Strategic Asset Management Research Articles

Bank-specific and Macroeconomic Determinants of Commercial Banks Profitability in Kenya

This study focuses and examines the impact of bank-specific factors and macroeconomic determinants on the financial performance of commercial banks listed on the Nairobi Securities Exchange (NSE) during the period spanning from 2011 to 2020. The research is anchored on transaction cost economic theory with financial panel data methodology. In the pursuit of study objective, the study employed pooled ordinary least squares (OLS) estimation method combined with fixed effect model to account for individual-specific characteristics that may not be directly observable but are likely to impact the dependent variable. The research findings reveal that bank assets, bank capital and debt ratio have a positive impact on bank profitability while bank concentration has a negative effect. Notably, inflation rate, lending rate and tax rate were insignificant in relation to rate of return on equity among the selected banks in NSE. The study recommends that banks should prioritize efficient capital allocation and diversify their business lines and offerings. Therefore, banks should give thought to the implementation of strategic asset management as a means to optimize their asset allocation, as it can contribute to increased profitability through diversification and efficient asset utilization.

The Impact of TATO and DER on ROA in IDX 2019-2023 Property and Real Estate Companies

This study was carried out at publicly listed property and real estate companies on the Indonesia Stock Exchange. The objective of this study is to examine and evaluate the impact of total asset turnover and debt to equity ratio on return on assets in Property and Real Estate Companies that are listed on the IDX from 2019 to 2023. The research methodology utilized in this study adopts a causal approach, specifically employing a quantitative and descriptive research design. The study included a total of 78 companies, selected using purposive selection technique, resulting in a sample size of 54 companies. The study employed the multiple linear regression approach and conducted classical assumption checks for analysis. The findings of this study suggest that the Total Asset Turnover and Debt to Equity Ratio significantly impact the Return on Assets (ROA) in Property and Real Estate companies listed on the Indonesia Stock Exchange between 2019 and 2023. The TATO has a moderately favorable influence on the return on assets (ROA), whereas the debt-to-equity ratio (DER) has a substantial and adverse effect on ROA. These findings have significant consequences for individuals and organizations involved in the property and real estate industry, highlighting the crucial role of strategic asset management and financial structuring in influencing firm performance. This research makes a valuable contribution to scholarly discussions and provides practical insights for professionals seeking to improve financial performance in the ever-changing Indonesian real estate market.

Enhancing financial stability in Islamic banks: An investigation of determinants during the COVID-19 in Indonesia

Purpose — This study investigates the determinants of Islamic banks' stability in Indonesia amidst the Covid-19 pandemic.Method — Employing a causality-associative quantitative approach, the research utilizes purposive sampling and secondary data collection from monthly financial reports on the official websites of OJK (Financial Services Authority) and BI (Bank Indonesia). Statistical techniques including normality test, multicollinearity test, t-test, f-test, R2 test, and multiple linear regression, aided by SPSS version 22 and Microsoft Excel, are employed for data analysis.Result — The results reveal that Islamic banks' total assets significantly positively influence their stability in Indonesia. Additionally, variables such as Operational Costs to Operational Income (OCOI) ratio and BI 7-Day Reverse Repo Rate (BI7DRR) exhibit significant negative effects on Islamic banks' stability. Practical implications — Understanding the influence of total assets, Operational Costs to Operational Income (OCOI) ratio, and the BI 7-Day Reverse Repo Rate (BI7DRR) on Islamic banks' stability in Indonesia during the Covid-19 pandemic can guide policymakers and bank management in implementing measures to strengthen resilience and mitigate risks, such as strategic asset management and cost optimization strategies.

Review of Asset Management Practice in Indonesian State-Owned Enterprise

This study examines Indonesian State-Owned Enterprises (SOEs) asset management methods, problems, and financial and operational performance effects. The report synthesizes case studies and academic research on how large organizations manage their huge and diverse asset portfolios and how governance, regulatory frameworks, and human resource practices affect their effectiveness. The research begins with case studies of talent management innovations from big Indonesian SOEs. These cases show how proactive human resource approaches can boost company commitment and reduce turnover, improving asset management efficiency. According to the research, governance and legal frameworks influence asset management techniques. Studies show that corporate governance quality affects SOE operational performance. The paper explores how reforms and legislation affect state asset management, highlighting the major changes in SOE governance and legal frameworks, particularly after economic and political reforms. Asset management difficulties for Indonesian SOEs include managing large and diverse asset portfolios, integrating modern management frameworks, and optimizing state asset revenue. According to the study, comprehensive asset management systems, governance transparency, and professional management can address these difficulties. The research examines how asset management strategies affect Indonesian SOE profitability, corporate governance, and performance measures. Strategic asset management boosts financial performance, especially profitability. SOE profitability is greatly affected by current asset and liability management. The study offers advice to Indonesian SOEs and policymakers. Enhancing financial and operational performance requires comprehensive asset management, governance changes, and strategic innovation. These efforts boost Indonesia's economy, demonstrating the importance of asset management in SOE performance.

