In today’s competitive landscape, companies that heavily rely on assets (particularly in sectors like oil & gas, utilities, and chemicals) face significant operational risks. To stay competitive, it’s crucial to manage these risks effectively. This article discusses the importance of asset risk awareness, how companies can mitigate risks, and the role of asset performance management (APM) philosophy in achieving long-term operational success.
Understanding Risk in Asset Management
Many companies struggle to assess the risks associated with their assets in a methodical way. Whether it's around leakages, equipment failure or regulatory compliance. Not being in control of these risks can jeopardize a company's operations, profitability, and even its license to operate. Without a clear understanding of the risks you are taking, decision-making becomes reactive rather than strategic.
Consequences of Poor Risk Management
In industries with critical assets, failures can lead to significant financial losses, reputational damage, or shutdowns. For instance in the Netherlands, companies have lost their license to operate due to inadequate inspection methodologies. Globally, the ability to stay competitive in the current, fast changing environment, depends on mastering operational risks while also managing your costs effectively.
A Risk Management Philosophy: The Role of APM
A strong risk management philosophy is essential for navigating asset-related challenges. Asset Performance Management (APM) is not just a tool, but a mindset that enables companies to strategically assess risks, mitigate them, and continuously improve their performance.
APM at Its Core:
- Criticality Assessment:Start by understanding the risk levels of each asset and aligning maintenance activities to mitigate those risks.
- Risk Mitigation:Look at which risks are acceptable and where you might be over-maintaining. This helps prioritize where to allocate resources for maximum impact.
- Continuous Improvement:By freeing up maintenance and reliability teams from unnecessary tasks, you allow them to focus on more strategic improvements that enhance company growth in the longer term.
Practical Tools and Methods
While APM philosophy underpins successful risk management, it needs to be complemented with the right tools and methods. There are specialized tools that help assess and address asset performance comprehensively. Examples are GE-APM, Aveva, Bentley Systems etc. However, it’s not just about selecting the right tool; it’s about integrating them into a broader strategy that aligns with your company’s goals.
The Roadmap to Implementation
The first step in implementing this philosophy is understanding where your company currently stands. A practical way to start is by conducting workshops that help assess your company’s current risks and pain points. From here, a roadmap can be developed, outlining the steps needed to mitigate risks and improve performance. The roadmap will also provide a structured plan for the next 1 to 5 years. The outcomes of this workshop will answers questions like: Where do you want to go, what are you struggling with and what do you need to do to stay successful.
Common Challenges During Implementation
Even when everything is thought out well, challenges still might occur during implementation. Preparing for these will ensure a smoother and more sustainable implementation. Below 2 common examples of challenges:
- Data Integration & Security:These are often technical hurdles but those are becoming easier with modern cloud solutions.
- Employee Buy-In:A successful implementation requires employees to understand the long-term goals and embrace the change.
The Asset Management Technology experts of Bilfinger can guide your organization through this process, from identifying pain points to embedding long-term improvements within your daily operations.
Ongoing Growth Through Strategic Risk Management
Once an asset risk management approach is embedded, the benefits are clear. Companies become better equipped to manage current and future risks, improve competitiveness, and ensure long-term operational success.
Takeaway Message:
In an environment of increasing complexity and pressure, it is essential for companies to adopt a long-term roadmap for risk management. Understanding and actively managing asset-related risks not only ensures smoother daily operations but also prepares the company for future challenges.
