25 May Why Manufacturing Companies Must Focus on Creating an Accurate Asset Registry
- Businesses spend approximately $50 billion every year in unplanned maintenance
- Up to 30% of all manufacturing deaths are related to a maintenance activity.
- Because of unplanned downtime, factories lose 5% and 20% of their productive capacity.
The one solution that could potentially solve all these problems is asset registry. Despite that, only 17% of small businesses use proper asset management solutions that allow asset auditing.
Most small and medium businesses (SMBs) still rely on traditional means to manage their assets, which often leads to data inaccuracies. Large manufacturing companies have their teams of accountants to help them maintain an asset registry. But in this digital age of remote working, they also need digital access to an accurate asset registry.
So why an asset registry is so important in the manufacturing industry? Let’s find out!
What Is an Asset Registry?
An asset registry (also called an asset register) is simply a detailed list compiling real-time data on all the business assets.
The primary purpose of an asset register is to help businesses know the details and value of every asset immediately. It includes specific details of the assets like:
- Type of asset
- Owner of the asset
- User of asset
- Purchase cost
- Date of purchase
- Expected asset life
- The warranty information from the manufacturer
- Expected depreciated value
- Insurance coverage
- Maintenance information
- Expected resale/salvage value
Significance of an Asset Registry
By creating an asset registry and updating it on a regular basis, business maintenance workflows get more streamlined. An asset registry eliminates all the guesswork and provides the company with hard data to base their business decisions upon.
According to the United Kingdom’s Information Commissioner’s Office, an accurate register can increase the profits and business revenue by 5-18% approximately.
An updated asset registry can help a business prioritize capital planning and offer insights into the overall performance.
Benefits of an Accurate Asset Registry in Manufacturing
As a centralized data bank of all the assets, an updated and optimized asset registry can have major benefits for the businesses in the manufacturing sector, such as:
– Optimized Inventory Management: A well-maintained inventory is the backbone of a manufacturing assembly line. Proper asset management can not only help streamline inventory management – even for organizations across multiple geographical areas. Low inventory stock can lead to decreased productivity, failure in timely delivery, inability to do maintenance, and business loss. With accurate asset management, the concerned departments can always check for the correct data on the stocks and take the required action.
– Minimized Asset Breakdown: An unexpected breakdown can hinder the productivity of the production line and can be costly. The labor force is also rendered task less if heavy-duty machinery fails. Without the maintenance activity, the replacement of machine parts can also be very expensive. But an accurate asset management service implements preventive maintenance activities. It can reduce asset breakdown by scheduling maintenance way in advance. When the assets don’t pose a threat of catastrophic breakdown in the middle of a workday, businesses can reliably depend upon them.
– Reduced Labor Costs: One of the most understated benefits of maintaining an accurate asset registry is the proper allocation of labor. Low labor cost does not indicate exploitation of the resources. Rather, with a dedicated asset review system in place, businesses can analyze how many employees are required to do a certain kind of work. This way, companies can allocate the right workforce according to the specific needs, based on the prevailing priority. Maximizing employee performance can help enhance the quality of work and allow the business to use its resources in a more useful way.
– Effective Monitoring of Manufacturing Assets: The manufacturing sector is an asset-heavy industry with a plethora of small and large assets to maintain. From a small screwdriver to an industrial-grade, heavy-duty machine, all the resources come under the maintenance department. With correct asset management technology, handling these assets, maintaining their performance, and monitoring their condition can get easier.
– Increased Asset Lifecycle: Based on the analysis of data gathered from the asset monitoring system, organizations can take measures to increase the asset lifecycle. With the implementation of an effective maintenance and servicing system, the assets can be kept functional for a long while based on the preliminary defects. Repairs and maintenance get a lot easier. With continuous monitoring and conscious use of assets, the lifecycle gets optimized.
– Simplified Audit Process: Audit and taxation go hand in hand – both very essential for businesses. When a business has consolidated data on all its assets, it gets easier to identify and verify the assets. The correct depreciation method can be adopted with the financial information available from an accurate asset registry. Organizations can run a quick audit and streamline their process for tax computation.
– Quick Creation of Financial and Regulatory Reports: An accurate asset registry not only helps the maintenance department but largely benefits the financial department. In the manufacturing sector, there are small to huge expenses to track. With an asset registry, financial reports such as maintenance costs and replacement costs can be easily monitored, measured, and optimized. From better reports on asset turnover ratio to predicted depreciation, regulatory compliance also gets easier. This swiftness in action can also give businesses an edge over the competition.
Challenges In Creating an Asset Registry
Despite being a useful practice, creating and maintaining an asset registry can be a strenuous task. Most of the information associated with assets is dynamic. Using pen and paper or spreadsheets for constantly shifting data creates more chances of data inaccuracies.
In medium or large-scale businesses, and for some small businesses, there can be multiple teams designated to handle some section of the data. Mismanagement can entirely mess up the asset registry. To avoid such discrepancies and challenges, what can be the ideal solution?
Partner with an experienced data management expert who can create an accurate asset registry and also share best practices to maintain the health of the registry over a period.
Connect with us, and we will be happy to assist you in creating a reliable digital asset registry and eliminate the possibilities of data incongruity.