Discuss about the Framework For Strategic Planning In Maintenance.
Asset management council body of knowledge is a technical base of the council of asset management. A body of knowledge explains and represents about the core and basic information about a particular area of expertise. For the council of asset management, asset management body of knowledge is a collection of various definitions, models and associated content which depicts about the profession and the management of assets. It is significant for the managers and the organizations to document communicate and understand the asset management properly (AMBoK, 2018).
Organizations and the management of the organizations always seek to optimize the asset’s evaluation to make it easy for the company to achieve the goals and objectives. On the other hand, Strategic infrastructure project is a planning to evaluate the best practice at international level in terms of investment. Government plays a crucial role in evaluating the framework of assets in the various industries such as water infrastructure, real estate industry etc (Wong and Young and Computer Associates Think Inc, 2011). The content of assets management body of knowledge (AMBok) is published electronically as well as in print and it acts as a primary base to communicate and advance a deeper understanding about the asset management.
AMBok explains that for strategically manage the assets of an organization; it is required for a business and its managers to evaluate all the related aspects and figures and must aware about the principles of asset management (Willcocks, 2013). Various books have been launched by the institution to make it simple for the professionals to manage the performance and the position of the assets in the market.
Weber, Alfen and Staub-Bisang, (2016) has explained that any organization which wants to manage and prepared the strategic asset management plan should be aware about the principles and the strategy about the asset management. Asset management is a life cycle of managing the physical assets of a corporation to achieve the stated output and the objectives of an organization. Asset management principles have been founded to manage and evaluate the assets of an organization in a better way. Assets management is based on the set of principles. Love et al, (2014) states that if any of the principle is missed from the process of managing the assets than the organization would definitely face some kind of reductions in the total with of the assets.
Mak, Rong and Shen, (2013) further adds that the asset management should directly make an influence on the system and plans on the assets of an organization. The main principles of strategies asset management of an organization are: capabilities, focus, output, level assurance, learning organization and the worth of the assets.
Morden (2016) has added in the study of strategic asset management that there are various ways to manage the asset in an organization. Some of them are: Asset management conceptual model, asset management system model, organizational system model, capability delivery model and maturity model. All of these models evaluate and manage the assets of an organization in different manner (Mootanah, 2005). Asset management conceptual model explains that the assets should be managed on the basis of various concepts and theories. In addition, Asset management system model explains that the assets should be managed on the basis of its key components and their inner relationship with other assets in the organization.
Further, organizational system model explains that the assets should be managed after evaluating their key components and the integration process of them. Capability delivery model and maturity model explains that the leadership, culture, human performance, discipline, process etc are the few important elements which should be considered by the company while recognizing and managing the assets of an organization (Niekamp et al, 2015). The main purpose of this literature is to provide a brief overview about the conceptual framework to identify the capabilities needed in the management of an organization to manage the assets of the company (Too, 2018).
It discusses about the need of adoption of strategic management approach to improve the performance of an organization’s assets. In recent years there has been a change in the practice of approaches used by organizations in maintaining the assets. Thus, this paper analysis the strategic infrastructure asset management framework in use and evaluate its importance as well (Tseng and Lee, 2014). It should be noted that the practice of asset management begins when the owner of asset acquires a new piece of asset. Further, the manager should understand it as their major duty to maintain and properly operate the asset so as to initiate its proper functioning in long run (Takagi, 2010). Good state of assets would also offer benefits to managers and the stakeholders of the organization as the asset would work properly that would satisfy the requirements of the customers as well. Basically, asset management refers to the concept of continuous improvement of the assets.
Further, the asset management activities and the venture have been explained by the company which is as follows:
Figure 1: Framework of AMBoK
(Too, Betts and Kumar, 2018)
The above framework of AMBoK makes it easier for the management and the organizations to evaluate the assets of an organization and manage them efficiently. It explains that how could an assets be managed in strategically way. It is important for the asset manager to evaluate and manage the entire physical assets in a proper way and periodically (Storbacka, 2011). It is a technical base of the council of asset management. A body of knowledge explains and represents about the core and basic information about a particular area of expertise. For the council of asset management, asset management body of knowledge is a collection of various definitions, models and associated content which depicts about the profession and the management of assets. It is significant for the managers and the organizations to document communicate and understand the asset management properly (Kabir, Sadiq and Tesfamariam, 2014).
