How to Effectively Manage Company Property and Assets – Part 3 of 3
By Angel Rosario, Industrial Property Management Specialist, Defense Contract Management Agency (DCMA). If you have comments, please email it to Angel.Rosario@SmartBizPractices.com.
By reading this three part series you will be well on your way to understanding requirements optimized for efficient property management of your company and/or customer property.
In Part 1, we have described Property Management procedures, Acquisition, Receipt of Property. In Part 2, we have described Records, Physical Inventory, Sub-Contractor Control, Reports. In Part 3, we will describe Utilization, Maintenance, Disposition, and Contract Close Out.
The element of utilization is a very important element as it covers several subcategories. This element includes the using, consuming, moving and storing of your company property only as authorized by your procedures. For example, it would not be good use of your company assets if employees were using them for their own personal gain. How would you feel if your employees (which might be you yourself) are adding undue wear and tear to your company truck, saws, or other pieces of equipment? Worse yet, how would it affect your company (and your pockets) if employees misuse and abuse your material such as paint, cables, lumber, or whatever your materials consist of? Establishing well-defined utilization procedures and processes enable your company to separate business expenses from personal expenses, while reducing the risk undertaken by your company. Conducting internal audits/assessments/analysis of your asset utilization can help reduce waste, and increase effectiveness; all of which increase your bottom line and profits by reducing your costs.
It should go without saying that companies often seek to increase profits by reducing costs. Increasing profits should not however mean decrease value-adding expenses such as conducting preventive maintenance on your assets. Truth be told, it is often more expensive to replace your equipment than it is to maintain it. Establishing a well-rounded property/asset management system includes a thorough maintenance plan. This maintenance plan should include the identification, disclosure, and performance of normal and routine preventative maintenance (to include calibration) of your equipment.
The scope of your maintenance plan will vary by the intricacy of your equipment, but most commercially off the shelf items (equipment you can purchase commercially) includes a preventive maintenance plan you can easily track on a periodic basis. Use my workshop as an example, our vehicles’ preventive maintenance plan is nothing more than the OEM recommended maintenance which we log on an excel spreadsheet and review monthly. Preventive maintenance for our woodworking equipment varies by use, all of which are also maintained on a simple spreadsheet and evaluated monthly.
As with most businesses, planning of byproducts, waste, and end item lifecycle can make or break a company. What type of waste (scrap, material waste, hazardous, etc.) are you creating, and how do you dispose of it? Is there a way you can benefit or profit from the waste you’re creating? For example, one of my companies repurposes pallet woods and creates rustic wooden items such as clocks, beer totes, and wine racks. Material scrap such as metal shavings can be sold to a scrap yard for a few dollars. Lastly, you may be able to gift or donate items that are excess to your needs and perhaps earn a tax deduction. Did you upgrade your computers or lawn mowers? Did you acquire a new printer, an upgraded trailer, a new bandsaw? You get the point. Can you think of a way your business can reduce waste and maximize profits.
Lastly, a very important part of controlling the property and assets in your possession includes contract close-out. Did you furnish your vendor with a forging/casting, tools, equipment, material to accomplish a job? Who has the rights to these items at contract completion? Did you submit the final payment to your subcontractor/vendor?