Major asset failures happen all too frequently. Many of us don’t need to cast our mind too far back to recall some of the highly preventable tragedies that are the result of an asset, or a part thereof, failing.

In Australia, in 2016, four people were killed when the Thunder River Rapids Ride (TRRR) malfunctioned, causing the raft to flip and crash against the surrounding structures. In northern Italy, a bridge collapsed in 2020, making it the third bridge to fail in a two-year period in the country. Earlier in 2021, a cable-car on a funicular line in the popular Mottarone mountain district, also in Italy, plummeted twenty metres to the ground, killing fourteen tourists on board.

Unfortunately, major asset failures are not restricted to those examples. Over past decades, the world has watched in horror when mines and tunnels collapsed or as power plants exploded. These tragedies and the subsequent loss of multiple lives could have been avoided had the businesses in question taken the time to embed asset management principles.

Asset management is the critical component that will safeguard businesses against major asset failures and will ensure that major assets are never left in a state where they run-to-failure. The four principles of asset management are the tested means to oversee the safe operation of assets, and a path to build value for the enterprise.

• Assurance

Assets must be able to perform their intended purpose. Frequently with asset failures, the fault can be traced back to a lack of accountability over tasks and roles relating to the asset. The result is confusion at best, evasion at worst, and will leave the asset at risk of not fulfilling its intended purpose.

• Alignment

Asset management aligns the business objectives with the financial decisions and technical plans. This includes the cost of an asset for its intended lifecycle, incorporating maintenance, upgrades and overall operation. This is especially critical for major assets in the public domain. The need to keep people safe over the life of the asset requires long-term investment planning.

• Leadership and Culture

The leadership team crucially set up the culture within the business. It is at this top tier where the values, rules, processes, behaviours are rigorously endorsed or tacitly ignored, with cascading effect to all levels in the organisation. Executives and managers must be cognisant of the condition and usage of the assets in the business, including the maintenance procedures, record-keeping, operating systems. If overlooked, the business is at risk of a major asset failure, and a possible catastrophe.

• Value

Each asset exists to bring value to the organisation and its stakeholders. Too often, businesses are hesitant to allocate the necessary capital for ongoing, whole-of-life maintenance, instead channelling those funds elsewhere in the budget. This means, unfortunately that the asset is often left to run-to-failure, with the failure itself becoming a globally publicised tragedy. Ongoing and long-term value for the enterprise must include hard decisions relating to finances.

These major asset failures can teach anew the importance of open communication in business and underscore the dangers when teams operate in silos. The first casualty of a lack of communication typically lies with the maintenance of the organisation’s assets. When departments operate in silos, risks and hazards to assets will not be identified to management, leaving leadership unaware and unable to take adequate action.

Future major asset failures can be avoided by strategic planning and meticulous maintenance of assets. Prevention of failures also lie with a leadership team who keep line-of-sight on the whole of the business, along with an ability to make critical decisions that promote the safety of employees and the wider public. Finally, good management of assets that aligns investments and stakeholder interests will also keep the business from global headlines.

This is because asset management enables value and ongoing performance to the business and will keep asset operations running smoothly, avoiding major failures.

Dave Daines is a global thought leader in Asset Management.  He is a Director of WPiAM (World Partners in Asset Management) and a Director on GFMAM (Global Forum Maintenance and Asset Management).  He is the Australian Chair of the MB19 which is the mirror committee for TC251/ ISO55001 International Standard.  He is an accredited Asset Management Assessor and has contributed significantly to asset management knowledge over his 30 years in the mining sector.