Stages of Asset Lifecycle and Role of Asset Tracking Software

asset tracking software

Looking to optimize asset lifecycle management? Organizations of all sizes, in  public or private sectors, can start by investing in a comprehensive asset tracking software

What is asset lifecycle management?

Asset lifecycle management is the process that comprises different stages of an asset that it goes through during the span of its lifetime. The main stages of an asset’s life-cycle are planning, procurement, operations and maintenance, and disposal. 

Tracking an asset’s life cycle is essential as it leads to optimized operations, minimized downtime and reduced overheads. There are different systems, methods, software, and standards which are used to manage different types of assets. A robust asset lifecycle management solution would enable an effective and well-organized asset and deliver services. For the same purpose, companies use asset tracking software to track and manage their assets’ lifecycle.

This blog details the stages of an asset’s life cycle and how you can track them using asset tracking software.

Benefits of a powerful asset lifecycle management solution

  • Get insights into what assets you have and how they are being used
  • Discover and track new purchases along with the existing assets right from procurement to disposal
  • Have streamlined and automated processes for license renewals, asset servicing & maintenance and asset retirement
  • Make knowledgeable decisions on what assets must be purchased, updated or retired to ensure operational efficiency
  • Boost productivity and reduce unplanned downtime with real-time information regarding assets health
  • Offer better customer experience with streamlined data availability

On the other hand, if you don’t have a dedicated asset tracking software, you run the following risks: 

  • The risk of assets theft increases. According to Sheerid, approximately $50 billion worth of assets get stolen from US businesses alone.
  • Lack of an asset tracking software means you are likely using  manual tracking methods such as spreadsheets. These can be time consuming, prone to human error, and don’t provide you real-time information. 
  • Optimizing procurement is a critical part of balance budgets. You risk overbuying or underbuying of new assets due to the lack of visibility in the existing assets.  
  • An asset tracking software automates and streamlines equipment maintenance by enabling collaboration, assigning ownership, and sending reminders and alerts. Without a proper system in place, you can experience increased asset downtime due to the lack of proper asset maintenance. This factor will then lead to decreased business efficiency.

Read More: What is equipment tracking software and why is it important for your company

Stages of asset lifecycle management

The wide-ranging factors under asset management have been classified using a simple, four-stage format. This is to help you understand and manage with ease the best practice methodology in asset management.

It highlights the critical aspects of the cycle, from a data accuracy perspective, including planning, procurement and operations at the front end of the cycle and disposal at the back end.

Planning

The first stage of an asset lifecycle that an efficient asset tracking software helps you record is planning for acquisition. This stage establishes and verifies your business requirements for an asset by defining what assets you need to track. 

Establishment of these requirements is based on the evaluation of the existing assets and their potential to help you carry out and streamline everyday business processes.

Throughout the planning phase, it is crucial to make sure that the ongoing development adds value to the organization. If the company uses planning in all asset management cycle stages effectively, it will help in:

  • Assessing the current state and usability of existing assets.
  • Ensuring that the assets are available when required.
  • Recognizing underused and shelved assets.
  • Estimating options for future asset acquisition.
  • Ensuring that the assets are maintained properly.

This stage monitored via asset tracking software gives the most excellent means of delivering value and lays down a foundation for a robust asset management lifecycle.

Acquisition

The acquisition in asset lifecycle management includes activities involved in an asset’s procurement with the aim of ensuring cost-effective acquisition. This stage includes every aspect of acquiring an asset, from sending out initial purchase order requests to vendors to assigning the assets to the end-users. 

The two broad processes in this stage involve user management and the approval process. This also includes receiving a proper request and purchase order approval for items that may include quantity and vendor details, and any related documents. Ultimately, the goal of the procurement process is to enable the best price for the best product available to meet the business’s needs, while providing full asset visibility.

Read More: Why Procurement Management is vital to your business?

Operations and Maintenance

The most crucial and important stage of an asset’s life cycle is the operation and maintenance of the asset. It indicates the usage and management of an asset, including maintenance, with the aim of delivering continuous and timely services. The goal of asset tracking software should have a high focus on service and maintenance events. When managed and serviced properly, assets offer higher ROI and help you enhance operational efficiency.

Assets with longer life, especially in the public sector like on the roads and buildings require ongoing and specific maintenance during their life cycle. Throughout this stage, an asset should be the focus of appropriate maintenance, monitoring and potential servicing to overpass any gap in operational requirement. 

An efficient asset management lifecycle software will automate the scheduled maintenance for the assets and will provide real-time information on their health. This allows you to make predictive maintenance decisions and hence increase the lifespan of these assets.

Read More: Ways to reduce maintenance costs

Disposal and Replacement

As we said above, disposal or retirement is the stage in an asset’s life cycle which is handled at the back end. When an asset reaches the end of its productive life, it can be treated as a ghost asset. These can also be referred to as unused assets and these are difficult to track. 

So, to enable effective asset tracking and eliminate ghost assets, any unnecessary increase in the asset stock should be countered by an exit or retirement linked to the acquisition. In simple terms, new equipment should lead to the old equipment out. 

The best practice would be to determine whether the underperforming assets should be repaired or replaced. If the asset is to be replaced, then its access should be revoked and a new asset should be allocated in replacement. This stage can be automated through the use of asset management solutions.

Acquisition and upgradation of assets is a continuous process in every organization. As organizations face increasing challenges associated with asset lifecycle tracking, the use of an asset tracking software becomes inevitable. A reliable asset tracking software helps organizations in determining the operational costs, usage frequency of the assets and their performance throughout their lifecycle. Such a software will also help organizations get a grasp on asset lifecycle processes which will eventually empower organizations to run more optimized business processes.

Read More: Tracking and Eliminating Ghosts Assets

Choosing the best Asset Tracking Software

The best solution is the one that saves time, reduces operating costs and effectively monitors asset lifecycle. EZOfficeInventory is the leading asset tracking software used by SMBs and technopreneurs all over the globe. Track stages of asset lifecycle management seamlessly. Sign up today for our 15-day free trial and start increasing your company’s assets ROI.

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