Don't Let Your Assets Waste Away - Here's How to Optimize Them


Finance Insights for ProfessionalsThe latest thought leadership for Finance pros

Thursday, June 23, 2022

Asset management optimization can make a significant difference to key aspects of your business, including more efficient product or service delivery, which will naturally lead to happier customers.

Article 4 Minutes
Don't Let Your Assets Waste Away - Here's How to Optimize Them

Assets are any items of value you use to run your business. It follows that effective management and use of the assets at your disposal will lay the foundations for a more successful enterprise.

However, this isn't necessarily easy, particularly when you're faced with challenges such as budget limitations, rapidly evolving customer expectations and intense competition in your industry.

It's therefore important to have a clear picture of where asset optimization sits within your business operations and what you can do to keep this process running as smoothly as possible.

The case for asset management optimization

One of the most valuable outcomes any organization can achieve from asset management optimization is higher levels of satisfaction among its customer base.

A manufacturing company, for example, will be better positioned to maintain consistent and timely delivery to its clients if it has a reliable plan to maintain the assets required for production. Having redundancies in place will also prove crucial in the event of unplanned downtime owing to asset failure.

Moreover, maintaining your assets and checking they're operating at the required level reduces the risk of product defects, which raises customer satisfaction and mitigates potentially costly risks such as recalls.

Of course, the benefits of asset management need to be weighed against financial priorities and constraints, whatever industry you're in. Having redundancies in place might help you reduce downtime, but it could be difficult to justify the cost of keeping backup assets that are rarely used.

Given the complexity of this challenge, it's crucial to come up with a bespoke plan that reflects the unique needs and circumstances of your business.

How to optimize your asset management

Like many business projects and functions, asset management optimization is more likely to succeed if it's driven by a clear strategy and follows a rigorous, methodical approach.

Here are some of the practical steps you can take to get the results you're looking for in this space.

1. Put a dedicated team in place

To ensure asset management gets the time and attention it deserves, consider creating a specialist team with the right skill sets and awareness of best practices to raise your performance in this area.

If you don't have the necessary staff resources or expertise in-house to dedicate a group of people to this task, make sure you have at least one nominated individual who can take ownership of the project, monitor performance and report results.

2. Form an accurate picture of your assets

Before you can think about optimizing and deriving maximum value from them, you need to ensure you have an accurate picture of the assets available to you.

One of the key responsibilities of the team or stakeholder taking the lead on this task will be to conduct an audit of your existing assets and monitor how they're performing. This can be made significantly easier with dedicated software, which will take the manual work out of processes such as monitoring how equipment performs over time.

3. Track assets throughout their lifecycle

Another key benefit of specialist asset optimization software and tools is the ability to track how your equipment and resources are performing at different points in their lifecycle.

Your approach to managing particular assets will be very different when you're at the purchasing and deployment stage, for example, to when you're focused on consistent use, reliability and, eventually, disposal.

4. Communicate and coordinate

Different departments within the business need to collaborate to enable the most efficient use and management of assets. Finance managers and senior directors might have ultimate responsibility when it comes to purchasing, for example, but various teams and frontline employees across the company will be involved in using, monitoring and maintaining your key assets.

Consequently, it's important to place emphasis on efficient communication and coordination across departments. This will help you achieve the transparency and visibility required to truly optimize your asset management.

5. Turn new tech to your advantage

Many modern technologies could offer the potential to transform and improve how you manage your assets.

Prescriptive analytics, for example, enables you to use artificial intelligence and machine learning to create a data-based picture of how your assets are functioning and where you have opportunities to improve efficiency.

A manufacturing firm could use tools like these to make informed decisions about various operational functions, such as running machinery at optimal capacity to minimize downtime.

6. Look forward and be ready to adapt

The only constant in business is change, so you need an agile asset optimization strategy to avoid being left behind by rapidly evolving market trends or competitor practices.

Asset management is often about being reactive and dealing with challenges as they arise, but it's also important to maintain a proactive mindset and consider how easily you could adapt if industry conditions demand it.

Like in many areas of business, a willingness to embrace change and modify your methods could prove crucial if you want to derive maximum value from every resource available to you.

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