While there are countless reasons for companies to implement an asset tracking solution, the decision to do so is typically rooted in two basic needs:
- You have things you don’t want to lose track of that are expensive and/or highly valuable to your business.
- You have things you need to monitor and protect.
The problem companies face in addressing these needs, however, lies in choosing a “right-sized” solution. For example, if a small business with a handful of employees has to keep track of the time spent using a single piece of equipment, it could probably accomplish that goal using signup sheets with time slots.
Interesting Read: The Four Stages of IoT Asset Management and Digital Transformation
On the other hand, a repair facility with multiple workstations and technicians will likely need a more sophisticated solution that goes beyond something as standard as a spreadsheet asset tracking system.
Although replacing lost items that belong to customers is bad for the bottom line, losing irreplaceable data on those items is even worse, often costing organizations both revenue and relationships.
When you’re weighing the available options you have to meet the needs of your asset management strategy, here are three main considerations to help guide your decision:
- Know your goals.
- Recognize that your asset management needs will change over time.
- Define how you’ll measure return on investment (ROI).
We’ll discuss each of these in more detail throughout this post…
And as a side note before we go on, no matter where you are on this spectrum of complexity, here’s a quick explanation of asset tracking.
Know Your Goals: Set Asset Management Objectives
Stephen Covey once famously told the world to “begin with the end in mind.” Selecting an asset tracking solution is no different. Once you have identified what you are trying to achieve, take an inventory of the assets you have.
The idea is to identify both the number and the types of assets you have, so you can set realistic goals that can then be used to help define the business processes you want to create and measure. So to give you a framework for setting those goals and defining those processes, let’s run through some examples.
Goal: Maintain compliance and gain location certainty.
Inventory can include things like capital assets such as beverage dispensers or retail displays. Perhaps you want to know exactly where assets you’re leasing out are located so you can do things like implement a state-specific depreciation schedule in compliance with the Sarbanes-Oxley Act.
So asset tracking in this case means locating and monitoring your resources in the wild, so to speak, where things are relatively out of your control. You could have excavators that travel between construction sites you don’t manage on transports you don’t own. Maybe someone relocates the wrong one and the mystery begins…
Or you could have ice cream coolers that you lease to convenience stores all over the country. The right kind of asset tracking software will tell you exactly where these kinds of things are located so you can maintain compliance with food safety temperature requirements and even automate painful financial burdens, such as recalls, that are so often associated with compliance violations.
Goal: Increase inventory visibility, automation and accuracy.
Your assets could also be one-way, meaning you sell a product that’s meant for consumption, like wine or commercial agriculture seeds (we’ll talk about returnable assets shortly).
Maybe you need to know more about which products are in your distribution centers so that you can automate re-ordering and maintain a minimum stocking level.
Under this scenario you’d be outfitting your warehouses and distribution centers with systems that “know” what’s on the ground. The data from your asset tracking system can then be folded into your warehouse management system (“WMS”), which knows how much should be there.
Once those two systems are in sync, the magic starts to happen, enabling you to orchestrate workflows for automatic procurement, receiving, etc. At that point you’ll never have to worry about having too much or too little of something again.
Goal: Reduce the cost of doing business by ensuring returnable goods come back.
As I mentioned earlier, some companies have returnable inventory, like baking racks, gas cylinders or even beer kegs. It’s easy to imagine how some percentage of those items simply never come back, resulting in uncontrollable business losses.
Think about something like gas cylinders that occasionally go missing simply because folks never get around to returning them once they’re empty. Given that they probably cost anywhere from $50-500, depending on the size, it can get pretty expensive to replace them. And while a simple GPS asset tracking solution may seem attractive, they have their drawbacks.
Goal: Better understand equipment utilization for budgeting and planning purposes.
Oftentimes, businesses overlook their ability to track asset and equipment utilization which can turn into a pretty costly issue, as well. Consider infusion pumps in hospitals. While they’re present in nearly every patient-occupied room, not all rooms have patients in them, and not every patient needs one.
So how do you know if you have the right number of these costly machines on hand if you aren’t sure what’s being used and when? How do you make a solid case to the CFO, complete with data that supports your request for additional pumps?
Again, an asset tracking solution should keep tabs on each machine so that staff members aren’t wasting precious time searching for one and the hospital can right-size its fleet.
Although you should always have your goals clearly outlined when you’re selecting an asset management vendor, here are a few other things to keep top of mind:
- How many assets do you need to track? There’s a sizable logistical difference between our customer who tracks six specialized jacks through a manufacturing facility (and raves about the newfound efficiency) versus the one who tracks hundreds of pieces of customer equipment through the company’s repair facilities.
