Asset life cycles are the four stages of an asset’s lifespan, and each requires different management. The four asset life cycle stages are acquisition, utilization, maintenance, and renewal or disposal. You can measure this for every asset, but the cycles will vary dramatically depending on the asset type. For example, a screwdriver is likely to have a short acquisition and a very long utilization life cycle. On the other hand, large machinery or equipment with many components will have a longer acquisition and shorter utilization life cycle.
The 4 Asset Life Cycle Stages
The asset life cycle stages may sound relatively simple, but, in practice, they each have their own challenges.
For smaller tools and equipment, the acquisition stage is not a big deal. It would focus on identifying the item needed, deciding on the brand, and choosing a vendor to purchase from. However, large equipment and machinery require more time and planning in the acquisition life cycle. Choosing the wrong equipment or overlooking a feature that could save a lot of time and money has a long-term impact.
You may be thinking that utilization and maintenance should be in the same life cycle, but that’s not always true. While a lot of maintenance can be done during utilization, larger repairs or breakdowns can take an asset completely out of production. So, they are two separate stages, albeit they are connected. Ideally, your assets remain in the utilization stage as long as possible.
If you want to maximize an asset’s useful life, maintenance is essential. The maintenance asset life cycle covers all types of maintenance, planned or unplanned. This includes all reactive, preventive, and predictive maintenance. With the support of Redlist’s asset management software, you can better forecast your planned maintenance scheduling. Better maintenance scheduling and automation enable you to improve the utilization asset life cycle and reduce downtime.
4. Renewal or Disposal
You may reach a point where an asset is often taken out of utilization for unplanned maintenance, whether due to age or other circumstances. Using Redlist, this would be an excellent time to pull your total cost of ownership report for that asset. This report would help you decide whether it is more cost-effective to continue repairing that asset or to dispose of it.
Why Should You Measure Asset Life Cycles?
If your business relies heavily on tools, equipment, and other assets, then asset life cycle is very important to measure. The benefit will differ based on an asset’s cost to replace, how vital it is to production, and overall asset reliability. With proper planning, data collection, and reporting, you can optimize your asset life cycles. Maximizing an asset’s useful life maximizes your return on the investment in that asset.
The larger the asset, the larger the investment and total cost of ownership. The cost is not only monetary but also the investment of your employees’ time to maintain an asset. Better maintained assets will recover time and money that you can spend elsewhere. Additionally, this results in greater asset reliability and overall productivity.
Extend Your Assets’ Usability with Asset Life Cycle Management
At the end of the day, your goal with measuring and managing asset life cycles is to increase your assets’ usability without loss of functionality. It is challenging to measure, manage, and plan for your asset life cycles without the support of technology. Redlist’s Enterprise Asset Management (EAM) software digitizes and automates this process for you. This allows you to easily collect data, auto-populate reports, make a plan, and automate the integration of that plan. Also, opting for software over a paper or spreadsheet-based system ensures you can easily assess and fine-tune your processes. Book an EAM software demo today!