All entries for Thursday 31 March 2011

March 31, 2011

To manage assets, you must manage knowledge.

I stumbled across one of the major links between knowledge and asset management today. It might sound really obvious, but assets generate information! To effectively manage assets, be they property, machines, people, etc, you need to have a way of dealing with the flows of important information surrounding them, and of converting that into knowledge that is useful, and an aid to your decision-making processes. This is where the Knowledge Management comes in.

It's not just that you're managing assets based on knowledge and theory (which you should be anyway of course - theory is the basis for action), it's that the assets themselves need continuous monitoring/maintenance/support and all of this generates information that must be handled appropriately for effective use later. For example, for a single component of a machine you own, you must: record the decision-making process that led to purchase, the cost, market and book value, likely depreciation values, how often it needs maintaining, what kind of maintenance is required, its productivity, etc. Now, if you scale that up, that needs to be repeated for every machine you have. In every factory you own... that's a LOT of information, and this is just one small area of asset management!

Even then, as we have previously discussed, that's a small part of the battle. It's fair to assume that you require more than just one person's input in your asset management. If you had a small operation and you didn't, life might be a little easier. But, assuming you do, because the operation is big and there is too much for one person to consider, then you have fresh problems, because it is no longer just about making sure the information is collected and occasionally used; no, you have to get past communication barriers. And we know that while this isn't too tough with explicit information, it's much tougher with tacit information. Even with just two people managing all assets, an incredibly high level of communication would be required for effectiveness, and with every extra person involved in the process, it becomes even harder to sustain!

And yet it is vital that you do have a lot of people involved, or else, you completely lose access to the huge volumes of tacit information within them, as well as their buy-in and consequent compliance or interest in 'your' (not 'their'/'the company's') asset management policies.

So it appears this is the challenge: Knowledge and Assets are inextricably linked in this way, and you need to manage both effectively to succeed. Wow... good luck to us all... no wonder KBAM seems so big!


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