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What are Rotating Assets?

by Jonathan Davis on January 6, 2022
 
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When you have collections of identical assets that live inside larger assets, should you treat them the same way you do all your other inventory?

You can, but it tends to end up costing you more time and money. Instead, you should set them up as rotating assets. 

What are rotating assets? 

Rotating assets are interchangeable, repairable or rechargeable assets that you can swap in and out of service, moving them in and out of inventory. The designation "rotating" comes from their moving in and out of service and inventory. 

One way to understand rotating assets is as assets that act as parts inside other, larger assets. So, in a manufacturing setting, you might have a complex system for extracting and filtering welding fumes. Inside the system, there are six identical fans units, each with its own motor and electrical controls. In addition to the six in service, you have a spare in inventory. When one breaks down, you replace it with the spare, taking the broken one back to inventory so the maintenance techs can repair it. 

Rotating assets are unrelated to the practice of rotating inventory or stock, which is when you organize items to avoid waste due to expiration, degradation, or obsolescence. An example of rotating stock is when you put the pack of new batteries behind the ones that are already in the supply closet. The idea is that the older ones should be used first. 

How are rotating assets different than MRO inventory? 

Maintenance, repairs, and operations (MRO) inventory is consumable, which means it's mostly "eaten up" as part of the production process. Importantly, although they do not appear in the finished product, your business needs them as part of the various processes that come together to produce that final product. So, the grease that keeps the press from seizing is not in the widgets you sell, but you can't make widgets without it. It is the same with office cleaning supplies. The people who buy your widgets don't see them, but your office can't function without them. 

The important difference between rotating assets and MRO inventory is that rotating assets are not consumable. Instead of, the maintenance team pulls them out of services, fixes or recharges them, and then puts them back into service or saves them in inventory as spares. Generally, you would decide if something was MRO or rotating based on the repair costs. So, it's not cost effective to repair a light bulb, but it is to repair a pump. 

On a more technical, asset management and tracking level, rotating assets have their own serial numbers and associated work orders. MRO inventory items do not.  

What are common examples of rotating assets? 

Examples differ across industries, but can include: 

  • Pumps 
  • Fans 
  • Motors 
  • Engines 
  • Fire extinguishers 
  • Control boards

An example from the front office is something like a monitor for a desktop computer. If it stops working, you can quickly swap it out for one that does work. Although there might be no one on staff who can fix it, it is repairable. It just might mean you have to send it out.

What are the benefits of designating an asset "rotating"? 

Using rotating assets saves time and money. And, over time, if the maintenance team keeps good records, the benefits have an accumulative effect. Saving time and money now helps the maintenance department save more time and money in the future. 

For example, you have an asset with six identical pumps, each of which you treat as a rotating asset. When one fails, you can quickly swap out the entire pump and replace it with the one you've been keeping in inventory, saving you time. 

And, instead of throwing out the broken pump and buying a completely new replacement, the maintenance team can take the broken one back to inventory, where they can then take their time repairing it properly. The fixed one then becomes the spare, which they can quickly swap in if another pump in the asset breaks. 

Because the team is gaining experience fixing those pumps, and this experience carries over because all the pumps are the same, the techs are faster and better on each future fix. 

How does an EAM help leverage rotating assets? 

To gain the benefits of rotating assets, the maintenance team needs to know where they put the assets and what repairs they performed. Without this information, the team starts from Square One every time a rotating asset fails. 

Modern enterprise asset management software makes it much easier to connect assets to locations and work histories. Remember, because rotating assets have their own serial numbers, you can generate related work orders and track movement. Later, when the maintenance team needs to work on the assets, they can instantly know where they are and review past maintenance and repairs, looking for actionable insights on how best to proceed. 

 ##Next steps

To find out how EAM software can support your maintenance goals, schedule a demo of ManagerPlus Lightning today.

Summary 

Rotating assets are repairable or rechargeable assets you can swap out of larger assets, rotating them in and out of inventory. The asset category is unrelated to the practice of rotating stock, which involves organizing stock to encourage the maintenance team to use older stock first. It's the same basic idea behind why grocery stories restock milk cartons from the back. Rotating assets are also different than MRO inventory, which are the parts and materials a business needs to remain productive but that do not appear in the final product. For example, printer ink and cleaning supplies. Common examples of this type of asset include motors, computer monitors, engines, fans, control boards, and fire extinguishers. The benefits of rotating stock are related to speed and costs. If you have four identical fans inside an asset, when one fails, you can quickly swap it out with one in inventory. Your asset is up and running quickly and the maintenance team has time to take the broken fan and repair it carefully and properly. Once they've fixed it, it goes back into inventory as the new spare. Modern EAM software helps you manager rotating assets because it makes it much easier to connect work orders and locations, the two elements the maintenance team needs to make the whole system work. 

Jonathan Davis
About the author

Jonathan Davis

Jonathan has been covering asset management, maintenance software, and SaaS solutions since joining Hippo CMMS. Prior to that, he wrote for textbooks and video games.

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