Strategic view of asset management – managing emerging trends and perspectives
Many trends and perspectives impact how asset management strategies are formulated and implemented. My thesis, "Supporting strategic asset management in complex and uncertain decision contexts," explored this topic and won the EFNMS 2021 Ph.D. Award competition. Due to covid, the official award ceremony was postponed to the Euromaintenance conference that will be arranged in April 2023. Currently, the key topics of the thesis are increasingly crucial for organizations.
ISO 55000-2 (2014)
defines AM as the "coordinated activity of an organization to realize value from assets." At a strategic level, asset management decisions are often uncertain and complex. Uncertainty is the deficiency of information about an event, its consequences, or its likelihood. In contrast, complex systems have a history, are evolving, and involve many interacting elements, where minor changes may have significant consequences. This complexity and uncertainty stem from factors such as long and varying lifetimes of assets, imperfect information on which the decisions are based, complex technologies, information systems and organizational structures, and multiple stakeholders with possibly conflicting needs and requirements.
The dissertation (completed in 2019) identified key trends and perspectives affecting strategic asset management: regulation and legislation, sustainability, circular economy, climate change, enabling technologies, ecosystem, business models, risk management, robustness and flexibility, and life cycle information management. There is a need for methods supporting strategic asset management that consider these aspects of managing the uncertainty and complexity related to strategic asset management.
Re-evaluation of key trends
More concrete requirements and demand for a sustainable society have sparked several new legislations, regulations, standards, and guidelines that affect asset-intensive industries. These include EU Green Deal, Fit for 55, EU Taxonomy for sustainable economic activities, and Corporate Sustainability Reporting Directive. Role of stakeholders and the impact of (lack of) social responsibility has become more visible. Since 2019, there has been a need to re-evaluate the list.
Investments in the low-carbon industry and energy efficiency have been abundant. Minimizing greenhouse gas emissions is on everyone's agenda, and biodiversity is the focus of manufacturing industries. New regulations are expected to force organizations to verify and quantify the green claims. The global pandemic and war in Ukraine have emphasized the risks of dependency on extra-EU raw materials, components, and competencies. Supply security and military aspects are among the key decision criteria in strategic asset management. Current and future energy prices are increasingly crucial in asset management decisions. Furthermore, which role can AI take in automating and assisting asset management decisions?
There is a call (figure 1.) to build resilience against the impacts of these disruptive phenomena and to identify opportunities within them. These phenomena have far-reaching impacts on many parts of production systems and infrastructure. They are interconnected with megatrends such as circular economy, sustainability, and digitalization, which are already transforming businesses.
The focus is establishing an asset management system and strategic plans that inform investment, maintenance, operation, and sustainable end-of-life decisions. From a strategic asset management perspective, these disruptive phenomena disrupt the use of assets, alter investment volumes in the asset base, alter the timing and nature of production disruptions, and may even result in the shutdown of production units.
Circular economy as a key for sustainable asset management
Circular economy emerges as one of the main topics for strategic asset management. Strategic asset management already incorporates many aspects of the circular economy, such as reducing waste and keeping assets in use through effective maintenance. Adopting life cycle thinking in strategic asset management aligns with the goals of the circular economy by maximizing the value of assets. Assets are stockpiles of valuable resources, including critical raw materials (CRMs), and any degradation results in value loss.
However, incorporating circular principles more deeply into strategic objectives would increase the sustainability of the asset management system and the organization. This requires a more comprehensive understanding of strategic decisions' economic, environmental, and social impacts and incorporating circular design strategies into decision-making.
Examples of such decisions include investing in greener production systems, investments, and practices to increase energy and material efficiency, prioritizing non-critical, biobased, or secondary raw materials, maintaining and remanufacturing production systems, and reusing or recycling them at the end of their first life cycle and essentially all actions towards preventing waste and downcycling.
This article outlined some of the main topics of my dissertation. The main contributions of the dissertation were: 1) emerging trends and perspectives in strategic asset management, 2) advancing the classification of methods supporting strategic asset management, and 3) developing and testing novel methods for supporting asset management decisions.
The dissertation is available to read at: https://urn.fi/URN:ISBN:978-952-335-397-8 .
To be able to respond to current developments and trends in society, it is of vital importance for organizations to focus on the sustainable employability of assets.
EuroMaintenance is a great venue for all involved with asset and maintenance management in one way or another.