What is life cycle asset management?
Life Cycle Asset Management (LCAM) is an IT management method for capital improvement that captures all of the assets used in the current environment and analyzes their life cycle efficiency. This enables an organization to exchange or purchase new equipment when the life cycle of the older equipment dictates that it should be replaced. LCAM helps a company identify, quantify, and prioritize deferred productivity and develop a reduction plan based on company goals.
Another way of looking at LCAM is that it is a tool that defines and analyzes a current state of the work environment or facility being analyzed within a company. LCAM will then allow the company to identify a desired future situation and make decisions to meet that condition in terms of both task and cost.
Life cycle asset management typically begins with an examination of the conditions under which the assets are being used and takes into account all of the assets used in that condition. It then estimates the cost of tasks that have been postponed due to a lack of funds or manpower, as well as the replacement of equipment at the end of its life cycle. Budget plans are analyzed and a plan is developed to achieve the company's goals.
Formulas are used to develop the plan and budget a company will need to achieve its goals. Variables exist such as the time a company waits for the plan to be implemented.