JuliaAn asset is anything that has value and brings returns to a business. They include the value of buildings, land, machinery, and other capital assets. Assets include intangible things like patents and trademarks, typically held onto by a business to keep them from being copied. To maximize returns from assets, companies must be proactive in keeping them up-to-date and in good working order.
Asset management ensures that assets are adequately maintained and worked well. It optimizes an asset’s resources, maximizes its value, and promotes efficiency in its use. To manage assets effectively, businesses need to follow some basic rules. Here we will discuss five asset management mistakes and some tips on how to avoid them.
1. Ignoring Network Asset Life Cycles
Network equipment like switches and routers creates traffic flow and is set up to communicate internally and externally. The network can substantially negatively impact productivity if it is not appropriately maintained. Network equipment has a predictable life cycle with specific phases of its use. As time passes, these assets become obsolete as more efficient ways of connecting people become available. To keep up with these changes and ensure a smooth transition from old to new technology, businesses need to be proactive in updating their digital networks.
CMMS software provides businesses with real-time status updates on individual network assets. It also allows network administrators to maintain a database of their assets, use, and planned replacement dates. This data can be integrated with other software so that businesses can arrange for replacements or repairs. Digital asset systems can be customized to a business’s unique needs and include information on expected life cycles, planned replacements, and other data vital to an asset’s health and continued operation. A CMMS demo online can show you how to monitor your networks and keep them up-to-date.
2. Relying Completely on Audits
Audits are an excellent way to get a handle on existing asset conditions. They can provide an overview of what is working and what is not and give customers an idea of where their money will go regarding repairs and upkeep activities. Audits can be done manually or with the help of software that has been customized for a specific industry. Without ongoing monitoring, the data they generate may just sit on a shelf, gathering dust.
Many CMMS systems are highly customizable. They can include workflow management, preventive maintenance schedules, and usage reports. These features can be combined with the ability to generate regular reports automatically. This data can be entered into a database to be tracked over time and compared with other readings to ensure things are running smoothly.
3. Improper Budgetary Management
A budget is a business plan that defines the allocation of resources. It includes anticipated income and expenses for the following forecasted period. If budgets are not properly managed, some assumptions could be wrong. Unexpected expenses could arise. Without proper budgeting, businesses can fall prey to unforeseen costs and risk failing to meet objectives. Constraints on an available budget could also limit investment opportunities.
Budgeting needs to be viewed as an ongoing process. Budgets need to be created for different time frames and should also consider cash flow needs and changes in company growth. They also need to take into consideration the risk associated with managing investments. Categorizing most assets helps make budgeting a simpler task. Businesses also need to set aside funds for replacements and repairs and ensure they have enough to survive periods of hardship.
4. Lack of Inventory
Inventory includes inputs like raw materials, components, parts, and finished products used to create products or services. A business needs to have enough inventory on hand to meet demand during periods of peak usage. Too much stock can lead to storage costs and potential damage to certain parts if left on the shelf for too long. Too little inventory can lead to lost sales, production delays, and the inability to meet customer demands.
Managers must keep track of inventory levels and ensure they meet customer demands. Accounting software can make this process easier. It can be integrated with other business management systems, including purchases, production, and other systems. This way, the software can give managers a complete picture of inventory levels and the associated financial risks. The software can also recommend the best ways to keep inventory levels up to date and improve their utilization.
Conclusion
Asset management contains many processes and activities vital to an asset’s health and operation. The cost of not maintaining your assets properly can be very high. Examine your current management process and look at ways it could be improved. Take advantage of technology to keep regular tabs on your assets. This can help you react quickly to changes that need to be made on your part.
Josephine William
Julia
