5 Ways To Improve Fixed Asset Life Span and ROI
Manufacturing revolves around fixed assets. From the machinery that keeps production lines running to the facilities housing those lines, fixed assets are the backbone of production. So, it’s critical for manufacturers to get the best performance from these assets for as long as possible — which is easier said than done. Enterprise asset management (EAM) is a dynamic exercise in perpetual problem-solving.
To function at their full potential, assets need proper attention, maintenance, upkeep, and handling, and to further complicate matters, they’re constantly in use, which puts them under continuous stress. EAM and asset performance management (APM) are full-time jobs, and they take a full team effort.
What is a fixed asset?
A fixed, aka legacy, asset is one that remains on the company’s accounting balance sheet for many years. Your company might purchase a machine with an estimated useful life of 20 years. For the next two decades, that machine will show up on your books as an asset — something you use to generate revenue.
In the manufacturing world, fixed assets are everywhere. Machinery, equipment, vehicles, buildings — all are assets crucial to production and revenue. The longer a company can leverage these assets, the better their overall ROI.
Tips for improving asset life span
Because fixed assets are instrumental in continuous operations, they are under constant stress. To ensure they last up to and beyond their expected life span, consider the following tips:
- Engage in proper maintenance. Proper maintenance is a must, and it means getting to know the unique demands of each asset and using that knowledge to keep it in prime condition throughout its serviceable life.
- Shift to predictive maintenance. The transition to proactive, as opposed to reactive, maintenance is the best way to keep an asset running smoothly and prevent serious problems from arising.
- Use real-time monitoring tools. Real-time monitoring via the Industrial Internet of Things (IIoT) allows for quicker, and better, service. When asset problems arise, you can attend to them before they take a greater toll.
- Follow OEM operation standards. While it might be tempting to reduce cost of ownership with aftermarket parts and service, or by deviating from the OEM maintenance schedule, following established guidelines yields better long-term results.
- Train technicians on proper operation. Proper asset operation reduces equipment strain, keeps it operating within expected parameters, and optimizes performance in the long term.
These simple steps yield significant results for asset performance, longevity, and ROI.
Don’t neglect EAM and APM
Fixed assets are investments, but beyond accounting for them on the balance sheet, not every manufacturer considers the long-term implications of asset management. A proactive approach to EAM and APM is essential for optimizing the operating life span of fixed assets and maximizing manufacturing ROI.