Strategic asset management health index for predicting power transformer health conditions

Strategic asset management health index for predicting power transformer health conditions

Seismic excitation model in probabilistic risk assessment of civil infrastructure

AbstractRealistic risk assessment of civil infrastructure subjected to catastrophic events plays a crucial role in strategic asset management. In this process, visualization of the asset and its environment always possesses some epistemic uncertainty associated with the modeler's simplification/abstraction. The present paper aims at providing a critical perspective into the characterization of the seismic excitation model for risk assessment of civil infrastructures and identifying gaps in the present knowledge. For this purpose, the main factors that influence the development of a comprehensive framework for the simulation of seismic excitation are highlighted. The coupling effect of the spatial variability of ground motions and the substructure's footprint on the realization of the seismic excitation model is illustrated. Finally, the necessity of direct incorporation of the load analysis subtask in the probabilistic seismic risk assessment of civil infrastructures is discussed. In addition, simplified probability density functions are proposed for the simulation of the seismic excitation model.

Measuring the Performance of a Strategic Asset Management Plan through a Balanced Scorecard

The purpose of this paper is to propose a tool to measure the performance of a Strategic Asset Management Plan (SAMP) based on a Balanced Scorecard (BSC). The SAMP converts organizational objectives into asset management objectives, as well as specifies the role of the asset management system, providing support to achieve asset management objectives. The SAMP becomes the heart of the organization and integrates the long-term, medium-term, and short-term plans. In the SAMP, the balance among performance, costs, and risks are taken into consideration in order to achieve the organization’s objectives. On the other hand, the SAMP is a guide to set the asset management objectives while describing the role of the Asset Management System (AMS) in meeting these objectives. Since the SAMP is the central figure of AMS, it is important to measure its performance and should be built and improved through an iterative process. This indicates that it is not just a document, it is “the document” that should be treated as a “living being”, which needs to adapt to internal and external changes quickly. The BSC is an excellent tool where, through the appropriate Key Performance Indicators (KPIs), the progress can be measured, and is supported by four perspectives: Financial, Customer, Internal Business Process, and Learning and Growth.

Modelling the long-term sustainability impacts of coordination policies for urban infrastructure rehabilitation

Due to structural and hydraulic deterioration, urban water pipe networks have annual rehabilitation needs. Worldwide, these needs are often significantly larger than the actual amount of rehabilitation being performed, leading to increased risks of serious failures, lower performance and a growing techno-financial burden for future generations. It is well accepted that, in order to limit the multiple impacts of utility works in the urban environment, rehabilitation projects should be coordinated between water, transport, energy and telecommunication infrastructures. In practice, such coordination means that public utilities must rehabilitate assets earlier or later than technically needed, in order to engage in joint projects in which digging and resurfacing expenditures are shared. Hence, at the municipal scale, such coordination influences two variables that are key to strategic decision support: average costs (€/metre) for asset rehabilitation, and the service lifetimes of those assets. However, current models for strategic asset management do not enable practitioners to estimate how changes in the coordination process may influence the long-term financial and environmental impacts of infrastructure rehabilitation. The present study aimed at addressing this methodological gap by introducing the concept of a coordination window that quantifies to what extent utilities compromise asset rehabilitation times in order to join multi-utility projects. An algorithm for modelling the influence of the coordination window size on long-term sustainability costs is presented and applied to one Swedish municipality. The results suggested that total capital costs and carbon emissions can be lowered by 34% and 16% with a coordination window of 35 and 25 year, in comparison to the no-coordination case.

