Asset management policy breakdown: what is it, why you need one and the benefits 🗒️

A facility’s assets are the lifeblood of any company, as its health determines how strong and productive the company will be. In the same vein, people are the heart of any company and can impact equipment with their decisions. 

Since decision-making and asset efficiency are so intertwined, companies need guidelines connecting them. And that’s where an asset management policy comes in.

In this article, we’ll explore what is an asset management policy, why it’s important, and the key benefits it provides.

What is an asset management policy?

An asset management policy is one of the core requirements of ISO 55001:2014 certification and is a cornerstone of a solid and complete asset management strategy. It's like a compass pointing everyone in your organization in the right direction when making decisions about assets. An asset management policy provides a set of guiding principles, intentions, goals, and methods for asset management.

It also provides a template so people can achieve the best possible outcomes for each task while meeting the organization's goals. Think of it like a mission statement; it not only embeds asset management into the culture of a facility but also serves as a sign of the organization's commitment to efficiency and sustainability to those outside the company.

A great asset management policy for production-heavy facilities has the following:

• They are general and have broad principles
• They identify roles and responsibilities, including policy implementation
• They outline how asset management is integrated within the organization
• They establish defined goals, service levels, inventory guidelines, and standards of maintenance

Why do you need an asset management policy?

An asset management policy helps you to meet the stakeholder, business, and legal requirements of the ISO 5500 standard for asset management. Plus, it aligns your operation with international standards, saving money and time. By better managing your assets, you’ll be able to use them more effectively and efficiently while delivering added value to the business.

Developing an asset management policy signifies that an organization is committed to implementing asset management as a business model and promoting asset improvement. Also, it communicates what the organization defines as good practices of asset management, and sets strong direction and clear expectations for continual business improvement activities.

Benefits of an asset management policy

While this can be a big task, the payoff will be worth it. Here are just a few of potential benefits that come from creating these guidelines:

1. Standardization and efficiency

• Having one eliminates any ambiguity or gaps in asset knowledge and encourages constant improvement
• Because document is concise it sets a strong direction and clear expectations, and uses language that lets everyone at your organization see how it relates to them, their role, and their goals
• Everyone can work together towards the same goals, creating unity and efficiency are created across the entire organization
•  Backlog is reduced, costs go down, inventory is easier to manage, etc.,

2. Reliability and safety

• It highlights best practices that are specific to the organization it is made for, which fosters operational excellence and eliminates any room for people to stray from their best work 
• It ensures that nothing is left to chance when it comes to handling assets.
• Maintenance is optimized so assets experience peak reliability and less unplanned maintenance
• Tasks are  done with an eye towards being the best in all areas, meaning health and safety aren’t sacrificed for speed or cost

3. Executive sponsorship

• Having executive sponsorship for the document gives it immense power, making everyone accountable for enforcing it 
• It helps communicate the organization’s commitment to exceptional asset management to external stakeholders, which can boost awareness and trust in a brand and its leadership
• Having executive backing provides reinforcement for a maintenance team that’s stretched too thin by creating allies within the organization who the maintenance team can rely on to ensure assets are front and centre in decision-making