how to improve assets efficiency through ILS
If you fail to manage your company assets well, your business will likely end up being unable to meet its obligations. The reason why assets need to be managed for efficiency is twofold: business assets are costly to acquire and maintain over time and, their lifespan is limited. With this in mind, any business executive should strive to enhance asset efficiency and reduce costs if higher returns on assets (ROA) are desired.
The most effective way of improving asset efficiency and minimizing costs is through Integrated Logistics Support (ILS). ILS includes a comprehensive asset management plan that involves all the departments of a company. This ensures that the asset management vision is implemented across the board rather than by a single department.
Here are outlined five effective approaches to enhancing asset efficiency and reducing costs.
Developing a vision for asset management
Proper asset management begins with a vision. Before buying or acquiring any assets, a detailed plan should be made on how it should be put to use. A clear understanding of how the asset will function is crucial for preventing misuse and unnecessary costs. Have each department clearly outline their needs and then prioritize them at the executive level on which one will be acquired first.
Identifying effective asset management procedures
Effective asset management considers three factors. These include how often the asset will be put to use (utilization), how well it does its work (reliability), and how much it costs to use the asset (unit cost). Asset performance index (API) is also useful in determining efficiency. It measures the time spent actually doing the work it was acquired for versus the time it lies idle. An evaluation of these four parameters can help identify possible areas of improvement in asset management.
Simplifying asset management processes
With time, new functions, processes, and procedures get layered over the old ones, thus rendering asset utilization slow and less efficient. When asset acquisition, commissioning, and utilization become cumbersome due to the accumulated bureaucracy, perhaps it’s time to consider an overhaul. Reducing the processes and number of people involved in asset management can be a great way of cutting costs and enhancing efficiency
Constant performance monitoring and evaluating
Asset management does not stop once the asset has been acquired and commissioned for production. It is a continuous process that goes on over the entire asset life cycle. Monitoring and evaluation are critical to this process. Continually evaluating the asset’s performance will enable you to determine whether the actual operating efficiency is similar to the envisioned one. It also helps identify potential trouble areas to correct for improved efficiency.
Outsourcing integrated logistics support
Sometimes the demands of integrated logistics support are just too much to be met internally. Outsourcing such services to a professional asset supportability firm may be all you need to do to streamline your company’s asset management. These firms are well-equipped with the expertise and resources to guide your business on how to improve assets efficiency through ILS.
Asset management consultancy near you
IRIDIUM Engineering – Asset Management Consultancy is a top asset management company in the Middle East. We specialize in offering asset supportability services (such as helping suppliers improve assets efficiency through ILS) to reduce asset-related costs and enhance efficiency.