Why Criticality Analysis? The Foundation of Decisions in maintenance

Why do we need Asset Criticality Assessment at all?

Asset Criticality Assessment is one of those terms that appear very frequently in maintenance and asset management discussions, yet are rarely truly well understood. For some, it is a simple classification of machines; for others, a preliminary step to RCM; and for yet others, just another “Excel project” that ends up as a binder on a shelf. In reality, Asset Criticality Assessment is neither a list nor a one-off exercise. It is a decision-support mechanism designed for operating under constrained resources.

At its core, it answers a question that remains unspoken (and therefore unresolved) in many organizations: which assets truly matter from the perspective of achieving business and operational objectives? This is not only about production. In modern Asset Management, safety of people, product quality, environmental impact, regulatory compliance, and organizational reputation are equally important.

Asset Criticality Assessment makes it possible to combine all these perspectives into a single, coherent model. As a result, the organization stops reacting to what is currently the loudest problem and starts consciously managing what is truly the most important.

Asset Criticality Assessment vs. Risk Analysis

One of the most common conceptual mistakes is treating Asset Criticality Assessment as a synonym for risk analysis. While the two approaches are closely related, they play fundamentally different roles within the management system.

Risk analysis focuses on specific events. It considers scenarios such as failures, incidents, or damage and attempts to answer two questions: what is the likelihood of occurrence, and what will the consequences be? This approach is highly precise but also requires significant amounts of data, time, and expert involvement. Importantly, risk levels change over time as assets degrade, operating conditions evolve, or new safeguards are introduced.

Asset Criticality Assessment operates at a different level of abstraction. It is not concerned with how something will fail, but rather what will happen if an asset loses its function. In this sense, it is an analysis of the level of consequences. By design, asset criticality is a slowly changing indicator. The criticality of a machine, production line, or transformer station does not fluctuate week by week, even if the risk level of individual failure modes, the production plan, or external conditions such as weather do change.

In mature organizations, Asset Criticality Assessment serves as the starting point for risk analysis. Assets whose loss of function would have the most severe consequences are identified first, and only then are resources invested in detailed analyses of events, scenarios, and safeguards. This approach is consistent with the philosophy of the ISO 55000 standards, which emphasize proportionality of actions relative to asset significance.

Asset Criticality Assessment vs. RCM and FMECA

Similar relationships can be observed in the context of RCM and FMECA. In these methods, the central element is the analysis of failure modes, their causes, and their effects. The RPN indicator (Risk / Criticality / Priority Number), based on severity, occurrence, and detectability, provides a very detailed picture of the risk associated with a specific failure mode.

The challenge is that RCM and FMECA can be organizationally expensive methods. Asset Criticality Assessment can therefore act as a selection mechanism. It helps answer the question of which assets justify analysis at the failure-mode level and for which assets simpler maintenance strategies are sufficient. In other words, Asset Criticality Assessment does not compete with RCM or FMECA, it enables their effective and targeted application.

Asset Criticality Assessment as a Common Organizational Language

One of the greatest—and often overlooked—values of Asset Criticality Assessment lies in its communicative role. In many organizations, different departments use the same word “critical” to mean completely different things. For maintenance, a critical machine may be one that is difficult to repair. For production, it is the one whose failure disrupts the schedule. For quality, it is the one affecting product conformity. For HSE, it is the one associated with a high risk of accidents.

Asset Criticality Assessment integrates these perspectives into a single model. Through clearly defined criteria and scoring scales, it forces the organization to answer what “criticality” actually means in its specific context. As a result, decisions are no longer driven by emotions, urgency, or the persuasive power of individual departments, but by shared and agreed-upon principles.

Why Asset Criticality Assessment Is the Foundation of Optimization

Optimization without a criterion of importance leads to a paradox. The organization tries to do everything “better,” yet ultimately does nothing particularly well. Resources (people, time, and budget) are allocated randomly instead of being focused where they deliver the greatest impact.

In some organizations, this also results in decision paralysis, where any allocation decision can be challenged due to the lack of objective criteria. Asset Criticality Assessment reduces the influence of subjective opinions by replacing them with a structured and objective assessment.

Asset Criticality Assessment introduces a hierarchy of importance. It enables conscious differentiation in asset management approaches. For some assets, advanced preventive strategies, condition monitoring, and detailed risk analyses are justified. For others, reactive maintenance or simple experience-based prevention is sufficient.

This is precisely why Asset Criticality Assessment forms the foundation for:

PMO – Preventive Maintenance Optimisation,
rational CAPEX allocation,
prioritization of maintenance activities,
outsourcing and SLA decisions,
spare parts inventory management.

Without it, each of these decisions is made in isolation from the overall picture.

Why a Multi-Criteria Approach?

The temptation to simplify Asset Criticality Assessment to a single criterion (most commonly failure frequency or production impact) is very strong. Such an approach delivers quick results but leads to systemic decision-making errors (if it is accepted at all). A machine that rarely fails may still be critical from a safety or regulatory compliance perspective. Conversely, a frequently failing asset may have low business significance if redundancies or workarounds exist.

A multi-criteria approach makes it possible to capture the full operational context of assets. Criteria related to production, safety, quality, environment, cost, and reputation do not compete with one another, they complement each other. Only their combined consideration provides a picture that can be regarded as credible.

How to Use Asset Criticality Assessment in Practice

Asset Criticality Assessment is not an end in itself. Its value becomes apparent only when it starts influencing day-to-day decisions. One of its most common applications is the implementation of preventive maintenance. In organizations that are just beginning to build preventive programs, the key question is: where should we start? Asset Criticality Assessment allows the selection of assets for which planned maintenance delivers the greatest business and operational benefit.

The same applies to renewal and modernization projects. Combining criticality with technical condition assessments enables the creation of investment portfolios that are justified not only technically but also strategically. Management receives a clear explanation of why certain projects are prioritized while others can be deferred.

Another important area is spare parts management. The criticality of the asset in which a part is used is a key parameter when defining stock levels, purchasing strategies, or decisions related to refurbishment and regeneration. Without this criterion, the warehouse becomes a collection of historical, often accidental decisions.

Finally, Asset Criticality Assessment plays an important role in both short-term and long-term planning. It can influence work order prioritization, response times, and the scope and timing of planned shutdowns.

However, there is one essential condition for effective use: the organization must clearly define in which processes Asset Criticality Assessment will be applied. Without this, it remains an interesting but ultimately inert artifact. Therefore, when treating Asset Criticality Assessment as an implementation project, it should not be limited to assigning criticality scores to assets. The most important aspect is embedding Asset Criticality Assessment into procedures, processes, and decisions - in short, into everyday work.

Criticality Analysis - Part I: The foundation of rational decision-making in Asset Management