An Introduction to Physical Asset Management

There have been many knowledge sources and articles which stated that implementing asset management at the organization or the company is a must. Albeit, after knowing the importance of asset management, it is common that this question “where should we start it?” will pop up in our head. In advance of planning asset management, we have to grasp what we will manage first.

Asset is everything which has economic value owned by personal or company, and it has a lot of types. Under those circumstances, each asset has different potential value depends on its owner. In general, asset classified into physical asset or tangible which is building, vehicle, and non-physical asset or intangible such as IT, information, etc. Owing to the fact that the physical asset is the most easily recognized, assessed, and widely owned, this article will initiate an introduction to physical assets.

The crucial parts you have to know about physical asset are:

  • It is tangible;
  • The value of asset represented on the financial statements;
  • Listed or registered officially;
  • The value depreciated gradually;
  • The condition of assets deteriorates or worsen with time and usage;
  • Having a role and function in carrying out the process or the services;
  • It will be beneficial if it managed properly; and
  • Lots of similar assets will be worthwhile if it manages equally.

After gaining the comprehension of physical asset, you also have to understand what physical asset management is, and what you should embed to yourself about physical asset management. In detail, physical asset management is:

  • An idea which consider the asset is not only as an object somewhere that irreversible, but also it can damage and perish;
  • Acknowledgment towards asset life cycle;
  • The coordination of activity within the company to generate asset value;
  • The importance of the asset for engineer and others is similar to finance;
  • Approach in bringing the best assets performance for the benefit of the company and shareholders;
  • Understanding risk management on asset;
  • Not only about asset maintenance;
  • Not as a substitute for quality management;
  • Not only applied for the engineer, but for each employee that has the responsibility for the asset; and
  • Not only as an accounting training which has to depreciate assets, but also understand why assets have to be depreciated.

After noticing what is and what isn’t of asset management, you can ask, then what will we do? You or Manager of Asset Management can start by preparing the policy, strategy, and goals of asset management, which is not separate from the fundamentals of asset management that have explained. Asset management policy is a connector between the overriding plan of the company and the asset management strategy. Also, you must analyze the oncoming demand of your products which connected to the asset. Then, you can continue to perform the steps of asset management, start from planning, implementing plans, developing employee skills, managing asset risk, and asset information.

You can classify asset management activities into groups, namely planning and strategy, asset management decision making, asset life cycles, asset information, company & employee, and risk & review. During implementation, you need to measure the level of professional asset management expertise created and applied with the following levels:

From the ‘innocent’ level to the ‘excellent’ level is an achievement itself in the successful asset management applied and of course, it takes time to get through the process.

After slightly knowing about asset and asset management, where to start about asset management and the asset management measurement, now you get the idea that physical asset management is a simple thing, right? you or your company’s asset management manager can start now! if there is anything you need to know or you want to know further, then please do not hesitate to discuss it with an expert, Good luck!