How to Set up an Asset Management System
Define your assets., Take inventory of your assets., Figure out asset demand., Determine each asset's total cost over its life., Reduce risk., Minimize cost.
Step-by-Step Guide
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Step 1: Define your assets.
Identify all of the assets managed or owned by your business.
Assets are any items, whether physical, digital, or intangible, that have value to your business.
Assets can be anything from fixed assets like machinery, vehicles, or buildings, to digital content or software.
Define these things as they specifically apply to your business.
What objects produce value for you? Your assets are referred to collectively as your asset portfolio. -
Step 2: Take inventory of your assets.
To get a good picture of your current asset portfolio and future asset costs, you'll need to count, organize, and value the assets you currently have.
You should also take care to assess the condition of your assets and take note of where they are physically located.Asset value should be assessed using the fair market value calculation.
This amount represents the potential sale value of the asset, rather than its relative, economic, or book value., The point here is to determine how much value needs to be created by your assets.
This combines shareholder value creation demand, customer product demand, and regulatory requirements.
This information will help you to determine a level of service, which here refers to how much, how frequently, or how many times you will have to use each asset to create value., After determining the asset's level of service, you will need to determine the cost of maintaining, servicing, or repairing the assets to keep them at that level of service.
Repair costs will combine the actual cost of repair with the likelihood that the asset will require repair over its lifetime., Measure asset risk as a way to identify and minimize your exposure to risk.
Asset risk includes the chance that your assets will break down or fail to provide value adequately and the cost of that failure.
By analyzing this information, you are able to assess the potential costs of your assets over time and find ways to minimize that risk.
For example, you could design processes to replace risky assets or temporarily use alternative assets in place of them.
This would reduce the cost of the asset failing., Look for ways to optimize the efficiency of acquiring, managing, maintaining, moving, or using your assets.
This will mostly depend on the nature of your business's assets.
Figure in the cost of maintaining assets over a long period of time and decide whether it would be more cost effective to just replace.
Alternately, you could find more efficient methods of moving you assets around as you need.
Consult with your management team to brainstorm cost-reduction ideas. -
Step 3: Figure out asset demand.
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Step 4: Determine each asset's total cost over its life.
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Step 5: Reduce risk.
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Step 6: Minimize cost.
Detailed Guide
Identify all of the assets managed or owned by your business.
Assets are any items, whether physical, digital, or intangible, that have value to your business.
Assets can be anything from fixed assets like machinery, vehicles, or buildings, to digital content or software.
Define these things as they specifically apply to your business.
What objects produce value for you? Your assets are referred to collectively as your asset portfolio.
To get a good picture of your current asset portfolio and future asset costs, you'll need to count, organize, and value the assets you currently have.
You should also take care to assess the condition of your assets and take note of where they are physically located.Asset value should be assessed using the fair market value calculation.
This amount represents the potential sale value of the asset, rather than its relative, economic, or book value., The point here is to determine how much value needs to be created by your assets.
This combines shareholder value creation demand, customer product demand, and regulatory requirements.
This information will help you to determine a level of service, which here refers to how much, how frequently, or how many times you will have to use each asset to create value., After determining the asset's level of service, you will need to determine the cost of maintaining, servicing, or repairing the assets to keep them at that level of service.
Repair costs will combine the actual cost of repair with the likelihood that the asset will require repair over its lifetime., Measure asset risk as a way to identify and minimize your exposure to risk.
Asset risk includes the chance that your assets will break down or fail to provide value adequately and the cost of that failure.
By analyzing this information, you are able to assess the potential costs of your assets over time and find ways to minimize that risk.
For example, you could design processes to replace risky assets or temporarily use alternative assets in place of them.
This would reduce the cost of the asset failing., Look for ways to optimize the efficiency of acquiring, managing, maintaining, moving, or using your assets.
This will mostly depend on the nature of your business's assets.
Figure in the cost of maintaining assets over a long period of time and decide whether it would be more cost effective to just replace.
Alternately, you could find more efficient methods of moving you assets around as you need.
Consult with your management team to brainstorm cost-reduction ideas.
About the Author
Elizabeth Wells
Experienced content creator specializing in home improvement guides and tutorials.
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