What would you do if I told you a whole lot of cash were available for your organization’s use over the next year? Let me assure you that anyone responsible for an organization’s assets is probably sitting on a gold mine. Here is how you can mine it:
Begin by counting the total number of assets within your organization. Include equipment, components that are swappable, tools, spares and materials. For the sake of argument let’s say that adds up to 20,000 items. Now, estimate the average value of those assets, balancing the quantity of low- and high-end consumables with assets. Again, for the sake of argument, let’s say that average value is $2,250.
Next, calculate the number of “hidden” assets – those you already own but don’t know you have. Unless you are using an auto ID-enabled (barcode or RFID) process, we can say with a high degree of certainty that your asset records are incomplete, inaccurate, or missing. This typically accounts for 45% of the total asset count, or, in our example, 9000 assets.
In addition, as many as 3% of the assets that are shown in your database or spreadsheet are missing, and another 8% of assets that are not in your records are actually within the walls of your organization. (It is very possible that as many as 70% of those assets that you don’t know you own are out of date or not usable.) We’ll focus on the remaining assets that could be put to use if you knew about them, 2.1% of the total or 420 items. If you knew the exact location, condition, and readiness of those, then that is 420 items you would NOT have to procure when they are needed, thereby adding $945,000 directly to your bottom line. If you only need 20% of these newly discovered assets on an annual basis, you have saved $189,000.