Losing track of critical assets can be a real trouble for businesses. Reasons for loss can vary from theft to unexpected breakdowns, excessive depreciation, and poor maintenance.
As per a report, asset loss due to employee theft alone can cost businesses around $50 billion per year.
But why does it happen? The answer to this is simple: inability to effectively track assets. Inefficient asset tracking can easily translate into lost asset control as there is no visibility into the asset landscape. Whether it is a critical piece of equipment such as a truck or a small item like a screwdriver, the loss or theft of these assets can incur huge costs.
Using an advanced asset tracking system comes in handy as it enables businesses to swiftly track various types of assets from a centralized platform. This article takes you through the nuances of asset tracking and how it can help enterprises to improve their bottom line.
What is asset tracking?
Asset tracking is a systematic process involving monitoring and management of physical and non-physical assets. It enables businesses to locate an asset, track its movement, and assess its status whenever necessary.
Modern asset-tracking technology helps businesses automate the asset-tracking process and reduce inaccuracies in asset records. Asset management software is an example of such a technology as it empowers businesses to track real-time information about their assets, such as location, custodian, and count.
This way asset managers can conduct on-the-spot checks on assets and quickly assess their condition and quantity.
Risks associated with lack of asset tracking
Poor asset tracking can become a vital reason for operational inefficiencies. There is an increased risk of slow business activities when you do not have accurate visibility into your assets. Inaccurate asset tracking can lead to asset theft or misplacement which can add to the overall business costs.
Likewise, tracking resources is necessary to assess what assets are available for immediate use. This way, assets are not properly designated, leading to misallocation, and inefficient operations. Businesses are likely to end up manually searching where, how, and in what quantities assets are located – wasting effort and time.
Not only this, but the inability to track assets hampers a business’s long-term success. For instance, a construction company that does not have an accurate count of its assets and inventory might end up ordering extra tools and costly heavy equipment to keep a construction project running. Certain assets might not be utilized to their full capacity which wastes the potential each asset has to overcome operational inconsistencies.
Asset tracking technologies
There are several ways to ensure effective asset tracking and stay updated on the whereabouts of your assets. All of these ways curb the need for manual data entry and ensure that none of your asset details are missing. Some of these mechanisms are:
1. Barcodes
Barcode labeling was introduced in the 1970s and remains the most widely used asset-tracking technique to this day. Its popularity stems from the various benefits that barcode tags offer.
They are affordable and automate the asset tracking process. You simply need to scan the barcode tag on an asset to conduct various actions. You can even create your own barcode labels and design them as per your business needs.
However, there are some downsides to barcode tagging too.
Barcode tags must be within the visible line of sight of a barcode reader. This means that barcode labeling proves futile for tracking assets in remote locations.
2. RFID tags
RFID tags are advanced and offer more features as compared to barcode labels. An RFID tag uses radio waves to emit asset data to a reader. It is ideal for tracking assets that are not easily accessible, for instance, a tool that is being used in a coal mining shaft.
RFID tags also enable businesses to scan multiple items at once – expediting the process of data documentation.
But, RFID tags are not suitable for small businesses that are looking to track various, low-value items. Unlike barcodes, they can only be read by a limited type of scanner.
3. GPS tags
Ideal for tracking assets in transit, GPS tags allow firms to actively record the location coordinates of each asset item. GPS active tags send signals to relevant satellites so you can locate your items wherever they are. Efficient GPS tagging enables businesses to remain updated with the real-time location of their assets – enhancing asset security.
Since they are fairly expensive, it’s not feasible to use them for monitoring asset movements indoors. Logistics companies normally use GPS tags to track assets that are always on the move!
Benefits of asset tracking
With the new and enhanced asset tracking landscape, automation is the new way forward! Automated asset tracking eliminates the need to rely on paper-based records or different systems to track different assets. By consolidating all of this data into one platform, you can get a holistic view of your assets within a few minutes – enabling you to make data-driven decisions.
Here are some major benefits of using an asset management system to track assets:
1. Improved risk management
One of the prime risks businesses face and try to mitigate is lost and stolen assets. It increases the necessity for immediate replacements leading to substantial expenses.
Similarly, asset theft deprives businesses of the remaining useful life of assets. So, they cannot benefit from the value of the assets they could have in case the asset was still in use.
With an asset management system, you can track assets from location to location, along with their quantities, to reduce the chances of asset theft. You know at all times where, in what condition and quantity, and in whose custody are particular assets. This way, you can simply check from the system if the physical count of assets is in accordance with the system count.
2. Enhanced security
75% of businesses store 40% of their highly sensitive information on cloud devices and almost 39% of these businesses experienced data breaches in their cloud systems in 2022. Security breaches not only put a business’s confidential information at stake but deteriorate its long-term sustainability as well.
