Operational Performance and Physical Asset Management
Operational performance and physical asset management go hand in hand as any shortcomings with either discipline will lead to reduced performance and under-performing assets, with high life cycle costs. This has a negative influence on the financial performance and returns on capital investment.
Generally speaking, physical asset management is the tracking of business resources (used to create value for the organisation), along with the monitoring of regular maintenance, so you can keep using your existing assets for longer. Activities facilitated by physical asset management include:
- End-of-life disposition
What Is Physical Asset Management?
Physical asset management is all about the preservation of a company’s assets throughout its life cycle. Essentially anything that provides value to your business and is important to the functioning of the business.
Businesses all over the world are finding themselves in difficult and unfamiliar terrain, facing resource constraints and supply chain issues. So, it makes sense to get the most out of your existing assets and parts inventory – who knows when you can get replacements.
Physical asset management has recently been considered one of the most important sources of competitive advantage. The relationship between asset management practices and organisational performance is an important issue, as researchers have argued that the ultimate goal of asset management is to realize the value of an organisation’s assets.An Analysis of Physical Asset Management Core Practices and Their Influence on Operational Performance
How Can An Asset Management System Help?
Asset management systems perform multiple functions and are a process to manage assets across an organisation. Assets can be tangible or intangible and can include people, infrastructure, software and hardware, inventory and stock, machinery, and equipment.
This system also helps in asset life cycle management (the process of optimising the profit generated by your assets throughout their life cycle) and efficient resource planning (overseeing assets at all stages from purchase to disposal). Asset data is used to make appropriate asset management decisions.
Implementing an asset management system helps organisations to improve financial performance, decision-making processes, risk management, services and results, social responsibility, as well as reputation and organisational sustainability.Impact of ISO 55000 on organisational performance: evidence from certified UAE firms: Total Quality Management & Business Excellence: Vol 32, No 1-2
Core Themes Of Asset Management And Operational Performance
The focus has shifted from mere maintenance management, toward the total cost of ownership and optimum life cycle cost. Because ineffective and under-performing assets with high life cycle costs, have a negative influence on the financial performance and return on capital investment.
The core themes of asset management are to:
- To support the achievement of business needs, asset management must integrate technical and financial decision-making processes
- Asset management requires auditable and transparent decision making
- Decision-making is fact-based, where alternative solutions are evaluated using risk-based methodologies
- Asset management requires the development of a supporting leadership style and organisational culture
How Can Organisations Save Time And Money?
Organisations save time and money by knowing exactly where their assets and spares are located, whether repairs are required, their licencing status, and end-of-life disposition of the asset, by having a top-down, bottom-up, 360-degree picture of their assets and equipment.
- Maintain assets at the lowest cost
- Adhere to continuous improvement
- Opportunity to plan against financial, operational, and legal risk
- Define lean service levels
- Create a more efficient operation with the ability to track performance
- The utilisation of space (buildings/facilities)
- Total cost to run assets
- Measure and monitor life cycle costs
- Promote the economic stability and growth of your company
Challenges Establishing An Asset Management System
Challenges have been identified with establishing an asset management system and some of these are outlined below:
Asset Data Accuracy
A lot of companies have found their current asset data to be incomplete or out of date.
Inadequate Asset Strategy
While some companies have no strategy, what other businesses have is inadequate for compliance.
Where does responsibility for assets lie since it could be in several different areas and departments?
Difficulty And Expense Of Compliance
The differential could be giant between what your current asset management system is, and what it must be, your department could have depleted resources to manage the gap.
Create Certainty And Reduce Knowledge Gaps
To assist with these challenges, businesses implement a comprehensive asset management system to prevent knowledge gaps that often exist between departments, with a centralised “single source of truth” asset register. This ensures all departments access the same up to date information and maintain a trail of the service history for audit verification and regulatory compliance.
Asset management software that is accessible via the web and mobile devices (with data security controls) breaks down the silos, allowing you to focus on where policies and procedures align with business objectives and asset maintenance goals.
When asset and incident data is provided to operators, maintenance teams and executives, you have a transparent decision-making process that creates trust across the organisation.
Comprehensive asset management software should:
- Increase operational efficiency, which is a goal for most organisations to maximise ROI while keeping in line with budgets.
