Business inventory is generally categorized as either finished goods or raw materials, to be used in production. On the other hand, a company’s assets are generally divided into current and non-current assets. Regardless of the type, every organization has to handle a large volume of assets as part of their daily operations. Managing such a large volume and variety of assets can be a challenge. For this, organizations need to implement a robust inventory and asset management system. However, doing so is not as easy as it sounds.
Contingent upon the nature of goods a firm acquires, it is a challenge for equipment managers to track assets during work tasks. The first step towards tackling these hurdles is to identify why they occur:
- Lack of real-time data: An absence of a proper management system means that business transactions are not being tracked in the correct manner. Inaccurate data hinders the ability to forecast future consumption patterns, thus making restocking difficult.
- Inability to meet regulations: If a company wants to compete in the market, it should abide by the legal regulations. Stricter compliance terms put immense pressure on firms to perform credible audits. Failure to comply with these can call upon lawsuits and create financial trouble.
- High rate of misplacement: Assets and inventory items are likely to be used across different locations. This is more common for businesses which operate from multiple locations and offices. Without checks and balances, assets are at a greater risk of being misplaced by staff workers.
Companies suffering from mismanagement need to devise a plan to maximize efficiency and achieve higher productivity levels. The key to achieving this lies on three factors:
- Achieving production targets
- Controlling costs
- Setting and meeting organizational goals
Each organization needs to define its goals and how it plans on achieving them. For the proper management of capital investment, an automated inventory and asset management solution can be really useful. Listed below are some prominent features of an inventory management solution that can make the task of handling and managing assets easier:
Check-ins and checkouts to track usage
One of the most common procedures adopted by small and medium sized business for tracking assets is tracking through barcode labels. By creating a unique identification number, you can tag all your inventory items and even their storage space. An electronic label lets you check-out and check-in items simply by using a scanner. This practice records usage information alongside usernames. In case of stolen assets or misplaced inventory, you can track location history of the missing asset and put an end to fraudulent activities. Readily available data also allows you to check which assets are available for use before you schedule a project. Increased transparency in asset ownership leads to lower risks associated to loss through theft or mismanagement.
Depreciation management for timely disposal
Fixed assets need to be adjusted for depreciation along the years. Keeping track of asset depreciation is important for financial upkeep and uninterrupted daily workflows. Tracking asset lifecycle lets you estimate the useful life of an asset and its replacement date. Companies which keep track of devaluation can sell off old assets at their salvage value, and save on costs incurred by equipment breakdowns. Basically, when a business wants to dispose an item, it can gain some monetary returns if depreciation has been calculated in the correct manner. Moreover, choosing the appropriate devaluation method also enables firms to streamline procurement processes.
Frequent audits to maintain compliance
Regardless of the industry you specialize in, audits are a critical part of business management. Failure to maintain compliance not only incurs grave cost penalties, but can also damage business reputation. Businesses should take every step necessary to make the audit process successful by fulfilling the following criteria:
- Carry out a self-compliance audit: Before calling upon an external team, try to conduct an internal audit. This allows you to judge where you currently stand and whether you will be able to pass the external audit compliance test.
- Ensure compliance audit trail: Having a comprehensive database of your user chain lets you identify any changes that have been made and by whom. This makes it easier to monitor asset possession.
- Stay up-to-date with new regulations: The business world is always evolving which makes it essential to stay in touch with new rules and regulations. Choosing the right type of technology is imperative to help you stay compliant at all times.
Maintenance events to reduce downtime
Maintenance implementation usually takes up to 40 – 50% of a business’s operational budget. If utilized in the correct manner, repair events can drastically improve performance through increased uptime. An asset and inventory management system lets you organize calibration sessions well in advance. Doing this is extremely useful as it ensures each and every item in your inventory is being checked in for maintenance. Once this is done, you can also automate repair by setting up recurring services. This means that you don’t have to manually send in an asset to vendors for inspection. You can also send out alerts to all your employees so that the unavailability of certain tools doesn’t hinder workflows.
Automated procurement to cut down on outages
Maintaining optimal quantities of stock can be quite daunting if you don’t have the right tools for the job. A small business report shows that only 21% of the companies use an inventory management system. While some companies opt for manual procedures to carry out tasks, absence of an automated program significantly lowers efficiency. For instance, the lack of real time data hinders timely stock replenishment. An inventory module can help you automate the procurement process in a few simple steps. As soon as you order stock, you can set a minimum threshold level. When this limit is reached, purchase orders are created and sent to the respective vendors. This practice helps you avoid under or overstocking, while at the same time enabling seamless warehouse management.
Proper management of an organization’s assets is important to achieve business goals. For this, businesses need to invest in a proper asset and inventory management. A smart way would be to choose a system which suits the needs and requirements of your company. This way you will be better able to design policies to increase rate of return on your capital investments. Once you’ve highlighted your business requirements, the next step is to choose program that integrates well with existent workflows.
An inventory and asset management system can help you streamline workflows, increase workplace efficiency, improve asset visibility and reduce equipment downtime. This in turn helps businesses save resources both in terms of time and money.
EZOfficeInventory is an asset tracking software that helps thousands of companies track assets and inventory, conduct maintenance events, cut costs and streamline processes all over the world. We offer a free 15-day trial – no credit card required!