5 asset management challenges & how to overcome them

You can make a real difference in terms of operational efficiency, lower costs, reduced vehicle and equipment downtime and increased employee and customer satisfaction by employing a number of asset management best practices.

Asset management is more than just fleet. If the world outside of vehicles is not your area of expertise, don’t worry: we’ve put together five tips to help you create an effective asset management plan.

Challenge 1: Choosing the Right Assets

Your first job in this process is to go fact-finding. This will help you determine the needs of your fleet and equipment. You’ll need to involve relevant department leaders and actual operators in the discussion so you can reveal how both are, and should be, being used.

Purpose is everything. For example, what is the carrying capacity of a vehicle, or can a particular piece of equipment be worked by the team using it? Or will it require more people, or training? All that adds to the cost of using the asset.

We’ve also found that a focus on required features and capabilities can lead to more effective choices. Selecting the engine and fuel type can lower costs, improve fuel economy and reduce CO2 emissions as part of a company’s sustainability efforts. Making safety a part of any decision can lower the potential for accidents.

Challenge 2: Reducing Downtime

Once you’ve got the right vehicles and equipment in place, your next challenge is to keep them working and reduce downtime.

Although it is difficult to calculate the costs of vehicle downtime, in the average fleet, it costs $1,000 a day to not have a vehicle running. Unavailable equipment not only increases costs but is also a cause of revenue loss. This in turn drives up employee frustration and creates a drop in customer satisfaction.

That’s why it’s important to identify asset management challenges that keep vehicles and equipment out of service. Doing this gives you a better understanding of best practices that can lead to company-wide improvement.

Unscheduled downtime for repairs also needs to be addressed. Should a group of vehicles be out of service due to specific parts failures or driver related issues on a regular basis, an ability to address inspection and maintenance practices or poor driving behaviors can lead to measurable improvements in utilization.

Challenge 3: How to Replace Your Assets

Unfortunately, there’s no one-size fits-all solution to finding the most effective replacement cycle for fleet vehicles and equipment. You need to consider vehicle mileage variances, the purchasing process, financial rates and incentives for new purchases or leases, projected maintenance costs and the resale value of used assets.

Most businesses use such factors to establish fixed replacement policies. To effectively assess whether a flexible vehicle and equipment replacement strategy could lead to longer-term benefits, it’s essential to consider new alternatives. This can involve extending or reducing vehicle and asset lifecycles or using short-term rental programs to meet specific operational needs. Why not consider alternatives such as relocating out of commission higher mileage vehicles with low operating and maintenance costs to other parts of your operation?

Whether buying, financing or leasing your fleet operation’s vehicles and equipment, effective replacement programs can go a long way towards lowering your company’s overall cost of doing business.

Challenge 4: Understanding Your Costs

It’s vital that you analyze the total cost of assets in your operation – from initial purchase through operations, funding, repairs and maintenance to resale – to give you a financial picture that leads to the most cost-effective choices.

By doing this, strengths in asset management can be leveraged and weaknesses can be addressed. Drilling down into costs of vehicles and equipment, maintenance overheads, labor and parts, fuel operators and drivers will give you a better understanding of everything from acquisition to disposal of vehicles and equipment.

Managing your fleet’s total cost of ownership leads to a more productive, cost-effective operation that meets its efficiency goals.

Challenge 5: Taking a Systematic Approach

While this all sounds daunting, remember that it is really just a business process. Solving asset management challenges requires accurate and actionable information. Once you have this, it’s much easier to make the best decisions and this is where fleet asset management software shows its value.

Advanced enterprise asset management software provides a means of considering all of the factors about operations and costs that you need to know. These solutions drive the development of reports that in turn provide the insight you need to effectively optimize the use of your assets.