The economic and financial developments of recent years alert us that what we have been doing in the past will not be satisfactory to deal with challenges in the future. Realistic, advanced methods for value-based asset management of physical assets have increased in sophistication over the past several years.
Value-based asset management is about ensuring the highest level of value creation from your assets and equipment. Value creation takes place over the entire lifecycle of the assets, and value is optimised through the coherent management of costs, risks and performance.
Effective asset management will add value to your company at a time when resources are under growing pressure. You understand your objective is to be profitable, otherwise, you will not survive. However, what many do not understand is the big picture. Because more important than profitability is to create long-term business value.
Organisations across many sectors face the challenge of maximising value out of their assets, so an integrated approach is vital for success. With better use of data on physical assets, companies can cut the lifetime cost of assets.
Understanding the impact and value of enterprise asset management
Having a strong asset management system is as important as ever. It continues to be essential to building a robust asset management strategy amidst the current business climate. Investing in long-term efforts rather than over-prioritising short-term performance goals is the smarter investment. In addition, sub-optimal asset data and deteriorating information over time impact the ability to make informed decisions and extract the maximum value from your assets.
Most Common Business Challenges
- Delays in locating assets lead to loss in productivity
- Cost to hire or replace assets (when you can’t find your own)
- Cost, time taken and the high potential for errors when conducting manual stocktakes/inventory verification/asset audit
- Managing existing and new compliance regulations
What is the Total Cost of Asset Ownership?
The Total Cost of Ownership (TCO) is an analysis meant to uncover all the lifetime costs that follow from owning certain kinds of assets. As a result, TCO is sometimes called life-cycle cost analysis.
Asset ownership brings purchase costs, installing, deploying, using, upgrading, and maintaining. These after-purchase costs can be substantial. Consequently, for many kinds of assets, TCO analysis finds a significant difference between the purchase price and total life-cycle costs. And, the difference can be vast when ownership covers an extended timespan.
The total cost of ownership is centre stage when leaders face purchase decisions for large IT systems, vehicles, buildings, laboratory equipment, medical equipment, factory machines, and private aircraft, for instance. So, considering TCO instead of the purchase price when making purchase decisions is vital.
Changing the Traditional Asset Management Culture
Changing the traditional asset management culture from controlling assets to value-based asset management improves asset utilisation so that you can make corresponding reductions to capital and the cost of managing the company’s resources.
Focus on a single asset management system, accessible via web and mobile apps, to reduce the number of record systems being managed. Which will eliminate duplication and overlap in data entry, record keeping and IT costs, providing more consistent information to users and customers.
Alliances between business units to standardise the asset management database and functionality can achieve economies of scale. While implementing an asset re-utilisation program between business units will reduce spending.
Cost Savings at an Organisational Level
Getting Asset Management Right
Improved decision-making and cost savings will produce value to an organisation and its stakeholders. Having an alignment of asset management functions enables an organisation’s financial and non-financial functional areas to share information. And collaborate to achieve the objectives of the organisation.
Understanding the opportunities arising from using an end-to-end approach to asset management, together with an integrated and cross-functional approach, will enable organisations to create growth opportunities and additional value from their assets.
Optimising asset management
Hardcat understands that efficiency is a key measure of success and we’d love to help you with:
- Providing a better understanding of key opportunities to maximise value for asset-intensive owners and managers.
- Outline potential factors and opportunities for increasing productivity and savings.
- Highlight how value can be created from managing assets in an effective and integrated manner across functions and activities.
Knowing where your assets are is just the first part of the job. Hardcat offers a complete solution to help you tag, track, audit, maintain and add value. Manage your assets, tools and equipment in a way that gives you complete control. We know that certainty matters. That’s why our asset management system provides full and instant visibility, so you’re never in any doubt.
Hardcat solutions will supply you with everything you need to optimise your business processes.
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