WHAT DOES SUSTAINABILITY OF PHYSICAL ASSETS & INFRASTRUCTURE MEAN?

DEFINING A FAMILIAR TERM 

The roads and bridges we cross, the buildings in which we work and live, the utility networks that distribute the water we drink, the manufacturing plants and the energy and fuel pipelines we use are all physical assets and infrastructures that require proper management.

Physical Asset Management aims to ensure that physical assets deliver the required services and value, remain available, operate safely with low risk, and perform economically. This approach embodies a professional mindset and involves an appropriate decision-making process carried out by the right people at the right time, ensuring that the necessary information consistently reaches those who need it.

In other words, by adopting a holistic perspective, combined with knowledge and relevant data, asset managers or owners can effectively implement Physical Asset Management to leverage the competitive advantages of their physical assets or infrastructure.

But how do you ensure that the right information reaches the right people in your organisation, to carry out analytical and predictive modelling, not just routine maintenance?

MANAGEMENT OR MAINTENANCE?

Maintenance may be a key point in the management of physical assets and infrastructure, but when we talk about management, we refer to a broader concept, a systematic process from planning to final disposal. In other words, it is a coordinated activity to extract value from assets and goes beyond the simple maintenance of industrial plant and equipment, focusing primarily on reducing and optimising the life cycle costs of assets at all stages.

As a concept, Physical Asset Management is broad and sometimes misunderstood;

it is not merely an approach to reactive damage repair but rather an applied way of thinking about the organization and operation of an entire business.

The publication of PAS 55 in 2008 and the subsequent release of ISO 55000 in 2014 brought Physical Asset Management to the forefront worldwide. However, in Greece, comprehensive Physical Asset Management remains the exception rather than the rule. Today, Atom Group, leveraging an extensive experience in Testing, Inspection, and Certification (TIC), aims to introduce and implement this business culture in Greece with a fresh perspective.

While the critical importance of a financial bid in relation to the existing budget is fully recognized, the comprehensive scope of physical asset management as a competitive advantage must also be considered in the decision-making process since a physical asset or infrastructure has a full life cycle.

WHAT IS PAM IN PRACTICE?

However, to examine what “applied thinking” or “in practice” means, I will give some examples from my experience in the field.

One thing that is often observed in Greek companies is that, for example, full maintenance contracts are based mainly on competitive bids, i.e. on measurable economic costs, rather than on unmeasurable – or perhaps more difficult to measure – characteristics such as the continuity of operation of the asset, and hence the pursuit of business continuity with increased and calculated predictability.

This is a typical case of reactive rather than strategic asset management, where one looks at the tree and misses the forest.

In such an example of a facility, the ‘narrow view’ of ensuring continuity of operations did not allow for consideration of future reliability issues. In addition to the narrow view of the engineering team, the need for a low budget was destroying the value creation of the lifecycle asset.

This is a typical example that we all face, whether on the business side, the consultancy side or the project management contracting side. And while the critical importance of a financial bid vs. existing budget is fully understood, the full extent of physical asset management as a competitive advantage cannot be left out of the decision equation at a time when a physical asset or infrastructure has a full life cycle.