Viewpoints

Viewpoint: Why local and state governments need asset management

Tracking all costs associated with equipment can save money and extend useful life cycles

By Jennifer Daugherty

Every year, local governments spend a considerable amount of money on equipment purchases, replacements, upgrades, repairs and preventative maintenance. Budget cuts and staff reductions haveled to fragmented equipment management, making it virtually impossible to determine if the dollars spent annually on equipment purchases, maintenance and repairs have been invested wisely.

Asset management — the tactical management of physical assets — is vital to government entities for a simple reason: control. In a stagnant economy, it’s more important than ever to control expenses. Yet, for many government personnel, asset management consists of a simple spreadsheet used to track information about equipment bought or maintained under their area of control.

While it makes economic and operational sense to implement an organization-wide equipment asset management program, it’s difficult to do so without assistance.A variety of asset management tools are on the market today, ranging from very simple to more complicated and technically challenging. The goals of an equipment asset management program are to: manage inventory; track the location of equipment; monitor preventative maintenance schedules; manage manufacturer warranties and service agreements; record the cost of equipment repairs; capture pertinent information on each service event, such as vendor, parts, labor and travel costs; track surplus equipment; and make information accessible to all managers and equipment users.

For an asset management system to be successful, it must be embraced by both end users and administration. Since there may be some apprehension about implementing a potentially complicated and costly system, the benefits should be quickly noticeable and outweigh the system’s cost. A training program, as well as ongoing customer support, also should be offered to educate all end users.

Before implementing a system-wide equipment asset management program, conduct an honest assessment of your organization’s current equipment management practices. Consider the following questions:

Is a physical inventory of all equipment assets conducted each year?

Which department is responsible for this task?

Are the locations of equipment being tracked?

Is the inventory list updated as soon as any changes are made?

Are the cost and other details of every equipment service recorded?

Are manufacturer warranties and service agreements monitored?

Is excess, surplus and obsolete equipment tracked?

Equipment asset management information must be accurate and kept up to date. The quality of the equipment information collected and tracked will affect the overall cost of owning the equipment. This vital information also will affect future budgeting for equipment expenses. Using an asset management program to its fullest potential puts control back into local managers’ hands and relieves them of the administrative headache of trying to manage a multitude of equipment located across a city, county or state.

Jennifer Daugherty is employed by The Remi Group, which offers equipment maintenance management programs. The Remi Group currently manages 19 state contracts. Daugherty can be contacted at jdaugherty@theremigroup.com.

Discuss this Blog Entry 2

Prof. Dr. M.M. El-GammalAnonymous (not verified)
on Jan 27, 2013

Dear Esteemed Lady,
As you may know that Asset Integrity Management is considered to be a global kit which is serving different kinds and varieties of sciences. Simply it is being composed from several kits mixing together to give the ethical, social and technical overview for the person in charge. So, definitely every Government on the international level must have those tools should their decisions will be with the least risk values. For more about asset integrity management please visit the following sites:
http://www.iqpc.com/Event.aspx?id=236486
http://www.oilandgasiq.com/integrity-hse-maintenance/articles/asset-inte...
Greetings and Regards,

Prof. Dr. M.M. El-Gammal,
Emeritus Professor, Faculty of Engineering, University of Alexandria, Egypt, Zipcode: 21544, Head and Manager of International Gammal Technical and Engineering Consultancy Group, Alexandria, Egypt, International corrosion and protection systems designer, International Maintenance Advisor in oil and gas upstream and downstream Industries and Reclamation as well as waste and drain Siphons, Egyptian State Engineering Encouragement 1983 Award 1st Golden Medal of Egyptian State for Sciences and Arts 1985, Who's Who 2006 International Encyclopedia, 21ST Scientist of the World, IBC, International Biographic Cambridge center, UK, 2007, ONAINTEC Distinguished Maintenance Engineer, 2009, Hariri Arab Award 2009,
URL: http://www.alex.edu.eg/files/cvs/engineering/marine/profgammalcvoct09.pdf Email: profgammal@hotmail.com,
Cell phone: +2 01223328776
+2 01114888853
+2 01113731053

Gregory M Baird (not verified)
on Jan 29, 2013

A "one time" investment needs to support a sustainable long-term infrastructure improvement process called multi-sector infrastructure asset management. This will ensure that a "one time" investment is fully leveraged to prevent the same situation from happening in the future. Multi-sector infrastructure asset management can help allocate the funding between above ground (transportation) networks and below ground (water/sewer) assets and find the optimized cost efficiencies where the two intersect. Texas also has an opportunity to look at the development of grey water systems for water and wastewater utilities as green/sustainable/drought projects which address conservation without artificially hurting the environment. Through a process of integrated finance the overall risks and benefits can help determine the cost benefits for the tax payer and rate payer to make sure that the state funds are leveraged taking into consideration both growth and existing infrastructure needs.

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