Physical asset management is an important activity that helps organizations in keeping assets in good shape. If an organization does not take care of its assets physically then asset performance will start decreasing & asset failure can occur.
In today's marketplace, no organization can bear mistakes as it can be lethal for business. In today's world businesses are so competitive and they need to be competitive otherwise competitors can take over.
That is why physical asset management is significant so that their assets are maintained, and their performance always stays on top.
What Exactly Is Physical Asset Management?
Physical asset management is the management of fixed assets such as equipment, vehicles, machines, HVAC, chillers, etc. Physical asset management is a systematic approach for better management of assets.
The purpose of physical asset management is to prolong asset life and keep these in good condition. Another objective of physical asset management is to better manage asset lifecycle from procurement to disposal.
Also Read: How Does Asset Management Benefits Facilities Across an Organization?
Making assets efficient is important because assets add value to the organization & they are the backbone of an organization.
For What Reason Is Physical Asset Management Important?
To comprehend why physical asset management is significant, you need to see how the assets are utilized in the business and improving the assets to capitalize on them before they are decommissioned.
The stock should be seen to guarantee it doesn't run its timeframe of realistic usability prior to being sold. Gear should be kept up with and adjusted so it doesn't cause vacation when it breaks.
Physical asset management utilizes procedures and cycles that spotlights forestalling these conceivable outcomes while as yet helping your association bring down the complete expense of possession.
It is an extremely modern cycle that should be managed by experts who will consistently search for approaches to further develop it.
When appropriately conveyed, you will get a drawn-out advantage that impacts your primary concern as well as the wellbeing and dependability of all your actual assets.
What Are the Best Practices of Physical Asset Management?
Although asset management practices change from organization to organization and from industry to industry. However, we have mentioned some generic practices that are implemented in all industries.
Best practices of physical asset management are discussed below:
1. Utilize Asset Management Software
The most basic need is to utilize asset management software that helps in managing all types of assets. In all aspects of asset management, this software has a role to play.
If an organization is not equipped with this software, then there is a lot of room for improvement.
2. Keep Track of Assets
How many assets do you have? Where are they located? Who is using them? These types of information are essential in order to keep track of assets. Keeping track of asset saves from theft and misplacement.
Also Read: 5 Reasons Why You Need to Invest in Asset Tracking Software
However, when you are equipped with asset management software you can easily retrieve information.
3. Provide Schedule Maintenance
When you have a lot of assets then keeping them maintained especially when you are highly dependent on pieces of equipment. Maintenance is one of the major aspects that organizations ignore as a result growth is not much seen as expected.
Equipment needs maintenance otherwise they can break; their performance decrease or equipment failure can occur. Only providing maintenance on time can decrease a lot of expenses for the organization.
It can save from sudden failure and increase asset life.
4. Emphasize Improving Staff Performance
Increasing productivity is not a simple job. There are several activities are done precisely then you will notice some improvement in performance either staff or assets.
Ensuring that employees are working as per the system. Furthermore, they should be equipped with technology so that error chances are minimized, and efficiency can be improved.
For instance, they can use a barcode scanner as it will be time-saving and productivity will increase as well.
5. Take Informative Decision
Several businesses do this mistake, which is making decisions based on assumptions, as a result, they do not get the expected outcome and they disappoint. Therefore, it is important that you collect data from all aspects data is very crucial in order to grow a business.
Data is the key to business growth, tracking trends, and so on. Even when you know the business inside out data assistance shall be taken while making crucial business decisions.
This is important that you make a data-based informed decision rather than making a decision based on assumptions.
Why Asset Management Software Is Essential for Physical Asset Management?
Asset management software is built to resolve this issue as it automates the maintenance process, and you don't have to remember manually. It will alert your maintenance team about upcoming maintenance activities and tasks.
With this software, you will notice maintenance expenses reduced, better asset performance, improved return on investment (ROI). There is no doubt that every business wants to improve its bottom line. This software can help you in achieving your goal.
According to Markets and Markets, “The global Enterprise Asset Management (EAM) market size is expected to grow at a Compound Annual Growth Rate (CAGR) of 8.7% during the forecast period, to reach USD 5.5 billion by 2026 from USD 3.3 billion in 2020.”
These practices will help your business in optimizing operation and saving time. Moreover, physical asset management needs to do because pieces of equipment are the backbone of an organization especially for industries such as construction, manufacturing, hospital, oil & gas, etc.
However, managing them becomes hectic because there are so many assets and which asset is maintained which is not becomes hectic that is why asset management software becomes more significant.
If your organization want to improve their maintenance, then investing in asset management software is necessary.
Also Read: Cloud-Based Vs On-Premise Asset Management: Which Is Better?
Frequently Asked Questions (FAQs)
1. What are the various stages of the asset lifecycle?
Various stages of the asset life cycle are as follow:
1. Asset procurement /Acquisition
2. Commission asset
2. What are the advantages of asset management software?
Asset management software provides several benefits that are given below:
1. Asset lifecycle management
2. Extending asset life
3. Scheduling maintenance
4. Saving maintenance expenses
5. Increasing productivity
6. Saving assets from theft & misplacement
7. Asset tracking
3. What is the difference between CMMS and asset management software?
Computerized maintenance management software is focused on maintenance whereas asset management is focused on asset maintenance and asset lifecycle management as well. Asset management software has more features, and it is more advanced than CMMS.