A company of any size small or large constitutes some fixed assets. These fixed assets provide value to the company. Moreover, they are considered as pillars of the organization as their deformity can cause many losses to, the company/organization and eventually affect the business.
What are Fixed Assets?
Fixed assets are also known as long-term tangible assets, they can either be property or equipment that a company owns and works to produce income. Fixed assets are not assumed to be utilized or transformed into money within a year. They can be seen in the balance sheet.
In this article, you will explore different fixed assets from several business industries and answer to why they should be tracked and managed.
Business assets in different industries
1. Oil & Gas Industry
Oil & Gas Industry is one of the biggest business industries across the world. The sector is providing jobs to millions of people all over the world.
Note: According to Investopedia, in 2019, the estimated GDP of the oil and gas sector was $86 trillion, which makes 3.8% of the global economy.
The oil and gas industry can be divided into three different sections. These sections are upstream (search of underwater or underground natural gas, crude oil field), midstream (transportation, storage, and processing of oil and gas) and downstream (filtering raw material received from midstream).
The Primarily used Equipment in the Oil and Gas Industry are:
- Tank Vessels
- Heat Exchangers & Air Coolers
- Evaporators, Towers
- Reactor Equipment
- Tubular Furnace
- Boiler Equipment
- Auxiliary Equipment
- Pumping Equipment
- Pipeline Connecting Accessories
- Dust Collectors
It seems that the oil & gas industry has lots of hard work and a long procedure including in their key responsibility area.
For the equipment's mentioned above, there is a need for regular track and maintenance to keep them working in good and healthy condition. So that, any kind of breakdown or unnecessary fault in the equipment shall not cause any hindrance in daily operations.
2. Information Technology (IT) Industry
According to Statista,
- The total global technology market spending from 2014 - 2019 is 2,959 US billion dollars to 3360 US billion dollars. This global technology market includes telecom services, tech outsourcing & hardware maintenance, tech consulting & integration services, software, communication equipment, and computer equipment.
- According to the data published in 2016 by Statista Research Development, the size of the total Information Technology (IT) services market was estimated to grow 748 US billion dollars by 2020 and 706.4 US billion dollars by 2022. It is currently 2021 going on, let's see how this estimation falls.
There are some researchers who say that the digital economy of the IT sector is worth $11.5 trillion globally, which makes 15.5% of global GDP.
In this vast sector, there are numerous assets that used on a daily basis, which requires attention for their maintenance, disposal, depreciation tracking, location tracking, etc.
IT Asset Management is the set of business practices that joins financial, contractual, inventory functions to support life cycle management and strategic decision making for the IT environments.
IT Assets are equipment that is used in the acquisition, storage, manipulation, management, movement, control, display, switching, interchange, transmission, or reception of data or information.
List of assets used in IT Industry for business are:
- Computer Software
- Computer Equipment
- Servers & Systems
- Data Communications Lines
- Routers, Hubs & Switches
- Other Network and Telecommunications Equipment
- Internet-related IT infrastructure
- Printers, Storage Devices
- Phone Equipment & Systems
Through IT asset discovery you can secure your database by running and maintaining it on all the networks and domain credentials, import asset details from different sites using remote scanning technique, and syncing asset data automatically.
It also keeps a check on active and inactive assets present in your network and generally used to analyze the asset cluster by identifying its usage, network, and accessories.
3. Healthcare Industry
As Wikipedia says, the healthcare industry is an aggregation of sectors within the economic system that provides goods and services in treating patients with curative, preventive, rehabilitative, and palliative care.
The industry is one of the largest and fastest-growing industries. The industry produces 10% of the country's GDP.
Healthcare industry emphasis patient safety and care for which the doctors, nurses, administrators, and staff aim and focus on improving the concern every day. Even the most skilled, veteran doctors and practitioners are not immune to some occasional medical errors. Even they also get sick, exhausted and over-tired.
Along with the safety of patients surrounded by challenges, the healthcare industry has more work to do like managing information. On a daily basis, they deal with the complications of inventory, tracking materials, patient validation, etc.
List of Medical Equipment that All Hospitals Need are:
- Radiography machines (X-ray machine)
- Computed Tomography (CT scan)
- Magnetic Resonance Imaging (MRI scan)
- Wheelchairs (manual & electric)
- Hospital Beds
- Oxygen Cylinders
- Surgical Machines
- Medial Ventilators
This list is endless. Healthcare Industry has an uncountable number of machines and equipment for the treatment of their patients.
Barcode technology provides an easy-to-use and cost-effective solution to all the complex problems that run inside the healthcare industry.
