The Complete Guide to Creating Asset Management Policies

An enterprise asset management policy serves as a guiding document that outlines the principles, procedures, and best practices for managing and optimizing assets throughout their lifecycle.

In today's rapidly evolving business landscape, the importance of effective enterprise asset management cannot be overstated. It is a critical factor in enabling organizations to thrive and maintain a competitive edge.

Crafting a comprehensive and well-structured policy is paramount to ensuring the longevity, efficiency, and cost-effectiveness of your organization's assets.

In this article, we will delve into the eight crucial steps that will empower you to write an effective enterprise asset management policy (sample policy draft included) and enforce it with a CMMS.

Or, you can jump right to the 8 steps to writing an effective asset management policy >

• Define clear objectives and scope
• Conduct a comprehensive asset inventory
• Analyze regulatory requirements and industry standards
• Engage key stakeholders
• Establish clearly defined roles and responsibilities
• Develop robust maintenance strategies and schedules
• Implement effective performance measurement and reporting
• Regularly review and update the policy

What are the three principles of asset management policy?

There are three pillars to writing an asset management policy that provide a guiding framework to enable you to maximize asset value, align asset management with strategic objectives, and foster a culture of continuous improvement and innovation.

1. Value

• Emphasize value realization beyond initial acquisition cost, considering factors such as operational efficiency, risk management, and revenue generation throughout the asset's lifecycle.
• Implement robust performance measurement frameworks, analyzing key performance indicators (KPIs), return on investment (ROI), and total cost of ownership (TCO) metrics.

2. Alignment

• Integrate asset management practices with overall business planning and decision-making processes, ensuring alignment with strategic goals, risk appetite, and financial targets.
• Proactively manage risks associated with assets, including technological obsolescence, regulatory compliance, and market volatility.

3. Leadership

• Foster a culture of asset management excellence, promoting knowledge sharing, collaboration, and continuous learning among professionals.
• Encourage leadership involvement in asset management initiatives, with executives championing strategic asset management and providing necessary resources.
• Embrace emerging technologies and data-driven approaches, such as predictive analytics, IoT, and AI, to optimize decision-making and asset performance.

Ultimately, these pillars help optimize asset performance, mitigate risks, and achieve sustainable long-term success.

Suggested read: Effectively Achieving Org-Wide Unity With an EAM Strategy

What are the objectives of an asset management policy?

Imagine a scenario where two competing manufacturing companies have vastly different outcomes with their assets.

One suffers from underutilization, increased downtime, and high maintenance costs, while the other achieves maximum operational efficiency, minimal equipment downtime, and significant cost savings.

The differentiating factor? Their asset management policies, to begin with.

An effective policy unlocks an organization's asset potential, reducing costs, mitigating risks, and driving operational excellence.

Here are 10 primary objectives of an asset management policy:

1. Optimize asset utilization and maximize value.
2. Minimize downtime and improve operational efficiency.
3. Enhance asset performance and reliability.
4. Reduce costs through efficient asset management.
5. Ensure compliance with industry regulations and standards.
6. Foster sustainability and responsible asset practices.
7. Improve decision-making through accurate asset information.
8. Mitigate risks associated with asset ownership and operation.
9. Enhance asset lifecycle management for maximum value.
10. Promote accountability and effective asset management practices.

What should an asset management policy include?

An asset management policy should include several key elements to ensure comprehensive and effective asset management within an organization.

8 steps to writing a clear and effective asset management policy

Each of the eight steps outlined in this guide is designed to be actionable and provide insightful guidance for crafting a clear and effective asset management policy.

Let's take a closer look at how each step contributes to this goal:

Step 1: Define Clear Objectives and Scope

To begin the process, it is imperative to establish clear objectives and scope for your enterprise asset management policy.

Consider the specific goals you wish to achieve, such as maximizing asset utilization, minimizing downtime, improving maintenance practices, and reducing costs.

Furthermore, determine whether your policy applies to all assets across the organization or specific departments and functions. By defining these parameters, you create a solid foundation for the development of your policy.

