As a business owner employing many tools, vehicles and other equipment in your day-to-day operations, you understand the role that these valuable assets play in your business’ operations.
However, with so many assets on your books, it can be easy to overlook when a particular asset may be being underutilised. Therefore, it’s important to regularly assess which items in your inventory are most valuable and driving a strong return, and which ones are inefficient or surplus.
Here's how you can reduce asset underutilisation and improve your business’ operational efficiency.
What is asset underutilisation?
Asset underutilisation is when a specific asset is not being used to its full potential, or when current operations are not dependent on the asset. This can happen with equipment, tools, vehicles, raw materials, and so on.
There are several factors that can cause underutilisation, including time, innovation and competition. As most assets depreciate in value over time, the tendency is that the longer an asset remains with your company, the less it will be effectively utilised. Innovation also means that new technology continues to force older tech to the back of the line, especially as your company works to keep up with the evolving industry and your competitors.
How does the underutilisation of small to medium sized assets affect your business?
The way in which you utilise your small to medium sized assets significantly affects the productivity of your business.
One of the greatest consequences of underutilisation is unnecessary costs. For instance, you may be renting or leasing equipment that isn’t even being used. This is wasteful and those funds could be redistributed to provide a higher ROI.
Underutilised assets also take up space that could be used far more effectively. As your needs grow, so does your inventory. Holding on to assets that you do not utilise properly is a waste of both space and money.
How can you address asset underutilisation?
Minimising this underutilisation of small to medium assets within your workplace is one of the key steps in optimising your operations. To help, we’ve prepared some tips:1. Stocktake your assets.
Look at each of your assets and ask yourself: Is owning or leasing this asset worth it for my business? Am I earning a return on my investment, or should I sell and reinvest the capital into something that will yield better returns?
Answering these questions will help you to assess what’s worth holding onto and what assets you can afford to let go or even lease out to other businesses for income.2. Stop renting equipment that may be underutilised.
Once you have a clear understanding of your asset usage, you can start to wind up any rental agreements for hiring any underutilised assets. Renting can be a significant operational expenditure and isn’t always accounted for in project or operating costs.
Likewise, you can look to sell underutilised assets that you own and even purchase high-use assets that you’re currently renting to save on costs.3. Use an Asset Management System.
To better utilise the small to medium assets you own and rent, proper management is key. This can be a tedious task that requires consistent usage monitoring. Fortunately, there are Asset Management Systems like EROAD Where that can make this task much easier for you.
How can EROAD Where help you utilise small to medium assets?
If you’re looking to keep track of your small to medium assets, improve your daily operations and reduce asset underutilisation, EROAD Where is the ideal solution for you.
EROAD Where allows you to efficiently manage your projects across multiple job sites by providing asset visibility and data, right at your fingertips. You can use this information to ensure that all your small to medium assets are being managed and utilised to their full potential.
Want to learn more about EROAD’s Asset Management System?
Experience the benefits of an effective Asset Management System with EROAD Where.
EROAD Where helps you achieve greater small to medium asset productivity and efficiency while you focus on managing your business.
Request a demo of EROAD Where now and see it in action for yourself.