Additionally, the asset manager is the governing body who initiates the infrastructure maintenance activities in the organization. There are two segregations of the asset management that are operational and strategic (Kelly, Male and Graham, 2014). Operational asset management refers to the process of asset management that deals with the practical business of keeping the assets in a stable working condition. And the strategic level refers to the process which integrates user needs, business functions and the environment of the organization (Lasserre, 2017).
Apart from these according to Langston and Lauge-Kristensen, (2013), many other systems of asset management have been used by the companies but they did not work well in the real world conditions as these system concentrated on single asset at operational level. As in the real world scenario, the managers are faced by considerations of social objectives and political goals that affect the maintenance of infrastructure asset. Further, it should be noted that there are various fixed and fluctuating factors present in the environment that degrades the asset management system of a company in long run (Gharehbaghi, 2014).
Due to which, the need to assume of adequate framework of strategic asset management from the strategic point of view has been enhanced. Additionally, for an asset management to create true value within them, it needs to be majorly concerned with the occupying the strategic role which means that the asset manager must be proactive not reactive in their strategic approach (Hitt, Ireland and Hoskisson, 2012.). Also, the strategic infrastructure asset management approach provides a long term view of the performance and cost measure which successfully aligns the dynamic capabilities of an organization with the customer need satisfaction attribute in the environment. But lately, this approach took more time to gain attention of the management and the formulation and implementation of this approach also took time in the external market (Lenferink, Tillema and Arts, 2013). Thus, it has been approached by AMBoK that the asset management should evaluate all the principles and must not ignore any of the principles. The main principles of strategies asset management of an organization are: capabilities, focus, output, level assurance, learning organization and the worth of the assets.
One of the most common questions which have been heard in context with the asset management is some difference of that how should a strategic asset management plan look like? Earlier, it was quite easy for the companies to prepare the plan. But with the changes in the market and due to huge competition, globalization and liberalization, it becomes tough for the companies to manage the assets in a normal way (Pandey and Dutta, 2013). Now, it is required for the businesses to manage the strategic asset management plan in relation with the ISO 55000. The below given graph explains that for evaluating and preparing the strategic asset management plan, it is required for the businesses to evaluate the organizational plan, asset management policy of the company, asset management plan, asset management system plans and the other organizational policies of the company (Srinivasan, 2011).
Figure 2: Strategic asset management plan
(Patanakul and Shenhar, 2012)
The above graph of strategic asset management plans of the company explains that the asset management plan is crucial for the business and thus while preparing that plan, organization is required to evaluate and manage all the related aspects of the business. With the upcoming need to improve in the competitive environment, more organizations are concerning towards the strategic approach in asset management. It has been said by LottiOliva, (2014) in addition that this approach would help the management team of an organization to make full output of the asset which they purchase for the organization. With respect to this process many common themes are identified which talks about best practice guidelines and strategic approach in this case (Aaker and McLoughlin 2010).
In the earlier times, the infrastructure investment and decision making process were initiated according to the traditional techniques, availability of resources and personal experience. So, under this systematic management success was measured under way in which the mangers used to control the backlogs and not focus on optimizing the system performance. This is a wrong approach to optimize the asset performance and the growth of the company (Alegre et al, 2012). The management team is required to optimize a systematic approach which should examine, maintain an upgrade the physical asset in a way that they do not obsolete before its expiry. AMBok explains that for strategically manage the assets of an organization; it is required for a business and its managers to evaluate all the related aspects and figures and must aware about the principles of asset management (Al-Turki, 2011). Various books have been launched by the institution to make it simple for the professionals to manage the performance and the position of the assets in the market.
Also this approach should be cost efficient to the company. Further, due to relatively long period of lifecycle of the infrastructure asset, it has become more important to consider the whole period of the life cycle approach in the decision making process. Another theme in this process is the resource allocation, this aspect states that limited funding and complication in investment and operations decision have made it difficult for the managers to gain benefits from their business activities (Ang, 2014).
After evaluating the strategic infrastructure asset management, framework of strategic asset management is identified that talks about the plan in which whole asset management plan and system works. Despite of different approach of planning identified in the market, this approach clearly segregates itself in three main process namely strategic analysis; strategic choice; and strategic implementation respectively. According to Bofinger, (2011), this framework is cyclic and offers reliable feedback about the work on which company should work on.
