Most manufacturing corporations have lately discovered that fixed asset management needs to be a key part of the success of the enterprise enterprise. It’s now realised that fixed asset management leads to economy of production and operation. This in turn can to extend in profits of 10 to 15 per cent, which can’t be ignored as it makes a significant contribution to the bottom line of the business.

There is no such thing as a doubt that stock and production administration deserves the primary focus of the administration for efficient functioning in a producing enterprise. If asset management was neglected, then fixed assets were not being effectively and effectively managed. However in recent years it has been realised efficient administration of fixed assets like plant and machinery and different movable and immovable fixed assets can lead to economies of scale. Thus proper monitoring and common maintenance of productive fixed assets will give an extended productive life. The net impact of this is more profits for the business.

Naturally in fixed asset management, the assets answerable for production, research and development etc., which have direct bearing on the productivity of the business, need to be managed more closely. There have to be constant monitoring on the upkeep side to prolong the useful lifetime of the asset. Even a movable asset like a vehicle needs proper maintenance. Otherwise without regular running and upkeep the vehicle can soon become corroded and useless.

Each category of assets needs a different focus of management. Fixed assets need regular maintenance to make sure normal lifetime of the assets relying on the wear and tear on the asset. Adequate planning is also crucial for building up monetary reserves over the lifetime of the asset for replacing the fixed asset at the end of its useful life. Thus the new plant and machinery can be ordered well in time to replace the old one.

Management also has to weigh the advantage of replacing the plant and machinery and other production assets or continuing to maintain the current production assets. Additionally they should consider sometimes whether or not the asset has turn into out of date owing to new technological advances. In recent times, technology has advanced at a speedy tempo and administration needs to be vigilant on this problem to keep away from being left behind by competitors. Asset administration also consists of adequate insurance to cover any furtherordinary losses as a consequence of fire and natural disasters.

A type of awakening has taken place in major industries during the previous decade on the position of asset management. It has turn out to be attractive due to lowering margins and competition growing day by day. To avoid major capital spending, companies at the moment are developing strategies to get optimum performance from available fixed assets thereby getting elevated returns. This includes proper schedule of upkeep to minimise breakdowns and consequent loss of production.

To be able to have reliability in scheduling, regular planning in conjunction with numerous departments, at the very least on a monthly basis is totally necessary. Standards must be set as well comparative evaluation within trade standards must be evaluated to determine whether the company is achieving optimum production in line with the industry. If not, then suitable targets and best practices must be set up within a reasonable time frame to achieve these targets.

Logistical performance should also be evaluated to consider whether or not transportation costs are economical and advantages of location are met. The management tools for evaluation might be in form of comparison studies, which can set up in form of graphs and bar charts for simple visual comparison. If fixed asset performance is seen to be beneath par, then priorities could be fixed for the give attention to improvement.

Asset management tracking is vital in large manufacturing plant and utilities. Integration of asset management with raw material and maintenance procurement systems as well as financial systems and their value versus savings benefits should be monitored on a day-by-day basis. Senior financial officers must subsequently be concerned in asset management.

Relying on nature of assets in different businesses. For instance, utility corporations, mineral firms, oil and natural gas are having massive properties as part of their assets. These need to be successfully managed and timely selections have to be taken whether or not to purchase or sell properties for the health of the business. Relying on their values and necessity to the running of the corporate, the assets may be categorized for better management.

To assist company management, there are a number of established consultant corporations having qualified manpower whose assist will be beneficial for asset management. They can be very efficient to audit present practices and recommend greatest practices, problem fixing and action plans. It might be well well worth the expense to hire established consultants to improve performance.

Asset administration data could be computerised to enable administration to chalk out strategies on an total basis. Integration of asset management systems with other financial systems would give better image of complete operation of the enterprise. This will enable varied key officials to provide their timely input to top administration so as to devise suitable plans. For example, government could come out with particular tax incentives for sure industries to invest in fixed assets. In a state of affairs where management is monitoring and managing fixed assets, the Finance Manager might quickly recommend buy of new fixed assets to take advantage of the federal government’s tax incentive for that business.

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