Practical approach for development of risk based asset management program

In any optimized asset management system, risk management is considered to be one of the core elements. International asset management standards like PAS 55, ISO 55000 has integrated risk management with the asset management process throughout the life cycle of assets. Risk based asset management guides the organization to perform the trade-off on both cost and risk, and enables a structured decision-making process. To develop a practical implementation approach, what is required is the alignment of asset management activities from the corporate strategy to the point of execution while embedding the risk management activities throughout. The focus of the paper is to provide an integrated framework for asset and risk management and to demonstrate, in detail, the development of the risk management process for a thermal power generation unit operating in the Indian context. Though the context of reference is set specific to power generation units in India, the approach could be generalized across any asset intensive organization.