In my previous blog postings, I have often noted that equipment management is an Art and a Science. In my earlier posting on starting an equipment management process improvement working group, I wrote that the task leader must understand how equipment management works, and the expected outcomes that can be measured as a result of adopting industry best practices. I received several emails on this posting, and my readers have asked me to explain what these outcomes should be, and what industry standards exist to document this process. OK, I admit, the tone of one of the emails was “you made a statement now prove it!” and I smiled at the thought of having to justify my existence.
I was wondering how to lead into this topic. It is an extensive topic that can get bogged down in the minutia of standards and documents, and can become tedious when trying to explain. When getting a certification in Equipment Management from the National Property Management Association, one has to study each and every regulation and how it applies in real life. The way I think I need to tackle this topic in my blog is to not be so serious, and to stretch this out in several postings. I want to be informative, and to give a recipe for success. As in every science, the measurement of the process gives the proof of delivery, and in this case, equipment management as a science is no different. Having guiding industry standards provides blueprints for this process, and a model to judge whether or not your process has maturity or still needs work.
So my post for today is to talk about an industry standard that has the ASTM Designation E2279 – Standard Practice for Establishing the Guiding Principles of Property Management. This standard as well as others that I am going to be describing can be ordered from the ASTM site and used directly. These ASTM standards have been developed by the E53 Committee which covers the industry standards on Property and Equipment Management. This committee is staffed by members of the National Property Management Association.
So why establish an industry standard to set “Guiding Principles?” At first thought, this appears to be redundant with each principle described in detail in other standards in this series. As most of the standards in this series go, the Standard Practice for Establishing the Guiding Principles of Property Management is only 3 pages, mostly term definition. Simply put, it is a standard to create a standard.
But in detail, this standard describes a set of guiding principles that can be applied to all factors of equipment management and describes a set of objectives that when employed stress a simplified process that encourage the adoption of best practices. The importance of developing a standard to establish a set of guiding principles is that less is more, and these objectives will foster judgment rather than “by the book” decisions. The E53 committee’s purpose in adopting this standard was to foster a problem-solving mentality within the equipment management community and encourage the use of innovative and cost effective processes. In today’s environment of changing needs and budgetary constraints, it is essential that organizations respond to these needs within the context of a good equipment management process. The economic benefits and conformance to the restricting budget is the most practical benefit of using these guidelines.
So what are the guiding principles? This standard divides these principles into three groups:
- The Management Of Equipment,
- The Utilization of Equipment, and
- The Disposal of Equipment
When devising an equipment management working group to examine your equipment management process and adopt what should be a working charter for this group, this standard should become your guiding mission statement. What should this charter look like?
Under Management of Equipment, the goals are specific and somewhat obvious:
- The Equipment Management Working Group shall establish a set of policies and a system for the acquisition, use and disposal of equipment.
- The Equipment Management Working Groups purpose is to devise and maintain a system of controls sufficient to provide assurances to management and DHS auditors that provide for limited access, recorded transactions that can be compared to existing equipment at reasonable intervals, with appropriate actions taken if there are differences.
- This working group’s responsibility is the maintenance of adequate equipment records.
- The degree in which equipment is controlled and the costs of control must be commensurate with the consequences of a shortage and the criticality of the item’s loss.
- The controls established by this working group should be based on equipment management outcomes and have associated metrics that encourage process improvement.
Under Utilization of Equipment, these goals cover how equipment is inventoried and periodically audited:
- The Equipment Management Working group shall establish procedures that encourage the best value in the long term of maintenance of equipment assets.
- This working group’s responsibility is to oversee the property system that ensures that records are maintained in an accurate manner, all controlled property is received, records established and maintained and marked to denote the level of control, ownership and other information that fulfills organization objectives.
- The Equipment working group will set up procedures to survey and identify equipment that is in excess.
- This working group’s responsibility is to set up administrative controls based on inventory results and these controls should be reassessed based on economic value of the equipment rather than acquisition costs.
- The group should project the possibility and probability of loss, damage or destruction and minimizing such occurrences is a critical and economic factor.
- Create a system of handling excess and a process of using excess equipment as the first source of supply.
Finally, under Disposal of Equipment, the working group charter should cover the goals related to surplus equipment:
- The working group should create the process of disposal of surplus equipment including the sale or internet auction of such equipment that may still have economic value, or to decide how equipment should be donated to eligible recipients.
- This group should determine when abandonment, destruction, or donation would be appropriate and to set the guidelines necessary.
- This group should administer the cost and the proceeds from the disposal of equipment, and the proceeds should offset the cost of disposal, except where prohibited by state regulation.
If you read the ASTM standard, there are a few more key points; I am only focusing only on the main ideas for each section. However all of these guiding principles are fundamental to the success of an equipment management process improvement program. By adopting an Equipment Management Process Improvement Working Group, the key benefits are that the administrative costs of equipment management are reduced and the goal of stewardship of agency equipment is supported.The use of the working group provides the necessary stakeholders a voice in this process, which results in everyone working to reduce overall work, duplicated procedures, and redundant data. Having a working group ensures that the process is monitored and as metrics are gathered, the process can be further optimized in the face of the changing budget requirements.
I know this is a bit tedious, and if you have any questions or comments, please feel free to share them with me or post them here.
In subsequent postings, I am going to cover some of the other equipment management standards and how they apply to equipment used in the EOC setting. Coming up next, what is an appropriate level of control of equipment and what is the cost values used in determining that control. We will explore what the industry standards say and how to apply it to your equipment management process.