Poor asset management means unscheduled downtime, leading to unexpected costs that chip away at the overall bottom line.
Because there are many different reasons for asset management problems, it’s a challenge to come up with the right combination of solutions.
But it is possible.
Before looking for asset management solutions, it’s important to first establish their relative value. Are the consequences of poor asset management serious enough to warrant the investments you need to make to address them?
Even if the solutions are possible, are they both practical and profitable?
Consequences of poor asset management
Your organization invested in assets to generate value. When your assets and equipment fail, you’re not seeing that projected return.
There’s a clear line between assets failing and your organization losing money. Imagine a press on the production line stops working.
You’re now paying for:
- Maintenance techs to work on it
- Idle operators to stand around and watch them
- Rush deliveries of parts and materials
- Overtime shifts to make up for lost production
That’s just in the short term. Long term, you can incur additional losses. When production issues mean you fail to meet contractual obligations, you lose out on future orders. If, worst-case scenario, someone was hurt when the pump failed, you face future civil litigation, loss of reputation, and likely large OSHA fines.
Considering even a short list of the potential short- and long-term consequences, it clearly pays to invest in systems and software that help you keep your assets up and running.
But before you choose the right fixes, you need to see the sources of your potential problems.
Examples of asset management problems
Unfortunately, there are many factors that contribute to poor asset management, from not knowing what’s in stock to lacking an optimized management system. Here are some of the more common issues and how to fix them.
Inaccurate MRO inventory counts
Busy organizations struggle with knowing both what assets they own and the parts and materials they have in stock. It’s a lot of work to capture accurate inventory counts, and because of the time commitment, maintenance teams often push the project down the schedule to focus on putting out small daily fires.
The problem is that the time they save by delaying the project is quickly eaten up by compounding inefficiencies. Instead of being able to maintain and repair assets properly, the team often wastes time waiting for rush deliveries.
Solution: automated asset lists and inventory control
The solution is to import all your assets and parts data into one database. Centralizing asset management gives you a single source of truth on everything you own, so you know both what you have and what you have in stock to keep it running.
To maximize your centralization initiative, start by creating lists of all your business assets and inventory. Then create a well-thought-out hierarchical structure, assigning each asset and part a place inside the structure.
Think about the main categories and subcategories. For example, vehicle categories could include flatbed trucks, pickup trucks, and forklifts. An HVAC category may include a furnace, fan, ventilation, rooftop AC, or swamp cooler.
Add the equipment type, such as engine, generator, pump, or air conditioning unit. Finally, include details like locations, including country, state, site, building, floor, room, and department.
Having a centralized system goes a long way toward minimizing errors or disruptions. Once completed, you’ll be able to view all your asset data in one place while further building out and fine-tuning your data.
Nonstandard naming for assets
When your assets go by multiple names, it increases the challenges of effective parts management. For example, there is a big difference between “vehicle,” “truck,” and “forklift.”
If your data entry is not consistent across the board, you miss business opportunities, waste money, and create incomplete reports. As a result, you may not have the parts or assets you need when you need them, or you may have too many parts taking space on your shelf and in your budget. Over time, there’s a widening gap between your business decisions and the reality of your assets.
Solution: standardized naming conventions
An asset naming convention defines how you refer to your assets and inventory parts inside your system. By removing ambiguity, you improve communication, tracking, and decision-making.
Create a consistent part naming structure, starting with the basics, including the make, manufacturer, model, and serial numbers. Add any details that help with keeping track of your operations, such as usage and location.
Poor communication between operations, maintenance, and staff
Employees working in operations, maintenance, and asset management all need to be on the same page. Otherwise, critical steps fall through the cracks, creating a greater chance of downtime. Everyone knows clear lines of communication are critical, yet it remains a challenge throughout many organizations.
Solution: centralized operations management
Bring everyone together on a single software platform, such as an enterprise asset management (EAM) system. Everything each team needs lives in the same system—from work orders to inspection documentation and inventory. When everyone is using the same processes and accessing the same data, you eliminate conflicts and errors, optimizing workflows and productivity.
Under- or over-maintenance for assets
Too often, maintenance is viewed as a business expense open to cost-cutting for the sake of maximizing profits. With constant cost-cutting pressure, maintenance departments struggle to balance costs with performance requirements. Cost-cutting often wins, resulting in delays in proactive maintenance.
On the other hand, over-maintaining assets result in the higher cost of non-value-added maintenance.
Solution: focused, optimized preventive maintenance schedules
The fix to this dilemma is finding the sweet spot between under- and over-maintaining assets. This can be achieved when an optimized schedule is determined and programmed into an asset management system, which tracks preventive maintenance schedules. You get worry-free execution.
EAM helps you implement all these asset management solutions
Although there are different kinds of asset management problems, you can solve many of them by implementing a modern enterprise asset management solution. A big part of the implementation and onboarding process is collecting data and creating accurate asset lists and inventory counts. From there, because the whole team is working from the same data set, you get strong communication across the organization. Using the software, you can plan and track preventive maintenance programs, ensuring inspections and tasks never fall through the cracks.
Next steps
By addressing these leading asset management risks, you can mitigate the effects on your organization. ManagerPlus created our EAM software to help you streamline your processes through a powerful desktop interface and easy-to-use mobile app.
Sign up for a free demo today to see how ManagerPlus can help you reduce your costs and manage your business’s assets more smoothly.
Summary
Poor asset management costs you time, money, and frustration. Even a small failure at a critical time forces you behind schedule, where costs quickly add up, cutting into your bottom line. It’s possible to solve asset management problems, but the first step is understanding what’s causing them. In some cases, the problem is poor inventory control, while in others it’s down at the level of naming assets. Poor communication can lead to costly mistakes, while a failure to appreciate the maintenance department’s role in producing value can promote cost-cutting that eventually leads to expensive repairs and replacements. A modern EAM solution helps you overcome all these asset management problems by centralizing your data and streamlining your workflows through focused automation.
