The commercial property market is currently navigating some interesting challenges. There’s the ongoing debate over work-from-home and hybrid working models, which threaten corporations’ demand for office space. Construction costs continue to rise, squeezing feasibilities and development opportunities. Cap rates have softened due in part to volatile economic conditions. Additionally, unpredictable global weather patterns highlight the need for a stronger focus on sustainability and efficient resource allocation.
What does that mean for existing assets? The aim is to have them last as long as possible, sustain their value, and operate as efficiently as possible. This objective aligns with the interests of all stakeholders, including investors, landlords, property and facilities managers and tenants.
Without a systematic management approach maintenance can easily be neglected, leading to compounded issues that could have been addressed earlier and more economically. Eventually, this oversight results in significant problems, such as chiller breakdowns or the need for extensive lift overhauls, causing substantial inconvenience for all parties involved.
The solution lies in Asset Lifecycle Management (ALM), a practical and straightforward methodology for managing and optimising asset value. This article sets out the phases of a standard ALM process.

What is Asset Lifecycle Management?

ALM is a strategic approach to managing assets from acquisition to retirement. An asset, in this context, can be anything valuable within the organisation, such as machinery, equipment, or entire buildings. The primary objective is to maximise the value derived from these assets throughout their lifespan.
In today’s climate of rising costs, maximising asset value isn’t just smart—it’s essential. Prolonging the life of equipment and ensuring its efficient operation reduces expenditure on replacements and repairs. ALM provides a structured methodology to maintain smooth operations and optimise asset performance.

The Key Phases of ALM

ALM is involves a series of critical phases essential for managing assets effectively. Let’s explore these phases:

1.Planning and Acquisition

This initial phase involves identifying necessary assets and establishing a budget for procurement. Effective budgeting and procurement strategies are vital at this stage. Annual asset plans are essential for structuring regular budgeting and capital expenditure planning. Asset registers and technical due diligence reports provide relevant information about expected lifespans, estimated replacement costs, and insights into existing wear and tear.

2.Deployment and Installation

Once the decision to acquire a new asset has been made and the purchase completed, the next step is to deploy and install the asset. This phase includes site preparation and ensuring proper installation of the equipment. Comprehensive document management is crucial for filing operating manuals, warranties, and other important information related to the equipment.

3. Operation and Maintenance

With the asset in operation, the focus shifts to maintaining its optimal performance. Regular monitoring and performance evaluations are essential for identifying and addressing small issues before they escalate. Planned preventive and corrective maintenance strategies ensure that assets remain efficient and functional.

4. Upgrade and Modernisation

Over time, assets may require updates to align with new technologies and practices. This phase involves identifying assets that need upgrades and implementing those changes. Planning for upgrades in the capital plan is essential to keep assets modern and efficient.

5. Decommissioning and Disposal

Eventually, an asset will reach the end of its useful life. Safe and efficient removal, considering environmental and regulatory factors, is essential during this phase. Proper decommissioning and disposal ensure that assets are retired responsibly.

Best Practices in ALM

To optimise ALM, consider these best practices:

  • Implement a Centralised ALM System: Centralised systems facilitate easier management by keeping track of all assets in one place.
  • Data-Driven Decision Making: Utilise data to guide decisions on maintenance, upgrades, and replacements.
  • Integrate ALM with Other Business Processes: Ensure that ALM supports and enhances overall business strategy.
  • Invest in Staff Training and Development: Well-trained staff significantly improve asset management effectiveness.

Embracing Technology in ALM

Technology plays a transformative role in ALM. Innovations such as IoT and smart sensors provide real-time data, while predictive analytics and cloud-based ALM systems enhance predictive maintenance and optimise schedules. These technological tools are crucial for predicting potential failures and saving time and resources.

Overcoming ALM Challenges

Implementing ALM is not without challenges, including budget constraints, resistance to change, and data management issues. However, these obstacles can be overcome with the right strategies. Securing stakeholder buy-in and investing in robust data management systems are critical steps in addressing these challenges.

The Future of ALM

Looking ahead, ALM will continue to evolve, driven by emerging technologies and a growing emphasis on sustainability. As eco-friendly practices gain importance, ALM will play a crucial role in reducing waste and maximising resource efficiency.

How Redd Zebra can help

Redd Zebra is an Australian-based Asset & Building Advisory organisation that provides comprehensive advisory services throughout the property lifecycle. Their experienced team of consultants and engineers can assist with compiling asset registers, preparing technical due diligence reports, developing IOT strategies or anything else needed in relation to ALM.
Redd Zebra is dedicated to ensuring clients have the information required to make informed decisions about assets, mitigate risk, reduce unnecessary costs and optimise returns. For more information about how Redd Zebra can help, contact us on admin@reddzebra.com visit their website at www.reddzebra.com. 

Special thanks to our copy writer Christine O’Hara cohara@cohesivecopy.com.au