Significance In Asset Management

The importance of criticality cannot be overstated in asset management. A company must first recognize and then take steps to protect its most important assets before attempting to perform the most fundamental forms of asset management. Criticality emphasizes which assets are essential to monitor and maintain; as a result, the first step in developing an efficient maintenance program based on asset status is determining which assets are critical and developing an asset plan for them.

The implementation of Asset Management can be made more accessible by assigning criticality, which enables prioritization of work activities and investments and the creation of performance reports. The possibility of an asset failing at an expensive rate is what we mean when we talk about its criticality. The relative cost risk of an asset is referred to as its criticality, and this risk is evaluated to calculate availability and establish which assets need to be prioritized and funded to prevent failure. The failure mode, the cost, the risk, and the relative significance of an asset are the components used to determine its criticality.

Asset failure modes 

For asset maintenance, strategic decision-making, and risk assessment, knowledge of the failure mode is essential.

  • Maintenance, capital expenditures, and condition monitoring must all have their schedules planned out following the critical failure modes of each asset. Failure of the guardrails could result from rust, an accident, or poor road maintenance, making planning more difficult.
  • Failure modes, effects, and criticality analysis (FMECA) should determine when assets need to be replaced and maintained. The technique determines the primary failure modes, their impact, and probability and then builds preventative maintenance programs based on those findings.
  • A lack of success does not always involve a physical manifestation. Failure modes can be broken down into structural, capacity/utilization, the necessary level of service, obsolescence, cost/economic impact, and operator error. Every one of these potential failure scenarios has a unique set of characteristics that need to be analyzed to determine the effects it will have on the asset and the service.

When a component of infrastructure fails, the cost of failure is determined by three different factors.

  • Substituting. Expenses incurred from upgrading or replacing an asset, including those for designing, acquiring, and installing the upgrade or replacement.
  • Service loss cost How much of a hit does it take on the community’s economy or quality of life when essential services like water, traffic, or electricity are taken away while a deteriorating asset is being replaced? There is a possibility that the “cost of downtime” will change depending on whether or not maintenance is performed in anticipation of a breakdown or response to an unexpected failure.
  • Legal cost. This includes being sued for safety infractions that resulted in harm and being fined for environmental issues such as silt in a salmon stream. In addition, this includes being sued for safety infractions that resulted in harm.

Failure risk. 

If an asset is at risk of incurring significant cash costs (replacement, service loss, liability) or other costs (environmental, social), it must be monitored and maintained, and all inspection, event, and auction records must be kept.

Over time, every asset will experience a progression that can be visualized as a deterioration curve, moving from brand new to used to destroy. A condition index is what determines how this process is carried out. It is possible to derive them from quantitative engineering measures or qualitative observations to anticipate the failure of an asset. Condition evaluations that identify only two states (such as operating or requiring replacement, for example) are less useful for predictive modeling and asset criticality ranking than evaluations that identify more than two states.

The probability of an asset failing due to its associated degradation curve is dependent on the following four factors:

1. Design- If we compare bridge pavement to road pavement, for example, we find that bridge pavement has a longer lifespan.

2. Maintenance program- The lifespan of an asset can be significantly lengthened through proper maintenance. Procedures for preventive maintenance or replacement will need to be carried out once an asset reaches a certain age and begins to deteriorate.

3. Work- The useful life of an object can be shortened or lengthened depending on how it is being used. The useful life of a road will be cut shorter if there is an increase in the number of trucks that use it. External variables The structural integrity of a sewer pipe may be jeopardized if it is subjected to environmental conditions and forces that originate from the outside, such as a leaking water main.

4. Weight- Which of your assets requires immediate protection? Those assets have the most significant costs associated with their liability, replacement, and maintenance. The priority should be given to maintaining high-priority assets when allocating funds for maintenance.

Appropriate investments in assessment and maintenance are economically justifiable due to the asset’s importance, which is reflected in return on those investments. High-criticality assets are required to have risk management principles incorporated into their administration. It is acceptable to risk the loss of non-essential assets deliberately and to replace the ad hoc when necessary. 

In conclusion, assets can be prioritized according to their criticality or the cost of the risk they present, and money can be allocated for inspection and maintenance by those priorities. This strategy can generate significant cost savings over the life of an asset, and it can integrate with a risk management program. It can maximize the amount of money that will be invested in assets in the future.

Real-world risk-based asset management is complicated because of the following: 

Uncertainty in every estimate; interactions between assets – failure in one may cause failure in others (this is network criticality); optimizing investments across a portfolio of asset maintenance options; schedules for a proactive replacement to avoid failures, accommodate new capital works, or to improve service levels; and forecasts of future operations and use. Each of these possibilities must be evaluated in light of the requirement to maintain certain service levels (like the flow of traffic, for example) as well as short-term and long-term financial stability.

The costs associated with an asset’s life-cycle maintenance can be reduced thanks to effective asset management, which also helps to ensure that service levels are not compromised. As a result of its role in regulating the costs associated with Asset Management, criticality plays a significant role.