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Location and Asset Hierarchies 2.0

Mar 30, 2022 | Maximo Configuration, TRM Blog | 0 comments

Why do you need them, what are they used for, how should they be set up?

Is there a problem with my Location hierarchy?

When companies implement an EAM tool, like Maximo or Manage, they often struggle with the initial development of their location and asset hierarchies. Often the structure is fragmented, incomplete, and does not allow the maintenance crews to logically find or organize their assets. This prevents the company from collecting and rolling up cost, performance, and other business-essential information.


Where to begin developing my asset or location hierarchy?

Establishing the Location hierarchy is where asset management begins. The Location hierarchy serves as the structural relationship of physical and functional placeholders necessary to logically organize assets. It is the heart of implementing Asset Management Best Practices which is part of establishing the first tier of your journey to comprehensive Asset Management. It is also the backbone of standards such as ISO-55001, which calls out Asset Registry and Asset Organization as two foundational elements.

No two location hierarchies are the same. It is critical to develop a structure that meets the needs of the organization and implement asset and data management processes to support the ever-changing hierarchy. It should be given the energy necessary to get it right before you jump into any of the others.


What is the difference between asset and location hierarchies?

The word “hierarchy” is often used for both the Location Hierarchy and the Equipment (or asset) Hierarchy. It is important to understand that there are distinct differences. Both Locations and Assets play their part in effective asset management.

For modern asset management in Maximo or Manage, the term “asset hierarchy” should be used to describe the physical and functional parent-child relationship of nodes built within the Location application. Imagine a hierarchy that starts at the campus level, then to the buildings, their floors, the rooms on each floor, and perhaps areas in each room. It does not matter how many or few levels you have. The goal is to provide a clear picture of where your assets are located to those who must go find them each day.

The physical equipment becomes the mostly flat Asset Registry which is managed in the Assets application. Assets can have sub-assemblies (other Assets) but only go down two or three levels and not entirely from highest to lowest level to model the enterprise.


Why have asset and location hierarchies?

  • The main benefits for the development of a physical & functional based Location hierarchy are as follows:
  • To provide a clear indication as to where assets are located, especially for field teams executing work orders;
  • To facilitate organizing and grouping of nodes within a location – which could be used to represent geographic, functional, or plant/operating systems;
  • To provide the ability to track lifecycle costs for functional nodes where assets reside, also allowing costs to roll-up to any level in the structure;
  • To enable use of other technologies such as GIS/GPS, process functional modelling, BIM, which can use the hierarchy as their foundation;
  • To facilitate functional organization of systems, subsystems, and assemblies to simplify reporting, reliability/RCM analysis, and asset management methodology improvement;
  • To store key data points such as GL Account, Priority, and Failure Codes for the functional location. Assets may require different cost accounts or other information depending on where they fall within the function of a system or systems. Entering this static data once on the location record enables coding to work orders when assets in that location are applied to them, thus minimizing typing by the end-user and extra time required to change that data on assets when assets are moved to another operating system/location;
  • To enable companies to leverage EAM/Maximo rotating asset capabilities. Since a location is “fixed in space” within the hierarchy structure it will always have cost and work history tied to it. Since assets can be removed/returned with a new asset installed in its place, it is desirable to both maintain the integrity of all costs and history. This allows a functional location, for all assets that have ever been installed in it while allowing assets to carry their asset-specific costs and history with them to other locations. This concept is critical to assets which are ‘rotating,’ or ‘move around’ from one location/system to another location (repair location, storeroom, salvage, etc.).


Let TRM help you.

Implementing a well thought out and well-constructed location hierarchy (and asset registry) is the first and the most important step in building an effective asset management program. A well-designed location hierarchy helps all users to find, group, and track/report on systems and assets. The asset registry itself, structured into a functional location hierarchy, is the fundamental building block for asset management.

It is important to remember that the “end-game” is not the hierarchy itself. Business goals for improved asset reliability, worker safety, uptime and work force productivity are common desired states. If the location hierarchy and asset registry are not properly implemented (and then maintained), the benefits of using Maximo/Manage for effective Asset Management will most likely not be realized. Therefore, the location hierarchy is the first and most important step in the path.


Check out our Feature Friday video on Asset & Locations Hierarchies.


Article by John Q. Todd, Sr. Business Consultant at TRM. Reach out to us at if you have any questions or would like to discuss deploying MAS 8 or Maximo AAM for condition based maintenance / monitoring.




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