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Fact: Asset managers aren't ageist by Joseph Litre

30th April 2014

 

One of the hardest concepts for asset management newcomers to grasp is that age has very little bearing on the condition of a component.  Yet it is natural for us to make judgement on something based on its age (very likely based on our own mortality) and we pretty much calculate life expectancy using that factor alone.

But in asset management we recognise that condition has more to do with how you care for a component and age is just an interesting piece of additional information. I love using the "Pink Cadillac" example to illustrate this.

Pink Cadillac

 Most new asset management students, sight unseen, suggest that a 1960 Cadillac could well be assessed as C4 (Poor) or C5 (Very Poor) simply because of its age. However, because this example has been kept in mint condition, and as a result the car will continue to be perfectly sound for many years to come, it should be rated as C2 (Good) or even C1 (Very Good) condition. 

This becomes quite addictive.  You soon start viewing the buildings you frequent in quite a different light - looking beyond the superficial 'age' to its real condition. When you take this another step further, newcomers become quite concerned when they realise that the owners of an expensive piece of equipment, providing critical 24 x7 service to the community, may not even understand the basics of assessing its actual condition or other factors like usage and performance.

The air conditioning system in a gym can be a good example of this.  It will be operating pretty much all day, every day and the age of the system won't have any bearing on how well it works - but will often be the sole factor determining when its upgraded. 

The impact of failure would affect a large number of people yet there is seldom investment in analysing the benefits and savings that can be achieved by regularly assessing the condition, usage and performance.  And doing so with a view to understanding what is necessary to maintain the equipment in good health versus waiting for it to fail.  You would think that the additional expense of reactive maintenance or urgent replacement would be enough of an argument - before you start calculating the even higher cost of disruption to the service.  

It is exciting to see people start to realise the true value of asset management and how they can apply it to not just their world, but the rest of the community around them. Not just the assessment of components but the real hard-core analysis and planning that we are now able to do.  

Asset management used to be the domain of a few; the algorithms and calculations behind what we do are complex and not for the novice. But thanks to being able to deliver this via software we are able to turn just about anyone into a successful asset manager - and that in itself is exciting.

But still, no matter how fast someone might learn the basics it is still that old asset management fundamental of 'condition does not equal age' that flies in the face of what we generally perceive and continues to trip everyone up.

 
 
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