The barcodes allow quick and accurate data entry for the healthcare industry, supporting precious time to be spent in increasing efficiencies instead of manually entering the data.
Barcode technology helps practitioners and doctors to see all the previous notes along with the medical information attached to the unique barcode label linked to each patient.
There are benefits of implementing barcode asset management system in the healthcare sector:
- Safety of Patients
- Patient Id Wristband Efficiency
- Easy to Integrate
- Inventory Control
- Track of Materials
4. Manufacturing Industry
The manufacturing industry is a large industry, which contributes approximately 16% of global GDP and 14% of the world's employment.
The manufacturing industry is a critical sector for any developed or developing economy. This industry is the future with global growth and innovation according to the McKinsey report.
All the heavy machines and equipment used in the business are known to be assets for the manufacturing industry. Therefore, asset management is very important for the whole industry as it makes the company efficient by providing an accurate and deep understanding of the whole production chain.
The list of the most popular manufacturing machines is:
- Diamond Cutting Machine
- Rice Mill Machine
- Cold Roll Forming Machine
- Seed Oil Press Machine
- Concrete Block Making Machine
- Laboratory automatic flask petri dish wash cleaning machine
- Reel to Reel Flexible Printing Machine
- Injection Moulding Machine
- CNC milling machines
- Pharmaceutical Machinery for Economical High-Speed Tablets
With all these heavy and continuously working machines, most manufacturing companies are not able to perform effective maintenance, auditing, and management for these assets.
The main reason behind it is ineffective and disorganized asset tracking & underutilization of assets. We are here to discuss how important is asset tracking in the manufacturing industry, you will discover more as you continue reading.
- Perform audit effectively
- Better inventory management
- Reduce maintenance cost
- Better Asset Utilization
- Increasing Asset Life
- Ensure Regulatory Compliance
5. Hospitality Industry
The hospitality industry impacts the global economy significantly. As it provides 266 million jobs in the travel and tourism industry, all around the world. Moreover, it contributes around 9.5% of GDP globally.
According to Statista,
It is one of the fastest-growing industries the hospitality industry has the retail value of more than 600 billion U.S. dollars in 2018 globally.
The assets used in the hospitality industry are:
- Land & Buildings
- Furniture and Fittings
- Paintings and Statues
- HAVOC System
- Business center
- Spa, Sauna & Gym
- Inventories like bathrobes, towels, snacks, books, etc.
In the hospitality industry, customer service is a big factor & it is considered the heart of hospitality. In recent years the radio frequency identification (RFID) technology has been most successful especially in asset tracking & asset management.
Therefore, how RFID asset tracking software assists the hospitality industry is listed below:
- Increases Customer Experience
- Great Vehicle Management
- Asset Tracking
- Inventory Tracking & Control
- Maintenance Management
Features of Asset Tracking System
Unbiased of the industry, the asset tracking system has various importance to enhance the functionality and increase the efficiency of assets and equipment.
Some of the features of an asset tracking system and how they are helpful, are given below:
1. Asset Tracking & Management
Asset management and tracking is the method to track down your physical assets, using several techniques and methods including barcode, RFID, NFC tags, etc.
This is important for your organization, for its foundation and compliance, it lets you know the location of each asset & informs you about those assets which have come to an end of their lifecycle.
It can solve several business challenges, with its framework allowing the companies to become more efficient and boost their bottom line by making the best use of existing resources to achieve the best results.
Any kind of change in the movement of devices is recorded for future reference if needed. These changes in movement may include:
- IP Address change of IT device
- Physical relocation of Asset
- Asset removed from the network
- Installation and uninstallation of the asset
- Expiration of asset license
The main objective of an asset tracking system is to maximize asset control and minimize equipment loss.
Industries should implement the asset tracking software compiled with asset management solutions and automated tracking methods with advancements like fixed scanners, bar codes, asset tags which will generate a report to managing and track the assets.
There are few things that organizations can do to manage their business assets in a better way.
- Finds Ghost Assets
- Extend Life Cycle
- Minimizing Asset/Equipment Loss
- Precise Asset Information
- Save Time & Money
- Scheduled Maintenance
- Maximize Asset Efficiency
- Establish Compliance
Check-in/Check-out software is focused on circulatory records of the assets owned by an organization. It involves the information like who has the asset currently and when it will be returned.
This check-in/check-out out of assets can be checked through the barcode label attached to the asset. The system creates a library in the database which records the information to whom the asset has been issued and its returning date.
Benefits of Check-in/Check-out System are:
- Accuracy - Complete information about where each and every asset is and with whom.
- Simplicity - Quick process with few scans.
- Efficiency - Less time required to locate items.
- Accountability - Hold each user responsible for all the items they use.
