What is the purpose of an asset management plan?

Asset management involves maintaining, developing, and operating assets in a cost-effective manner. Every organisation needs to have a thorough understanding of their assets, both liquid and fixed. In this blog, we’ll delve into the purpose of an asset management plan and the implementation of asset management objectives. 

What is an asset management plan? 

An asset management plan is a systematic, tactical plan that aligns an organisation’s infrastructure and assets with an agreed-upon standard of service. These plans are crucial in managing an asset’s life cycle and are multidisciplinary in nature. Good asset management is foundational to the success of any business.

A strategic asset management plan typically covers:

• Standard of service 
• Current performance 
• Planned actions 
• Costs and benefits 
• Potential future improvements 

What is ISO 55001? 

The ISO 55001 standard provides organisations with the framework needed to establish, implement, maintain, and improve an Asset Management System. It applies to all types of assets and, while not an asset management plan itself, it offers a universal standard for organisations to follow. 

Creating an asset management plan 

The first step in creating an asset management plan is to inventory every asset owned. A clear plan requires documented information to be effective. When taking inventory, consider the following: 

• Value of each specific asset 
• Location of each asset 
• Acquisition date of each asset 
• Total number of each asset 
• Expected life cycle of each asset

Next, calculate the life cycle of your asset, considering not only the initial cost but also a long-term view, including maintenance costs and disposal costs.

You’ll then set your levels of service, outlining the services that each asset provides and what operations and maintenance are required to keep these assets in good condition. 

Finally, use this information to create a long-term financial plan. Effective asset management is built on this foundation. With many free resources available to help develop asset management plans such as our gap analysis checklist.

The benefits of Asset Management Certification 

• Improves use: By tracking your company’s assets throughout their life cycle, you can enhance your entire Asset Management System by improving how you acquire and maintain your assets. 
• Risk management: Having a clear understanding of your assets allows you to better assess risks and effectively mitigate them. 
• Improves compliance: All companies, non-profits, and local governments must account for the acquisition, use, and disposal of all their assets. With a developed Asset Management plan, you have a central repository of all recorded asset information, which simplifies reporting. 
• Improves accuracy: Knowing your assets well ensures that financial statements accurately record them. 
• Cleans up the inventory: Any lost, stolen, or damaged assets will be cleared out of the system and eliminated from the company books.