How to Develop a Robust Asset Management Policy

Asset-intensive organizations rely on well-managed organizational assets to operate efficiently. Unplanned downtime can cost industrial manufacturers up to $50 billion annually, with an average facility losing about $25,000 per hour when critical equipment fails, depending on the industry.

A robust asset management policy document provides formal guidelines and procedures for managing physical and digital assets throughout their lifecycle so companies can optimize performance and ensure safety and compliance. Developing an asset management policy is a core requirement of the ISO 55001 asset management system standard and is considered a "cornerstone" of effective asset management. This formal document outlines an organization's principles, intentions, and directives for managing assets.

In short, a robust policy lays the groundwork for such improvements by standardizing best practices and providing guidelines for proper management of assets. Here, we will take you through the steps required to develop this policy.

Key takeaways

• Strategic asset management reduces financial impact. Unplanned downtime costs organizations $25,000-$500,000 per hour. A well-developed policy aligned with ISO 55001 minimizes losses while ensuring compliance with regulatory requirements.
• Structure and accountability drive implementation. Define purpose, establish clear roles for asset owners, classify assets by criticality, and document lifecycle procedures from acquisition through disposal.
• Communication and training transform policy into practice. Use multichannel distribution, stakeholder-specific messaging, role-based training, and feedback channels to embed the policy in daily business processes.
• Regular review of mechanisms ensures adaptability. Implement scheduled reviews, performance metrics, audits, and the Plan-Do-Check-Act cycle to keep the policy relevant as conditions change for continual improvement.

Define your policy purpose and scope

The first step in developing an asset management policy is to define its purpose and scope. This section of the policy clarifies why the policy exists (its objectives) and what it covers (which assets, asset types, and business units it applies to).

Start by tying the policy to your organization's broader mission and goals. For example, your purpose may be "to optimize asset performance and minimize lifecycle costs in support of our company's goal of reliable, safe production." Be specific about key objectives, for example:

• Improve equipment reliability
• Reduce unplanned downtime
• Ensure regulatory compliance
• Standardize maintenance practices
• Control asset-related costs through effective capital investments.

This gives context and a "why" for employees reading the policy. The policy's goals should mirror what the business cares about (e.g., if uptime and customer services are top priorities, the asset management policy applies these principles to support those outcomes).

From there, you can clearly delineate which assets and processes the policy encompasses:

• Will it cover all physical assets (plants, machinery, vehicles, facilities)?
• Will it cover all IT asset components (hardware, software installed, cloud services)?
• Does it include infrastructure like buildings and utilities?
• What about assets the organization uses but doesn't own (leased equipment or supplier-owned assets critical to operations)?
• Which sites, other departments, and human resources are governed by the policy?

By clearly stating purpose and scope in your asset management policy document, you set the stage for a focused policy and effective decision making.

Establish clear roles and responsibilities

An effective asset management policy must specify who is accountable for various aspects of asset management. Clear roles and responsibilities ensure that the policy is actually executed and maintained. Without defined accountability, even the best-written policy can fall flat and tasks get overlooked because people assume "someone else is handling it."

Explicitly documenting these responsibilities accomplishes two things:

1. It drives accountability so people can be held to specific duties.
2. It facilitates control so each group knows who to contact or hand off to for various asset management tasks.

ISO 55001 expects leadership involvement and states that top management must ensure roles are assigned, and the policy is enacted through the organization. By creating a RACI matrix (Responsible, Accountable, Consulted, Informed) and naming roles from executive level down, you satisfy this expectation.

Create asset classification systems

Not all assets are equal. A failure of a $10 bearing vs. a failure of a $10 million turbine have vastly different consequences. Thus, a robust asset management policy should include or reference an asset inventory classification system. This system categorizes assets in a logical way (by criticality, value, type, etc.) to guide decision making and resource allocation.

