To handle complexity in a modern reconfigurable production system from a strategic and tactical planning perspective as well as to enable operational decision making a skill-based asset management system is introduced. It provides a novel approach of managing assets in the context of the asset lifecycle based on their provided skills. It aims at the vertical integration of higher level management systems with production execution level systems of small and medium sized manufacturing enterprises, using a common skill-based abstraction. Thus the skill-based asset management system can effectively provide digital factory functionality to companies while integrating into their existing IT systems.