Everything You Need To Know About Surplus Asset Lifecycle Management

Article Written By: Clayton Arnold

Table of Contents

  • What Is Industrial Asset Management?
  • Planning
  • Acquisition
  • Operation and Maintenance
  • Disposal

What Is Industrial Asset Management?

Industrial asset management is the process of maximizing the value of your industrial machinery and equipment. Surplus industrial assets can drain your company’s bottom line by adding holding costs and clogging up storage facilities. By implementing an asset recovery strategy as part of your asset lifecycle, you can retain as much value as possible from assets as they enter the disposition phase.

The Asset Lifecycle 

Understanding the asset lifecycle is critical in asset management. This section will categorize and discuss the 4 essential phases of the asset lifecycle:

Planning 

The asset lifecycle begins with planning – this sets and verifies asset requirements. These asset requirements are determined by assessing current assets’ ability to satisfy service delivery demands. Management techniques must be identified to incorporate and assess the need for an asset. Throughout the planning process, it’s essential to ensure the development offers value to the company.

Planning well at all phases of the asset management cycle will help with:

  • Determining whether existing assets are sufficient for the job at hand
  • Ensuring that resources are available when needed
  • Identifying assets that are too big (or not working well)
  • Determining how to get money to buy assets
  • Keeping assets safe and in good condition

Acquisition 

The best solution can be chosen only after determining the cost and needs. This decision will be the acquisition phase. The acquisition planning encompasses tasks involved in acquiring an asset to ensure cost-effectiveness. This includes designing and buying an asset. These actions ensure the item is suitable for usage.

 The company should first determine whether the asset will be acquired or built. Next, the company will define a budget, a time period, and a purchase need for the item. Deficiencies in funding might jeopardize the purchase process. A project team should oversee the purchase process to ensure service delivery and other organizational goals are accomplished, whenever these conditions are satisfied.

Operation and Maintenance 

The operation and maintenance stage describes how an asset is used and maintained to provide services. Like roads and buildings, long-lived assets need specific upkeep throughout their lifespan. The asset management strategy should prioritize asset upkeep.

The asset should be maintained, monitored, and improved during this period to meet any operational changes.

Disposal 

When an asset approaches the end of its useful life, it enters the disposal phase of the asset lifecycle. However, just because the asset is in the disposal phase and is now surplus to ongoing operations does not mean the asset has no value.

During this phase of the asset lifecycle, the goal of the organization should be to maximize the recovery value from the asset as quickly as possible. By recovering the remaining value from the equipment, you are able to take the capital recovered and invest it back into the organization. 

Selecting the Method of Recovery

There are several methods for recovering value from used and surplus industrial assets. e will discuss several options below.

Redeployment

Redeployment refers to the process of putting the asset back to work within the organization. This can be done at a different facility or different production line. This method allows you to retain the most value for the asset. 

Resell

Reselling your used and surplus equipment is a great way to recover capital and add it directly to your organization’s bottom line. 

It is a common misconception that industrial equipment has little resale value. However, companies from other regions may be interested in purchasing a used asset, or a startup that cannot afford the newest version of a piece of equipment may seek the second market to fulfill their needs.

There are many different methods for selling used industrial equipment and surplus assets. It is important to understand all the selling options and pick the one that works best for your organization. We have put together a comprehensive article on this topic to help you better understand your options when selling industrial equipment. Check out our recent blog The top methods for selling used industrial equipment and machinery

Removal

Removal refers to the process of removing or scrapping assets from your facility. With this method of recovery, you will recover the least amount of value, when compared to other methods of recovery such as redeployment and reselling. The method of recovery should only be used if you are unable to redeploy or resell an asset.

A benefit of the removal phase is that it can be executed relatively quickly with minimal internal efforts from your organization. 

Choose Aucto for Surplus Asset Lifecycle Management

Aucto is a web-based platform that enables companies to recover value from their used and surplus industrial assets. Companies can use the platform to redeploy their assets or sell them on our private or public marketplace.

Click the link below to book a meeting with one of our asset recovery experts, or give us a call at (844) 326-7305 today.

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About the Author

Clayton Arnold

Clayton Arnold is the Marketing Manager at Aucto. Clayton has 10 years of experience working in traditional and digital marketing campaigns. A Mohawk College graduate, Clayton believes in leveraging the latest technology & analytics to foster long-term relationships with clients.