The long-term value proposition of asset management combines asset optimization, strategic decision making and a higher return on investment. In the narrowest sense, it monitors costs and supports peak asset performance. Broadly, it facilitates vital document storage and accessibility, maintenance and repair cost management, vendor management and regulatory compliance.
Here are three ways asset management helps your business use facility-level data to control costs and create positive organizational changes:
#1: Eliminate Unnecessary Equipment Repair Costs
Tracking asset warranty information for one site is complicated. Across multiple sites, it can be daunting. An innovative asset management system flags which assets are covered by warranty protection or are the landlord’s responsibility for easy reference, which eliminates the unnecessary costs of covered maintenance and repairs.
Consider one of the largest investments in a commercial real estate asset: the roof. In 2006, commercial roof maintenance and repairs cost the average property owner approximately $219,541, according to research published by the Journal of Architectural Engineering. With accurate warranty information, a percentage of those costs might be minimized or eliminated.
Warranty information also outlines scheduled maintenance and site condition issues that define coverage or void it altogether. For example, if another vendor installs equipment that penetrates the roof, the warranty shows on the front end how or whether the installation will affect coverage. Most assets take a smaller budgetary bite than the roof, but all unnecessary costs equal waste, especially across several facilities.
#2: Identify Issues with Equipment and Vendor Performance
Equipment and vendors who don’t hold up their end of the performance bargain can chip away at your bottom line. Asset management pinpoints the weakest links at a glance.
At the facility level, managers have a firsthand view of problematic equipment that consumes too much energy or lives in a constant repair cycle. Poorly performing vendors are easy to identify, as well. With asset management technology, you can spot issues and narrow them down to their source.
Technology enables equipment performance and maintenance tracking by brand and model year as well as vendor performance and cost statistics. It also shows how each site uses equipment and how usage data relate to higher or lower maintenance and repair costs.
#3: Avoid Regulatory Fines Through Compliance
Regulatory fines and post-incident compliance requirements can blindside businesses. With an up-to-date parts and equipment history, you can remain compliant, avoid fines and manage course-corrective measures instead struggling under the weight of a regulatory order.
Here’s a staggering example. Trader Joe’s was fined $500,000 in 2016 by the Environmental Protection Agency for “alleged violations of the Clean Air Act.” The retail grocer agreed to millions in equipment replacement costs in an abrupt, course-correcting move.
New regulations could phase out equipment and parts, or, as in the case of Trader Joe’s, refrigerants could become an issue. With an asset management system, you won’t run afoul of a government regulatory agency. An accurate parts and repair history also helps identify problematic parts so you can replace or repair before they lead to equipment damage or total failure.
Asset management enables a higher and more efficient level of control over asset and vendor performance as well as hard and soft costs. Through technology, mass information becomes streamlined data points to review and compare, which supports strategic decisions that make the biggest impact. It keeps you ahead of the curve.
To learn about cost management options, read our whitepaper, How to Calculate the True Cost of Facilities Maintenance.