Major Process Failures in Managing Physical Assets

Managing Physical Assets effectively requires having business processes in place to record assets accurately and track the movement of assets timely.
In working with our customers to implement a system to manage physical assets, we have observed 2 most common process failures in managing physical assets.
  1. Incomplete record of assets
  2. Lack of an asset check out and check in process
Incomplete record of assets
Not all assets are in the record. Not all relevant information about the asset is in the record.
Organizations buy assets with different procurement methods, through purchasing orders or credit card purchases to be reimbursed later. Not all these purchases are in the procurement system.
Before switching to one web-based system to track assets, organizations tend to track assets in different ways and by different people. The requirements for what type of information to be tracked for the assets are not consistent. There is not a systematic check to ensure certain required fields (for example, barcode, serial number, asset category) are entered. That’s why not all relevant information about the asset is in the record.
Lack of an asset check out and check in process
Asset check out/in is the temporary transfer of asset custody. Before switching to one web-based system to track assets, organizations don’t track the transfers. They are too tedious. Consequently, they lose the accountability of assets.
In some industries, particularly industries receiving federal contracts or grants, they can’t use equipment bought with one contract for another. In these industries, we have observed additional process failures, such as:
  1. Unauthorized/Unapproved Asset Use
  2. Inadequate Understanding of Contract Terms, Regulations
Previously, we have written a blog on these process failures. You can read it here for more details.
Before implementing an automated system to track assets, an organization should examine its asset management processes, identify gaps, determine how to address those gaps, and then use the automated system to support the improved business processes.

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