The efficiency of an asset depends on its reliability. But what is, exactly, asset reliability?
What is an asset?
An asset is anything that a company owns that can be converted into a profit or benefit. So, there are hundreds of things that can be an “asset”. Examples include financial assets (such as deposits or stocks), intangible assets (like patents, copyrights, or even market notoriety), and physical assets (real estate and equipment).
For the purposes of this article, we will focus only on physical assets. Asset management typically encompasses the entire life cycle of assets, from the time they are ordered until they are replaced and decommissioned. The goal is to optimise the assets’ use and maximise the benefits that can be extracted from each asset.
During its useful life, optimising the use of each piece of equipment implies good maintenance management. When it comes to real estate, on the other hand, the focus splits between hard facility management, which encompasses technical services, and soft facility management, which focuses on the occupants’ comfort. You can read more about the differences between asset, facility, and maintenance management here.
What is reliability?
But getting benefits from assets implies that they are reliable. Reliability (or dependability) is the ability of an asset to fulfil expectations about its functionality. Therefore, a reliable asset functions expectably and consistently. It also meets all legal requirements, delivers the performance required for the business, and fulfils stakeholder expectations.
There is no simple formula to calculate the reliability of a piece of equipment. Some use a Weibull distribution, but you can also use a lognormal function to calculate reliability. In a previous article, we explained how to calculate equipment reliability and availability in a simplified manner, based on an indicator you are already familiar with: the MTBF.
Reliability vs. Availability
It is important to realise that an asset with a high availability rate is not necessarily reliable. A given piece of equipment can be available 90% of the time, but only work as expected 70% of the time (we all know that printer in the office that crashes all the time, right?). This makes it a piece of equipment with good availability, but low reliability.
Our life is surrounded by examples like this. Imagine a GPS, for example, that should cover almost the entire territory but doesn’t always find the correct orientation or the fastest route. These failures result in wasted resources (we spend more than necessary), damage the user experience, and have a negative impact on business productivity.
Reliability vs. Quality
However, it is equally important to distinguish reliability from quality. Quality is how well an asset performs its function – whether it is efficient, safe, intuitive for technicians, or comfortable for users. Reliability, on the other hand, is how well the asset maintains its performance over time under various conditions.
For example, a car may be comfortable, run on electric power, have an excellent GPS system, and be suitable for your technicians in the field. That’s quality. But what determines whether the car is reliable is the ability to maintain those characteristics under different conditions (for example, in difficult terrain) over time.