Step 2: Conduct a Comprehensive Asset Inventory

Conduct a thorough asset inventory is vital for gaining a deep understanding of your organization's current asset landscape.

This provides valuable insights into various aspects, including asset types, quantities, locations, and conditions. By undertaking a comprehensive inventory, you can identify redundancies, underutilized assets, and potential risks.

Armed with this information, you will be equipped to make informed decisions when crafting your policy and implementing strategies to optimize asset performance.

Step 3: Analyze Regulatory Requirements and Industry Standards

It is essential to analyze the relevant regulatory requirements and standards that apply to your organization. Incorporate these guidelines into your asset management policy, addressing critical issues such as safety, environmental impact, and legal obligations.

Adhering to these regulations not only protects your organization but also enhances its reputation and credibility.

Step 4: Engage Key Stakeholders

Engage relevant departments, including operations, finance, IT, and maintenance, to gather diverse perspectives and ensure comprehensive coverage.

By involving stakeholders in the policy development process, you foster a sense of ownership and increase the likelihood of successful implementation and adherence to the policy guidelines.

Step 5: Establish Clearly Defined Roles and Responsibilities

Clear and well-defined roles and responsibilities are crucial for effective asset management. Assign specific tasks and accountabilities to individuals or teams responsible for asset acquisition, maintenance, disposal, and reporting.

By establishing clear lines of responsibility, you promote accountability and streamline decision-making processes. Consider incorporating training and development programs to enhance the capabilities of personnel involved in asset management activities.

Step 6: Develop Robust Maintenance Strategies and Schedules

Maintenance plays a pivotal role in maximizing asset performance and extending their lifespan. Integrate comprehensive maintenance strategies and schedules into your asset management policy.

Explore different approaches, such as preventive maintenance, predictive maintenance, or condition-based maintenance, based on the nature of your assets.

Ensure that maintenance activities are planned, documented, and executed systematically to minimize downtime, optimize resource allocation, and enhance overall asset reliability.

Step 7: Implement Effective Performance Measurement and Reporting

Measuring asset performance and monitoring maintenance KPIs are critical for evaluating the effectiveness of your asset management efforts.

Identify relevant metrics that align with your objectives and incorporate them into your policy. Develop a robust reporting system to capture, analyze, and communicate performance data regularly. This enables you to identify trends,

Spot areas for improvement and make data-driven decisions to enhance asset management practices continually.

Step 8: Regularly Review and Update the Policy

An enterprise asset management policy should not remain stagnant. To ensure its effectiveness and relevance over time, establish a process for regular review and updates.

Technological advancements, industry trends, and organizational changes can impact asset management practices. Schedule periodic reviews to evaluate the policy's effectiveness and make necessary revisions.

During the review process, gather feedback from stakeholders and conduct assessments to identify any gaps or areas for improvement. Consider incorporating emerging technologies and industry best practices to enhance your asset management policy.

Engage with experts, attend conferences, and stay updated on the latest advancements in asset management strategies. By keeping your policy up to date, you can continually optimize your asset management practices and maintain a competitive edge.

Sample Asset Management Policy

Here's a sample asset management policy draft you can simply copy-paste and modify for your needs:

[Your Company Name] Asset Management Policy

Effective Date: [Date]

1. Introduction

This Asset Management Policy establishes the principles, procedures, and best practices for managing and optimizing assets throughout their lifecycle within [Your Company Name]. It aims to ensure the longevity, efficiency, and cost-effectiveness of our organization's assets.

2. Objectives

The objectives of this policy are to:

• Optimize asset utilization and maximize value.
• Minimize downtime and improve operational efficiency.
• Enhance asset performance and reliability.
• Reduce costs through efficient asset management.
• Ensure compliance with industry regulations and standards.
• Foster sustainability and responsible asset practices.
• Improve decision-making through accurate asset information.
• Mitigate risks associated with asset ownership and operation.
• Enhance asset lifecycle management for maximum value.
• Promote accountability and effective asset management practices.

3. Scope

This policy applies to all assets owned, leased, or operated by [Your Company Name]. It covers all departments, functions, and facilities within the organization.