Figure 3: Strategic asset management process
(Brown, Garlappi and Tiu, 2010)
The initial stage of this framework is the strategic analysis that refers to the process of identifying the directions that will help the organization to attain the best output out of the asset which could be further contributed in the process of delivery of services to the customers. So, under the process of strategic analysis, the organization must ensure that there is compatibility between the current asset management plan identified and the constantly changing environment (Brown, Bessant and Lamming, 2013). Similarity or relation between the plan and the environment is very important otherwise the functions will not work properly and it will not give expected results as well. Further, the application of this process involves three steps that are, analyzing the environment of business, review and assessment and lastly, implementation of strategic ‘gap analysis’ (Campbell, Jardine and McGlynn, 2016).
It is important for an organization and the managers to analyze the business environment under this process as it helps in establishing adequate the services which are required by an organization to perform well and manage the entire assets of the business in better way. The strategic analysis approach aims to forecast the delivery needs present in the market and ability of the organization to meet these long term and short term requirements. The key outcome of this process is the available services with the use of optimum resources of the company according to the customer needs (Li, Ng and Skitmore, 2013). Further, the review and evaluation of the current asset portfolio is a formation of the process that involves the identification, collection and evaluation of the relevant information in order to assess the current growth and performance of the asset portfolio. The purpose of this asset portfolio is to get a clear consideration of the present environment of the company’s asset and their system of management.
According to Hardwicke, (2005), the purpose of this strategic asset management analysis is to identify whether the existing assets are properly connected to each other to provide better services in the organization. This process could also easily identify the strategies which are to be developed to furnish the changes and manages the assets in the organization. Additionally, the strategic analysis process should take into consideration the economic, environmental and social changes present in the environment to initiate success of the strategy (Haynes, Nunnington and Eccles, 2017). Further, it leads to the other process of the strategic management analysis which makes it easier for the strategic managers and the asset manager of the organization to prepare a better plan for the betterment of the company and the performance of the organization in the industry.
Thus, in this way the above mentioned strategic infrastructure asset management framework gets completed, but the fact should be taken into consideration that there are different approaches to this concept which are used in the environment. It depends upon the discretion of the organizations, industries and their work environment for which they want to select the suitable framework (Frangopol, 2011). Although all organizations have their different ways to solve the problems relate to asset management but at the end objective or mission of all the frameworks is same; that is, through the project, the organizations want to improve the efficiency of their asset, cut costs, increase benefits and improve the lifecycle of the asset (AMBoK, 2018).
The main purpose of strategic infrastructure asset management is to ensure that the goals made at the beginning of the infrastructure asset management plan are adequately achieved by the company. In two groups, the performance of the asset management plan can be measured that are, efficiency and effectiveness. Efficiency refers to the amount to total work performed by the asset in terms of the total energy expended on them. And effectiveness refers to the process of successfully achieving result or desired outcome from the event performed (Chevrette and Duchesne, Connectif Solutions Inc, 2013). The effectiveness under this case measures the adequacy of the asset portfolio to support the service needs of the user. The service performance indicators under this case are the quality, quantity, safety, reliability, environmental sustainability, capacity, fitness for purpose and responsiveness. And the efficiency measures under this case relate to the use of the asset, it explains how well the assets are managed in terms of profitability and cost. Thus, with proper understanding of the asset, the management will come to know about the necessary changes which are required in the framework to act more effectively (Della Croce, Stewart and Yermo, 2011).
Thus, in the limelight of above mentioned events it should be noted that the changes present in the asset management framework requires the asset managers to be more competent and proactive in their approach of the management to comfort the infrastructure asset. This process initiates a need to adopt this framework which clearly defines and integrates all the possible events to produce a better outcome of the project (Chang and Chuang, 2011). The framework of strategic infrastructure asset management is identified by synthesizing the current practices of the infrastructure asset management. The presented infrastructure project can be best applied to the industries like railways, roadways, seaports, airports, utilities etc.
Conclusion:
Thus, through the above study and literature review, it has been evaluated that there are various ways which are available in the market to evaluate and manage the assets of an organization. But through the evaluation and study, it has been found that AMBoK is one of the best technical ways for an organization to evaluate and manage the assets. This process explains that all the principle should be followed by the business to manage the performance and the performance in the industry. This asset management process initiates a need to adopt this framework which clearly defines and integrates all the possible events to produce a better outcome of the project. The framework of strategic infrastructure asset management is identified by synthesizing the current practices of the infrastructure asset management.
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