But, these instances can be significantly reduced with advanced security measures even on a cloud-based system.
An asset management system helps overcome weak security by allowing you to set up access control permissions i.e., allowing only specific users to access asset information. You can enable authentication with single sign-on and OTP so only authorized users can access the asset database.
You can also assign custody of each asset to trusted users so all asset activities can be tracked. Track the asset checkout and check-in history to get a better understanding of who had access to a particular asset at a particular time.
3. Compliance with regulations
Staying compliant with industry protocols and standards for asset management is the foremost priority of most businesses. With efficient asset tracking, businesses not only stay compliant with regulations but effectively maintain the quality of their assets.
An asset tracking system helps businesses record asset details, including asset history, maintenance logs, and depreciation to maintain transparency. Following these protocols, you can ensure that every asset is being used for the required purpose and that your business is audit-ready.
For instance, the Occupational Safety and Health Administration (OSHA) binds healthcare units under regulation to securely manage and track medical equipment. The asset tracking system enables these units to record data about medical supplies, assess the condition of medical equipment, and update inventory levels to account for emergencies. The aim is to ensure that equipment is safe to use at all times.
By automating asset maintenance and recording, you can ensure compliance and establish quality control while avoiding penalties and fines.
4. Reduced costs and time
Do you often face administrative hurdles while tracking assets? Does tracking them take a lot of your time and effort? Efficient resource allocation is the solution to all these challenges.
You can monitor the use of assets to assess if they are being used for the right purpose. The system will help indicate which assets are in inventory and which are being used. This way, businesses can identify overutilized or underutilized assets to reallocate them and put them to good use. This helps save costs associated with new asset acquisitions and replacements.
Likewise, such a system helps in efficient inventory management as businesses can set maximum and minimum thresholds. In case an asset reaches a low threshold, the system will notify the user allowing them to take quick action. This way you can avoid overstocking and understocking – reducing the costs and time it takes to manage inventory manually.
5. Timely asset lifecycle management
Smooth asset lifecycle management is the key to prolonging the lifecycle of assets. With a system in place, businesses can optimize the life of their assets, and ensure they are functioning well.
Asset tracking enables managers to track where and in what condition assets are located. This allows them to make timely decisions about the keep of their assets, and manage them according to their life stage.
Every time an asset is checked in, maintenance managers can conduct thorough checks to ensure that the asset does not need additional maintenance. So, assets can be kept up-to-date and well-maintained as per their operational function.
6. Chances of scalability
Using an asset management system for asset tracking enables businesses to expand with time. Businesses can increase the asset count as per their needs to track more assets. So, when businesses are expanding, they do not have to worry about whether the system they are using will be able to support the asset count or not.
Likewise, these systems allow integrations with other customer-facing or service management systems like Zendesk and Jira. With these integrations, businesses can use outside systems to manage asset-related requests, allowing smooth request management.
Common use cases for asset tracking
Asset tracking applies to almost all businesses regardless of size. To help you get started, we have compiled a list of asset-tracking use cases that various industries deploy to smoothly run their daily operations.
1. Retail
Instant product information: Asset tags on each stock item can be scanned to retrieve instant asset details. Easy access to inventory information enables you to plan timely procurement. This greatly helps in the retail industry where you cannot afford to run out of your inventory and lose out on potential sales.
Mobile point of sale: Most asset tracking solutions are smartphone-compatible. They enable you to scan item labels with your mobile cameras. With your personal devices acting as a point of sale, you can expedite the checkout process and cut down on POS hardware costs.
Goods in transit: With GPS tracking enabled, you can keep an eye on your inventory when it is shipped off to different retail locations. Instant location updates in the asset tracking database lower the chances of misplacement.
2. Logistics
Data management: A cloud-based asset tracking system enables logistic companies to store relevant details regarding their orders and customers in a single database that is accessible across different branches.
Shipment tracking: Different orders shipped to various customers in different locations can be traced using active GPS tags.
Bundles and packages: Some items are usually booked together by customers. An asset tracking system enables a logistics company to group such complementary assets in bundles. This way they can check them out together. It eliminates duplicate workflows and saves them time.
3. Healthcare
Equipment maintenance: Patient safety and health is a top priority for hospitals. An asset tracking system enables medical technicians to regulate sterilization for surgical tools. It also enables biomedical engineers to check in diagnostic equipment for periodic maintenance. This prevents unpredictable breakdowns during patient checkups.
Consumables management: Hospitals stockpile different types of pharmaceuticals and disposable medical goods. These consumable assets have a short shelf life and need continuous monitoring for timely disposal. Medical asset management software helps track the expiry dates of such instruments and alert the hospital staff on when to get rid of them.
