An Analysis of Physical Asset Management Core Practices and Their Influence on Operational Performance

Abstract

The commitment of organisations to physical assets management (PAM) has recently received considerable attention in theory and practice. Indeed, PAM plays a key role in asset-intensive organizations and is also considered as a principal actor within Industry 4.0. Therefore, this paper aims to examine the PAM core practices and the performance implications of integrating these practices into business, in particular by assessing their impact on operational performance. Survey data were collected from managers in 138 international and local organisations. The data was analysed using Partial Least Squares Path Modeling (PLS-PM). The study validates the second-order construct consisting of PAM latent variables, namely Strategy and Planning, Risk management, Lifecycle Delivery, Asset Information, and Asset Review. The results have shown that PAM core practices directly influence operational performance. This paper is a response to recent calls for empirical studies on the organisational approaches that can increase the success of organisations.

Framework Development of an Asset Manager Selection Based on Risk Management and Performance Improvement Competences

“…Organizations can adopt and implement a wide range of asset management activities, including those related to asset condition maintenance, asset acquisition, asset life cycle, asset performance, risk management, asset criticality, asset safety and security, return on investment, financial performance, asset value, etc. [9,40]. With the development of a proactive organizational culture in engineering asset management, employees are becoming increasingly important as assets [41].…”

“…Asset management translates organizational goals into asset-related decisions, plans and activities, using a risk-based approach [7][8][9]. The efficient management of existing and emerging risks is a topic that is well discussed within the asset management body of knowledge [10][11][12][13][14][15].…”

“…Asset management requires a multidisciplinary approach [9,19,20]. Therefore, different competence requirements are needed in asset management.…”

Value Creation in Physical Asset Management: A Case Study

“…Over the past two decades, the demand for effective physical asset management (PAM) has steadily increased [2]. As a result, PAM has become an important area, especially in the capital-intensive industry [3][4][5][6][7]. Assets according to the ISO 55000 standard for asset management are items, things and entities which have a value or potential value to the organization [8].…”

“…Although there is a growing literature on various aspects of PAM (e.g. [5,[15][16][17][18]), the topic PAM is relatively new from a scientific point of view. Further studies are therefore needed to examine various aspects such as the added value of maintenance and asset management.…”