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Life Cycle Asset Management

What Does Life Cycle Asset Management Mean?

Life cycle asset management (LCAM) is an IT management method of capital improvement that is accomplished by accounting all assets used in the current environment, then analyzing their life cycle efficiency. This allows an organization to exchange or purchase new equipment when the life cycle of the older equipment dictates that it should be replaced. LCAM helps a company to identify, quantify and prioritize deferred productivity and to develop a reduction plan based on the company’s goals.


Another way of looking at LCAM is that it is a tool that defines and analyzes a current condition in the work environment or facility being analyzed within a company. LCAM will then allow the company to figure out a desired future condition and help make decisions about attaining this condition in terms of both tasks and costs.

Techopedia Explains Life Cycle Asset Management

Life cycle asset management usually starts out with an inspection of the conditions where the assets are used and accounts for all assets used within this condition. Then, costs are estimated for tasks previously postponed as a result of the lack of funding or manpower, along with the renewal of equipment reaching the end of its life cycle. Budget plans are analyzed and a plan is developed to meet the company’s goals.

Formulas are used to devise the plan and budget a company needs to reach its goals. Variables exist like the time a company is willing to wait for the plan to be realized.


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