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How and why to track the life cycles of your assets

As a facility manager, you need to track your assets properly. This is not only so you can keep abreast of your inventory, but also so you can predict when your assets may need maintenance or replacement.

An asset refers to valuable properties or pieces of equipment a company owns or possesses. More simply, an asset is anything that is of value to a company or business. Assets can fall into different categories like facility-related assets such as lighting, appliances, and HVAC systems. Personal protective equipment, vehicles, and mobile devices are personnel-related assets. Computers, software, printers, and servers are examples of IT-related assets. 

As a facility manager, you need to track your assets properly. This is not only so you can keep abreast of your inventory, but also so you can predict when your assets may need maintenance or replacement. Although assets are relatively easy to grasp conceptually, they are far from stagnant and appreciate and depreciate with time.

What Is an Asset?

An asset is something containing economic value and future benefit. An asset is valuable to a company because it repeatedly produces value and generates cash flow. For example, a bakery owns several cars they use to deliver their bread and pastries. Their vehicles are considered assets because they help the company sell their products and profit from them. 

Business assets can be machinery, vehicles, electronic appliances, office equipment, computers, furniture, lights, fixtures, cash, investments, and other elements that have and produce value.

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What Is an Asset Life Cycle?

An asset life cycle is a strategic and analytical approach to the management of a business’s assets. The asset life cycle divides assets into four stages, starting from its initial planning stage until its eventual disposal. The four key asset life cycle stages are planning, acquisition, maintenance, and disposal. Each stage is essential and should be followed one after the other. 

Before a business acquires, purchases, or disposes of an asset, it must go through a process. This set of steps are based on the asset life cycle. The first step is planning, and it involves assessing the need for an asset. Before acquiring a new asset, the facility manager should determine first if it’s needed. For example, if an old air conditioner is not working, the facility manager should decide whether to have the air conditioner repaired or buy a new one. 

The acquisition is the process of searching for and deciding on an asset purchase. In the acquisition stage, you analyze which is more beneficial and cost-effective to the company: repairing a piece of old equipment that might not last or buying a more expensive one that will last longer. After deciding which one is the more cost-effective, you will now decide on the actual purchase.

When your facility purchases a new asset, you have to make sure that it is working correctly and that you are maximizing its use. This stage requires consistent upkeep of said asset. Asset installation is the most extended phase in its life cycle. This period is when your new asset begins to be used for its intended purpose. 

Using the earlier analogy, this is the time when you install and use the new air conditioner you purchased. The maintenance stage requires you to operate, monitor, and do proper maintenance or repair if necessary. You will also check its performance and make necessary adjustments if possible.

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Lastly, disposal entails when an asset has reached the end of its potential value. Your target is to maximize the use of your asset and extend its service life. Your asset will eventually show the effects of constant use and operation and exhibit its age through wear and tear signs. If it is not economically viable and practical to repair your asset, you have to dispose of it and replace it with a new one. 

Why Is Tracking Asset Life Cycle Important?

Tracking asset life cycles saves costs, improves throughput, and extends asset life. By monitoring assets, you can gauge repair costs, upkeep histories and predict future servicing. A business usually has several assets, and it’s challenging to monitor each of them efficiently manually. 

Even your best efforts might not be enough, and eventually, some assets will break down due to missed service schedules. It is also difficult to manually monitor and prioritize service reports. Using FMX’s professional preventive maintenance software helps facility managers track assets and improve productivity. It will help your operations run smoother and more efficiently. 

Protect Your Assets

Assets are the lifeblood of your business, and you must put them to good use to improve your company’s bottom line. Your objective is to maximize the use of assets and extend its service life. This goal is only possible through constant monitoring, proper servicing, and upgrade. Assessing asset life cycles should be a continual process for facility managers. With the right technology, one can easily monitor asset life cycles. 

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