From Procurement to Depreciation: Navigating the Asset Management Pipeline

Asset management is the practice of buying, selling, and managing assets, commensurate with specific risk tolerances, focusing on improving performance and profits alongside striving for sustainability and optimization.

Asset management is a broad and complex field that covers multiple areas:

Tangible assets – physical objects such as complex processes or manufacturing plants, infrastructure, buildings, or equipment;
Intangible assets – such as intellectual property, goodwill, or financial assets;

The asset management theory primarily deals with the periodic matter of improving, maintaining, or in other circumstances assuring an asset’s economic and capital value over time. The term is commonly used in engineering, the business world, and public infrastructure sectors to ensure a coordinated approach to the optimization of costs, risks, service/performance, and sustainability.

The process of asset management can be broken down using the following structure:

Asset Planning and Acquisition
- Identify Needs: Assess the requirements for new assets based on organizational goals and objectives.
- Budgeting: Allocate financial resources for asset procurement.
- Procurement Process: Select vendors, negotiate contracts, and purchase assets.
Asset Registration and Documentation
- Tagging and Identification: Assign unique identifiers (e.g., barcodes, RFID tags) to each asset.
- Record Keeping: Enter asset details (e.g., type, serial number, purchase date, cost) into the asset management system.
- Documentation: Store purchase receipts, warranty information, and user manuals.
Asset Deployment
- Installation and Setup: Deploy the asset to the appropriate location or user.
- Configuration: Ensure the asset is configured and integrated with existing systems if necessary.
- Training: Provide necessary training to users or operators.
Asset Maintenance and Monitoring
- Routine Maintenance: Schedule and perform regular maintenance to ensure optimal performance.
- Monitoring: Continuously monitor asset performance and condition using asset management software.
- Repairs and Upgrades: Conduct repairs or upgrades as needed to extend the asset’s lifecycle.
Asset Utilization
- Tracking Usage: Track how assets are used to ensure they meet organizational needs.
- Optimization: Analyze utilization data to optimize asset use and minimize downtime.
- Compliance: Ensure assets comply with relevant regulations and standards.
Asset Valuation and Depreciation
- Valuation: Assess the current value of assets for financial reporting.
- Depreciation: Calculate depreciation to account for the reduction in value over time.
Asset Reporting and Auditing
- Reporting: Generate reports on asset status, utilization, maintenance, and financials.
- Auditing: Conduct periodic audits to verify the accuracy of asset records and compliance with policies.
Asset Disposal
- Assessment: Evaluate assets that are no longer needed or have reached the end of their lifecycle.
- Disposal Process: Follow proper disposal procedures, which may include selling, recycling, or discarding assets.
- Record Updating: Update records to reflect the disposal and remove the asset from the inventory.

Resource flow 2.0 WIP

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