Don’t Risk a Poor Asset Hierarchy

The Importance of Accurately Identifying Your Equipment and Assets


You may ask, “Why should I take the time and trouble to put my equipment and assets into a logical hierarchical order?” Allied Reliability believes it is well worth the effort to create an equipment hierarchy structure that allows for:

  • Work identification/management
  • Maintenance cost accounting
  • Failure tracking
  • Asset delay/downtime information
  • Spare part/component management

It also involves creating a standardized set of naming conventions (taxonomy) for labeling your equipment and assets. Finally, to be successful, it helps to have a Computerized Maintenance Management System (CMMS) to house all this data for centralized tracking and reporting.

What A Good Asset Hierarchy Allows

A well-designed equipment hierarchy allows you to track costs and failures at any level of the organization. It allows you to analyze costs by department, system, specific equipment, and component.

The oil and gas industry has developed an equipment hierarchy pattern, documented in the ISO 14224 standard. This is a recommended method for organizing assets in a logical, consistent manner.

equipment hierarchy pattern

Different industries, or companies, will have different needs, and therefore hierarchies and naming conventions should be customized to best reflect your facility operations. The key thing to remember is: any item that may be worked on should be captured in the CMMS; otherwise, how would you be able to report on its condition and plan on the necessary maintenance?

There are several ways to effectively organize your hierarchy data. The different methods of organizing the hierarchy include:

  • By System: facilities – plant compressed air system
  • By Equipment Type: all fork trucks, AHUs
  • By Product Line: discrete production areas

Standardized Naming System

Using a CMMS, you can set up consistent naming of equipment and assets, so they are easy to find and view related data at a glance. This can be a simple exercise, keeping the following best practices in mind:

  • Be logical
  • Be consistent
  • Be unique
  • Avoid duplicate data
  • Leave room for growth
  • Prioritize the use of letters over numbers (or a combination of both that MAKES SENSE)

What a CMMS Provides

The automated capabilities of a CMMS provide a way to gather data for driving equipment reliability and process improvement. Without reliable data, it is difficult, if not impossible, to effectively allocate already scarce maintenance resources. Poor data leads to making decisions based on whatever is causing the most pain today.

Once Your List is Complete, Use It

Just having a complete equipment hierarchy defined isn’t enough, and a waste of time if you don’t use it. Once the hierarchy is complete, an effort to prioritize the equipment should be performed. This will allow you to prioritize the work execution efforts to organize and prioritize the efforts of the maintenance department more efficiently and effectively. It also helps set priorities for preventative and predictive maintenance activities, allowing for early identification of problems and their resolution BEFORE a production stoppage occurs. Ultimately, this helps create a safer workplace with fewer HSE incidents.


Having a well-organized hierarchy can greatly enhance your reliability efforts. It is the foundation of any successful maintenance and reliability program. A comprehensive equipment hierarchy is the backbone of any CMMS (otherwise known as an asset management system). It’s an essential step towards achieving not only condition-based maintenance tasks, but a more reliable operating environment overall, so you can be more competitive in the marketplace.

On-Demand Webinar

Be sure to check out our webinar, “The Real Cost of a Poor Asset Hierarchy

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Allied Reliability provides asset management consulting and predictive maintenance solutions across the lifecycle of your production assets to deliver required throughput at lowest operating cost while managing asset risk and achieving environment, social, and governance objectives. We do this by partnering with our clients and applying our proven asset management methodology and leveraging decades of practitioner experience across more verticals than any other provider. Our asset performance management solutions include Consulting & Training, Condition-based Maintenance, Industrial Staffing, Electrical Services, and Machine Reliability.

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