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Global Asset Sustainability Is The New Norm

Addressing asset efficiency without understanding the associated energy performance is no longer regarded as a good business practice

. Organizations from around the world are moving towards an approach that is in line with a 'global asset sustainability approach'. Likewise, management teams are also finding out that it is by looking at their asset management in a global perspective that they are able to improve their financial metrics across the board.

The ever-growing price of energy and the related security issues are driving the push for global asset sustainability. Energy prices are on a relentless rise and availability is far from assured. Companies realize that energy issues are significantly affecting their profit margins and unless action is taken, will threaten their very business viability. Additionally, the duel concerns of the environmental impact of energy consumption and the resulting greenhouse gas production has companies seeking a thorough corporate analysis of energy efficiency down to an asset level.

It is no longer good business practice to address asset efficiency without a clear understanding of the associated energy performance. Companies around the world are rethinking their approach to asset management and moving toward a 'global asset sustainability approach'. Management teams are finding that by looking at their asset management globally they are improving their financial metrics across the board.

Businesses must strive to be in a position to leverage their operations to uncover inefficiencies wherever they may be. It is no longer sufficient to look at assets purely from a conventional management perspective. Traditional approaches simply monitor asset performance against specification to see if it is performing and producing under acceptable operating conditions. This doesn't take into account the amount of energy which an asset consumes, and such invisible cost would cause a negative reallocation of budgets.

Global asset sustainability focuses on energy consumption in addition to asset availability, performance, and condition. The United States Department of Energy (DOE) states that it is typical in the U.S. for companies to spend more than 80% of their non-labour budget for maintenance and operations on energy against maintenance. This shows that traditional asset classification of efficiency is far from complete.

Now, let's consider global asset sustainability as an alternative way to manage assets. The new approach focuses first on the critical element of availability. Needless to say, the maximum uptime would be necessary to generate the needed revenues. The company also needs to consider how every asset performs against its specifications and warranty. This dictates the return on investment and is the primary, traditional metric that companies use to determine good value.

Performance is a base metric, of course, and asset output quality is the indicator that determines how thin margins turn out. Quality control is what sets underperformance from market dominance apart among competing organizations.

With the traditional practices in asset management, organizations did not have to deal with energy consumption, as among the most important considerations in global asset sustainability measurements. One important initial step for energy consumption research is to establish an asset baseline position. How every single energy consuming asset performs when under prime conditions can be shown with the asset baseline. An asset could be evaluated over time in an almost instantaneous basis in order to reveal efficiency once already established. Even a slight variation in efficiency can account for a huge operating loss across a distributed enterprise. Thus, catching these inefficiencies quickly and adapting practices to improve efficiency can save organizations a significant amount on energy spend.

Traditional practices observed in equipment evaluation has to be modified to include energy use as part of the new approach for global asset sustainability. Energy is and will continue to be the largest cost liability and companies must be ready to monitor and micromanage it.

by: Daniel Stouffer
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Global Asset Sustainability Is The New Norm