Regulatory compliance: Medical assets are subject to strict quality controls set by regulatory authorities. The asset tracking system enables hospitals to run frequent asset audits to meet compliance. It also helps keep a check on asset ownership and usage to prevent fraudulent activities.
4. Construction:
Equipment check-in/out: Construction businesses extensively use heavy equipment that needs to be checked in and checked out frequently. Accurately tracking this equipment is the key to ensuring that it is available at the right time and the right location.
Location tracking: Large construction businesses are usually spread across various locations. The asset tracking system enables tracking the quantity and type of equipment checked out to different locations, and manages these locations remotely from anywhere.
Project planning: With an asset tracking system, you can manage equipment allocated to a certain project from one place. This includes creating projects on the system, checking out items to a certain location, and tracking their usage for analysis.
5. Education
Lab management: Resources in science and experimental labs need to be tracked to keep an accurate count of all assets. The asset tracking system enables users to access the availability calendar to check what items in the labs are available for use and reservation.
Maintenance management: Frequently used resources need to be sent for maintenance. Schedule asset servicing from time to time to ensure educational assets remain in top-notch condition.
Asset redistribution: Assets sitting idly need to be identified so they can be allocated for some other use. Ensure efficient sharing of assets across universities to run the university smoothly.
Steps to successfully conduct asset tracking
You can utilize your assets and inventory to the full capacity by expediting the asset monitoring processes. By knowing the exact count of assets, businesses can have better visibility into their asset landscape.
Let’s look at some of the best practices to streamline your asset tracking using an asset management system:
1. Create a database
Once you have decided on the system you want to use to track assets, create a detailed asset repository. An asset repository serves as the single source of truth enabling you to access essential asset information with a click. Enter all asset details into the repository to maintain a record of all the assets. Details include but are not limited to:
- Asset name
- Identification number
- Model number
- Owner
- Depreciation
Consolidating this asset information allows you to uniquely identify each asset and later access this essential information in a few minutes using barcodes or identification numbers.
2. Use asset labels
Barcode labeling is one of the easiest ways to track assets. Barcode labels can be scanned every time an asset is checked-in or checked out to maintain an asset’s history trail.
Design and assign distinctive asset labels to each item. Tweak the design according to your own needs to make sure it aligns with your brand image for smooth barcode asset tracking.
It is advisable to assess the monetary value of assets to categorize resources so it’s easier to design asset labels. Decide what assets need to be tagged, including high-end assets such as laptops and heavy office equipment.
3. Remove ghost and zombie assets
Make sure you have the right kind of assets in your inventory to avoid the additional costs associated with holding assets. Conduct a physical check to identify assets that are present but not mentioned in your system (zombie assets) and assets that are mentioned in the system but are not physically present (ghost assets).
Reportedly, 30% of assets in a business comprise ‘Ghost’ or ‘Zombie’ assets. Zombie and ghost assets can be a real problem for businesses! Imagine, you have $20000 worth of critical assets, and 30% of them – approximating to $6000 – are ghost assets. You are paying taxes and depreciation costs on those assets and also bearing the holding costs associated with their storage. That’s expensive!
Identify them today before you severely impact your bottom line!
4. Implement regular maintenance
Forbes reports that 80% of businesses experience unplanned downtime of high-end assets due to lack of maintenance; in turn, shut-downs cost 1-10% of production time. Make sure you service your assets well from time to time to prolong their useful life. You can adopt maintenance best practices to optimize the maintenance and upkeep of your assets. You can pick and choose the practices that suit your business model and asset type the most for smooth tracking.
Create maintenance logs, and set maintenance schedules to ensure your assets are in the best possible condition! These schedules help ensure that assets are available when they need to be serviced and not reserved for other purposes.
5. Review asset performance
You can review asset performance by creating asset reports and quantifying the data for analysis. These reports provide an overview of your operational and financial performance. You can create customizable reports to gather relevant asset and/or inventory data. You can also generate graphs and charts to present information in an easily understandable format.
Customize your report to apply formulas and filters so the information can be statistically presented and used to derive critical decisions. These reports can be used to assess asset utilization, inventory consumption and service costs, etc., to get a holistic view of your assets and associated costs.
Streamlined business processes with enhanced asset tracking
Asset tracking is one of the most important components of everyday operations. There are several techniques for asset monitoring and tracking that can expedite asset management, but the decision to choose a viable option lies with the stakeholders.
By adopting the right technology and streamlining asset-tracking processes, your business can yield significant benefits. Not only do these factors reduce costs, but help transform your strategies to better suit the business’s needs.
Achieve operational excellence by simplifying asset management and identifying the best ways to track your assets. Use asset management software to manage your assets from one place!
