In almost any discussion of asset management today, we should first understand that ISO 55001:2014 is an international standard for an organization’s “management system for asset management.” The 2014 Standard does not explain HOW to set up an asset management system but, instead, specifies WHAT is required for such a system.
The three main components of the 2014 Standard are:
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- ISO 55000 – Overview, principles and terminology
- ISO 55001 – Requirements
- ISO 55002 – Guidelines for the application of ISO 55001
In November 2018, a revised and expanded version ISO 55002:2018 was released. General improvements include expanded detailed guidance for every clause of the 55001 requirements document, and clarification of the contribution of each requirement to the four ’fundamentals’ of asset management: Value, Alignment, Leadership, and Assurance.
Then, in August 2019, another ISO publication was released: ISO/TS 55010:2019 Asset management — Guidance on the alignment of financial and non-financial functions in asset management. It should help clarify financial and non-financial assets for organizations pursuing ISO 55001 conformance.
Note that the new document is a “Technical Specification,” meaning that it doesn’t add or reduce any of the requirements of ISO 55001.
According to the International Organization for Standardization (ISO), Geneva, Switzerland, “This document gives guidelines for the alignment between financial and non-financial asset management functions, in order to improve internal control as part of an organization’s management system. Alignment of these functions will enable the realization of value derived from the implementation of asset management detailed within ISO 55000, ISO 55001 and ISO 55002, particularly ISO 55002:2018, Annex F.”
THE MEANING OF ‘ASSET’ HERE
The Asset Management Standard defines an asset as an “item, thing or entity that has potential or actual value to an organization.” Those of us involved in maintenance, engineering, manufacturing, and reliability improvement typically think of PHYSICAL assets. Conversely, C-level executives, boards of directors, and Wall Street analysts think of assets as FINANCIAL.
In the years since ISO 55000 was launched, many of us have discussed the specifically vague use of the term “asset” in our respective asset management journeys. From my experience and perspective, I see four distinct groups of assets in any modern organization. Each group works interdependently to satisfy the goals of an organization, a business, a department, a team. These four asset groups are:
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- physical assets, i.e., equipment, machinery, buildings, property
- financial assets, i.e., investments, expenses, revenues, cost of goods sold
- non-financial assets, i.e, reputation, branding, image, good will,
- human assets, i.e., employees, partners, contractors, customers, suppliers
I am convinced that many organizations will be able to easily recognize and pursue the design of asset management systems for the first three asset groups. But, if history is any indicator, the HUMAN ASSETS may end up being treated differently.
DETERMINING HUMAN-ASSET VALUE
Organizations often think of people in terms of groups, i.e., labor, management, staff, executives. And organizations have job classifications, such as compensation plans, labor agreements, and the like to provide differentiation among these human groups.
In most businesses, those groups of human assets are perceived as providing VALUE to the organization, but are frequently treated differently when it comes to employment, skills building (training), and engagement in continuous-improvement processes.
Asset management systems can and will work ONLY when we align ALL of the organization’s assets, including the human ones, to focus on common goals.
As previously noted, the ISO Standard defines as asset as an “item, thing or entity that has potential or actual value to an organization.” Moreover, a person, a crew, a department, and a team are all “entities” that bring value to an organization.
In the end, how well organizations perform in establishing an asset management system for their human assets will set the stage for how effective their overall asset management systems will be.TRR
ABOUT THE AUTHOR
Bob Williamson is a long-time contributor to the people-side of the world-class-maintenance and manufacturing body of knowledge across dozens of industry types. His background in maintenance, machine and tool design, and teaching has positioned his work with over 500 companies and plants, facilities, and equipment-oriented organizations. Contact him directly at 512-800-6031 or b[email protected].
