Understanding the Life Cycle of Industrial Assets

The definition of asset, for the purposes of this article, will be restricted to tangible assets, material goods that comprise the physical production structure of any industry.

Assets are material goods that have value in themselves or that produce value for an organization.

Asset management implies the optimal management of its life cycle in order to achieve the defined objectives of a business in a sustainable way.

It is finding the right balance between performance, cost, and risk to achieve the same goals.

The efficient management of the asset life cycle, or asset systems, is fully in line with the need for the competitiveness of the industry, in all sizes and segments.

The life cycle of the asset involves since its selection (design and acquisition), operation, maintenance, retirement, to its disposal.

BENEFITS OF EFFICIENT INDUSTRIAL ASSETS LIFECYCLE MANAGEMENT

The quality of management in an organization is what determines its success or failure.

In a competitive environment, where leading-edge organizations are introducing Industry 4.0 technologies into their operations, extracting maximum value from the investment in assets cannot be neglected.

To maximize the value of an asset, it is necessary to keep track (in appropriate software) of its performance over its useful life.

This performance comprises operational activities and related costs, accompanying the return on investment.

Thus, it can be assured whether the value generated is aligned with the strategic and operational objectives of the organization.

Among the benefits of good industrial asset lifecycle management are:

• Extend the life of machinery and equipment;
• Increase the reliability of the operation;
• Increase productivity;
• Keep maintenance costs at an optimal level;
• Improve health and safety for employees;
• Generate greater energy efficiency;
• Contribute to the profitability of the business.

THE STAGES OF THE ASSET LIFE CYCLE

For industrial assets to generate value for the organization, throughout their life cycle, it is not enough to simply specify, request quotes, and buy that asset.

Unlike this, purchasing an industrial machine is a multi-step process to be done calmly and properly, including:

1. Identification of the necessity: the careful and detailed identification of the necessity, which includes the opinion of operators and maintainers. It should include analysis of the solutions available, the return on this investment, the form of acquisition, among others. 
2. Planning what is expected from this asset, once acquired. In this step a careful evaluation is done, a planning of its use, as well as the definition of goals for its use. 
3. Project or Design: at this stage any modification to the standard design of the machinery is defined. It is important to remember that a design adjustment after purchase or even commissioning is much more difficult and expensive. 
4. Acquisition: in this stage the acquisition, delivery and installation are done. This is the time to negotiate contractual terms of supply, including warranties, repair and exchange liability due to defects in machinery or parts. 
5. Commissioning and deployment: Some assets can be delivered ready for use. Others, however, need to be installed and commissioned. In this phase it is ensured that the asset is fit for the purpose of acquisition. That it is not damaged or installed incorrectly, and that it is not missing any features promised by the vendor. 
6. Operation and maintenance: this is usually the longest phase of the life cycle in which costs must be recorded and a clear plan for both operation and maintenance must be in place. 
7. Modification or upgrade: during their useful life, some assets are subject to modifications or upgrades to make them more efficient. It is important to compare the expected results of this modification with the acquisition of a new, more modern asset. 
8. Decommissioning and disposal: It’s the end of the useful life of the asset. When the operating or maintenance costs become too high, it is necessary to plan for its removal, which usually occurs in parallel with the acquisition of a new asset. 

THE BATHTUB CURVE

The bathtub curve, indicates where the highest risks of failures are. There is a high incidence of early stage failures, also called infant mortality, which are failures arising from:

• Manufacturing problems;
• Installation defects;
• Project errors;
• Incorrect assembly, among others.

Being aware of the associated risks at the initial stage of the asset’s operation, one has a clearer idea of the relevance of care in stages 1 to 5 of the life cycle, listed above.

Past the infant mortality risk period, you enter the asset’s useful life where failure events slow down and stabilize. When they occur, the failures are random.

At this stage the application of the appropriate maintenance strategy plays an extremely important role. There may be corrective interventions, but preventive maintenance and the application of predictive techniques are more usual.

The latter favor the reliability and availability of the assets, and therefore their generation of value.

With time, the asset tends to show more wear and tear failures.

As the graph of the bathtub curve illustrates, this incidence increases significantly in the final phase of the asset’s life. At this point, you enter the stages of modification or upgrading, or decommissioning and disposal.

The productive capacity, new technologies, maintenance costs, and asset replacement costs will indicate the best way forward.

PREDICTIVE SOLUTIONS FOR INDUSTRIAL ASSETS MONITORING

The Solution has proven adherence in various types of industries to help manage assets from installation to end of their lives.

It is a technology that incorporates the main values of Industry 4.0, helping to better manage the life cycle of industrial assets. Contact us and learn more.