Keeping a count of all owned assets in an organization is always helpful for many reasons. Asset tagging is the best practice as it assists in numerous functionalities of asset tracking and asset management challenges.
What are Asset Tags?
Asset Tags are labels that identify the equipment using a unique serial number, a code, or barcode.
The code affixed on an asset tag hold details of the asset including the item's manufacturing date, vendor name from which it was purchased, cost price, shelf life, name of the person to whom it is allotted, and other important information.
Asset tags or asset labels are commonly made of anodized aluminum or laminated polyester. The common designs of an asset tag include the company logo with a border for the pattern.
Most of the asset tags nowadays use barcodes to speed up their data entry and decrease field entry errors.
What is the Need of Asset Tagging?
Asset tagging or asset labeling helps in managing the physical capital and facilitates in making informed decisions in respect of physical inventory and assets, repair or replacement of an asset, and so forth.
- Maximum efficiency of equipment and personnel
- Reduction in downtime due to better planning
- Theft prevention with increased security of assets
- Completion of required compliance
Asset Management Challenges Faced in the Absence of Asset Tagging
There can be situations where assets are not tagged properly within or outside the organization premises. For instance, if you want to get the maintenance details of a certain asset, what can you do if no asset tag was placed on it?
You reach for the asset register to get all its details. Had all the assets been tagged, you would just need to scan the tag to get the required information. It offers a wider view in a digitalized way and also saves precious time.
Business operations are too dynamic to be managed with pen and paper. Asset tagging has become an important aspect of the business process today. It helps in getting handy information, saving time and money.
Let us have a look at to some of the scenarios of not implementing an asset tagging system.
1. Less Visibility
With less visibility to your assets, there is no assured way to determine the inventory or assets' location. When there is no accurate record of assets and relevant information, there is no way to track data e.g. asset serial or model number for any support or service-related activity.
Less visibility becomes a big problem with smaller assets like small appliances and tools which are tend to be moved to different locations for operational reasons.
Therefore, it becomes difficult to make smart asset-related decisions without actually knowing about assets, their presence, location, etc.
2. Warranty Status
Without asset tagging and accurate tracking of assets, it can be risky not to know about their warranty status or availability. This can cost the business money in the form of unnecessary repairs and maintenance.
Some research shows that companies can lose up to 35% of potential warranty saving by paying repair on under warranty equipment.
3. Lack of Information Sharing
Asset tagging is an essential part of data management strategy. Without such a process, it becomes difficult to create an effective data profile of critical assets for their life cycle histories.
This forces users to depend on contractors for unplanned repair and maintenance, which can potentially cause loss of money as well as business reputation.
4. Tough Repair/Replace Decisions
Does an asset need to be replaced or repaired? This can be a difficult decision to make when you lack information about the assets and equipment. One wrong decision can cost the business dear by spending more than required or suffer the consequences of equipment downtime.
Analyzing or taking decisions for asset repair and replacement without accurate data can result in counter-productive actions.
5. Asset Servicing Errors
When there is no asset tagging to give easy and accurate information on a particular asset or equipment, there is no certainty of selecting that asset for any work order.
In emergencies such as on-demand services, wrong decisions can spell higher costs for the services provided (repair or replacement).
This can make the best maintenance plan fail and put to risk the routine services and maintenance tasks e.g. by selecting wrong assets or assets that do not require service.
6. Time Consuming
Any decision related to operations or maintenance demands a lot of time as it needs to take into account the complexities involved. The absence of an asset tagging system compounds the situation for business by not managing assets effectively or managing them on higher costs.
7. Complex Decision Making
Expenditure on assets and equipment constitutes a huge portion of the business budget impacting an organization's bottom line. For investment in any required capital, there is a paramount need for accurate asset data from across all the locations so that the decisions can be implemented strategically.
For strategic decision-making, it is therefore very important to know about inventory, assets, services, cost per asset over the life cycle, etc. Data has to drive decisions and decisions have to drive business.
Asset tagging is an effective way to monitor, identify, track and control assets of an organization.
Assets have to undergo repairs. It is important to have updated information on assets during their functional life as also their prevention from loss or theft.
Apart from this, all information pertaining to the purchase of an asset until their eventual disposal is traced from the history made available by the use of the asset management software and asset tagging that comes affixed along.