What Is Asset Tracking? Benefits & How It Works

When you think of the term ‘assets,’ your mind might jump straight to your bank account. But “assets” actually refers to the physical things you own, and in the case of an organization, an asset is something that provides value to the company, like machinery or vehicles. As you can imagine, these assets can be crucial to day-to-day operations, which is why asset tracking is so important. It helps you understand exactly what equipment, tools, or materials you have on hand. In this blog post, we’ll explore what asset tracking is and how it works.

What is Asset Tracking?

In the world of business, asset tracking simply means knowing your physical assets’ locations and statuses. This helps organizations get the most out of their equipment and supplies. These assets can be anything from company cars and computers to big machines used in factories.

The overall goal of asset management is to keep things running smoothly. This includes figuring out the best way to maintain equipment, so it breaks down less often, keeping repair costs down and making sure factories are operating at full capacity.

Nowadays, keeping track of your assets often involves a combination of special tools and computer programs. The tools might include barcodes, QR codes, radio-frequency identification (RFID) tags, and asset tracking systems or software.

Using these tools to track your assets is becoming increasingly important, especially as workplaces and factories become more reliant on digital tools. Anyone who has used a self-checkout scanner at the grocery store has already used an asset tracking system!

Benefits of Asset Tracking

Whether your organization is brand new or decades old, it’s crucial to know what things are valuable and what you might not need anymore to free up space.

Knowing what you have helps you figure out what upgrades or replacements you might need to stay competitive. It can also help you save money and find better ways to do things efficiently. Plus, having a clear record of your assets makes it easier for your admin team to work faster since they know exactly what’s available.

Investing in asset tracking is also helpful for keeping accurate company records and predicting your taxes because you’ll have a good breakdown of what each department has. And regardless of where you’re practicing asset tracking, it’s always a great building block for the foundation of total asset management.

What Information Should You Track?

Here are some key details you might want to keep track of for your assets:

• Asset name: This is simply the name your organization uses for the asset or its technical name.
• Location: Knowing where the asset is physically located can be helpful, especially for fixed assets. For movable assets, keeping track of their current and expected locations can be useful.
• Purpose: Understanding what the asset is used for and how it fits into your organization’s workflow can be beneficial.
• People Involved: This could include individuals with specific access rights or the groups responsible for using the asset. It’s also important to track who’s accountable for ownership, maintenance, and other management tasks.
• Performance Tracking: This might involve things like the asset’s expected output or function, as well as how maintenance performance is measured.
• Maintenance Plan: Keeping track of past maintenance activities (what was done, when, and by whom) helps plan future maintenance tasks more effectively.
• Issues and Downtime: Record any times when the asset doesn’t work properly, along with the reason(s) why.
• Lifespan: This includes the estimated useful life of the asset, any plans for replacement or upgrades, and other relevant information about how you manage its lifecycle.
• Remaining Useful Life (RUL): This refers to the estimated time you expect the asset to function before needing replacement.

How To Track Assets?

There are several ways to keep tabs on your important equipment and tools, depending on your needs. Here’s a breakdown of some common methods:

1. Barcode Tracking

   Many larger assets already have barcode labels. You can use scanner apps on mobile devices to manage these items and keep a digital record, or use NEXGEN’s built-in QR code scanner for easy lookup. This is convenient because the information can be easily accessed by anyone who needs it, especially useful for businesses with multiple locations or workers who need to work in the field.

2. RFID Tracking

   These tags use radio signals to automatically broadcast the location of your assets. This can be a reliable way to track them and avoid mistakes. However, you’ll need handheld scanners to use them, so you’ll have to factor in how many you’ll need.

3. GPS Tracking

   This system uses GPS devices attached to your assets to track their location through cellular networks or satellites. It works well over long distances and provides real-time updates for everyone involved. You can even get mobile GPS trackers or hardwire them into larger equipment. An additional benefit of GPS tracking is the ability to set up alerts within designated areas (geofences). If an asset leaves this zone, you’ll be notified immediately. Plus, GPS software allows you to see everything on a user-friendly dashboard. This can simplify something like fleet management by giving you a clear picture of your vehicles’ locations throughout the day.

Examples of Asset Tracking Systems

There are several tracking systems to keep tabs on your important assets, depending on what you need to track. Here’s a look at some of the most common systems used:

1. Manufacturing Execution Systems (MES): These systems help manage and monitor all the equipment on a production floor.
2. Computerized Maintenance Management Systems (CMMS): Think of CMMS software as a central hub for keeping track of all maintenance tasks within a manufacturing environment.
3. Inventory and Warehouse Management Systems: This type of system helps keep track of how much stock you have on hand and where it’s located (including different warehouse locations and even specific areas within a warehouse).
4. Enterprise Asset Management (EAM) Systems: EAM systems offer an all-encompassing view of your organization, helping organizations to make predictions about their assets based on data they’ve collected over time.
5. RFID asset tracking systems: These systems use tags to locate smaller physical items, like packages. The tag sends a signal to a central system, letting you know where the item is and potentially other details like its name or purpose.
6. GPS Asset Tracking Systems: Similar to RFID, these systems use GPS trackers attached to larger, movable assets like trailers or shipping containers to pinpoint their location.

Asset Management vs Asset Tracking

While the terms might sound similar, asset management and asset tracking refer to two different things. You can think of asset tracking as something you can do either completely separate from asset management or as a component of it. We’ll get into the details below.

Asset Management

Imagine any organization – a manufacturer, logistics company, or a construction crew – that all rely on various physical assets for daily operations. Trucks deliver products, tools build products, etc.

These assets need to stay functional throughout their lifespan. That’s where a solid asset management strategy comes in. It creates a systematic approach to overseeing these physical resources, including tracking crucial information about them. This information might include:

• Asset value
• Usage history
• Current condition
• Maintenance needs
• Depreciation schedule
• Operating costs

Essentially, it acts as a framework to manage your assets’ entire lifecycle.

Asset Tracking

So, asset management is the plan for taking care of your assets. But in caring for your assets, you might find it useful to know where they’re located and what condition they’re in. That’s where asset tracking comes in.

Think of asset tracking as an important part of the overall asset management plan. It helps pinpoint the location and condition of your assets in real time. Of course, this can be especially useful for high-value items. Thanks to technology, there are now automated systems that track assets indoors, outdoors, and in various environments.

How NEXGEN Helps You With Tracking Your Assets

NEXGEN is an innovative CMMS and EAM solution that can help businesses manage their assets and reduce the risk of failure by providing insights and predictions about asset performance and useful life. If you want to learn more about how it works, you can.

Frequently Asked Questions (FAQs)

1. How do I choose the best asset-tracking method?

   The best method depends on the number of assets you manage and how many users need access. Common options include QR codes, barcodes, RFID tracking, and GPS systems.

2. What happens if I don’t use asset management?

   Without it, you risk theft, duplicate purchases, and downtime due to untracked maintenance needs. You might also miss opportunities to optimize asset usage and avoid unnecessary renewals.

3. Who benefits from asset tracking?

   Any business with valuable assets that are crucial for daily operations can benefit from asset tracking.

4. What’s the difference between inventory and asset tracking?

   Inventory tracks items you sell (or consume), while asset tracking focuses on what you own and use long-term.

5. Why do companies track assets?

   Companies use asset tracking to maintain control and gain insights into their asset usage. This helps optimize operations and make informed decisions.