The success of every business or individual depends on how well you manage the assets to gain more returns on the money you spend outsourcing them. This process can sometimes be complex, especially if you have large-scale operations with many items to track.
Therefore, you must rely on the best strategies and practices, ensuring you manage everything effortlessly without incurring more costs or losing track of anything.
Effective asset management practices are likely to contribute 60% to your business success, especially if your operations depend more on the equipment and machinery you have. Thus, your main goals should be ensuring they work optimally to meet all your business or individual needs.
Laxity in asset management could be catastrophic for your business, leading to delayed production and dissatisfied customers. This is why some companies prefer to outsource or rely on expert managers to help with such critical tasks.
However, if you plan to do everything alone and with your in-house team, here are some strategies to manage everything without breaking a sweat.
1. Rely On Enterprise Asset Management Software
You must maintain a keen eye on all your equipment and machinery. This is critical to ensure you do not lose any items, especially the less critical ones. Secondly, acquiring assets, however cheap they are, can be expensive, so you must secure and utilize them effectively until you have maximized the ROI.
However, monitoring extensive inventories can be cumbersome. You either need a good inventory manager or a good system that keeps track of everything trivial and essential. Labor can be expensive, and you need more people to manage large inventories.
That said, having the best enterprise asset management software can help you manage all the inventory, including those away from the stores and warehouses.
The software has various features and performance capabilities to help you keep track of every asset’s life cycle. As such, you know when to replace a component or discard the entire asset to avoid depreciation expenses. It is also critical to ensure you maximize production and returns per asset. This is achieved by features like maintenance and scheduling automation, which can inform you when the asset is due for repairs.
Furthermore, these software are not only dedicated to asset management alone. They are also an essential part of your operations. As you use the machines, the system monitors your task and can automate the workflow, ensuring you use the equipment effectively.
2. Asset Prioritization Practices
Prioritizing how to use the assets and which ones you need can significantly shape your business goals. For example, in an e-commerce business, you should prioritize the delivery system over warehouse automation. Otherwise, an automated warehouse with a slow delivery system to customers would lead to customer dissatisfaction and losses.
During purchase, compare all the options available and choose one best suited for your needs. This will help you avoid the industry mentality of buying the most recommended or bought assets even when they are unsuitable for your needs. So, the first goal should be to define your needs, prioritize everything you want, and then buy based on these guidelines. Ideally, anything that does not fit your priorities is unnecessary.
3. Timely Maintenance Is Key to Resource Utilization
The only time you should dispose of an asset is when the cost of operation outweighs the benefits you get from it. Even so, you must consider options like repairs to see if it can boost its productivity benefits.
So, you should always keep a system that reminds you when to maintain all the equipment to ensure it does not fall into disrepair and become too expensive to fix. This routine will help you minimize the expenses associated with overhauls or frequent replacements.
Secondly, the only time to get rid of an asset is when attention or competition is more beneficial, and you could gain more with a newer option. Otherwise, it does not hurt to operate old and well-maintained equipment that works effectively, just like the new ones. In such instances, you can also order the cost of upgrades to save you from buying a new one.
4. Monitor Asset Lifecycle
Everything you use in your production undergoes stages of higher production to low production and eventually becomes unnecessary. This cycle is often fixed; however, if carefully monitored, you can extend the cycle. So, it is good for you to monitor the asset right from the time of introduction when production is higher through the mid-stage and, eventually, its death.
Various practices should be optimized at every stage to extend the asset value. For example, at the introduction stages, you can use it for more production needs like 24-hour operations to boost your outcome. After a few years, like 3 or 4, you should optimize repairs and upgrades to keep up with its output levels. Then, as it ages and approaches the end of its lifeline, you can sell it or scale down and use it as a backup.
5. Attach KPIs To Every Equipment
Before enforcing KPI standards, you must determine why you need the equipment and how much it contributes to your overall operations. Every equipment should have KPIs based on its function, status, and contributions to the business. The goal of having these indicators is to ensure you always keep an eye on everything.
The outcome can help you know which equipment is most suitable for you and which is not performing. This can signal a problem or the need for upgrades. A good KPI should be system-based and generate instant reports and notifications.
So, you need to add the indicators to your production systems. You get an instant notification whenever the equipment underperforms, like taking too long to complete a task. Finally, the other reason to automate these KPIs is to ensure you do a comparative analysis.
Final Thoughts
Managing all your assets is more like an art; you need maximum attention and focus on the details. Luckily, you can always rely on the EAM system to help perfect the art, ensuring you have an eye on everything. You also need to prioritize the assets to avoid a large inventory of unnecessary items that will be costly.
To ensure every asset performs as you want, you should monitor their lifecycle and apply the relevant practices to deliver the desired results.
