Why it’s important to manage your assets

In today’s increasingly competitive global economy, and with the rising cost of materials, energy and transportation, it has become more important than ever to ensure you’re managing your assets efficiently.

So what is asset management?

All businesses have a range of assets from highly fixed assets, such as plant equipment or buildings, to liquid assets such as stock. In order to maximise value and return, it is important to manage these assets, and the human resource responsible for maintaining them, as efficiently and effectively as possible. Ineffective asset management leads to wasted resources and more rapid depreciation.Ultimately, failure to maintain accurate asset information can have a negative impact on finances, everything from the cost of unnecessary replacements to insurance premiums. According to BASDA, in many businesses “less than 40% of assets on the register are easily identified during a physical audit, with an estimated 20% no longer in existence.”

It is therefore well worth considering investment in specialist asset management software that is functionally rich, and encompasses all aspects of the asset cycle, from asset management and purchasing to work order management and stock and materials management.

Here are our top ten reasons to consider a dedicated system:

1)      Government regulations and cost savings

As businesses are increasingly subject to scrutiny, why risk the accuracy of your data by relying on disparate spreadsheets and outdated legacy systems?  In addition, the cost savings associated with reducing administration expenditure and increasing data quality can be considerable.  Integrating a dedicated asset management solution with existing business systems means you’ll have one source of truth and increased confidence in your information, allowing employees to proactively add value to your organisation rather than getting tied down by complex systems.

2)      Improved security and auditing

A specialist system will record every detail of your assets, maintenance received and individual actions – right down to whether health and safety procedures have been adhered to. Different levels of permission can be granted to individuals and every detail of an individual asset is recorded to maximise efficiency.

3)      Managing aging assets

Depreciation plays a major role in asset management and the more complicated a system, or series of systems is, the more likely figures will be subject to human error. Incorrect data will not only ensure calculations go awry, but depreciation values could be severely inaccurate.  The ability to keep aging assets running is essential to the performance of many organisations, and there are a number of factors that may influence how often assets are maintained and/or replaced.  If a particular asset is not performing as well as expected the planned maintenance schedules may need to be adjusted to keep it online for longer.  Imagine if your organisation had this information readily at hand and could easily identify that current maintenance efforts weren’t sufficient, or you had the ability to undertake a quick analysis to determine the cost of increasing maintenance effort versus replacing an asset.

4)      Be intelligent about reporting
As a busy month end approaches, wouldn’t it be nice to have the ability to quickly extract and organise data in a useful fashion? A specialised asset management system can integrate with your finance system and produce standard reports and useful analytics. You can also set up alerts and escalations and utilise industry specific functionality to extract knowledge as to why some assets are performing better than others.  Such analysis could change the way you look at asset maintenance, and if you imagine all this functionality available anywhere in the world, on any device, you’ll begin to realise the power of a true asset management solution.

5)      Automation = productivity and accuracy

Asset management systems come with features to reduce input errors and automate the entire process – saving you time and money and ensuring maintenance is always performed when required to maximise the life of assets.  Access is available across multiple departments, which streamlines the process and increases communication and transparency. Systems also feature escalation and alerting procedures, which inform someone automatically when a critical asset is in danger, or a high priority job has not yet been addressed.  Such automation could prevent a complete system outage and ensures a quick reaction to productivity related issues. 

6)      We are family

The ability to link ‘parent’ and ‘child’ assets is crucial in order to accurately track and measure relationships between assets, many of which depend on each other to function. Without a specialised system, it can be difficult to manage this process.

7)      I’m sure it’s still under warranty…

When managing a multitude of assets it can be difficult to keep track of when warranties are due to expire.  Managing this process electronically via a dedicated asset management solution will keep you informed before expensive breakdowns cost you money once warranties have lapsed.  You could increase warranty cost recovery by 50%, and the return on investment associated with this one benefit alone can sometimes justify the initial cost of a solution.

8)      Employees are your biggest asset

Whilst speed of response and cost saving is important in the management of assets, corners can never be cut on safety!  A useful solution should associate safety information with particular locations and assets, thereby informing workers when certain hazards exist, or what precautions to take when working in particular environments. This means every time work is raised in those places workers are informed of the hazards and the tools to utilise. Ultimately there’s more at stake than the downtime of your assets.

9)      Going global

In the face of global expansion, assets are increasingly located all around the world, so it is important for your asset management system to be able to share information across borders, whilst ensuring compliance with local policies.

10)   Time to take stock

Optimising your warehousing can be as simple as giving employees a solution to see real-time stock levels, and a tailored solution can automatically set economic order quantities. It can even reduce your administration costs by releasing purchase requests automatically, and thus allowing your organisation to keep optimum levels of stock on the shelves whilst reducing the costs to procure them.  

Ultimately assets are always ageing and budgets are tightening; so businesses need to make every effort to improve their procedures and the bottom line. There are a number of dedicated asset management solutions on the market designed to improve performance and help businesses make better decisions, so be sure to do your homework and select the system that best suits your industry needs.

Check out our funky new animated EAM videos, or visit Sapphire System's website for more details.