- Easily control asset movement and monitor utilisation to optimise your resources.
- Improve accountability by maintaining transparency throughout daily operations across locations.
- Maintain ownership trails to account for daily usage. This makes it easier to investigate cases of missing equipment and asset misuse.
- Streamlined location management when multiple locations need to be supervised.
By investing in the right asset management software, you can effectively monitor assets at various locations, ensuring a proper channel of authorisation with the least amount of potential for errors.
In-Depth Visibility Into Every Asset
As organisations become ever larger and more interconnected, they have also become reliant on technology. So it is, therefore, more critical than ever to keep track of those resources. When everyone is connected, it’s important to track exactly who has access to your asset data.
Asset management is largely a data-driven process as one of the key elements of asset management is using data to support decisions.
Such data is key to maintaining physical assets in a state of good repair and addressing safety issues. Simple tasks such as capture, curation, storage, search, sharing, and analysis are challenging as our ability to collect data expands. Ideally “better” data will be understandable, transparent, interoperable, automated, and visual.Opportunities and Challenges in Asset Management
Multi-industry case studies clearly show significant reductions in running expenses by:
- Reducing the potential for unnecessary asset purchases through accurate and accessible information
- What assets already exist and their current levels of utilisation and depreciation
- Improve the utilisation of assets by tracking their usage
- Assists in the planning process by contributing up-to-date information on assets
- Helps to reduce the likelihood of fraud occurring by tracking assets
- Conducting regular audits to ensure asset data accuracy
- Ensures the maintenance requirements outlined in each asset’s warranty are tracked and complied with
Asset management software captures all of this information and provides reports that the company can utilise to enhance asset use. A well-implemented asset management software system provides your business with in-depth visibility into every asset inside its environment to help:
- Lower maintenance expenses
- Dispose of old assets
- Guide new IT equipment acquisitions
- Increase software licence usage
- Protect against security threats
- Make the business more audit-ready and compliant
How Can Hardcat Help?
Hardcat asset management software is jam-packed with all of the capabilities and functionality you need to help your organisation save time and money.
Hardcat software solutions are considered the best solution for overall asset management because of the mature technology and ease of use, providing an opportunity to plan against financial, operational and legal risk.
|Requirement||Outcome using Hardcat|
|Consolidated view of all assets across your company||Better decision making and governance|
|Reduce redundant purchases||Cost savings|
|Locate unused equipment across your site||Better utilisation|
|Common system to be used across the business||Save time training/ease of change management and standardisation|
|Ease of onboarding for new sites||A common backbone and simple user interface will improve user observance and streamline processes|
|Common standards for assets across the business||Provides governance and control to meet organisational asset management strategies and best practice|
|Increase purchasing power||Buying for the group instead of site by site provides substantial cost savings|
|Clean integration into ERP System||Supplementing not substituting provides major savings|
To Sum Up
Hardcat solutions encompass the identification and management of risks that arise from the utilisation and ownership of assets. Provides you with the certainty and the critical insights you need to optimise and maintain your critical assets, mitigate the risk of failure, and ensure that you have governance, compliance, health, and safety covered. Give your team what they need to quickly and accurately manage faults and service issues, with the most efficient mobile tools possible.
Also read: Enterprise asset management software continues to be essential to build a robust asset management strategy. Amidst the current business climate, investing in long term efforts rather than over-prioritising short-term goals is the smarter option.Strategic asset management
- Highly configurable dashboards
- Robust and easy-to-use feature-rich mobile app
- Workflows and processes can be customised
- Straightforward and easy-to-follow navigation
- Feature-rich toolset with mature technology
- Change management and license management
- Work orders and jobs management
- Manage assets at multiple locations and assets moving between locations
- Notification system is easy to set up, and it quickly notifies users of any problems
- Inventory/stock/parts and asset management under one platform
- Mobile apps for scanning and creating assets on the go, which is completely integrated with our web application
- Managed I.T. assets do not have to be networked
- On-premises or cloud-hosted options
- Extensive reporting both pre-formatted and ad-hoc
- Solid technical support
Maximise Operational Efficiencies
with Hardcat Solutions
Call +61 3 9695 5400