Crafting an Asset Management Policy: Key to Success for Trade Businesses

Asset management

An asset management policy is a set of guidelines and procedures that govern the acquisition, utilisation, maintenance, and disposal of assets within a trade business. It essentially guides organisations in effectively maximising their resources and maintaining operational efficiency. 

Some trade businesses don’t have an existing asset management policy, and this can lead to drastic consequences such as project delays, customer dissatisfaction, and the inability to anticipate and support business growth. 

This article explains why every trade business should never overlook such a policy. It also provides a step-by-step guide on creating and implementing an effective asset management framework.

Why is a robust asset management policy necessary for trade businesses?

To thrive in the competitive trade industry, businesses need to have a clear understanding of their assets and how these are managed. An asset management policy can serve as a roadmap that outlines the procedures and practices required to optimise asset utilisation. 

Specifically, it can: 

Simplify inventory management 

Trade businesses often struggle with tracking and managing inventory, which can result in low or excessive stocks. Low inventory can lead to stockouts, delays, and frustrated customers, while excessive inventory can limit cash flow and increase storage costs. 

An asset management policy outlines protocols for inventory tracking, ordering, and replenishment. This assures accurate stock levels, efficient procurement, and timely restoration of stocks, effectively eliminating under- or overstocking issues.

Minimise equipment downtime

Equipment downtime delays projects and increases labour costs, which can hurt a trade business’s reputation and bottom line. An effective asset management policy emphasises preventative maintenance to avoid equipment breakdown.

By establishing preventive maintenance schedules based on manufacturer recommendations and asset performance data, businesses can identify and assess potential issues before they cause major disruptions. They can also schedule swift repairs and replacements, ensuring that equipment downtime is minimised and all projects progress smoothly.

Ensure appropriate resource allocation

Underutilised assets mean wasted resources, since the business does not get the maximum return on investment from them. Overutilised assets, on the other hand, lead to excessive wear and tear, increased maintenance requirements, and higher risk of breakdowns.

An asset management policy provides guidelines for optimal resource allocation. When a business is able to monitor asset usage, it can reallocate underutilised assets to other projects where its use can be maximised. Asset monitoring also helps tradies identify overutilised assets so they can redistribute the workload more evenly and prevent excessive strain on specific assets.

Streamline compliance and documentation

Trade businesses in Australia operate in a regulated environment, with specific requirements for equipment maintenance, safety inspections, and recordkeeping. An asset management policy ensures that businesses maintain proper documentation, including inspection reports, maintenance logs, and compliance records. This facilitates regulatory compliance, reduces the risk of penalties, and guarantees a secure environment for both its employees and customers.

How to create and implement an effective asset management framework

To establish an asset management framework that meets your specific business needs, follow these steps:

Assess current assets

Begin with a comprehensive assessment of existing assets. Auditing your inventory allows you to identify and categorise all assets, including equipment, vehicles, tools, and supplies, based on their current condition and performance.

Use a job software management solution like WorkBuddy to make asset assessments more efficient. WorkBuddy provides a centralised platform where you can easily record and access asset information, including details such as location, maintenance history, and usage. This ensures accurate and up-to-date asset records while eliminating the need for paper-based systems or manual tallying.

Set clear objectives

Clearly define your goals and desired outcomes for creating an asset management policy, taking into account factors such as cost reduction, productivity improvement, safety compliance, and risk mitigation. By aligning the asset management policy with the broader business objectives, your asset management practices will contribute directly to your organisation’s success.

Establish standardised procedures

Standardised procedures ensure consistent and efficient asset management practices. This is why it’s essential to establish clear guidelines and processes for asset acquisition, maintenance, utilisation, and disposal. These procedures should cover areas such as inventory management, including ordering, receiving, and tracking assets. They should also include policies for preventative maintenance schedules to ensure optimal performance, as well as documentation processes for inspections, repairs, and compliance records. 

WorkBuddy can easily standardise these asset management procedures. In particular, the software enables businesses to schedule and track asset preventative maintenance tasks based on custom intervals, so that all assets are regularly inspected and serviced. WorkBuddy also comes with templated checklists that can be tailored to any asset maintenance task. These checklists can outline detailed instructions for conducting equipment inspections, repairing or placing machinery components, and performing safety tests to make sure assets are at peak condition.

Implement asset tracking systems

Modern asset tracking technologies, such as RFID barcodes, can significantly improve asset management processes through accurate tracking, automated data collection, and streamlined inventory management. When you integrate WorkBuddy with these modern asset tracking technologies, your business creates a centralised system where you can keep eyes on all your assets 24/7. This system will also provide real-time visibility into asset location, status, and usage, empowering leaders to make quick, data-driven decisions.

Train employees 

Your business’s asset management framework can only be successful if your employees understand and know how to implement it. It’s therefore crucial to provide comprehensive training to all employees involved in asset management processes. This training should cover everything from asset management policy to standardised procedures to asset tracking technologies to documentation requirements. 

When employees understand their roles and responsibilities, they can contribute directly to the success of the asset management framework.

Improve the framework continuously

Asset management is an ongoing process, so trade businesses must regularly review their asset management policy to identify areas for improvement. Getting feedback from employees and stakeholders is paramount, as this provides valuable insights into the effectiveness of procedures and helps identify opportunities for improvement.

WorkBuddy’s feedback feature is an invaluable tool that promotes employee engagement and stakeholder collaboration in the asset management process. It allows trade businesses to gather feedback, suggestions, and concerns from employees and stakeholders, and then use the data gathered as a basis for improving the framework.

By following these guidelines and leveraging WorkBuddy, you can establish an effective asset management framework that aligns with your goals. Drop us a line today to unlock the full potential of your trade business.

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