6 Ways to Optimize Your Asset Management Process

Sharing is caring!

Asset and inventory management processes add unique value to an operation by creating a reliable framework for the tracking of individual consumables, industrial equipment, and other important property. Assets are defined as the equipment that is used to run your business, while inventory consists of the finished goods or parts used during manufacturing. In this post, we’ll focus on asset management and discuss 5 ways that you can improve your existing management practices.

Data provided from Accelix estimates that the average organization may spend up to 80% of their maintenance time performing reactive work as the result of an issue or performance disruption. One crucial lesson in effective asset management is the creation of proactive practices that can reduce the likelihood of production issues and increase the return on investment (ROI) for your capital equipment. Optimizing an asset management process takes time and the commitment of several departments. Adopting the best practices identified in this post can add strength to your asset management efforts and help you drive sustained improvements for your business.

1. Establish a Dedicated Asset Management Team

Management team discussing asset management data

An asset management process is much easier to optimize when resources are dedicated to completing the work. For smaller companies, this can mean assigning an asset management project owner, while larger organizations may create a team of several members. The most important point is to have a clear owner who can track progress and be accountable for results. It’s also advisable to choose team members with the right skill set who are familiar with asset management best practices. Appointing a dedicated person or team also makes it easier to track the progress of optimization efforts.

2. Conduct Regular Asset Reviews

Another important task for inventory and asset management is verifying on-hand quantities periodically. Your entire asset management program relies on the accuracy of the inventory data captured in your database. Each company must choose a schedule that works best to meet regulatory and operational needs. Periodic reviews of inventory help to optimize your asset management process by identifying missing or underutilized assets. You can also use this time to conduct a financial review for asset budgeting, taxes, or insurance. This can be especially important for understanding capital depreciation estimates and finalizing future financial plans.

3. Track the Entire Asset Lifecycle

Person entering asset management data in a facility

Asset lifecycle management should cover each of the major steps involved in the process. This includes planning, purchasing, deployment, management, and disposition. It’s necessary to define each of these steps because unique considerations should be made at each phase of the asset implementation process. This can include differing maintenance practices, budgets, and work allocations based on the age and state of each piece of equipment. With all asset lifecycle process steps defined, it’s possible to optimize routine tasks and find other ways to streamline your approach.

The best way to ensure accurate data collection throughout the lifecycle of your assets is to tag each asset with a durable barcode label or asset tag with a unique identification number. Coupled with handheld barcode scanners, asset tags and barcode labels enable staff to quickly scan an asset to document maintenance, repairs, use, transfer, or other activities that can impact performance. By eliminating manual documentation, you can ensure more accurate and complete asset data to optimize your assets throughout their lifecycle. Choosing durable asset tags such as Metalphoto® foil labels and rigid Metalphoto asset tags that will remain readable throughout the lifespan of your assets avoids costly re-labeling and readability issues that can reduce the accuracy of documentation.

4. Invest in Automated Systems

Today’s modern asset management software platforms are capable of a high level of automation. These improvements will certainly require time and effort to implement but can often yield excellent results for optimization. Various automation technologies are available including artificial intelligence (AI), Internet-of-Things (IoT) devices, and machine learning. All these tools can be used to reduce the complexity of routine tasks and generate greater insights through advanced data manipulation. Optimizing maintenance, contract, and billing processes can lead to time and cost savings across several departments.

5. Improve Maintenance Planning

Asset management would be impossible without regular maintenance activities to keep equipment running properly. In addition to reactive maintenance, companies can also adopt preventive and predictive maintenance techniques. Each asset will likely have unique maintenance requirements and it is beneficial to develop the expertise needed to balance all of these approaches in an optimal way. Creating a capable maintenance team and adopting effective techniques will help you maximize the performance of your assets.

6. Streamline KPI and Financial Reporting

Financial planning is a fundamental part of asset management and can be used to prepare budgets, cost analyses, and reports. Maintenance expenses can represent some of the largest costs allocated for the upkeep of industrial assets and they must be well understood. In addition, deprecation estimates can be influenced based on the expected remaining lifetime of each asset. A strong financial reporting framework allows a company to compare cost and revenue projections with key performance indicators to determine if allocated asset management funds are helping to improve profitability.

Several industry trends will influence asset management practices far into the future. With modern asset management platforms and automation technologies, companies have an opportunity to optimize most of the important process steps. Understanding future demands and local asset management needs will allow you to develop a strong program for your operation that can add significant value to your corporate priorities.