing the asset before it’s necessary or waiting too long and making an expensive emergency replacement after a failure.
How can you avoid the costs and frustrations that come with running assets using just guesswork?
If you want to make informed decisions, you need information. Start by managing the asset data throughout its life cycle using an asset management system. You can capture good data, keep it safe and accessible, and then run automated reports to leverage your raw data into actionable business intelligence.
What is asset life cycle management and what are the benefits?
If your equipment is prone to sudden, unexpected failure because you’re having trouble properly maintaining it, you’re faced with downtime that kills productivity and balloons your budget. The solution is to take a more active approach to managing your assets throughout their life cycles.
Asset life cycle management is the development and operation of your business’s assets to deliver maximum value. To implement asset lifecycle management in your organization, the team responsible for managing your assets must put in place strategies and best practices for monitoring and maintaining assets.
Asset management solutions play a key role here. Rather than haphazard spreadsheets or outdated paper and pen solutions, both of which are time-consuming and prone to human error, asset management software can provide you with a continuous flow of clean data. It can help you monitor assets around the clock, build preventive maintenance strategies based on that data, and strengthen accountability. Ultimately, it can also help you keep assets operating for as long as possible and determine when making repairs is no longer economical.
So, in theory it all makes sense, but how do you implement it in practice?
Assess your assets
The first step is to find out as much as you can about your assets. No one knows more about your assets than your techs and the people who use them every day. Your historical records and maintenance suggestions and instructions from the manufacturer can all be valuable sources of information.
Collect, store, and analyze the data
Nothing can tell you what’s going wrong and why better than cold hard data. Yes, your techs can have an educated guess based on their experience with an asset, but consistent data collection is the only sure way to validate or disprove any working hypothesis.
This is where good asset management software like ManagerPlus can help. It allows you to see how well or how poorly your assets are performing and optimize your assets using historical and actual performance data. You can also track maintenance metrics and KPIs to get a clear overview of your assets and make more informed decisions.
Revisit your plans and policies
There’s no point in having great data if you don’t have a plan in place to use it. You should take a critical look at the processes and policies you have in place and think about the updates and investments you could make to look after your assets better.
You may find you need to update or rewrite entire policies so you can implement a new plan or process. While that can take time, it’s a worthwhile investment.
Integrate your plan across all assets
The final step is to integrate your new plan across all your assets in an interconnected and organized way. As we’ve already said, the plan does not have to be the same for every asset – critical assets may require ongoing preventive maintenance and reactive maintenance may be more cost-effective for non-critical assets. However, you should have a plan for every asset that’s based on data rather than guesswork.
What are the benefits of asset life cycle management?
Reviewing your asset lifecycle management and implementing new practices takes time and effort, so why should you go to the trouble of upending practices that may still work reasonably well? It’s a good question, but the benefits of effective asset lifecycle management typically far outweigh the initial investment.
One of the main benefits is freeing up the money and employee time that’s gobbled up by malfunctioning assets. With data telling you what tasks to do and when, employees and contractors can perform efficient and targeted maintenance that’s quicker to do and less expensive than major repairs.
Greater reliability is another major benefit. Maintenance strategies that you assign based on the requirements of particular assets can help you produce healthier, better-performing assets. It also reduces downtime and increases the asset’s output.
Asset lifecycle management also helps you plan for failure. Failure is inevitable, but a failure you’ve planned for is far less damaging to your business.
Navigate every stage of asset life cycle management with ManagerPlus
With less budgetary allocation for asset acquisition, organizations are trying to prolong their asset lifecycles and eke out more value from their existing asset inventories. A modern, feature-packed, and mobile asset management solution like ManagerPlus® can help you do exactly that.
From inspections to inventory and third-party contractors, ManagerPlus can help you take command of every aspect of your assets’ lifecycles with powerful and intuitive solutions. You can see exactly where resources are going with work order and maintenance scheduling, discover operational inefficiencies with in-depth looks at how your assets are performing, and track costs and expenses tied to work orders, parts, and labor.
And as ManagerPlus is always connected and lives in the cloud, you have real-time data on everything happening in your operations, right at your fingertips. That’s why ManagerPlus is trusted by global businesses with different asset types and across all industries.
What’s next?
Want to find out how the ManagerPlus® asset management solution can help you maximize the value of your assets throughout their lifecycle? Book a live demo with one of our experts or get in touch so we can answer your questions.
Executive summary
An asset’s life cycle is the different stages it goes through and the steps involved in its management, from its initial acquisition, through its useful life, and on to its eventual disposal.
How you manage the life cycle of an asset depends on the cost of replacing the asset, its importance to the business, and its overall reliability. However, while the steps you take to manage each asset may be different, the four stages of the life cycle, acquire/create, utilize, maintain, and renew/dispose of, remain the same.
Asset life cycle management is the process of developing and operating your business’s assets to deliver optimal value. You can put strategies and best practices in place to monitor and maintain your assets, and this is where an asset management solution like ManagerPlus® can help.
It guides you through every stage of the asset management lifecycle. You can see exactly where your resources are going with work order and maintenance scheduling and discover operational inefficiencies with in-depth looks at how your assets are performing. You can also track costs and expenses tied to work orders, parts, and labor – everything you need to keep your assets on track.
