THE CATEGORY WRAP

Issue 7, March 2012

Make an asset of yourself

Category Managers should think outside the box and work with suppliers to improve total asset utilisation and productivity on their capital equipment, rather than just providing a spare parts and maintenance service, according to a recent MRO Category Council speaker.

“Asset management is so much more than simply maintenance. It is about managing the lifecycle of an asset or assets to deliver the strategic objectives of the organisation,” according to Paul Agar, member of the Board of Directors for the Asset Management Council and Group General Manager Asset Management & Implementation at Transfield Services.

Paul, speaking to The Faculty MRO Category Council, challenged members to think about their categories and how they can influence the asset lifecycle within their organisation to deliver greater value. He pointed out that taking an asset management approach to maintenance category management provides a number of opportunities and benefits, both internally and externally, in terms of supplier relationships. These benefits can be achieved by:

- Linking supplier profitability to performance – ultimately, the performance of the asset is the key business driver. Giving a supplier greater accountability over the lifecycle of the asset (rather than just contracting them to maintain it) allows you to measure, and even remunerate suppliers using KPIs that are more meaningful to the business, such as availability and productivity.

- Transferring risk to the supplier - the more accountability and control a supplier has over an asset, the more risk they will be willing to take on for the continued performance of that asset.  The supplier may be able to manage risk more cost effectively than the buyer for whom ‘maintenance’ is not a core business activity.

- Reviewing planned vs. reactive maintenance - whether an asset is managed in-house or by a supplier, taking a lifecycle view allows for a more proactive approach to scheduling maintenance activities, which can not only reduce overall down-time but also allow the business impact to be managed more efficiently.

For Category Managers wanting to start thinking about asset management and lifecycle opportunities within their categories, Paul recommends looking at their existing supplier relationships. “Suppliers have a wealth of knowledge and experience that often extends well beyond the scope of what they are currently doing for your organisation. Asking them what more they can do to add value, from sharing technical knowledge to delivering training for example, is a great place to start the conversation.”

If you would like more information regarding this article, please email The Faculty at info@thefaculty.com.au.