April 13, 2011

Asset Management and Lean

I was thinking earlier, that asset management is effectively everything you have to do in business, that isn't directly what you are trying to do in business! What I mean is, it is everything but the product or service that you offer, and the processes or functions that support it. It is one of the most important business enablers, and to do it well is something of a skill. In fact, the Institute of Asset Management has this to say:

"Asset Management is the art and science of making the right decisions and optimising these processes."

Also, "the management of physical assets (their selection, maintenance, inspection and renewal) plays a key role in determining the operational performance and profitability of industries that operate assets as part of their core business."

So with all this in mind, I started thinking about all this in the context of lean, which admittedly I don't know much about. The way I understand it, the purpose of lean is to minimise waste in the system, such that anything that is not directly adding value to your product in the eyes of the product should be avoided. My question is, does this have implications for excellent asset management, or are you having to compromise on an excellent approach because it is not directly improving products for the customer? If this is the case, what is the point of expending money on things like health and safety, or better security, which I happen to think ARE necessary, but don't seem to add value.

Maybe I have some misunderstandings about lean, but it seems like an interesting area of conflict. I feel like I must be wrong, because Toyota seem like a pretty excellent company to me, and were also of course the creators of lean production. But, I bet there are also plenty out there who are actually reducing their own capabilities too.

- 4 comments by 1 or more people Not publicly viewable

  1. As a friend will say… dear Yanik… hahaha… it happened that I am in charge of H&S and security.
    I think that they dont add value to the product directly. They add value to the company as a whole. How do you think your employees will look upon your company if you dont give them a safe working environment. isn’t this going to affect their motivation? if “yes”, wont this have an effect on their effectivness?

    My thoughts about lean… I think its good to be lean, but how lean? isn’t there a limit, after which its too dangerous to operate? Imagine something hapens… and it always does… isn’t this system going to colapse with the speed of light?

    13 Apr 2011, 22:33

  2. This is what I am wondering too. I would really like to learn more about the asset management approaches of company’s that are involved with lean, to see how far they take it.

    13 Apr 2011, 22:44

  3. i agree with ivo ,,also im in charge of H&S..ha…
    if the value only add to products..what’s the motivation of employees to do so..according to Deming’s profound knowledge,,,whole organisation as a system…not only the products but also other factors have to be considered..obvious,,,everywhere need knowledge to be considered.

    13 Apr 2011, 23:23

  4. Ok, I am not in charge of H&S or security, but I would like to make a comment about this based on my working experience. I strongly believe that they add value and my argument for this is insurance companies. When a company calls insurance companies for tendering, all tenders ask for specific measures by the company. These measures are really strict about health and safety and security. Their bidding price will be highly differenciated according to the measures taken. Hence, apart form the people part of the enables, don’t you think that this is also part of the key results? Really high costs occur in insurance contracts.

    14 Apr 2011, 11:35

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