Effective asset management is critical for any logistics company. They move their assets regularly from one warehouse or facility to another, and when assets are transferred, the risk of asset loss and theft increases, which is why asset tracking is critical for them.
But the question is how! With logistics asset management and asset tracking technologies such as barcodes, QR Codes (Quick Response Tag), RFID (Radio-frequency Identification), and others, poor logistics management can negatively impact your organization’s financial health.
The use of asset management in logistics is significant. It provides the company with tools for managing the entire logistics process, ensuring the quality of the service provided.
With enough resources, it is possible to have a complete view of all assets involved in the logistics process, generating several benefits, such as:
- Real-time monitoring
- Identifying potential failures,
- Optimizing maintenance response time,
- Extending asset life.
Critical Challenges in Logistics and Transport Asset Lifecycle Management
Asset management is a time-consuming task, despite how simple it may appear. Managers frequently need help keeping track of their equipment. Whatever the business size, there will always be many assets to manage. The task may consume the majority of the manager’s working hours.
Whether it’s a small item like a stapler or a large manufacturing machine, proper monitoring always yields positive results for the company. As a result, managers must endure a great deal of hassle to manage assets effectively.
1. Overcoming errors and inefficiencies in manual processes.
Handling and recording asset additions, transfers, and disposals by hand takes time and increases the possibility of mistakes, resulting in missed period-end closing deadlines and overworked and stressed staff.
2. Steering clear of spreadsheet pitfalls
Standard spreadsheets are laborious and prone to errors, making it simple to overlook updates in tax law that could result in expensive calculations gone wrong.
3. Handling the pressures of tight finances
Organizations frequently need help to close their books due to the flow of information from various departments, manual processes, and data reconciliation from disparate systems.
4. Data sharing between departments
Custom spreadsheets or outdated ERP systems make sharing important tax information across departments more difficult. Furthermore, when the spreadsheet’s owner and knowledge base depart, there is a continuity issue because spreadsheets need more visibility and automation for crucial operations.
Benefits of using Revnue asset tracking and management software
Your organization’s assets are its vitality. With the help of intelligent contract intelligence and an intuitive platform, Revnue’s asset management software lets you safeguard and optimize your digital and physical inventory.
It’s possible with Revnue. We provide the only platform for enterprise asset and contract lifecycle management that unifies systems into an intelligent insights engine, boosting productivity, visibility, and risk mitigation through artificial intelligence.
Key features to look for in asset management solutions.
The key features to look for in asset management solutions include:
- Contractual Integration
While other platforms might monitor the performance of your assets, only Revnue’s AI-powered solution enables you to link your inventory and assets with contract intelligence. This translates to an end-to-end asset management system that improves decision-making and makes it easier to identify what is driving your company’s growth.
- Chain of Supply
Imagine this. With supply chain problems affecting practically every industry worldwide, Revnue offers the solution to provide stability and continuity for your business. We provide the most excellent SaaS and proprietary powered asset management software. Real estate, healthcare, manufacturing, and other asset-critical industries can all benefit from Revnue’s contract intelligence solutions, which eliminate problems associated with asset management.
- Correlation of Data
We are more than just another disjointed asset management system with our platform. We integrate with your business to facilitate matching contracts, assets, services, and other necessary metadata. Take advantage of an extensive, previously undiscovered connection between your products and your associated agreements with vendors, clients, and contractors.
Importance of Real-Time Asset Tracking into Asset Location
The following explains the importance of real-time asset tracking and asset location.
- Enhanced asset availability and usage, decreased asset loss and theft, and optimized return on assets.
- Decreased the cost of asset maintenance and removed unscheduled downtime due to early identification of abnormal asset functioning and potential asset breakdown.
- Savings associated with automated asset tracking (removal of incorrect data entry, prompt location of vital assets, etc.).
- Reduced tax overpayment as a result of precise asset depreciation tracking.
- Enhanced asset allocation, scheduling, and utilization due to continuous monitoring of the assets’ location, state, and use.
- Any asset shortage or surplus results from precise asset stock level monitoring and asset demand forecasts based on the study of asset consumption trends.
- Optimized asset efficiency by regulating asset transit and storage conditions, such as humidity and temperature.
- Reduced risks of asset loss, theft, misuse, and misplacement thanks to real-time asset geofencing.
Strategies for managing the entire lifecycle of assets from acquisition to disposal
Below are the strategies for managing the entire lifecycle of assets.
- Planning and Calculating the Need for Assets
Comprehensive planning is the first phase in asset management, and it’s essential since it creates the framework for how assets are bought and maintained to function at their best. Planning entails evaluating present assets, defining future needs, and ensuring newly acquired assets align with organizational goals.
- Procurement
Choosing the right assets would be crucial here. A thorough study may be necessary to ensure that every asset satisfies the requirements and falls within the allocated budget. In addition to the purchase price, the emphasis should be on the entire cost of ownership, which includes installation and maintenance. Companies want to buy assets that will serve them well in the long run and meet their current demands.
- Utilization
Effective asset management extends beyond the acquisition point. The accurate measure of an asset’s worth is how well it functions throughout its operation. This is important because it shows how productivity is affected directly, ultimately determining corporate operations’ success.
However, organizations must monitor their performance to ensure they are utilized to the fullest extent. In such a situation, regular evaluations would undoubtedly show whether they operate at the intended levels of effectiveness and usefulness. Additionally, they maximize asset productivity and proactively extend the asset’s life.
