- Literature review on Asset Life Cycle Management
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The main task in managing assets of any kind is not so much the assets themselves. Rather, it is the value that the particular asset delivers to the enterprise over the whole of its life or what is more commonly called the “asset life-cycle”.
- Careful Need identification (talking to the people who will be operating or using the asset)
- Planning what is expected from it once acquired
To plan exactly how the asset is to be used and what goals for utilization need to be set.
- Design effort (to see what minimum purchase specifications should be or any design additions perhaps)
Any modification is often much more cost-effective here than trying to make modification after the purchase and commissioning phase.
- Procurement or purchasing based on the previous three steps
For example, any guarantee, warrantee or other contractual terms that may be important.
- Commissioning or properly installing to make sure that the business gets everything promised in the purchase contract
In this phase the organization makes sure the asset is fit-for-purpose.
- Operating, maintaining and monitoring the asset on a continual basis
Depending on the asset, this phase may go from months to years or even decades and the business therefore needs to have a very planned use and maintenance approach.
- Modifying the asset or upgrading it if possible and if this makes good commercial sense
This is often cheaper than replacing the asset completely although eventually a new version of an asset will prove to be the better overall option.
- Decommissioning or retiring/disposing of the asset so that it can be appropriately replaced
At the end of their useful life or when the cost of operating or maintaining them becomes too high, assets need to be planfully retired and properly disposed of.
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