Future trends in asset management | Reviewing the near-term practical implications
As the global economy continues to adapt to the complex effects of the Covid-19 pandemic and the war in Ukraine, Enterprise Asset Management (EAM) professionals need to figure out how to keep assets productive and safe in a disrupted world. Hybrid working models and the digitisation of maintenance management processes are evolving, and new trends are emerging that will shape the future of EAM best practices.
In a recent webinar broadcast, four of our futurists discussed these trends. Their focus was on how the complex combination of digital, physical and human elements and the emergence of alternative business models will affect asset management in the future.
“These are trends we really need to be aware of now,” says Dirk Janse van Rensburg, MD of On Key Software Solutions. “We’re not looking too far into the future – maybe just a couple of years – and some of these things are already upon us.”
The changing context of asset management
To begin with, certain factors are materialising that will influence the context within which the responsible asset owner has to operate. “For example, we’re seeing changes in asset design with asset modularisation and component standardisation coming to the fore. On top of that, with IoT becoming more affordable, there’s a move to add a level of intelligence to assets, making them more autonomous and sophisticated,” says Dirk.
Strategies that will improve asset maintenance are also emerging. These include offline maintenance, decentralised maintenance and opportunity maintenance. Then there’s the shift to a ‘green economy’, which asset owners cannot ignore. Things like compliance and a focus on zero waste are becoming non-negotiable.
“Also featuring in the changing context is employee wellbeing,” says Dirk. “Increasing mental health challenges, additional demands on employees and the relentless pace of change can’t be disregarded. Besides the existing focus on safety through HSSE compliance, businesses will have to incorporate improved employee wellness and resilience into their planning.”
The rise of digital asset management
With the changing context as a backdrop, the panel discussed the rise of digital asset management. “It would be an oversight if we did not first consider the rise of the digital twin – a major trend that is coming of age,” says Stefan Swanepoel, Head of Product Development. “We’re seeing a lot of growth in the understanding of what the digital twin is and how it can be utilised. Digital twins have many benefits for optimising the performance of assets through planning, forecasting and modelling. They also provide opportunities for performance gains and risk reduction.
“However, in terms of responding to the rise of the digital twin as a trend, companies need to resist the temptation to jump on the digital twin bandwagon without fully understanding what they need it for. And to make the most of this trend, an organisation needs a certain level of digital maturity before embarking on a digital twin journey.”
Six other digital trends also coming to the fore are:
“Advances in technology, improved connectivity, and a greater emphasis on data sharing are all contributing to the changing digital landscape of asset management.” Stefan Swanepoel
Emerging business models
The next set of trends features some of the implications of the technology advancements described above and also highlights the science of asset management.
“The first upcoming trend is value based asset management. Defining the value – rather than the cost – of asset management investments and activity and being able to monitor and reallocate that value delivery dynamically is becoming much more critical,” says Stephan Kornelius, MD: Pragma Advisory and Academy. “We’re seeing more and more companies using almost real time analysis of equipment availability – and also the cost and reliability information – to allocate resources in value chains across their production lines.”
The second trend is return on investment (ROI) based business models. Original equipment manufacturers (OEMs) are starting to offer return-based guarantees or performance guarantees to their customers. “An asset OEM offering an ROI-based business model needs a very advanced set of predictive analytics, asset health monitoring and logistics planning skills for the model to succeed. If done correctly, these models will accelerate digital transformation and the use of machine learning, and will offer asset owners many new investment options,” says Stephan.
Other business modelling trends we’re seeing are the following:
Structuring the asset management capability. There’s a move away from using traditional headcount or asset value benchmarks to determine maintenance staffing requirements. Companies are starting to use a more nuanced approach in designing a resource structure that will meet the organisation’s requirements in the most effective way.
An increased focus on maintenance readiness. Recent high-profile project failures have resulted in an increased focus on maintenance readiness during project development. Asset owners are beginning to insist that maintenance strategies, criticality analysis, spare parts planning and skills estimates are included much earlier in the asset design process.
Building an ecosystem. Companies are shifting towards building technology and service ecosystems in which just one or two best practice partners are selected and then used for the companies’ global operations.
Customer demand for responsible maintenance. The broad sustainability agenda has moved beyond just carbon footprint reporting. “We’re seeing a lot of activism for companies to be much more transparent about how their production and maintenance activity is environmentally responsible,” says Stephan.
Talent and learning
Talent and learning is one more area in which certain trends are coming apparent. Darryl Aberdein, Partner Consultant, explains that as the asset management environment is being shaped by developments in technology, a new skills gap is opening up. “Current skills in supply/demand planning are based on traditional role definitions and learning pathways. However, modern technologies and maintenance practices are rapidly changing the skills requirements for these roles. The ability to keep up with technology is going to be one of the success criteria for job applicants. Flexibility is becoming more important than having a particular skill,” says Darryl.
Closely aligned to this trend is an evolving approach to learning. “Traditional approaches to learning and development will need to be adapted for what we call the ‘new talent generation’. These are the millennials, who will make up 75% of the workforce by 2025,” says Darryl. “They are motivated by different learning drivers than previous generations were, and organisations will need to modify their learning programmes accordingly or risk losing this generation to competitor companies.”
The final trend we’re seeing is the changing role of reliability engineers. The skill set of a reliability engineer tends to be underused as their role is often misunderstood, and this causes significant frustration. “Industry is starting to warm up to the idea that reliability engineers can add much more value in a dedicated analysis/design role, where they can really dig into failure causes and solution design to improve overall system availability,” says Darryl.
View the full webinar on YouTube by following this link: Trends shaping the Asset Management environment