- Maintenance
Thanks to the subsequent upkeep, each of these assets will have a longer lifespan and greater functionality. A well-maintained asset is less likely to break down, saving money on repairs and downtime.
This strategy’s most significant focus is on preventative maintenance. It entails routine equipment inspections and repairs for the company, where concerns may be fixed before they become more serious.
- Disposal
Every asset eventually reaches the end of its useful life.
It takes discretion to choose when and how to dispose of an asset. The residual value, the expense of maintaining the asset versus replacing it, and occasionally the environmental effect that may result from it are all considerations that the organization must make. Options include selling the item in one or more ways, recycling it, or even giving it; each affects the business’s finances and environment.
READ ALSO: Understanding Healthcare and Hospital Asset Management
Calculating the return on investment (ROI) of asset management initiatives.
Profits are expressed as a proportion of the capital managed and are measured by the return on assets managed, or ROAM. Operating earnings are divided by assets (which may include inventory and accounts receivable) to find out ROAM. The two primary factors influencing returns on assets managed are asset turnover and operating margin.
The formula for ROAM is the total income from investments x 100 divided by assets managed.
Even though ROAM isn’t as frequently discussed as other well-known business measures like ROI or Return on Assets (ROA), when utilized appropriately, it may be a helpful and insightful gauge of a company’s general health.
Strategies for cost reduction through effective asset management
Any organization that wants to properly manage and monitor its assets systematically has to have an asset management system.
The following are some of the most economical asset management techniques a company may implement using its asset management system.
1. Improving the Life Cycle of Assets
A company is just as good as its resources. Ensuring accurate asset monitoring facilitates prompt maintenance, significantly prolonging the equipment’s life. An asset management system enables the easy execution of this procedure.
2. Comprehending Asset Depreciation
The usefulness of an asset, the reason for its depreciation, and whether it is obsolete may all be ascertained using asset management software. Without this knowledge, your employees could continue using antiquated resources, decreasing their productivity. Keeping track of an asset’s depreciation lets you identify which assets require sale, donation, or disposal.
3. Creating both short- and long-term objectives
Companies also use quarterly, half-yearly, and annual goal-setting as an asset management method. You may prioritize and arrange the order of critical chores and define your goals daily. When a specific amount of time has passed, senior management ought to investigate whether or not the objectives have been met. If issues are reaching the objective, respond quickly to identify the causes and adjust your business procedures often to guarantee optimal effectiveness.
Compliance and Risk Management
Businesses with large asset bases must consider how such assets age and break down and adjust their risk management strategies appropriately.
Businesses may make rash decisions that harm the company if they don’t understand its risks and assets. Due to practical constraints, it is difficult to eliminate all hazards; thus, organizations must find strategic methods to accept some risks. Risk management makes financial and other restrictions visible, allowing for the precise definition and evaluation of risks to assist well-informed decision-making.
Asset Management Best Practices and Future Trends in Logistics and Transportation
There is an unspoken truth that applies to almost every industry: disruptive forces are always at work, altering how businesses think about technology, conduct business, and plan for the future. The logistics sector is influenced greatly by market movements; thus, it is not an exception.
In 2024, supply chain agility is expected to be a key focus of logistics trends as companies work to meet the rising demand for their goods and services. Being agile is critical for businesses to remain competitive in today’s dynamic market as it allows them to react swiftly and effectively to changes in supply and demand while simultaneously cutting costs and boosting efficiency.
The logistics business has experienced a significant shift in its daily operations due to the increased adoption of automation.
With the development of e-commerce and technological breakthroughs, the industry is changing rapidly to provide the finest services at competitive prices to keep up with global standards.
The role of automation, AI, and machine learning in the future of asset management.
Asset management is the strategic practice of managing and maximizing a range of assets owned by people, organizations, or companies. Stocks, bonds, real estate, and other financial instruments are examples of these assets. Asset management’s main purpose is to increase the assets’ value over time while lowering risk and supporting the asset owner’s financial goals.
Below are the roles that AI and Machine learning play in the future of asset management:
- Managing a portfolio and empowering clients
- Automated insights: Using earnings transcripts to assess management mood.
- Relationship: Determining inexplicable connections between securities and market indicators.
- Alternative datasets – Analyzing alternative data (e.g., weather predictions and container ship movements) and monitoring search engines for terms that aid in constructing hedging strategies.
- Obtain press releases, financial reports, filings, and information from social media and news sources to incorporate more sources into investing models.
- Analyze vast amounts of unstructured data, such as alternative data from satellite photos, credit card data, shop circulation data, and other sources.
- With intelligent automation solutions, you may enable the automation of manual middle- and back-office processes, which can help save expenses associated with high-volume, repetitive tasks.
- Enhance the supervision of the first line of defence by effectively monitoring and surveilling suspicious transactions in real-time. Monitoring chat, email, and other forms of communication are additional domains.
Final Thought
Technology innovation has been quite exciting over the past few years, particularly automation in corporate logistics. Modern technologies and systems are intended to minimize manual intervention and human error, which speeds up lead times and organizational efficiency.
Thus, the moment has come to adopt them. Today, almost every logistical problem has a tailored solution, from intelligent weighing scales that communicate with warehouse management systems and track inventory to business processes and communication software that offers real-time information for every facet of product flow.
Although logistics management can be difficult and time-consuming, the correct tools can make it simpler and more successful!
Use contract intelligence and intelligent data management to gain control over your assets.
Book a demo with Revnue today!
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