A BIA-Based Quantitative Framework for Built Physical Asset Criticality Analysis under Sustainability and Resilience

Asset-intensive industries, such as the construction industry, have experienced major catastrophes that have led to significant operational disruptions. Physical asset failure has been the primary cause of these disruptions. Therefore, implementing proper asset management plans, including continuity plans, is crucial for the business continuity of companies active in these industries. However, companies often face severe resource limitations when implementing these plans for all of their physical assets. Therefore, those critical physical assets that are vital for providing their key products should be identified. Moreover, sustainability and resilience are inseparable parts of organizations’ strategies, including strategic asset management plans. Therefore, any proposed ranking methodology for physical asset prioritization should encompass sustainability and resilience measures to ensure its practicality. This paper proposes a novel framework for physical asset criticality analysis based on the so-called business impact analysis to ensure the continuity of providing products/services through the continuity of physical assets. A hybrid fuzzy BWM-TOPSIS method is first applied to identify the key products. Then, a hybrid fuzzy DEMATEL-Bayesian network is applied based on proper sustainability and resilience factors to determine the critical physical assets, while interdependencies among these factors are well captured. The normalized expected asset criticality index is defined to guide managers in taking appropriate directions while developing asset management plans. A case study of a gas company is provided to show the applicability of the proposed decision model. The data needed for each step of the framework is gathered through experts’ judgments, historical data available on the sites, or quantitative risk assessment scenarios.

The impact of strategic intelligence and asset management on enhancing competitive advantage: The mediating role of cybersecurity

Companies utilize competitive advantage as a tool to assist them gain more value for their products at a cheaper cost without sacrificing quality to provide greater features and services. Companies and services must use cybersecurity tools, training, and risk management strategies, as well as regularly upgrade systems as technology changes and evolves, to secure organizations, employees, and individuals. As a result, with the mediating function of cybersecurity, this study clarified the influence of strategic intelligence and asset management on boosting competitive advantage. A questionnaire was designed, and 300 questionnaires were collected out of 350 distributed to respondents working in Jordanian telecom companies. The study found a positive impact of both strategic intelligence and asset management on enhancing competitive advantage through the presence of the mediating role of cybersecurity.

Health Index Assessment for Power Transformer Strategic Asset Management in Electrical Utilities

Health Index Assessment for Power Transformer Strategic Asset Management in Electrical Utilities

Strategic asset management of a heterogeneous locomotive fleet

Strategic asset management of a heterogeneous locomotive fleet

Health index assessment for power transformer strategic asset management in electrical utilities

Health index assessment for power transformer strategic asset management in electrical utilities

Strategic asset management of a heterogeneous locomotive fleet

Strategic asset management of a heterogeneous locomotive fleet

Barriers for data management as an enabler of circular economy: an exploratory study of the Norwegian AEC-industry

Effective data management can enable the utilisation of new tools and technologies and, ultimately the creation of circular business models in the building industry. To accomplish this, a targeted mapping and collection of data must take place. However, several challenges hinder the exchange of information in a seamless digital flow through the value chain and building life cycle. This exploratory study contributes to bridging the gap in the research, providing an overview of existing barriers related to mapping, collecting, and storing data about materials and products in existing buildings. The findings are obtained through 18 semi-structured interviews with experts working with circular economy and digitalisation in the Norwegian AEC-industry. Some of the identified barriers, such as the lack of data availability and interoperability, lack of competencies and unwillingness to share data, are strongly interrelated; a collaborative approach will be essential across the value chain. The research sets the basis for developing a framework for data management that can facilitate the reuse of materials and products from a building at the end of life to new construction or refurbishment projects. Ultimately, effective data management opens for developing and implementing innovative circular business models, enhancing strategic data-based asset management.

Automated portfolio-based strategic asset management based on deep neural image classification

Despite the popularity of image-based classification techniques in identifying building materials and elements in building and construction sites, the real feasibility of it accommodating the needs of operation and maintenance (O&M) inspection-repair processes in the real project scale is still awaiting testing due to the vast number of project assets, hundreds of asset categories, and requirements of portfolio-based strategic asset management (SAM) tasks. The building's O&M phase does not yet have a large-scale inspection-repair dataset created on images based on the actual workflow of building and infrastructure projects. This paper described a MobileNet1.0-based image classification method for optimising and automating a series of portfolio-based SAM service processes, including condition surveying, data validation, standardisation and integration. By examining the performance of image classification in the building O&M phase's SAM tasks, the paper examines whether the constructed MobileNet1.0 model can achieve satisfactory built assets category classification performance based on commercial surveying data with the enhancement of the online image training dataset. The constructed MobileNet1.0 model achieved satisfactory built assets category classification results for both building asset type category classification (with 85.6% level-1 test accuracy) and different building data attributes (e.g., built assets' condition, activity cycle, failure type, etc.). The experiment results proved the online enhanced image training dataset can further boost the on-site image classification performance. The results of this paper demonstrate a broader application of image-based technologies in portfolio-based SAM and other building and infrastructure projects' O&M phase applications. Future research can be conducted to exploit the performance of image classification methods over more building asset categories and building and building asset data attribute types.

