Electrical Safe Work Practices 2024 NFPA 70E Online Training

SIGN UP FOR OUR UPCOMING NFPA 70E ELECTRICAL SAFE WORK PRACTICES ONLINE CLASS

The Effects of Poor Asset Management on the Bottom Line

Running a business is like piecing together a puzzle, and one crucial piece is ensuring your equipment runs smoothly. Asset management is essential for keeping your gear in top shape to fuel your operations. Neglecting this can lead to significant financial troubles. This article will explore the real-world consequences of overlooking your equipment in both the short and long term and offer practical advice to avoid costly missteps.

The Consequences of Poor Asset Management

Poor asset management can:

  • Escalate maintenance costs, leading to frequent component replacements.
  • Lead to a higher likelihood of costly overhauls and rebuilds.
  • Create an increased need for frequent calibrations and adjustments.
  • Lead to retrofitting and upgrading equipment more often.

In manufacturing, downtime costs average $260,000/hour, with equipment downtime averaging 800 hours annually. Larger manufacturers bear the brunt of these expenses, with costs per minute 20 times higher than those of smaller manufacturers.

Short-Term Consequences

Short-term consequences of poor asset management can be costly, but the good news is that they are preventable. Frequent equipment failures and emergency repairs can disrupt productivity and increase expenses. By implementing regular maintenance and effective asset management, you can avoid these problems.

  • Inefficient operations: Poor asset management leads to unexpected breakdowns, causing delays and frustration as employees scramble to find solutions.
  • Immediate financial impact: Emergency repairs due to neglect or lack of maintenance incur significant costs, while 70% of these are believed to be preventable. Costs include downtime, emergency repair (parts and labor), replacement if needed, production loss, and supply chain disruptions.
  • Wasted time: Employees may spend excessive time searching for parts, delaying repairs, managing reallocated resources, or even experiencing bottlenecks that slow the workflow.
  • Stressful work environment: The disruption caused by equipment failures and rushed repairs creates a stressful environment, diverting attention from business growth and customer service and increasing employee turnover. On average, replacing an employee can cost between 75% and 200% of their annual salary.

Long-Term Consequences

Refrain from neglecting asset management to avoid trouble for your businesses in the long run. Like a car without regular tune-ups, poorly maintained equipment leads to more breakdowns and costly repairs over time, diminishing your profits and risking customer satisfaction.

  • Increased breakdowns and repairs: Over time, neglecting asset maintenance can lead to more frequent and costly repairs, as emergency repairs can be up to 10 times more expensive than planned maintenance. When your equipment isn’t regularly checked, minor issues can become big problems, causing unexpected breakdowns.
  • Diminished profits: Sometimes, ignoring minor maintenance issues can end up causing more significant problems down the line. It’s the same with your business assets. By staying on top of routine maintenance, you can avoid those unexpected costs and keep your finances in better shape, which makes it easier to invest in future growth
  • Customer dissatisfaction: When equipment keeps breaking down, it can be super frustrating for your customers. Keeping your equipment in good shape is vital to sticking to your production schedules and keeping your customers happy with timely deliveries to avoid them looking for a more reliable option.

Winning Asset Management Strategies

Give your equipment the necessary attention and care to keep it functioning optimally with regular check-ups and maintenance. Check for wear and tear, fix minor issues before they become significant problems, and stick to a maintenance schedule.

Keeping an organized workspace environment prevents chaos, especially when something goes wrong and needs a quick fix. That’s why your businesses need to track their assets efficiently. Know what’s utilized, where, and when it requires attention to maintain order and efficiency.

Lastly, ensuring your employees know how to handle equipment safely is vital. Investing in your employees will pay off in the long run. Proper training helps them use equipment without accidents or damage, keeping the business running smoothly and making better use of resources.

Benefits of Effective Asset Management

Effective asset management has many benefits that will help keep your business running efficiently and effectively. When you take good care of your assets, they stick around longer and work better, which means fewer problems and less money spent fixing things. Putting the time and effort in will pay off in the end.

While the financial aspect of not having to worry about constant repairs is nice, it’s not just about saving money—it’s also about keeping things going without any bumps in the road. Well-maintained equipment is less likely to stop working, which means less time wasted suddenly. Trust me; wasted time is a real pain—it can mess up your plans and make customers unhappy.

Another benefit of effective asset management is that it helps you use your resources wisely. By

tracking where your stuff is and how it’s used, you can see what is helpful to your business and what you use less or less. This lets you spend your money on the stuff that matters and cut back on things you don’t need.

Set up Long-Term Success with Asset Management

Poor asset management can be detrimental, from unexpected breakdowns and costly repairs to frustrated customers and lost profits for your business. However, by implementing effective asset management strategies with SEAM Group, your business can avoid these problems and keep its operations running smoothly. By prioritizing proper asset management, you can protect the bottom line and set yourself up for long-term success in today’s competitive market.

Call 866.772.6770 for more information.

Share
Explore these topics

Related Content

Stay Informed

Stay ahead of the curve with our latest insights, strategies, and news.