Due to heighten awareness of IIoT enabled solutions for Predictive Maintenance (PdM), one might believe that PdM and Asset Performance Management (APM) are the same.

It is understandable, because APM definitions are vastly different, depending on who is supplying the definition. By most accounts, however, PdM focuses on the predictability of potential asset failure and equipment reliability, where APM incorporates a holistic management approach over risk factors and performance dependencies, which extend beyond machines.

According to ARC’s definition for APM, “Asset performance has many dimensions including financial, health & safety, environmental, and sustainability.  Achieving these goals requires a collaborative effort by all groups involved in the use and care of the facility to manage the interdependencies that constrain performance.  To do this, they need an asset information management system that can deliver complete, accurate, timely information to APM workflows and enable seamless sharing of information across all APM stakeholders, internal or external to the organization.”

Consistent with ARC’s approach for APM, Asset-intensive industries like Oil and Gas, always focus on the much bigger operating picture, by incorporating people, processes, and assets into a well-defined holistic management approach, known as Operational Integrity.

While it would be foolish, not to acknowledge an improvement in machine connectivity and intelligence does positively impact PdM operations, it is equally naive to presume that improving machine intelligence alone, delivers the greatest overall business value for Asset Performance Management programs.

Looking closer at ARC’s Asset Performance Management definition, let’s futher examine three areas they consider as critical success factors:

1) ” Manage the interdependencies that constrain performance.”

2) ” Deliver complete, accurate, timely information to APM workflows.”

3) “Seamless sharing of information across all APM stakeholders, internal or external to the organization.”

1 )”Manage interdependencies that constrain performance”

Companies must efficiently and cost effectively manage risks and operating performances,between how their people, processes, and equipment work together. Whether a machine stops from a mechanical failure or, due to a related employee or environmental safety incident, the result is the same for a company- lost productivity and added cost.

A similar potential for lost productivity can occur, if, that same machine is subject to local operating permits for reporting air emissions or wastewater. Failure to comply with operating permits can result in a company losing its license to operate, and if not managed efficiently, the permits process can be quite costly to administer for the company. Not fully capturing, managing, and analyzing risk and performance dependencies,which exist, between machines, people, and processes, place a company’s operations at risk and increases operating costs. Most catastrophic failures occur when multiple and seemingly unrelated risk factors and processes fail together.

Moreover, moving forward, a larger piece of a company’s Asset Performance Management strategy needs to tie to the recruitment, training and retention of its workforce. Manufacturers face two significant challenges impacting its future operations- a knowledgeable workforce leaving the market and the need for a new generation of workers and skills to operate the digitize manufacturing operations of the future. How well a company balances these two shifting market dynamics will ultimately impact the success of its future operations.


2)”Deliver complete, accurate, timely information to APM workflows”

While the term Integration is overused, what separates genuinely integrated solutions from non-integrated reporting based solutions is the ability to trigger automated workflow.

In the prior example, let’s suppose that an accident occurred, which causes damage to the equipment and an employee injury.

Several new actions may need to be triggered to document and correct this occurrence:

  • The incident and factors leading up to that incident need capturing.
  • All the financial costs, involving the people and impacted equipment need to be captured, documented and updated.
  • Based upon the severity of the incident, OSHA incident reports may need to be created and filed.
  • New maintenance requests need to be executed to initiate and generate the required work orders.
  • The maintenance work needs to be scheduled and repair and safety worker instructions need to be created
  • Spare parts may be required, orders placed and inventories updated.
  • Companies might not have the right technician skills in-house to repair the equipment, so they may have to look outside the company for contract labor…..and etc,,etc.

Supported by pre-defined business rules and digitized systems, an integrated system can automatically trigger any required APM workflows which manage and optimize dependencies, between maintenance, suppliers, finance, HR, procurement and EH&S supported processes.

In the absence, of having this integration, APM related procedures need to be separately managed, which increases operating costs and the risk of non-compliance with company operating policies and regulatory reporting requirements. Well-defined end to end processes, fully supported by digitized, integrated systems, reduces operating costs and improves APM joint business collaboration within and outside the company.


3.”Seamless sharing of information across all APM stakeholders, internal or external to the organization” 

Companies operating in the digital economy, must think and operate more broadly. Business processes, including APM, are increasingly becoming intertwined with an organization’s business ecosystem. Companies must learn to manage their business within a larger connected network and APM is no different. Being able to operate, as part of a larger network, leveraging a digitized operating core, empowers companies to create the right kinds of connection points that seamlessly integrate internal and external stakeholders, supporting APM processes, across an enterprise’s entire Extended Ecosystem.

While improved machine intelligence, Big Data, and the IIoT are very positive developments for PdM operations, PdM alone, cannot sufficiently address the other interrelated risk and performance dependencies that are vital for overall APM program success.

To learn how leading companies are adressing their Asset Performance Management and EHS objectives more holistically, by leveraging a digital core, we invite you to visit with SAP and our  customers at these upcoming conferences:

SAP EAM Centric– March 5-7, Hyatt Regency Huntington Beach, CA

SAP Conference for Environment, Health and Safety Management– March 21- 22, Chicago, IL

We look forward to meeting with you.

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