Most businesses believe that asset loss is defined by the mere expense incurred to replace the item that was misplaced. For instance, a drill goes missing, and all that really matters is its $300 replacement cost, right? Wrong. That replacement value represents just a fraction of the real financial devastation caused by an asset goes missing.
The Tip of the Iceberg
The cost of replacing missing equipment might seem straightforward, but it actually represents the smallest part of a larger problem. What follows are several expenses and negative outcomes associated with missing assets, all of which add up quickly:
- Work stoppage: Work must cease while staff search for the item.
- Delayed deadlines: Projects fall behind schedule because necessary equipment isn’t available.
- Rental costs: When deadlines loom and the item cannot be located, rental equipment is needed as a substitute.
- Administrative effort: Time is spent filling out reports, updating asset registers and coordinating a new purchase.
When you factor in the total amount of time spent searching, you can easily see that the cost of a $300 drill is really more than $1,500 before you even notice that it is missing!
The Hidden Productivity Killer
According to research, workers waste between30 minutes and 45 minutes each dayin search of tools, equipment, and other information they require to complete their tasks. For an organization with a workforce of just 20 people, operating five days per week, over an entire year, this totals many hours. Those wasted man-hours represent a substantial lost sum, though they don’t reflect in any company expenditures.
Theft is a Bigger Problem Than You think
The vast majority of lost assets are not lost by accident. Equipment theft cost US companies billions of dollars annually, especially in industries like construction, healthcare, and warehouse logistics. However, theft often goes undocumented because companies cannot prove exactly what was stolen, when, or by whom. Without data regarding a company’sassets,the odds are you won’t be able to prove a theft occurred.
Insurance and compliance Costs add up
Frequent instances of asset loss increase your insurance premiums. When assets are missing during a compliance audit, they can result in fines and other penalties. You’ll incur additional tax liability on the value of any assets you can’t accounted for. Every item gone is an additional unforeseen expenditure.
How Businesses Eliminate Losses from Their Business
Successful companies manage their asset loss, not by doing anything extraordinary, but by creating visibility into their assets. With a tracking system, you always know exactly where every asset is at any time-you’ll also see its usage history and have access to its current status. A lost item may not disappear altogether, but it becomes an exception rather than the rule. And when that occurs, you will know what to look for and where to start.
AssetTrackPro allows organizations to obtain this visibility through real-time location, a check-out system with usage history, and automatic notifications when assets are “lost”. Instead of merely suffering through the loss of assets as a matter of course, an asset tracking system enables organizations to effectively manage asset loss as a problem that they can address.
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