5 Crucial Benefits of Asset Management for the Manufacturing Sector

In the manufacturing industry, the equipment used for manufacturing finished goods can be quite sophisticated and expensive. Hence, asset management becomes a crucial part of the manufacturing activity.

If we speak about the size of the US manufacturing sector, according to Statista  “This statistic represents the gross output of the manufacturing industry in the United States between 2008 and 2018. In 2018, this sector produced gross output of approximately 6.3 trillion U.S. dollars.”

Asset management makes the company operations efficient, by providing an accurate and deep understanding of the whole production value chain.

What is Asset Management?

There are many risks involved if there is no asset management system functioning in an organization. Every piece of equipment, whether fixed or moving, is important for the success of the business.

Also Read: Major Challenges for Manufacturing Industry & How Asset Management Assist?

What Happens When an Organization Is Not Equipped with Asset Management Software?

Below are some of the issues to confront when an organization is not equipped with asset management software.

Low Return on Investment

Maintenance of any hardware or software is expensive and time-consuming. It is difficult to keep a regular and accurate check over all the devices and software. This ends up with a poor return on investment.

Decreased Asset Performance

Improper functioning of assets or a lack of information and insight on poorly performing assets can lead to productivity loss and increased downtime period. This results in loss of time, money, and profitability.

Asset Theft Risk

In the manufacturing industry, there are huge organizations and scores of employees working in multiple shifts. Checking on each and every employee is an exhausting and ineffective task. This gives rise to a situation where expensive and portable assets are prone to theft.

Disorganized Inventory Management

Without an effective asset management system, you cannot handle and manage the inventory remotely. It is a critical aspect of the asset management system to remotely access data, revoke access or install software updates across all devices.

Unable to Identify Unused Asset

For the field-based personnel of an organization, it is important to know about the whereabouts of an unused asset or the time since when an asset has gone missing.

Asset Management is important because it assists in retrieving complete information of the asset life cycle. The centralized system helps in cost control and also integrates with other systems to obtain all information at one location.

What Are the Benefits of Asset Management for the Manufacturing Sector?

Below are some major benefits of asset management for the manufacturing sector:

Effective Audit

Auditing is very crucial for identifying and verifying the assets owned by the organization. How many assets are rented and where they are located? The system provides answers to all such questions.

Also Read: How Asset Management Software Helps Manufacturing Organizations?

The auditing part plays an important role while calculating the taxation also. In accordance with the correct depreciation adopted, it can provide financial information for tax computation. The organization can perform a quick audit using the software and is also able to track an asset's location, condition, status, etc. It, therefore, streamlines compliance.

Proper Inventory Management

Inventory is the lifeline of the manufacturing assembly line. A manufacturing enterprise can have several factories spread out geographically across the world.  In such a setting, the lack of a centralized system can make the operations go haywire. There can be cases of wrong information doing the rounds and work getting mismanaged due to the absence of coordination.

When inventory is not available in stock, it results in decreased productivity, failed timely deliveries, and business loss. If a machine fails and spare parts are not available in stock, the entire production can get affected leading to losses.

Asset tracking management software centralizes the business operations, no wrong information gets conveyed and correct data on the stocks are available.

Decreased Labour Cost

When you are monitoring employee activity with real-time location, you can analyze how many employees are spending what amount of time on each activity in their work. Employees can be assigned work based on the prevailing priority, e.g. arrival of ad-hoc work.

This helps enhance the work-in-progress state of the operations. This ensures maximizing employee performance and putting the manpower where it is actually needed.

Asset Breakdown Minimized

When an unexpected breakdown occurs, it not only costs money but also decreases the productivity of the organization. The workers can be rendered idle because of the machine breakdown.

Assets which are not maintained regularly can cause unexpected breakdowns, expensive repairs, and replacement of machine parts.

The emphasis of asset management software lies in preventive maintenance. It is also known as planned and proactive maintenance as it is scheduled in advance. This is the most popular and prevalent practice for maintenance activity.

Preventing a potential problem is the objective of preventive maintenance. With an information log, the preventive maintenance software system helps in detecting any kind of potential issue.

Extend Asset Life

The importance of maintenance is realized when a machine or vehicle is deployed on a heavy workload. With Asset tracking, you get regular updates for the maintenance of an asset.

Tracking asset life is also very important and necessary for an organization. With asset management software, it is easy to find out if an asset is working properly, whether it needs any kind of maintenance, etc. Overall, the system makes sure that assets are functioning well and performing as per expectations.

When the organization is appraised on the status of its assets, they can make correct decisions that help in saving costs and extending the life of the asset. One of the major benefits of asset tracking is that it enables tracking, managing, and increasing the asset's lifecycle. Asset tracking provides regular updates and reports on the maintenance of assets. As a result, asset life gets optimized.

So, these were some of the leading benefits of asset management for the manufacturing industry.

Also Read: 7 Ways to Improve Efficiency of Your Manufacturing Plant

Conclusion

Asset management brings aboard a lot of benefits and very powerful features such as Check-in Check-out software, real-time asset information, re-order level setting for inventories, alerts, and notifications. Through all these features, manufacturing companies can tackle several problems and make their operations smooth, automatic, and better.