Here are the key asset classification elements to consider:

• Criticality levels: Many organizations rank assets by criticality (e.g., high/medium/low). Highly critical assets are those whose failure would cause a major production outage, safety incident, or expose confidential information. Non-critical assets might have minimal effects on operations if they go down. The policy can specify that critical assets require more stringent maintenance regimes (e.g., more frequent inspections, redundant spares, special approvals before any access).
• Asset type: Group assets by type or function (production machinery, mobile devices, HVAC systems, IT hardware, etc.). This helps assign the right specialists and procedures. This is especially important in industries where both industrial equipment and information security systems intermix.
• Lifecycle value: Some policies categorize assets by their financial value or useful life cost. High-value assets might justify more robust tracking and ROI analysis. Along with value, consider age or lifecycle stages, e.g., identifying assets near end-of-life for replacement planning.
• Regulatory/compliance: If certain assets are subject to specific regulations (e.g., pressure vessels requiring inspections, medical devices with protected health information, or financial IT systems under SOX), mark those as a class requiring risk assessment.

In implementing classification, it's useful to maintain a centralized asset register (inventory) that records each asset's class, criticality, and other attributes, including asset tags. Modern asset management software like a computerized maintenance management system (CMMS) can greatly assist here: You can tag each asset record with its category and criticality level, making it easy to filter and report on different classes.

Document lifecycle management procedures

A robust asset management policy should outline the high-level procedures for managing assets through each stage of their lifecycle, from planning and acquisition through operation and maintenance to end-of-life disposal or renewal.

Think of the asset lifecycle in distinct lifecycle stages, each with its own policy guidelines:

• Planning and acquisition: Before an asset is acquired, there should be processes for needs assessment, specification, and procurement that align with the policy. The policy might state, for example, that all new assets must meet certain standards (energy efficiency, compatibility with existing systems, etc.) and that total lifecycle cost will be considered in purchase decisions (not just upfront price).
• Operation and maintenance: This is the longest phase where the asset is in use. The policy should reference maintenance strategies (preventive, predictive, condition-based, etc.) and any standard procedures or intervals.
• Inventory and spare parts management: As part of the operational phase, it's wise to include guidelines on spare parts management since it directly affects maintenance efficacy. The policy could state that "critical spare parts for Category A assets must be kept in inventory with minimum stock levels defined" or that "a physical inventory audit will be done annually." Approximately 58.9% of organizations that cut unplanned downtime costs credit better spare parts inventory management for their success, so your policy's emphasis here can pay off in reliability.
• Asset performance monitoring: The policy should encourage tracking asset performance data (downtime, MTBF, maintenance costs, etc.). It might mandate periodic asset management system reviews. The point is to institutionalize that we measure and respond to asset performance, not just fix things blindly.
• End-of-life and disposal: Eventually, assets will need replacement, disposal, or upgrade. The asset management policy applies specific procedures for how this is decided and managed. This ensures a controlled and compliant decommissioning process for securely stored data and valuable data. It also prevents obsolete or unsafe equipment from lingering in operation. ISO 55001 encourages considering the full life of assets and making decisions for long-term sustainable outcomes, which includes timely renewal.

You can leverage modern asset management systems to enforce lifecycle procedures: automate maintenance scheduling, send alerts when service is due, track asset histories, and even predict failures. It can also store documentation for disposal processes or new asset onboarding checklists. This makes it much easier to execute the lifecycle procedures your policy lays out and ensure nothing is overlooked.

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Address compliance and risk management

Asset management doesn't happen in a vacuum, there are external regulations to follow and internal risks to manage. A robust asset management policy needs to address compliance requirements (industry standards, safety regulations, environmental laws, etc.) and risk management strategies related to assets.

Nearly every industry has rules governing asset safety and maintenance. Industry regulations like OSHA mandate equipment safety maintenance, with violations of the 10 most cited regulations costing businesses $132.3 million in 2023. Your policy should explicitly commit to compliance with applicable laws and standards, ideally listing relevant information in an appendix.

Embed risk management by committing to identify, assess, and mitigate asset-related risks, including cybersecurity, safety hazards, environmental risks, operational disruptions, and financial losses. Practical implementation includes:

• Using preventive/predictive maintenance to reduce failure risks
• Planning redundancy for critical functions
• Establishing incident response procedures for confidential data protection
• Managing insurance requirements with separate media for backups
• Implementing two-factor authentication for critical systems

For digital assets, consider cybersecurity risk assessment to protect sensitive information. ISO 55001 emphasizes a risk-based approach throughout, suggesting defined assessment methods for decision-making under uncertainty.

