The Major Challenges (And Solutions) Of Asset Management

Asset management is a broad term that refers to a variety of field that focuses on management of a company’s assets such as:

• Inventory.
• Personnel.
• Materials.
• Equipment.
• Real estate. 

This process is also called asset management and asset planning. Asset management is also known as property management, logistics management, asset control, supply chain management, asset procurement, and logistics. In any business that has many assets, it is crucial. 

Poor Inventory Management

Inventory management is abstract to most people. It is the science of keeping track of the quantity, variety, condition, location, and other details of a business’s inventory. An effective inventory management system is essential for profitability, service and product quality, and inventory control in today’s workplace. Inventory management is the process of being aware of your inventory and making adjustments to it as necessary. However, it can also mean a list of vital equipment used in your business. Proper checks must be taken for these companies as some equipment can range from hundreds of dollars to hundreds of thousands of dollars. 

Solution

Choosing the proper method for managing inventory can be difficult, as it can involve many factors beyond just the number of equipment in your stock, such as where they are located at all times. To track and trace your machinery, you need specific asset trackers that can stay with each item as it moves around. This way, you will be better positioned to see what it is being used for, and you can ensure that your expensive investment is being used correctly. Nevertheless, traditional versions of these devices are battery-powered. If the crew operating the machine forgets to charge or change the batteries, it will leave you with a useless brick. That is where a solar asset tracker comes in. It provides the same utility as conventional trackers, except you don’t need to worry about it running out of power. Solar power is a fantastic option to keep them recharged because they tend to use much power. For example, better products will also provide vehicle telemetry and real-time location data based on GPS. These actions consume much energy, so having a set and forget is a massive benefit for any business using expensive vehicles.

Asset Downtime

Asset Downtime is a term used to describe a situation in which machines or people have their assets down. Asset downtime can be as simple as a machine not doing its job or could mean a company must cease operations. This could be disastrous for a company that runs on a moment’s notice, and as such, maintaining equipment so that it can run as and when it is needed is vital. Nevertheless, many businesses might be unaware of when their investments are down or immobile, and anything that isn’t working is costing money. Therefore to run efficiently, a company should monitor when an asset needs maintenance to get it back up and running again.

Solution

This problem can be solved in several ways, the majority of which involve keeping up-to-date records.

Keep a Centralized Database

Being able to see what repairs were made is vital for employees to keep equipment running smoothly efficiently. If they are unaware of what has been fixed or replaced, they will not correctly diagnose the problem.

Improve Communication

Similar to having a centralized log of repairs, your employees should also be able to communicate with one another so that they can get to the bottom of an issue far quicker.

Achieve Greater Accountability 

In other words, your employees must know who is responsible for what. Seeing as it is often expensive assets that are on the line, it is essential to delegate responsibility to specific team members to make decisions on the fly.

Replace or Repair?

This is the age-old question, do you replace or repair an asset that is no longer functioning efficiently. It might sound like an obvious choice, but things are more nuanced, as with anything that involves lots of money. For example, it might seem like a good idea to merely repair an old vehicle because it is cheaper than buying a new one. However, you need to make a cost-to-benefit decision because if machinery is constantly breaking down, it won’t only cost you spare parts but also labor and lost time and productivity.

Solution

A simple solution to this problem is not possible, so the person in charge will need to analyze which is the most cost-effective solution.

Summary

Asset management has taken on a heightened relevance as firms need to pay more attention to managing their assets. It is not feasible to ignore the most valuable parts of the business, i.e., the things that keep the company running. Therefore managers must begin to look for new solutions to keep their investments safe.