The principles of Asset Lifecycle Management and the emerging technology that makes it more practical can reduce equipment costs while improving the bottom line.

Contractors in the gas, oil and mining sectors own and maintain a massive array of equipment that experiences daily use and heavy wear. Often, maintenance of machinery only becomes a priority when operators see obvious signs that equipment is malfunctioning or broken. Replacement is simply a function of whether equipment repair bills exceed the cost of buying new equipment.

By applying the principles of Asset Lifecycle Management (ALM) to their inventory, contractors can improve safety, reduce downtime, predict breakdowns, minimize the cost of maintenance, and lower overall equipment costs.

Shannon Klabnik is the PeopleSoft practice director for MiPro, specializing in implementation of Oracle's PeopleSoft applications, including assisting clients in tracking and maintaining equipment.

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"Gas, oil and mining contractors rely on complex, specially designed machinery in remote corners of the globe in a range of varied landscapes, rugged terrain and unpredictable environments," Klabnik says. "Combine those realities with the logistical, financial and operational complexities of highly competitive industries that continue to become bigger and more technologically sophisticated while operating on tighter and tighter profit margins. It's easy to see why GOM firms are increasingly dependent on the reliability and functionality of their physical assets."

Klabnik recommends GOM contractors apply the principles of ALM, also known as enterprise asset management, to their businesses. Using ALM, operators always maintain a complete inventory of equipment, and know its condition, when it needs to be maintained, whether it has been maintained, and whether it meets all applicable regulations.

"Next-generation ALM requires the use of a software system to deal with the complexities of these challenges," says Klabnik. "The best ALM system employs integrated and sophisticated predictive software that enables powerful inventory controls and an automated maintenance management process. This capability elevates the contractor from a reactive scramble after equipment breaks down to a proactive position, increasing efficiency, maximizing operational uptime, and improving the bottom line."

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Klabnik has worked with GOM businesses in implementing Oracle software solutions for their equipment assets, but notes that the principles of ALM apply to any business, regardless of the software they choose. By integrating ALM software into broader financial or supply-chain software, the impact of any decision on the company balance books becomes much clearer.

She notes, however, that companies that simply declare they will adopt an ALM software package won't necessarily reap maximum benefits.

"Probably the biggest oversight made by companies when they undertake such a project is to take all of their old system and port it into the new system without starting at square one," says Klabnik. "They look at it as just an information technology project in which existing data is moved around. The old saying, 'garbage in, garbage out,' applies here. If you go about adopting ALM without changing the way you manage your inventoried assets, you will not likely improve the way you do business."

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Given the importance of correctly planning and integrating ALM up front, GOM sector companies need to be aware of the best practices associated with implementation.

Before implementing any new maintenance management system, operational priorities must be clearly established. Once the company identifies its goals and outlines its priorities and expectations, it can move forward with the process of establishing operational details on how to integrate the new system with existing infrastructure.

"Professional consultants can be an important resource at this stage of the process, where they are able to assist by refining the details of the maintenance program and strategy," says Klabnik.


It may not be easy to identify specific maintenance standards and metrics for all equipment, but it needs to be done right the first time. An ALM system is only as powerful as its users allow it to be. "Even the most sophisticated tracking and coordinating software will fall short of expectations if it isn't given the right foundational data to track," says Klabnik.

At this stage, it's also important to anticipate, evaluate and mitigate any problems that may crop up as the system is used.

"For example, consolidating replacement parts in one central location may appear to be more effective, but it might also be incompatible with operational mandates, or even create new inventory challenges," she says. "Iron out these details before they become a problem."

System security is also critical. Companies need to decide just how much access a consultant or subcontractor can be given to the system, and how that access can be terminated once they stop working on a project.


ALM also requires a thorough inventory of equipment assets, from rigs to pipelines to major machinery, vehicles and other transportation. A company needs to maximize the efficiency of the system by deciding on a threshold beyond which an asset value is listed.

"That may not always be based on the asset's dollar value alone," says Klabnik. "The components of a mobile rig would certainly be on that list, but something as simple as a fire extinguisher in the right location needs to be in that database as well."

The database of information should include standard maintenance procedures and schedules, approved replacement parts, costs and other critical information associated with each asset.

"If you're discovering that a particular type of rig continues to break down over and over, you can begin to apply a problem-cause analysis to it," says Klabnik. "With enough information, you can move from a corrective to a predictive mode. You'll begin to realize what sort of work and operating conditions result in that breakdown. This sort of thinking needs to be applied to all equipment."

Maximizing the lifespan and uptime of specialized and expensive equipment requires immediate access to critical information, including manufacturer support hotlines and the source of replacement parts. By including this information in the ALM software database, the most heavily used replacement parts can be identified and, if it makes sense, stockpiled.

Automatic meters and self-generated equipment reports can also be custom-tailored to provide ALM inputs. "If you program the healthy operational parameters for that equipment into the system, it can be alerted to kick out a work order every time it's operating outside of predefined parameters," Klabnik says.


The grunt work of ALM – inputting new data – still requires human cooperation. This means continually training all workers to capture the desired data in a consistent and meaningful way.

Educating and training the individuals who will be overseeing the new system is important, says Klabnik. However, it's more critical that all employees who will access or utilize the system understand how to make it work. An ALM system can deliver game-changing efficiencies when workers know how to use it. "You need to get (employees) to buy into it by showing them it can make their lives safer and help to make their jobs more secure," Klabnik says.

Systems that can only be accessed through a static keyboard may not encourage workers to use them as often as dynamic systems that allow input using a smartphone or tablet, she notes.


Initial design and implementation of an ALM system requires a significant investment of time and energy. And the effort doesn't end there. Realizing its full benefits requires long-term oversight. Periodic assessments and evaluation ensure the system is functioning properly and delivering anticipated results.

"A coordinated approach to asset management enables a company to realize its maximum return on assets," says Klabnik. "That value is further realized with enhanced compliance capabilities and an approach that minimizes downtime, waste and avoidable expenses while providing a safe working environment. In a competitive industry, that edge can be the most important extractable resource of all."

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