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  • Kleber Siqueira

The Organizational Paradox

The Organizational Paradox

The organizational paradox becomes increasingly evident as companies recognize the need to reconsider certain organizational aspects, including:

  • Maintenance departments being tasked with functions beyond their traditional scope and functional expertise.

  • The emergence of industrial asset management as a new discipline, characterized by its own complexity and strategic importance within the business value chain, akin to recognized domains like finance, human resources, and information technology.

  • The strategic significance of industrial asset management across their entire lifecycle, from inception to retirement.

  • The potential exposure to high-consequence risks for the business, should industrial asset failures occur.

Industrial Asset Management: Organizational Paradigm Change

Managing the risk associated with physical assets entails assessing and mitigating the severity of their failures and their consequences, which can encompass:

  • Safety concerns, including injuries and fatalities.

  • Environmental integrity, with a focus on preventing environmental disasters.

  • Operational losses in terms of quantity, quality, costs, and downtime.

The strategic nature of this emerging discipline, marked by its highly specialized and broad scope of action, necessitates independence to facilitate and audit the application of best practices for managing physical asset failures. Achieving this requires a significant shift in the current organizational paradigm to promote and integrate this new discipline into corporate leadership, thereby bridging the existing organizational gap.

Due to this organizational paradox, many companies are still unprepared to undergo the cultural shift required for effective industrial asset management, as recommended by international standards such as ISO 55000, PAS-55, and ISO 31000.

For instance, the PAS-55 standard defines asset management as follows: "Systematic and coordinated activities and practices through which an organization optimally manages and sustains its assets and asset systems, their associated performance, risks, and expenditures throughout their lifecycles in order to achieve its strategic organizational plan."

In practice, there is a glaring missing link: an organization at the corporate leadership level (strategic level) to champion the industrial asset management discipline.

Hence, it is paramount for companies to assess the strategic importance of this new discipline for their businesses and, if necessary, consider adjustments to their corporate organizational structure. This includes defining guidelines for its responsibilities, knowledge, information systems, and human resources.

In summary, in medium and large companies, where failures can significantly impact the business, the strategic recommendation is clear:

Consider establishing a new organization at the corporate leadership level to oversee the management of industrial assets. This is the organizational paradox that needs resolution.

Furthermore, maintenance departments should begin reviewing the existing organizational paradigm for reliability management. They can propose an open debate with top management about the unnecessary and potentially risky "extra responsibilities" that have been entrusted to them. This shift would allow maintenance management to focus more on the quality of their equally vital activities and contributions to the operational reliability of industrial assets.

The conceptual redesign of the organization required and the rationale behind its adoption will be discussed in more detail in a separate article.

The creation of a new organizational paradigm for managing industrial assets is a work in progress, and your input can be a significant contribution to this ongoing construction.

Your comments and suggestions are highly valued!


Kleber Siqueira - 09/24/2023

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