No oversight, no control, no verification, and no case for securing new budgets. That, in brief, is what it comes down to when as a facility, asset, or maintenance manager, you have no insight into how many business assets you have or their quality. This blog covers seven frequently occurring problems that you can avoid with sound asset management.
1. Higher costs
A lack of insight into available business assets means organizations often don’t know the condition of the operating assets they possess. So it’s then unclear if maintenance is needed, or if it might be cheaper simply to replace them. If business assets do actually fail, naturally they must be repaired. This can have a direct influence on your organization because it 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, this reactive maintenance entails higher costs because action is only taken when it’s too late.
2. Legal liability
Organizations are legally liable to perform regular maintenance, and they risk a fine if they cannot show they have done this. If there’s no clear overview, you don’t know what business assets you own and which you need to test. The documentation of maintenance that has been carried out needs to be in order; otherwise, your organization could be held liable if there’s an accident.
3. Increased risks
Poor maintenance is accompanied by risks. For instance, consider inadequate maintenance of air conditioning installations or water provision, which have a negative effect on the health of the users of a space. Maintenance personnel themselves are also then at risk: maintaining some equipment requires specific precautions, special clothing, or tools. Without sound asset management it’s not clear which precautionary measures need to be taken, so that performing the maintenance work creates hazardous situations.
4. Difficult negotiation with suppliers
Negotiating with suppliers for purchasing business assets becomes more difficult without insight into the performance of the assets an organization already has. For instance, you don’t know what they’re worth, and what conditions you can impose on suppliers. The maintenance of existing business assets is often also outsourced. Without insight into the quantities and condition, it’s impossible to request reliable quotations because it’s not clear to maintenance companies just how much work they will have to perform.
5. Difficult budgeting
A lack of oversight also causes difficulties at the financial level. What maintenance budget would you request, for instance, if you don’t know how many business assets there are, what their condition is, and which are due for replacement? You must be able to produce proof of this during budget negotiations. Negotiations with management on expenditure budgets also becomes easier with such proof. Consider being able to show the lifecycle, for instance, or (excessively high) power consumption.
6. Unhappy staff
Employees are quicker to complain when there are frequent problems with business assets. Consider an unhealthy indoor climate because of overdue maintenance to the air conditioning installation, for example, or an elevator that is often out of service. This can be improved immediately through good policy—by maintaining business assets better and 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, and how many, business assets your organization has, you won’t be aware if they go missing. No one notices. Your organization will also have to reinvest, thus incurring extra costs.
These seven problems underline the importance of gaining insight into the number of business assets and their quality. Asset management is a basis for gaining more control over this.