Evolving Reliability: Moving from Managing Assets to Dynamic Asset Management

What is the critical difference between simply managing assets and implementing an asset management strategy?

Risk Matters X.0 Podcast Host Frank Morphis, an experienced maintenance and reliability consultant, recently sat down with Rachel Wagner from Hexagon, a global leader in digital reality solutions combining sensor, software and autonomous technologies, to discuss how companies can move beyond traditional maintenance strategies to deploy a dynamic asset management framework.

Hexagon's strategy focuses on the rapidly widening gap between the enormous volume of data being created and the industrial world's ability to harness it effectively to improve asset management. Their solutions empower organizations to create meaningful value by putting data to work in new and world-changing ways.

To address today’s challenges around data quality, companies must build more effective programs that balance risk and opportunity, Wagner says. As maintenance professionals leverage advanced and innovative technologies to support asset management and improve performance, practical wisdom is also needed to drive operational excellence in today's complex and competitive industrial landscape.

“A true asset management strategy is constantly in motion and evolving based on new information,” says Wagner, “and it should also reflect the conditions your assets are operating in.”

Bridging the Gap: What Asset Management Is and Isn't

In the world of asset management, “the end goal, or the what, is pretty simple regardless of industry,” said Wagner on the podcast episode Asset Management: The Big Picture. “It's how we get there that's more nuanced and challenging.”

Whether you work in aerospace, power generation, oil and gas, or discrete manufacturing, the goal remains consistent—make assets generate value throughout their lifecycle and beyond. These asset-intensive and high-performance industries have spent a large capital investment on their assets, so finding ways to lower total cost of ownership (TCO) and continue extracting and maximizing value are strategic priorities.

However, Wagner pointed out, while the end goal is straightforward, the strategies organizations employ vary as each maintain their own unique processes. Some rely on “hope and luck” to achieve their goals, but that's not a good approach, she said candidly, noting that there's also the infamous “do nothing” strategy. Others default to original equipment manufacturer (OEM) recommendations or letting someone else define what the strategy should be, which she identified as the most common asset management strategy she encounters.

The problem with OEM recommendations? These are based on averages and don't account for operational variations such as behavioral patterns, or the conditions and context in which the asset operates. These variables ultimately determine performance, Wagner emphasized, and only going by as-designed averages creates significant opportunity for improvement. “There’s a lot of value leakage,” she said. “You’re probably spending more than necessary while still not achieving optimal reliability.”

When putting in place good asset management principles, organizations can balance the orders of magnitude, directly looking at their cost versus performance tradeoff, for example.

While following an OEM strategy for maintenance generally works for most, there is a more strategic path that inspires operational excellence within an organization, or what Wagner defines as ‘true’ asset management.

Dynamic Asset Management: Continually Refining Processes

What sets true asset management apart is its dynamic nature. Rather than a static or prescriptive approach, it adjusts and adapts based on how assets perform in their actual environments.

“A true asset management strategy is constantly in motion and evolving based on new information,” Wagner said, “and it should also reflect the conditions your assets are operating in.”

On this journey toward operational excellence in reliability and performance, she quotes from James Clear’s book, Atomic Habits, that “success is not a goal to reach or a finish line to cross. It is a system to improve, an endless process to refine.”

This ‘big picture’ view transforms how we approach maintenance and reliability, but it's not about instant transformations or doubling performance overnight. It's about continuous, incremental improvement that positions industrial organizations to manage assets more effectively over time by putting in place the right disciplines and the right systems.

From a safety and risk consulting perspective, Morphis added, deploying a dynamic framework is challenging for many organizations to do, especially when it comes to navigating change management. “It requires the entire organization to buy into this strategy,” he said.

To address change management and other key challenges when adopting new maintenance strategies, “asset management really puts in place flexibility within a framework,” Wagner noted. “It helps give organizations the ability to move within more of a structure and best practices approach to managing assets so it’s not a huge shift in what they may be accustomed to as a process.”

Differences Between Managing Assets and Asset Management

The conversation switched gears to comparing the difference between managing assets and asset management, two entirely separate concepts which draw a parallel to a long-term plan to maintain health through regular exercise and a well-balanced diet.  

“Managing assets is like eating a salad or doing a juice cleanse the night before vacation for instant gratification or a quick fix which leads to short-term results,” Morphis said. Asset management, meanwhile, is establishing a structured approach to a healthy lifestyle that delivers sustainable results. One is short-term thinking; the other builds lasting value through systems and habits.

Another illustration shared by Wagner was comparing asset management to a playbook used to coach a professional team of athletes. Like a sports coach who must understand individual players' strengths while focusing on winning games, asset managers must see beyond individual equipment to improve overall system performance. The ultimate goal is the same across athletes and assets: to have a continuous winning cycle.

She shared the remarkable story of Sir Dave Brailsford, an elite British cycling coach who inherited a team with mediocre performance. Instead of seeking massive changes, Brailsford focused on the power of making 1% performance improvements, or tiny improvements across dozens of areas, from redesigning seats to analyzing sleeping patterns. None of these changes alone would transform performance, but together, they created compound effects. The result was fostering a team that went from losing endorsements to dominating the Olympics and winning the Tour de France repeatedly.

Starting Your Asset Management Journey

For reliability engineers wondering where to begin, Wagner offered reassurance: you don't need perfect data, mature systems or a large organization to implement asset management principles. In fact, she underscored, "if you know almost nothing, almost anything will tell you something."

Common misconceptions that hold organizations back include thinking:

• Maintenance operations must be perfected first.
• Data quality must be near-perfect.
• Asset management is only for large global companies.
• Sophisticated condition monitoring or maintenance management systems are prerequisites.

None of these prerequisites are true, Wagner said. The key is starting with what you have and setting a baseline for your current performance so your organization can track progress, then developing a roadmap toward your objectives.

Key Takeaways

1. Think of asset management as your playbook; like a coach leading athletes, you're guiding assets to perform at their best within a system.
2. Asset management is a verb, not a noun; it's an ongoing process of continuous improvement, not a finish line to cross or a static program to implement.
3. There's never a bad time to start; don't let misconceptions about size, maturity or data quality prevent you from beginning. Start with what you have and build from there.