Challenges in Achieving Optimal Asset Performance Based on Total Cost of Ownership

Abstract

Ensuring optimal performance of assets in capital-intensive industry sectors is crucial towards sustained growth in terms of returns on investment (ROI). The primary challenge is to achieve optimal utilization of the assets over their productive lifecycle and identify the need and timing for replacement and/or enhancement. Such decisions are not trivial and can affect the ROI considerably. Operational and planning decisions related to the assets need to be based on the concept of Total Cost of Ownership (TCO) if they have to be economically optimal. The technical challenges posed are in terms of selection of a mix of techniques and methods for extracting useful information/knowledge from raw operational data, its use to construct predictive models for asset performance, and use of the models to achieve continuous optimization of asset performance with TCO consideration. It requires a model based approach to achieve asset performance over multiple lifecycles. Technology enablers are also a crucial element in achieving the maturity of asset management processes and practices in the organization. The paper discusses an EAM maturity model and its technological requirements that would help organizations to achieve sustained asset performance based on TCO.