What is fixed asset management?

Fixed asset management is the process of tracking and maintaining an organization’s physical assets and equipment. Assets include:

  • Vehicles
  • Electronics
  • Fixtures
  • Machinery
  • Computers

By managing fixed assets, organizations ensure that each is accounted for and in good working order. They can minimize lost inventory, equipment failures and downtime – and improve an asset’s lifetime value.

Fixed assets essentials

An organization buys fixed assets for its own use, for production of goods and services, or for rental to third parties.[i]

Physical assets may comprise a large portion of a company’s net worth. In some businesses, as much as 40 percent of investment goes to buying equipment and vehicles.[ii]

Fixed assets can’t easily be converted into cash – unlike liquid assets. They require a large cost outlay, and the expenditure is configured over several years. Value and asset depreciation are recorded on the company balance sheet.

Why fixed asset management is important

Fixed assets such as servers, transport trucks and elevators require a big capital investment. Global spending on IT hardware alone is expected to rise to $1.1 trillion US dollars by 2019.[iii]

Much can be gained from optimizing the useful life of physical assets. Without fixed asset management, an organization may experience:

  • Unplanned downtime
  • Equipment failures
  • Misplaced or lost inventory
  • Safety or environmental breaches
  • Failure to meet compliance or regulatory standards

For companies with large inventories, the results may convert into millions of dollars in lost productivity, repairs, replacement or fines.

Beyond immediate costs, substandard equipment can impact the quality of an organization’s services or products – in turn, affecting customer satisfaction and business reputation.

According to the ISO 55000 international standard, asset management should maximize value for money.[iv] Ideally, fixed asset management optimizes the quality and useful life of equipment and ensures the best return on investment.

Key features of effective fixed asset management

Fixed asset management enables organizations to track equipment, vehicles and machinery, assess their condition, and keep them in good working order.The process can be complex, especially for global enterprises or companies with large inventories – like a car rental business or manufacturing multinational.

Small organizations may use spreadsheets or enterprise resource planning tools for asset tracking. However, manual data entry is prone to error. It can also be a slow method for staying on top of inventory – when vehicles are moved between locations or technology is complex.

Automated solutions offer a reliable way to oversee fixed assets. Included are features like location tracking, work order processing and audit trails.

  • RFID and bar codes – Radio frequency identification (RFID) and bar codes can be used to track asset location and status. For example, organizations may use serial-numbered asset tags that are tracked with a bar code reader. Each item is quickly scanned and updated in a central database for easier management.
  • Asset management software – Fixed asset management software provides a platform for overseeing assets. It integrates data from across the asset lifecycle: acquisition, operations, maintenance and renewal or replacement. With a complete view, organizations gain insight into their complex asset environments. They’re better informed and armed to manage asset health. Features and workflows help them optimize management tasks and reduce downtime. Teams also have an enterprise view of safety and environmental controls, the better to address issues and risks.
  • IoT and AI – Internet of Things (IoT) and artificial intelligence (AI) capabilities can enable greater control of assets. IoT correlates data from sensors and devices to provide timely visibility into asset health and performance. It enhances asset management by analyzing status, assessing value and risk, and anticipating failures. AI uses machine learning to gauge asset status and enable predictive maintenance. The technology gathers data (from sensors, telemetry, work orders, even weather events) and uses algorithms to develop forecasting models. The information, coupled with predictive scoring, enables the system to prescribe preemptive tactics or strategies.

Case studies

Kone

See how this customer uses IBM to monitor and optimize management of millions of elevators, escalators, doors and turnstiles in buildings and cities worldwide.

Consolidated Contractors

Find out why this company chose IBM to increase operational visibility, lower maintenance costs, reduce downtime and extend asset life.

Cheniere Energy, Inc.

Discover how to improve business processes across the asset lifecycle, from inventory control and work management to monitoring and maintenance.

Resources

AI-powered manufacturing

Explore some of the latest trends and systems that support AI-powered technology.

Making sense of the asset management spectrum

Explore the full asset management spectrum and which choices are the right ones.

 

Understanding the impact and value of enterprise asset management

See how asset management insights can support better planning and control of assets.

Using the Internet of Things for preventive maintenance

Learn about the benefits of asset health management and using IoT and cognitive capabilities for asset health insights.

Eliminating unnecessary maintenance

Learn how IoT capabilities can monitor asset conditions and trigger preventive maintenance actions.

Which asset management strategy should you be using?

Understand why the future well-being of assets lies in looking beyond preventive maintenance.

Product spotlight

IBM Maximo

Combines enterprise asset management with powerful IoT data from people, sensors and devices to provide real-time visibility.

IBM Equipment Maintenance Assistant

Combines asset data and AI to offer insights for problem diagnosis and resolution.

IBM Predictive Maintenance

Unifies disparate operational data and uses analytics to provide predictive maintenance models.

IBM IoT for Energy and Utilities

Provides applications and capabilities for energy and utility companies to help improve asset maintenance and utilization.