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Asset Failure Modes

The performance of an asset declines at varying rates throughout its effective life until it eventually requires renewal or replacement. This decline or failure impacts on the overall system.

There are several ways an asset can fail to provide its required level of service or reach the end of its effective life. These failure modes are:

  • Lack of Capacity- the growth in demand has or will outstrip the asset's ability to provide the service required
  • Inefficiency- due to technological change, the asset could be replaced effectively by an updated asset
  • Obsolescence- due to a lack of spare parts etc. the asset can no longer be maintained to provide the service required
  • Level of Service Below Acceptable- cannot be achieved without excessive maintenance, renewal or repair costs
  • Structural Integrity- the age of the asset is such that it reaches the end of its effective life and mortality failure occurs
  • No Longer Required (Lack of Utilization)- the organization's objectives, strategies, needs or core activities no longer require the asset and it can be disposed of
  • Operator Errors- human error can often result in the early failure of an asset eg. not following optimal maintenance practice on plant and equipment or wrong operational procedures.

Failure Treatment Strategies

After predicting the failure of an asset component, it is necessary to assess the options available to rectify the situation. There are various strategies available to asset owners to correct the failure mode. These generally fall into the following categories and may apply to some or all of the failure modes.


  • Operate the asset differently - this can be done by looking at supply options, rerouting or reducing the peak demands or stresses on the asset
  • Maintain the asset differently - make it more reliable or to extend its life a different maintenance regime could be used
  • Operator Error - options can vary between training, protection system, and operator support systems such as operations manuals etc.
  • Demand Management - reduce demand or growth in demand to avoid capacity failure.


  • Rehabilitate - cost effective rehabilitation of the asset could ensure that it meets the level of service required of it
  • Replace the existing asset - if rehabilitation is not cost effective, the asset may need to be replaced.

New Work

If the above two options cannot correct the asset failure (e.g. demand/capacity) then the following options may need to be considered:

  • Create (or acquire) a new asset
  • Augment (or add to) an existing asset.

Disposal (Asset Rationalization)

This option may be brought about by a strategic planning decision or could result from failure of other options. Does the organization need to own the assets? Is the ownership of the asset (or asset group) a core activity of the organization?

  • For those assets involving non-core activities it may be necessary to reduce asset stocks
  • Transfer ownership of some assets back to the users, especially if only small numbers of users are involved
  • For other assets, look at leasing from other specialist companies eg. Vehicle fleets, office building, etc.

Do Nothing

In accordance with good economic principles, the "do-nothing" option must be included and the risk (cost) to the organization assessed against this base.

Other Treatment Option Descriptions

There are a multitude of treatment options that can be considered. Other options are listed below.

Augmented Asset

Covers those works that have been completed to upgrade the capacity of the asset rather than improving the level of service than can be delivered by the asset.

Improved Asset

Covers those treatment options that improve the standard or levels of service delivered by the asset to meet new customer expectations or government regulations etc.

Staged Refurbishment

Similar to rehabilitation but is used to describe the work proposed for components or assets that make up a facility in which the rehabilitation will be carried out over a period of time. This describes the optimizing of the rehabilitation to suit the life extension of the various components that make up the asset or facility.

Operational Changes

Help overcome some failure modes by operating the asset or the asset system to provide the service in a different way.

For an asset involving capacity failure it may be possible to re-route, load share or operate the asset in an alternative mode to provide the additional capacity required.

In the case of physical life extension (mortality failure) any change in the operational parameters that allows for a life extension may be a cost effective option.

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