Integration requires maintaining compliance matrices, scheduling tasks via asset management software, and regularly reviewing risk registers.

Implementing asset management policy communication and training

An effective asset management policy requires proper implementation through clear communication and comprehensive training. Without this, even the best policy becomes ineffective with potential non-compliance consequences.

Policy communication

ISO 55001 requires that the policy be documented, communicated, and available to all relevant parties. Best practices include:

• Multichannel distribution: Publish on intranets, email to managers, and post summaries in common areas. Consider a one-page version with digital version options signed by leadership to demonstrate commitment.
• Explain the "why": Provide context through cover notes or presentations highlighting the policy's importance and expected changes with guiding principles.
• Tailor messaging: Customize communication for different stakeholders, executives focus on risk reduction and cost benefits, maintenance teams on new procedures, and finance on budgeting implications.

Training and awareness

Once communicated, proper training ensures effective implementation:

• Role-specific training: Conduct targeted sessions explaining how the policy affects daily work, using practical examples and encouraging feedback.
• Competency development: Train staff to address any skills gaps.
• Leverage digital tools: Use mobile applications to distribute procedures aligned with the policy, create knowledge bases with easy-to-access resources, and implement on-demand training platforms.
• Encourage engagement: Create channels for clarification and improvement suggestions, reinforcing employee involvement and increasing buy-in for acceptable use of company assets.

Communication and training should be a continuous process. Include verification mechanisms like audits and incorporate policy adherence into performance evaluations. Assign champions to track implementation progress and identify coaching needs with effective date checkpoints.

When properly executed, the policy transforms from documentation to organizational practice, yielding fewer surprises, more consistent maintenance, and positive culture change.

Establishing review and improvement processes for asset management

Asset management policies must evolve with changing technologies, business needs, and regulations. Implementing robust reviews and continuous improvement mechanisms ensures ongoing effectiveness.

Regular policy reviews

ISO 55001 requires periodic policy reviews. Specify review frequency (annually or every two years) and responsible parties (asset management committee or policy owner). Include a policy statement like: "This policy will be reviewed annually and updated to reflect new organizational goals, regulatory changes, or lessons learned." Schedule these reviews to ensure compliance and documentation of multiple copies for backup.

Performance metrics and monitoring

Track key performance indicators (KPIs), such as unplanned downtime, maintenance costs, PM compliance, asset availability, and mean time between failures. Commit to using these metrics to identify improvement opportunities. For example: "We will monitor OEE and maintenance compliance monthly, investigating root causes when PM compliance falls below 90% or downtime exceeds targets."

Audit and assessment

Implement periodic internal or external audits to verify policy adherence and identify improvement areas. Audits can reveal inconsistencies across sites or documentation gaps in the asset management system.

Continuous improvement culture

Emphasize that asset management is an ongoing journey by committing to continual improvement (required by ISO 55001). Establish mechanisms to capture lessons learned, especially after major failures or successes. Encourage staff suggestions and dedicate meeting time to discuss improvement ideas.

Adaptation to change

Acknowledge that changes in technology, production volume, organizational structure, or compliance requirements necessitate policy adaptation. Document improvements through version control, providing transparency about revisions. Leverage data and analytics to drive fact-based decisions and improvements, completing the Plan-Do-Check-Act cycle essential to effective asset management.

Bringing it all together

Implementing a comprehensive asset management policy requires both strategic planning and practical execution. Modern CMMS play a crucial role in transforming policy theory into operational reality. These systems allow organizations to centralize asset data, automate maintenance scheduling, track performance metrics, and generate the documentation needed for compliance.

Solutions like MaintainX offer purpose-built functionality that directly supports core policy objectives, from creating asset hierarchies that reflect your classification system to enabling mobile access for technicians documenting maintenance activities in the field. When selecting asset management software, ensure it aligns with your policy requirements and can grow with your organization's asset management maturity.

Remember that creating an effective asset management policy is not just about documentation, it's about establishing a foundation for operational excellence, cost control, and risk reduction across your organization. With proper implementation and continuous improvement, your asset management policy becomes a living framework that delivers measurable business value throughout the entire asset lifecycle.