by the emergence of quality repositories.
It is therefore rather clear that the emergence of Asset Management was inscribed in a particular theoretical and economic context, and specifically one where new requirements were being set in almost every segment of the industrial world and its stakeholders. And indeed, the same types of practices were blossoming simultaneously in various regions of the industrial world; thus, one can observe that Dr. Penny Burns, one of the pioneering figures of our discipline, was then reaching very similar conclusions on behalf of the New Zealand government as early as 1984, in the context of her public infrastructures’ revalorization project. One could therefore assert that Asset Management now relies on precise and rigorous concepts, and has been validated by empirical achievements. In order to shine a light on both of these central aspects, the following volume will be structured in a matrix organization, setting as its abscissa axis the different phases of the asset’s life cycle and, as its ordinate axis, the theoretical and conceptual factors that impact these phases. This structure will simultaneously allow us to highlight the degree to which Asset Management is a transverse discipline, diffuse at every level of entrepreneurial organizations.
A Favorable Climate for the Emergence of a Practice
In order to understand the rising interest of the corporate and scientific communities towards the mechanisms of Asset Management, one must perceive how this evolution has occurred within a very specific economic and normative context. Indeed, the consequences of the 2008 financial meltdown have been profoundly disruptive. Between 2008 and 2013, several thousands of industrial plants have been forced to go out of business all across Europe. Furthermore, the part of the industrial fleet that has remained active throughout Europe is only running at an average 75% of its nominal output; while this can be partly justified by the weakening of demand in times of financial crisis, it is also clearly an effect of a severe lack of technologic renewal and innovation combined with an aging of industrial assets that is beginning to have a negative impact on organizational levels of productivity and competitiveness. Indeed, after a decade of economic crisis, we can now observe with certainty that the European productive apparatus has aged in disproportional excess relative to the number of years during which the influx of investments was insufficient.
How are we to envision this issue? Schematically, it can be established that the rarefaction of investments made it impossible for organizations to renew their asset fleets up to the expressed needs, therefore allowing for a continuous degradation of the assets already in place. We are therefore faced with a situation in which a rising proportion of assets are in their mature lives as opposed to their useful lives, in addition to the effects of obsolescence that threaten every industrial organization across the world. In more technical terms, one can observe the CAPEX/OPEX ratio has fallen (CAPEX: capital expenditures; OPEX: operational expenditures). Furthermore, it should be noted that in many organizations, this ratio tends to decrease for a number of years until a consistent break in production generates a massive influx of CAPEX concentrated over one or two years.
In spite of all this, assets remain the first post of capital immobilization and therefore for the Assets Base of these organizations. In the case of international organizations in which equipment and infrastructure networks make up most of their capital, as it can be seen for production, transportation, and energy distribution TNCs, one can observe as much as 150 billion euros of capital invested solely in assets. It would therefore be unwise to neglect the real weight of these assets in the mainstream economy. Furthermore, it is crucial to learn how to manage these assets with a systemic approach, even more so in a context in which asset renewals are rarefying; otherwise, one faces the risk of witnessing an uncontrolled, and therefore potentially dangerous, aging of the assets, which would threaten to endanger the business depending on these assets. Indeed, it is the nature of Asset Management to promote and implement a culture of objectified investment (regarding the parameters at play) in which the assets’ life cycles are taken into account over their entire spans or over the course of their operators’ liability periods.
The need to standardize and make available the accumulated knowledge in order to democratize the best practices in the field of Asset Management has therefore never been so strong. But to fulfill this objective, one must be armed both with a scientific arsenal and a strong operational experience, in order to make the true sense of these “best practices” obvious and to universalize the lore. Over the course of the last few years, institutions—primarily from the Anglo-Saxon world, but today on the global scale—have strived to create a conceptual and theoretical framework for Asset Management, through the publication of standards such as the BSI PAS 55. Regarding the ISO 55000/1/2 series, it should be noted that if ISO (whose standards act as a reference in 162 countries around the world) has deemed it useful to dispense an international standard for a discipline that had only been around for 20 years, it must mean that this knowledge brings an added value that has been urgently needed in the pre-Asset Management world.
Preliminary Notes Regarding the Essay’s Layout
Asset Management may often appear to be a somewhat puzzling discipline, but it is also a noble one, in the sense that it sets out to implement a true pathway for the construction of a structure of decision-making.
As we’re well aware, any decision taken within an organization, regardless of its success, is always dependent on the action of a leader, a human agent prone to making valid, disputable, or misled decisions.
Therefore, we set the purpose of this work in the perspective of the construction of decisions, without denying in any way the vital part played by the decision-makers themselves, who remain fallible human actors and stakeholders in the Asset Management process.
Why should this principle be regarded as a major guideline for this essay? The explanation is rather simple: beyond the transdisciplinary and multidimensional vitality of Asset Management, it has become clear that the two initial chapters of the ISO 55001 standard place our discipline under the two auspices of understanding the specific context inherent to each organization and of the notion of leadership, namely the ways in which roles and responsibilities are dispatched and deployed within said organizations. We must therefore respond to this observed impact of the leadership’s performance in the mobilization of the organization’s human energies in the drive to generate the profits inherent to Asset Management.
Thus, this essay was produced with these two crucial segments in mind: leadership on the one hand, and proper usage of technical and technological processes on the other.
Value extraction and long-term success are the only indisputable signs of a valid discernment in the context of Asset Management. But they would remain incomplete if efficient decisions did not aim at satisfying the conditions for a proper supervision of their implementation; in other words, not only is it vital to make the proper choices, but one should also be careful to ensure their “executability” without losing sight of the attached economic dimension it entails.
To deal with these seemingly disparate issues, we’ve chosen to organize the essay around four segments. The matrix provided below serves as the departure point for our reflection, which strives to provide the reader with a conducted tour through the various sequences of an asset’s life cycle in the order of their occurrence, from design to dismantling.
This choice is easily justified: the maturity of the professionals involved in Asset Management is on a constant rise, and since the launch of the ISO 55000 standards we’ve witnessed a considerable refinement in the questions asked by “newcomers” to our field. The notion of “life cycle” is among the main points of interest, and it appears as a major conceptual break for professionals who wish to distinguish thoroughly Asset Management from the other disciplines that aim to support industrial performance (the most obvious example being that of maintenance methods and activities).
An alternative and more personal justification for the elected layout of the essay resides in the fact that a decade ago, I published another work that sought to “give a voice” to the machines and assets, in a deliberate attempt to steer clear of methodical dogmatism. At the time, there were no existing international standards for Asset Management, and it seemed that to produce an array of conceptual answers to questions that were still in gestation would not have been a