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Is Your Asset Hierarchy Out of Order?

By Abel Galindo, Life Cycle Engineering

Asset hierarchy structure is one of the most basic elements of a computerized maintenance management system (CMMS). It’s also often overlooked. When we evaluate a company’s asset infrastructure, the CMMS hierarchy often scores poorly when assessed against best practices, and setting up the hierarchy properly ends up as a part of many project scopes. Here are some of the issues I’ve encountered when working on these projects.

Who’s responsible for the data contained within the hierarchy? This question usually prompts a lot of discussion. The CMMS manager is in charge of the program administration / security / functionality. However the Reliability Engineer (RE) is in charge of the information that is in the CMMS system. Of course, this is only true if your organization has an RE. If not, a senior engineer would have this responsibility.

What’s being tracked and how is that information managed? Often, management doesn’t really know. One of the most common problems that we find in CMMS systems is the misuse of what are usually called cost points or place holders (charge codes.) These are nothing more than unneeded charge codes for planners to assign work orders. Sometimes these charge codes are used when someone can’t identify which equipment a work order should be assigned to. Or sometimes they are used when emergent work comes up and everyone involved just wants to get it done quickly. Best practice is for work orders to be written to the lowest maintainable item. We strongly discourage the use of these charge codes. Writing work orders to these place holders creates data that clutters up your system and makes it a lot harder to find when researching particular equipment history. Years of this type of data creates a lot of rework later and sometimes drives the need for outside help to clean it up.

When is the last time your hierarchy was validated or optimized? Most companies don’t track their assets very well. The core of a hierarchy is the information (in this case, the assets) that resides in it. The first step in hierarchy optimization is to validate the asset hierarchy. You need to know what assets really exist versus the information stored in your CMMS. Performing hierarchy equipment validation often results in adding or deleting 10-20% of the assets. A common cause of this is flawed Management of Change (MOC) controls. Lots of equipment that is found  “retired” or “inactive” on the floor still shows as “active” in the CMMS because the MOC process was not fully completed.


Is your equipment information accurate? Supervisors, reliability engineers, and your CMMS manager should conduct random audits of the information in the system. Quarterly audits rotated by different departments are recommended. Engineering controls, specified in your MOC guidelines, should be in place to ensure equipment assigned maintenance actually exists, and verify that equipment information is correct and matches what is in the CMMS. The more audits you conduct, the more accurate your asset information will be and and the more reliabile your data will become.

Is your CMMS hierarchy not structured properly? Another common deficiency in asset infrastructure work occurs when a company does not, or can’t track equipment history because their CMMS hierarchy was not structured properly. An improperly structured hierarchy leads to unreliable or erroneous preventive maintenance and corrective work history, and incorrect maintenance expense and budget reports for supervisors and managers. Equipment maintenance may be scheduled improperly – or not scheduled at all for equipment that needs it. Equipment data needed to perform various risk failure analyses is incorrect or not reliable. It’s easy to see how an asset hierarchy that is out of order can waste time and money.

To create a  structured (tiered) asset hierarchy, a good standard to follow is the ISO/DIS 14224 – “Petroleum, petrochemical and natural gas industries” taxonomy structure. Although this ISO standard does not address all major industries, the basic taxonomy structure and philosophy is appropriate for other industries (metals, pharmaceuticals, food and others). Most structures I’ve seen illustrate four to five levels, while the ISO recommends anywhere from seven to nine. (These are recommended levels; however, your CMMS program capabilities might not support this.) Creating as many levels as your CMMS program will allow will enable you to assign proper divisions, systems, parent equipment, and even parts for each asset.

Why get your asset hierarchy in order? Once your asset information is verified and optimized, and placed in a structured hierarchy, your engineering and maintenance teams will be able to find the correct history, and schedule and perform applicable maintenance. With more accurate data your employees can focus on continuous improvement activites that will yield performance gains. Next time you look at your CMMS program, ask yourself if the information you are seeing is accurate and reliable. What’s in your asset hierarchy?

Abel Galindo is a Reliability Technician with Life Cycle Engineering (LCE). Abel has more than 22 years of experience in hands-on engineering repair and supervision of engineering technicians. He also has over 10 years of senior management experience with asset management strategies for complex systems. Abel can be reached at agalindo@LCE.com.