4. Roles and Responsibilities

4.1 Senior Management

• Provide leadership and support for effective asset management practices.
• Allocate necessary resources for asset management initiatives.
• Champion the implementation and adherence to this policy.

4.2 Asset Management Team

• Develop and maintain asset management strategies and plans.
• Coordinate asset inventory, maintenance, and disposal activities.
• Monitor asset performance and compliance with the policy.
• Ensure ongoing training and development for asset management personnel.

4.3 Department Managers

• Implement asset management practices within their respective departments.
• Collaborate with the Asset Management Team for asset-related decisions.
• Ensure adherence to asset maintenance schedules and procedures.

7. Asset Lifecycle Management

5.1 Acquisition

• Establish clear procedures for acquiring new assets.
• Conduct thorough evaluation and due diligence before acquisition.
• Consider factors such as value, performance, and compatibility with existing assets.

5.2 Inventory Management

• Maintain an accurate and up-to-date inventory of all assets.
• Regularly conduct physical audits to verify asset presence and condition.
• Implement a system for asset tracking and documentation.

5.3 Maintenance and Repairs

• Develop maintenance strategies based on asset type and criticality.
• Create preventive maintenance schedules and conduct regular inspections.
• Promptly address repairs and ensure proper documentation of maintenance activities.

5.4 Disposal

• Establish guidelines for asset disposal, including proper documentation and legal compliance.
• Consider environmentally friendly disposal methods and recycling options.
• Monitor and track disposal processes to ensure compliance with regulations.

8. Compliance and Reporting

• Regularly monitor and assess asset management practices for compliance.
• Establish reporting mechanisms for performance metrics and key indicators.
• Conduct periodic audits to evaluate policy adherence and identify areas for improvement.

9. Training and Awareness

• Provide asset management training to relevant personnel.
• Promote awareness of the policy and its importance within the organization.
• Encourage ongoing professional development for asset management staff.

10. Policy Review and Updates

• Regularly review the asset management policy to ensure relevance and effectiveness.
• Incorporate changes in regulations, industry best practices, and organizational needs.
• Seek feedback from stakeholders and update the policy accordingly.

11. Policy Compliance

Non-compliance with this policy may result in disciplinary action, including warnings, retraining, or termination, depending on the severity and frequency of the violations.

12. Policy Approval and Amendments

This Asset Management Policy has been approved by [Senior Management]. Any amendments or updates to this policy require their approval.

[Your Company Name] is committed to implementing and maintaining effective asset management practices outlined in this policy to optimize asset performance, reduce costs, and ensure sustainable long-term success.

Signature: ________________________

Date: ____________________________

Suggested read: Asset Lifecycle Management: How To Optimize Asset Potential

Last step - Effectively enforcing your asset management policies at a portfolio scale

Enforcing asset management policies at a portfolio scale requires a systematic and coordinated approach.

Here are some key steps to effectively enforce asset management policies across a portfolio:

1. Standardize asset management policies: Develop standardized asset management policies that can be applied consistently across the entire portfolio. These policies should outline clear guidelines, procedures, and performance metrics for asset tracking, maintenance, and compliance.
2. Centralize policy documentation: Consolidate all asset management policies into a centralized document or digital platform. This ensures easy accessibility and uniformity of policies across the portfolio. Regularly update the documentation to incorporate changes in regulations, industry standards, or organizational requirements.
3. Establish governance structure: Create a governance structure that oversees asset management practices across the portfolio. This structure may include a dedicated asset management team or committee responsible for policy enforcement, monitoring compliance, and facilitating communication among different stakeholders.
4. Conduct comprehensive portfolio assessments: Perform thorough assessments of the assets within the portfolio. This includes inventorying all assets, assessing condition and performance of assets & facilities, and identifying any compliance gaps. These assessments provide a baseline for policy enforcement and help prioritize actions and resource allocation.
5. Provide training and education: Offer training programs and educational sessions to all stakeholders involved in asset management across the portfolio. This includes property managers, facility teams, maintenance personnel, and relevant staff. Training should focus on policy requirements, best practices, and the importance of adherence to the policies.
6. Implement technology solutions: Utilize technology solutions such as integrated asset management software or computerized maintenance management systems (CMMS) to streamline asset tracking, maintenance scheduling, and compliance monitoring. These systems provide real-time visibility, automate processes, and facilitate data-driven decision-making.
7. Regular audits and inspections: Conduct regular audits and inspections of assets across the portfolio to ensure compliance with the policies. These audits can identify non-compliance issues, assess asset performance, and validate the effectiveness of policy enforcement. Implement corrective actions based on audit findings.
8. Performance measurement and reporting: Establish KPIs to measure and track the effectiveness of asset management practices across the portfolio. Develop a reporting mechanism to generate periodic reports on asset performance, compliance status, and overall portfolio-level metrics.
9. Foster collaboration and knowledge sharing: Encourage collaboration and knowledge sharing among different property managers, facility teams, and asset management personnel within the portfolio. This promotes the exchange of best practices, lessons learned, and innovative ideas for effective policy enforcement.
10. Continuous improvement and adaptability: Continuously evaluate and improve asset management policies based on evolving industry trends, technological advancements, and feedback from stakeholders. Regularly update the policies to reflect changes in regulations or organizational goals. Maintain a culture of adaptability and continuous improvement within the portfolio.

How Facilio's Connected CMMS enables your peak asset performance throughout lifecycles

Facilio's cloud-based Connected CMMS centralizes all asset data from across sites accessible to all relevant stakeholders via mobile or web.

It goes beyond acting as a system of records for all asset and maintenance activities to enable proactive and automated action, enabling your facility management teams to extend asset lifespans and keep them performing at their peak throughout.

1. Centralized asset tracking: Facilio provides a centralized platform to track and manage assets throughout their lifecycle. It allows organizations to create a comprehensive asset inventory, including equipment details, maintenance history, and performance data. This centralized approach ensures all assets are accounted for and promotes policy compliance.
2. Real-time monitoring and alerts: Facilio enables real-time monitoring of asset performance, condition, and maintenance needs. It leverages sensors and IoT devices to gather data on asset parameters such as temperature, energy consumption, or operating status. This data is analyzed to generate alerts and notifications, ensuring proactive action and timely adherence to maintenance schedules defined by the asset management policy.
3. Scheduled maintenance and work order management: Facilio simplifies the scheduling and management of preventive and corrective maintenance tasks. The platform allows organizations to define maintenance schedules, assign work orders, and track their progress. This feature ensures that maintenance activities align with the policy's requirements and helps prevent asset failures or performance issues.
4. Compliance tracking and documentation: Facilio facilitates compliance tracking by capturing and organizing essential documentation related to assets. This includes warranties, manuals, certifications, and regulatory requirements. By maintaining accurate and up-to-date records, organizations can demonstrate adherence to asset management policies during audits or regulatory inspections.
5. Performance analytics and reporting: Facilio provides analytics and reporting capabilities to measure asset performance and evaluate compliance with the asset management policy. The platform generates comprehensive reports on asset utilization, maintenance activities, downtime, and costs. These insights enable data-driven decision-making, policy refinement, and continuous improvement.
6. Collaboration and communication: Facilio fosters collaboration and communication among stakeholders involved in asset management. It allows users to share information, assign tasks, and track progress within the platform. This promotes cross-functional cooperation, ensuring that all stakeholders are aligned with the asset management policy and actively contribute to its enforcement.
7. Integration with other systems: Facilio seamlessly integrates with other business systems such as ERP or energy management platforms. This integration enables data exchange and synchronization, ensuring that asset-related information is consistent across different systems.
8. Mobile accessibility: Facilio offers a mobile application that empowers field technicians and maintenance teams to access and update asset information on the go. This mobility ensures that the asset management policy's requirements can be met regardless of location, enhancing compliance and data accuracy.

Would you like to know how Facilio's Connected CMMS can enable your teams across the globe to keep your facilities and assets healthy, safe, and performing efficiently throughout their lifecycles?