Applicability of six sigma for asset management

Assets are resources having economic value that an individual, corporation or country can own or control with the expectation that it will provide benefits to the organisation for its current and future operation. Asset management is considered as 'the systematic and coordinated activities and practices through which an organisation optimally manages its assets, and their associated performance, risks and expenditures over their life cycle for the purpose of achieving its organisational strategic plan' (BSI, 2004a). Statistical tools are currently being explored by various asset intensive companies for reducing costs and risks from operational and business perspectives. Six Sigma is widely applied in the manufacturing sector by using structured problem solving approach for continual improvement. Understanding the gaps in asset performance and taking corrective and preventive measures for improvement of asset performance is extremely important for competitive advantage in the marketplace. This paper examines applicability of Six Sigma approach for ensuring effective management of physical assets.