3. Maintenance Management
Regular maintenance of the assets is mandatory to keep the business growing as the word maintenance does not always mean to repair. What maintenance really means is to follow up with the regular or methodological processes to keep the equipment and asset up to date and in a healthy working condition. It does not only mean to repair a piece of equipment only when it is broken.
The equipment should be lined and labeled, its wearing surfaces should be examined and replaced, oil schedules should be lined up at regular intervals.
Hence, the equipment with good working conditions requires regular inspection and adjustment to continue to produce good quality products for a long time.
Without or in the absence of equipment management, it might be possible to face some consequences in revert of careless decisions. Some of them are:
- Production loss
- Rescheduling of whole projects
- Material wastage from resources that have not been used yet
- Over time of labor because of downtime
- Disposal of machinery and equipment before the end of its useful life
You can ignore any kind of mishappening by strategizing maintenance management software in your organization.
There are few intents you will need to know and remember while programming equipment maintenance or tracking assets in your business to:
- Plan and set some quality and usage standards for the staff internally, that too based upon your asset type.
- Conduct careful repairing, when proper consultation is done from the side of the concerned department.
- Document all the activities thoroughly. It will make it easier for you to track the repair history and calculate depreciation for timely disposal.
- Complete all the daily tasks and more, within their deadlines in order to stick to the maintenance plan.
4. Re-order Management
An inventory management system helps you to track and control the company's supply so that you can optimize your inventory and manage them without spending extra time and money.
The most integral part of the inventory management system is to evaluate your business on a regular basis to ensure your path towards success track.
Inventory Management is a technique through which stocked goods, inventories, and non-capitalized assets are kept in a proper manner according to their specific shape and placement.
It is a process of ordering, storing, and using inventories. This stock management includes generating the lead on raw materials, components, and finished products, along-side warehousing, and processing of such items in your company.
The objectives of inventory management are to:
- Ensure a continuous supply of materials and stock so that production should not suffer.
- Avoid both overstocking and under-stocking of inventory.
- Maintain the availability of materials whenever and wherever required in enough quantity.
- Optimize various costs indulged with inventories like purchase cost, carrying a cost, storage cost, etc.
- Keep material costs under control as they contribute to reducing the cost of production.
- Eliminate duplication in ordering stocks.
- Minimize loss through deterioration, pilferage, wastages, and damages.
- Ensure everlasting inventory control so that materials shown in stock ledgers should be physically lying in the warehouse.
- Facilitate furnishing of data for short and long-term planning with a controlled inventory.
- Supply the required material continuously.
- Maintain a systematic record of inventory.
- Make stability in price.
5. Depreciation Management
It is crucial to analyze how your organization utilizes depreciation. It can be regarded as an important part of the expenses on a company's income statement.
Each business has a fixed assets that bookkeeping teams take into consideration when concluding the overall worth value of the association annually. An asset may incorporate a vehicle, machine, and equipment that is expected to be owned by an organization for a long time.
The overall value of each asset decreases as time goes by and utilization is done regularly. Thus, it is important for companies to re-evaluate their assets continuously. This is where depreciation comes into play.
As per the Investopedia, “Depreciation is an accounting method of allocating the cost of a tangible or physical asset over its useful life or life expectancy. Depreciation represents how much of an asset's value has been used up. Depreciating assets helps companies earn revenue from an asset while expensing a portion of its cost each year the asset is in use. If not taken into account, it can greatly affect profits.”
Advantages of depreciation tracking via Asset Management Software are given below:
- Precise asset evaluation & account keeping
- Tax benefit
- Well informed financial decision
6. Audit and Physical Verification
Physical verification of assets is done by auditors to check and verify the number of assets that actually exist in an organization. The process involves the verification of each assets' existence, location, and condition.
At the end of the financial year, it is a business requirement to know how many assets they have, where they are located, when were they purchased, currently they are in use or not, etc.
Benefits of audit and physical verification are:
- Ensure the existence of all the assets.
- Manage internal compliance.
- Automated verification of asset tags and serial numbers.
- Verification of information like description, location, etc.
These all are the big business industries of the world which makes a great contribution to the world's GDP. They are not only providing employment to more than half of the world's population but also provide daily sources of living for us.
Setting records these industries are producing materialistic things for our daily living by using hundreds of machines and equipment.
An incident with any single machine can influence the operation (or production) of the industry. Therefore, it is a crucial call for all the industries to implement an asset management system for tracking, monitoring, and managing their assets.
General benefits of the asset management system are:
- Improved regulatory compliance
- Improved reliability
- Long-term system integrity
- Real-time asset tracking
- Achieve complete accuracy
- Identification of ghost assets