Finding the hidden value in asset hierarchy validation

Make the effort now to save time and money down the line.


Figure 1: The nine tier levels showing typical asset parent-child relationships, based on the ISO/DIS 14224 taxonomy. Courtesy: Life Cycle EngineeringThroughout industry we constantly hear statements like these:






No matter which CMMS system is used to capture the information, an accurate system asset hierarchy is of paramount importance in today’s plant environment. As we examine the importance and significance of an asset hierarchy and the pitfalls of an asset hierarchy that is not current, it will become apparent that we are wasting both time and money if the hierarchy is not up to date. If the hierarchy is not accurate, it is impossible to gain the reliability, maintainability, and required traceability of the assets. How can planners do their job if they are not aware of the plant’s assets and in particular how the assets relate to other assets? The planners’ only reference is the system asset hierarchy and the established parent-child relationships within the hierarchy.


There are several areas we consider when performing the hierarchy validation:

  1. Current system hierarchy and establishing the parent-child relationship
  2. Retired and or deleted assets
  3. New assets not currently residing in the hierarchy structure
  4. Bill of materials to support the maintainable assets
  5. Repair parts loading in the store room to support the assets, and
  6. Preventive maintenance assigned to the assets

In this article I’ll explore the first three of these areas. 

Current system asset hierarchy

Once developed, the asset hierarchy parent-child relationship allows the end-user to easily identify which assets are maintainable assets and which are considered bill of material assets. ISO 14224 illustrates how a parent-child relationship appears in a pyramid taxonomy.

One benefit of establishing the parent-child relationship is scheduling preventive and predictive maintenance activities. For example, if the planner is scheduling maintenance on a tank, then all assets associated with that tank (pumps, drive motors, loop instrumentation, pressure safety valves, associated piping, and isolation valves) can also be candidates for maintenance while the tank is offline.




Asset validation and optimization 

Figure 2: If the hierarchy is not accurate, it is impossible to gain the reliability, maintainability and required tracability of the assets. Courtesy: Life Cycle EngineeringAsset validation and optimization is a process that requires the involvement of subject matter experts (SMEs), process engineers, reliability engineers, planners, the maintenance department, instrumentation SMEs, and electrical SMEs, to name a few. The asset validation is a methodical process in which the most current process and instrumentation drawings (P&IDs), process flow diagrams, and electrical schematics are used to identify the assets in relationship to the current system configuration. 

Let’s discuss the process that is required to validate the assets. The best way to approach asset validation is to first segment your plant into manageable areas or sections. The most expeditious way to do this is to form a committee utilizing system engineers, reliability engineers (REs), and planners from the various areas of the plant. Once the areas have been identified and prioritized, this will be the best way to manage a large project and provide a way to track progress as the asset validation moves forward plant-wide.


Major points to include in the briefing include:

  • The reporting process of the actual asset validation.
  • The methodology required to place the validated assets into a parent/child relationship prior to uploading back into the CMMS system.


Typically if a retired asset, an asset that has been removed, or a new asset is not reflected in the CMMS system, this is a strong indicator that the management of change (MOC) process is not functioning.           

Retired assets and removed assets

Retired assets and assets that have been removed from the plant but still appear as active assets in the CMMS system create a major problem. One of the major concerns is that typically there are PM tasks still assigned to the assets. If the MOC program is not functioning, the planners do not know the assets are not active. Therefore, the PM schedules have not been revised to eliminate unnecessary activities.

Looking at a plant where the asset load is 45,000 and calculating that 2% of those assets have been removed and/or retired from the plant over time, then we can assume that 900 assets are no longer active. If there were only two PMs assigned to each of those assets, we now have 1800 PMs that would be applied to those assets. Estimating one hour is required to accomplish each PM and using a conservative, loaded man-hour rate of $55, the cost to perform the 1800 PMs would be $99,000 annually. But the assets requiring those PMs are no longer functioning.


New assets



A senior reliability technician with Life Cycle Engineering (LCE), Paul Langan specializes in executing best practices programs for asset management strategies supporting CMMS implementations. His email is  

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Chris , , 11/22/13 09:19 AM:

This was a great article as it explained the value of an asset structure very well. I was surprised,however, that operations was not included in the process. Why wouldn't you want input from operations on the organization as they would be able to identify if an asset grouping would unnecessarily segment a plant and affect operating when that asset was offline for maintenance. This seems like an activity to get Operations and Maintenance on the same page but if not done well, it could only deepen the often contentious divide between these organizations. Is this a reasonable concern or am I missing something?
John , Non-US/Not Applicable, Australia, 11/26/13 06:03 PM:

The value of preventative maintenance (PM) is that it prevents equipment downtime.

If the PM is so far behind schedule that maintenance is on a breakdown only maintenance schedule then the whole CMMS system should be scrapped as all it is doing is recording work that has not been done. which at the end of the day provides negative value to the business, as the time spent recording work not done could just as well be spent on breakdowns.


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