Sustainability assessment of strategic asset management decisions on municipal water infrastructure systems: Framework and application

AbstractDeveloping socially acceptable, environmentally friendly, and financially viable asset management plans (AMPs) is a major challenge for water and wastewater utilities and calls for a comprehensive Sustainability Assessment (SA). This paper proposes a novel framework that applies System Dynamics and Life Cycle Assessment tools to evaluate the long‐term sustainability of strategic asset management decisions for water and wastewater infrastructure systems. The merit of the proposed framework in dealing with the non‐linearity and dynamic behavior of the socio‐economic systems and its utility for SA of strategic asset management decisions are demonstrated in a case study of a Wastewater Collection (WWC) network system. Furthermore, the significant importance of population growth and urban densification policies in sustainability of AMP are highlighted by comparing four alternative scenarios of (1) 100% urban densification, (2) 0% urban densification, (3) 50% densification, and (4) no population growth in the case study. The results of the case study show that the greenhouse gas emission, operational and capital expenses, and bill burden of WWC and treatment services significantly reduce with urban densification.

A Treatment Reliability-Based Method for Supporting Infrastructure Asset Management of Wastewater Treatment Plants

A simple and consolidated reliability-based method widely used to unveil the real reliability and stability of wastewater treatment plants (WWTPs) is herein proposed to trigger decision making on operational improvements and asset management for maintaining or improving treatment effectiveness, reliability, and efficiency. Five-year data (2015–2019) from 16 Portuguese activated sludge WWTPs were used. For the 73% of the yearly data which fitted a lognormal distribution, Niku’s coefficient was computed to assess the plant annual reliability for biological oxygen demand (BOD5), chemical oxygen demand (COD), and total suspended solids (TSS). The standard deviation of the annual concentrations was used to characterize the plant stability, and the maximum standard deviations allowed to comply with the European discharge requirements for urban WWTPs were derived. The results demonstrate extended aeration WWTPs were more reliable and stable than conventional aeration WWTPs (0.98 reliability vs. 0.82 for BOD5, 0.97 vs. 0.91 for COD, and 0.94 vs. 0.89 for TSS). Furthermore, the lower reliabilities and stabilities were found for the smaller WWTPs. These results are important for strategic asset management for designing and rehabilitation of the wastewater treatment system. At tactical and operational levels, for resources’ allocation and operating conditions set up, the computed WWTP’s coefficient of variation allows establishing the mean effluent concentrations required for compliance with a given reliability for different scenarios of discharge requirements.

SVM-based predictive model for the most frequent structural failure in Bogota sewer system

Deterioration models simulate non-inspected sewer pipelines' structural conditions and are used to support strategic asset management. Most of the deterioration models have been constructed based on state ratings (SR) of the infrastructure. However, recent studies have shown that this simplification could provide incomplete information of the network's state, and therefore the SR may not be adequate to develop deterioration models. A support vector machine (SVM)-based modelling procedure was developed to predict the probabilities of structural failures of sewer pipes in urban areas and the reliability of these predictions. We applied this procedure to Bogota's sewer system. The results suggest that classification SVMs are feasible for developing predictive models of structural failures in sewer systems, which can be used to plan the inspections of sewerage networks, giving priority to specific areas where it is most likely to find the failure.

BIM-integrated portfolio-based strategic asset data quality management

A building's strategic asset management (SAM) capability has traditionally been limited by its site-based management. With the emergence of needs from clients about delivering a long-term portfolio-based building asset management plan that minimizes the asset risk and optimizes the value of their asset portfolios, SAM Units have emerged as a new business form to provide various SAM services to their clients. However, the quality of their current data model is still hindered by many issues, such as missing important attributes and the lack of customized information flow guidance. In addition, there is a gap in integrating their existing data collection with various data sources and Building Information Modeling (BIM) to enhance their data quality. By evaluating a SAM Unit's portfolio case study, this paper identifies the factors limiting the quality of SAM Units' data model and develops a guide to integrating various data sources better. We develop a BIM-integrated portfolio-based SAM information flow framework and a detailed hierarchical portfolio-based non-geometric data structure. The proposed framework and data structure will help SAM professionals, building asset owners, and other facilities management professionals embrace the benefits of managing the portfolio-based SAM data.