No oversight, no control, no verification and no case for securing budget. That, in brief, is what it amounts to when a facility, asset or maintenance manager has no insight into the quantity and quality of assets held. This blog covers seven common problems which you can avoid with sound asset management.
1. Higher costs
A lack of insight into business assets means organisations often do not know the condition of their operating assets. It then becomes unclear whether maintenance is needed or whether replacement of an asset might be cheaper. If business assets do actually fail, they must of course be repaired. Failures can directly impact your organisation, as they can bring parts of your enterprise to a halt. That’s an absolute nightmare for any facility, asset or maintenance manager. In contrast to preventive maintenance, such reactive maintenance also entails higher costs, because action is only taken when it’s in fact too late.
2. Legal liability
Organisations are legally liable to perform regular maintenance, and they risk a fine if they cannot show they have done this. If you have no clear overview, you won’t know what business assets you own and which ones you need to test. Also, maintenance documentation that has been carried out needs to be in order or otherwise your organisation could be held liable if there is an accident.
3. Increased risks
Poor maintenance goes hand in hand with risk. For instance, consider the inadequate maintenance of air-conditioning or water provision, both of which can have a negative effect on the health of the users of a space. Maintenance personnel are also themselves then at risk; maintaining some equipment requires specific precautions, special clothing or tools. Without sound asset management, it is not clear which precautionary measures need to be taken, so that performing maintenance work in itself creates hazardous situations.
4. Difficult negotiation with suppliers
Negotiation with suppliers on purchasing business assets becomes more difficult without insight into the performance of an organisation’s assets. For example, if you don’t know what the assets are worth, you can’t impose realistic conditions on suppliers. Also, the maintenance of existing business assets is of outsourced. Without insight into the quantities and condition, it’s actually impossible to request reliable quotations from suppliers, because it will not clear to such maintenance companies just how much work they will have to perform.
5. Difficult budgeting
A lack of oversight also causes difficulties at a financial level. What maintenance budget would you request, for instance, if you didn’t know how many business assets there are, their condition and which ones are due for replacement? You will need to be able to produce such proof during budget negotiations. Discussions with management on expenditure and budgets certainly becomes easier with such proof. Consider being able to demonstrate, for example, an asset’s lifecycle or its (excessively high) power consumption.
6. Unhappy staff
Employees are quicker to complain when there are frequent problems with business assets. Consider an unhealthy room environment because of overdue maintenance to the air-conditioning, or a lift which is often out of service. This can be improved immediately through good policy – by maintaining business assets better and by taking immediate action if there are frequent problems. Not only does this keep your staff happy, but it also makes them a whole lot more productive.
If you don’t know what type and how many business assets your organisation has, you won’t be aware if they go missing. Who would notice? Should this happen, your organisation will then have to reinvest, thus incurring extra costs.
These seven problems underline the importance of knowing your business assets and their quality. Asset management is the basis for gaining more control of this.