Asset management performs multiple important functions for all sorts of industries. You can use programs to monitor inventories, machines, hardware devices, critical equipment, and software. This helps with asset life cycle management, ensures licensing compliance, keeps maintenance history, and saves time and effort involved in auditing company assets (asset verification).
But strategic asset management is established to address asset management for long-term planning of your assets, maintenance and operations.
Playing the long game. … The Urban Dictionary says the long game is having a long term plan, long term goals, or doing things now that set you up for the future. Strategic asset management is a method that delivers robust, integrated long-term asset management and plans that powerfully demonstrate the outcomes of current decisions on tomorrow’s infrastructure and assets.
The application of an asset management system generally starts with the recording of data about the physical and digital assets of a company. This data is used for monitoring the location and maintenance of assets and making appropriate asset decisions. Let’s take a look at the various practical approaches in asset management.
Asset Tracking and Maintenance Challenges
Asset tracking is the process of tracking business assets to collect information that is important to the smooth running of your operations. The most common types of information; asset location, condition, and maintenance history are tracked to improve asset efficiency, reduce asset repair and replacement costs, increase productivity, and more. Why? because from various machine learning sources we know that:
- 40 per cent of maintenance costs are spent on low-impact assets
- 30 per cent of preventative maintenance is done too infrequently
- 45 per cent of maintenance efforts are ineffective
- 90 hours are wasted each month on searching for assets
Asset Visibility and Improving Operations
Improved visibility of assets and equipment will help you to monitor “what is where” when you have assets located in different locations and departments. You will get to know where the assets are located.
Effective planning of assets through different stages of an asset life cycle will ensure that the assets are properly maintained. In addition, it will help in monitoring the practical sufficiency of the current assets. Then management can know about excess assets. Also, they will know about outdated assets that require replacement.
Tagging critical assets with sensors can achieve huge savings as well as efficiencies in many areas. The application of IoT for asset tracking opens compelling opportunities to optimise equipment efficiency and life cycle management.
A simple example of this could be:
- A vehicle reporting its mileage to trigger a service via fleeting management
- Refrigeration sensors indicating out-of-range temperature readings
Your assets are critical to how well you can conduct your business. That is why it is essential to be able to track them, and in the process save millions of dollars, that can be put to better use than replacing assets.
Asset Management and a Culture of Responsibility
As asset management technology becomes more sophisticated, new challenges break the surface as well. Managing current and new regulations, increasing competition, the volatility of the global market, and shifting expectations have been identified as primary challenges of modern asset management teams and organisations.
Structure and rules
Organisations need structure, markets and enterprises need rules. As successful businesses grow, they often come to believe that new, complicated processes will undermine their culture. But systematisation need not lead to bureaucratisation, not if people understand what the rules are for and view them as legitimate.
Treat asset management and asset tracking as critical; this is central to a successful business strategy and builds a culture of responsibility.Organisational culture – six common imperatives | HBR
Better asset management can significantly reduce operating costs and deficits and accelerate a digital transformation program. Organisations need to consider asset tracking upfront when undergoing digital transformation.
Digital Transformation is the application of digital capabilities to processes, products, and assets to improve efficiency, enhance customer value, manage risk, and uncover new monetization opportunities.What does “Digital Transformation” mean?| CIO
Asset management guidelines
Make sure you have clear guidelines regarding missing assets; the U.S. Chamber of Commerce estimates that 75 per cent of all employees steal at least once and that half of these steal repeatedly. Potential global loss from fraud and employee theft is $2.9 trillion annually.
Employees should have clear guidelines on what to do when an asset goes missing and be encouraged to do the right thing even if it is considered taboo.
Employee theft is defined as any stealing, use or misuse of an employer’s assets without permission. The term “employer’s assets” is important because it implies that employee theft involves more than just cash. In many industries, there are much more important things than cash that employees can steal from a company.Why does employee theft matter?
Use the asset data from your asset system to make better decisions. A centralised system can provide so much more than just help you to find lost assets. Asset registers define which assets are critical and prioritise the assets that need to be more closely monitored and maintained.
There can be no doubt that the perceived importance of physical asset management has risen substantially. There can also be no doubt that this trend will continue as it has done over the past three decades.
Optimise your processes, customer experience and asset utilisation based on asset data for:
- Increased operational efficiency
- Increased productivity
- More efficient use of resources
- More efficient safety and compliance checks
- Automation maintenance alerts and repair operations
- Easy identification of growth opportunities
- Responsive smart ecosystem
With the use of asset management software, management will also have a more complete picture of the net cost of the assets. The asset management application brings all the required information in a single repository (asset register).
- Capture early-stage costs
- Document changes to assets
- Plan proper service and maintenance
- Capture the cost of disposal
- Determine profit or loss on the sale
Asset Management Life Cycle and Efficient Acquisition
With a good asset system, asset managers can estimate the options for the provision of assets as well as the funding for acquiring new assets. Effective planning of assets will help in delivering value for the organisation.
Apart from planning, an asset tracking solution also allows the efficient acquisition of assets. The decision-makers will be able to accurately define the cost requirements. They can use the information contained in the asset management system to make an informed purchase decision.
Once the asset is purchased, the system will help in tracking the maintenance requirements of the asset. This, in turn, will ensure the proper operation of the asset. Moreover, it will reduce the repair cost over the life of the asset.
Lastly, when the asset has reached its end of life, an asset management system can tell whether the sale on disposal will be reported as a profit or a loss. The asset management software will accurately calculate the gain or loss based on the purchase price and depreciated cost of the asset.
Benefits of asset life cycle management
- Better forecast of the asset purchase
- Informed purchase decisions
- Ensure timely maintenance
- Know the depreciated cost of the asset
Minimise asset loss by empowering employees with the right technologies and creating a culture of accountability and responsibility. This will reduce asset loss and help elevate the strategic importance of your asset management.
Proven experience delivering measurable asset management value to clients through innovative technology.
Consider a demonstration of the Hardcat V6 asset management solutions, using your own sample asset data, and get a feel for what can be optimised.
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