- How important is precision and accuracy? Items, like soap, can be scanned at the case or pallet level and assumed intact. Alternatively, assets, such as pharmaceuticals, typically have an airtight chain of custody.
- Do you care when your asset is moving? Maybe you only need to know when it arrives at a destination, like work in process moving from one staging area to another.
- Does your asset stay within your own ecosystem or travel to third party companies and/or locations outside your infrastructure and control? Those needs are usually far more complex, with few available solutions for meeting them (though we’re innovating substantially in this realm of indoor/outdoor asset tracking).
Of course, while you probably have your own set of asset tracking goals and considerations that are unique to your business, we have attempted to cover some of the most common issues we solve for here at Link Labs.
Recognize Your Strategic Asset Management Needs Will Change
By now it should be fairly apparent that one size doesn’t fit all in asset tracking. Sadly, once solved, the pain point you choose to resolve will most likely reveal more downstream inefficiency.
Which is why in planning for future success, you’ll want to ensure that both your asset management strategy and your solution partner can evolve with your needs. Truth is you need an asset management solution with a strong road map behind it, not a one-off asset management component.
So as you’re interviewing vendors and going through the selection process, be sure to ask about what their products do today, as well as what’s in store for tomorrow, to find one that can readily accommodate your changing needs.
Think about who your stakeholders are now. Account for their needs and ensure alignment. At the same time, envision who they are likely to be in six months, a year, and three years.
Understand the full lifecycle of your assets from an environmental and “touch point” perspective. Where does it come from before you acquire it? Or where does it go to after you make it? Where does it live while your organization has it? And what happens to it after it’s been delivered to a customer?
While you can’t possibly know every turn your company will take along its asset management journey, you can certainly ask the right questions now to help inform the direction of its asset management strategy.
Define How You’ll Measure the ROI of an Asset Management Solution
When selecting an asset management solution, vendors will generally use a “datasheet” or “spec war” comparison to illustrate how their solution is “the right one” – because let’s face it, asset tracking technology vendors often want to get very specific about their capabilities.
Don’t get me wrong; that can be a helpful conversation to have in some ways, especially if you’re a buyer who is well-versed in all things technical. But for most people (and companies), the IP rating or maximum operating temperature of their tags just doesn’t matter that much.
So, rather than being wooed or confused by minutia, simply hit the pause button and ask if the vendor you’re interviewing is more invested in solving your business problem or more in love with what they’re offering.
In fact, at Link Labs we have come to learn that potential customers are looking for a precise solution that both does the job and yields a healthy ROI. Or put simply, they want the right features at an affordable price. And by focusing squarely on their particular business need, rather than our product, we are far better equipped to get there together.
Let’s say that XYZ company is in the market for an asset tracking system that’s accurate to 10cm because the CTO has heard that 10cm is a gold standard.
In reality, few companies need that level of precision, and the price difference is presently an order of magnitude above a solution that delivers 1m of accuracy instead (though we’re breaking the mold on this paradigm, too… stay tuned…).
But after asking the right questions, this company reveals that it’s using robots to fulfill a large volume of customer orders in a sizable warehouse. So, given the need, 10cm not only fits the bill, it will also result in a decent return on investment.
Change management is yet another dimension to consider when calculating the ROI on a new asset tracking solution. While you may find an offering with all the right bells and whistles, it might also require your organization to undergo excessive cultural and behavioral change, the cost of which outweigh the savings you’re realizing.
Even when change management is not an issue, there are other costs to factor into the equation. For example, if the solution you choose will mean slapping a $20 widget onto every pallet of goods, you will need to ensure that the value of the pallet is significantly greater than the cost of the widget.
On the other hand, it’s not always about dollars and cents alone...
We have a customer that makes handheld equipment worth $25,000-40,000, which must be calibrated and repaired from time to time. They came to us because they were losing customer equipment about once a quarter.
For them, the problem was actually less about replacement cost and more about the loss of irreplaceable customer data – which meant looking for a solution that addressed both. And since implementing AirFinder, our real-time asset tracking system, they haven’t lost an instrument in a year! Consequently, the business case, as well as the ROI is rock solid.
When it comes to choosing the right asset tracking solution, it’s all about asking and answering the right questions, based on each company’s unique needs and success measures. That said, we hope that this post has helped you more clearly frame your own.
Once you do, we are more than happy to help you move on to the next leg of your asset management journey…so please don’t hesitate to reach out...