What Is An Asset Hierarchy? | Benefits & Tips | Fiix (2024)

What is an asset hierarchy?

An asset hierarchy is an important part of asset management. It helps you organize your assets and keep them working properly. To create an asset hierarchy, you need to understand the different levels at which you can classify items. You can use these classifications as a guide for organizing your inventory data and creating reports about your assets.

Why is an asset hierarchy important to use?

An asset hierarchy is essential for maintenance teams to use because it’s a way of organizing your assets so that you can identify and prioritize maintenance tasks, replacement parts, preventive maintenance, corrective maintenance, and other steps needed to keep an asset in good working condition. An effective asset hierarchy also helps you determine what needs to be done first when multiple repairs or replacements are required simultaneously.

Who uses an asset hierarchy?

Many different industries and personnel use asset hierarchies. If you're hoping to improve how your business operates, consider implementing an asset management solution that allows you to track every asset in real-time with hierarchies. Asset hierarchies are often used by: Facility managers, operations managers, and technicians, to name a few.

What are the benefits of creating an asset hierarchy?

Asset hierarchies provide:

  • Organizational benefits, such as improving employee productivity and increasing collaboration.
  • Better asset data storage. If you have a lot of data around your assets that are stored in multiple places, you'll be able to access your asset data easily with a hierarchy. If you store everything in one place using software like a CMMS, your team can access the data from anywhere at any time. This means you can also find information quickly when it's needed (i.e., identify all the assets that need servicing right away).
  • Data analysis benefits. You can perform data analysis on your asset hierarchy without worrying about what part of the hierarchy contains which information—you'll be able to work with all aspects of the hierarchy simultaneously. This will save time because you won't have to jump between different systems looking for the relevant data, instead, it's right there at your fingertips.
  • Data sharing. Since an asset hierarchy holds all your assets together as one unit, when someone else wants access to them, they'll know exactly what assets are available thanks to this feature alone.
  • A better understanding of where costs are incurred (i.e., what costs are incurred by each asset).
  • Better decision-making regarding which assets need attention first (i.e., if one meter on an asset fails, what other meters have failed recently?).
What Is An Asset Hierarchy? | Benefits & Tips | Fiix (2024)

FAQs

What Is An Asset Hierarchy? | Benefits & Tips | Fiix? ›

An asset hierarchy is essential for maintenance teams to use because it's a way of organizing your assets so that you can identify and prioritize maintenance tasks, replacement parts, preventive maintenance, corrective maintenance, and other steps needed to keep an asset in good working condition.

What is an asset hierarchy? ›

An asset hierarchy is a logical index of all your maintenance equipment, machines, and components, and how they work together. Building and understanding your facility's asset hierarchy is critical to efficiently tracking, scheduling, and identifying the root causes of failure in your equipment.

Why you need a well structured asset hierarchy? ›

In the world of asset management, establishing a well-structured asset hierarchy is crucial for businesses to effectively manage and maintain their assets. An asset hierarchy provides a systematic framework that categorizes assets based on their characteristics, relationships, and organizational needs.

What is the equipment hierarchy structure? ›

The term 'Equipment Hierarchy' in the context of Computerized Maintenance Management Systems (CMMS) refers to the structured organization of equipment and machinery in a facility. This hierarchy is crucial for efficient asset management, maintenance scheduling, and cost tracking.

What is the functional asset hierarchy? ›

Simply, the Asset Hierarchy displays records in the database and how they relate to one another. It provides a dynamic view of asset records, which are typically functional locations and equipment, and their associated analyses by navigating through the system based on the assets themselves.

What is an example of asset hierarchy? ›

In our example asset hierarchy, we defined HVAC as the system, with pumps as one of the children. Three different pump types are sub-units of the generic “pump” category, with each of them composed of individual components.

How do you set up an asset hierarchy? ›

What are some tips for creating an asset hierarchy?
  1. Use a team of people to create the hierarchy. ...
  2. Use a CMMS to create and organize your asset hierarchy. ...
  3. Use an online asset management system when creating an asset hierarchy. ...
  4. Use a free asset hierarchy template that you can populate with your team.

What is the ISO standard for asset hierarchy? ›

According to ISO 14224, it is a systematic classification of elements into generic groups based on factors possibly common to all aspects (location, use, the subdivision of equipment, etc.).

Why do companies set up a hierarchy structure? ›

Hierarchy creates authority and unity

An employee's level of authority is greater the higher they are in the hierarchical structure. Wherever leadership is required, authority is also needed. Authority ensures that everyone under a manager's command will work towards the organisation's goals — or face discipline.

Why do you need hierarchy? ›

Hierarchies add structure and regularity to our lives. They give us routines, duties, and responsibilities. We may not realize that we need such things until we lose them.

What is the standard hierarchy structure? ›

The standard hierarchy is a tree structure that contains all profit centers belonging to a controlling area and that reflects the organizational structure used in Profit Center Accounting.

What is the process hierarchy structure? ›

A process hierarchy divides core business processes into lower-level processes with detailed tasks or activities and graphically represents them. It shows the course of process breakdown from complex business processes, sub-processes, and process segments, to more detailed lower-level steps.

What is the structure of hierarchy level? ›

Hierarchy is a way to structure an organization using different levels of authority and a vertical link, or chain of command, between superior and subordinate levels of the organization. Higher levels control lower levels of the hierarchy. You can think of an organizational hierarchy as a pyramid.

What are the 3 pillars of asset management? ›

To summarize, effective asset management revolves around the three interconnected pillars of inventorying assets, assessing conditions and hazards, and maintaining assets.

What are the 4 main asset classes? ›

There are four main asset classes – cash, fixed income, equities, and property – and it's likely your portfolio covers all four areas even if you're not familiar with the term.

What are the 4 groups of assets? ›

Assets are reported on a company's balance sheet. They're classified as current, fixed, financial, and intangible. They are bought or created to increase a firm's value or benefit the firm's operations.

What is an asset hierarchy in CMMS? ›

Concerning assets, hierarchy is the relationship between the highest level of equipment and subordinate parts. For example, a technician may classify a tractor two levels above its carburetor system in an equipment hierarchy.

What are the three levels of assets? ›

Level 1 assets are those that are liquid and easy to value based on publicly quoted market prices. Level 2 assets are harder to value and can only partially be taken from quoted market prices but they can be reasonably extrapolated based on quoted market prices. Level 3 assets are difficult to value.

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