Asset Management (ISO 55001)

by Kishan Tambralli

An asset has value to the company; the term “asset” in this context can refer to tangible and intangible assets. It includes financial and non-financial assets such as buildings, machinery, equipment, software programs, and data. Asset management (ISO 55001) is a term many people have heard of but do not fully understand. In the simplest terms, asset management (ISO 55001) means organizing and maintaining your assets to achieve your objectives efficiently. However, managing all of your equipment can be challenging with everything else going on in the business world. That is why it’s essential to use a system for tracking inventory and other assets.

Requirements of Asset Management

Types of assets:

  • Current Assets – Current assets are things that can be readily converted into cash within a year. These include the company’s inventory, accounts receivable, and marketable securities. The company’s balance sheet lists current assets in the order of their liquidity – from most liquid to least liquid.
  • Fixed Assets – Fixed assets are a type of asset that is not available for use in the short term. They are used to generate revenue but can’t be easily converted into cash. Many fixed-assets include real estate, machinery, equipment, or patents. The value of these assets doesn’t change often – they will be worth the same amount today as yesterday, so it’s essential to keep them safe!
  • Tangible Assets – Tangible assets are physical assets that you can touch and feel. This includes any valuable object or property that can be sold in the future, such as jewelry, stocks, art, etc.
  • Intangible Assets – An intangible asset is an asset that does not have a physical substance. A typical example would be intellectual property, such as patents or copyrights. These assets have value and can be traded in the marketplace just like tangible assets.
  • Operating Assets – Operating assets are items that a company uses to generate revenue. Operating assets typically include cash, inventory, and accounts receivable. The value of operating assets can change depending on how well the business is doing financially.
  • Non- operating Assets – These assets are not required to run the business operations but still generate revenue. Examples include:
  1. Short term- investments
  2. Vacant land
  3. Interest received from investments.

Benefits of ISO 55001 certification:

  • Good governance and control over assets will increase stakeholder confidence and increase opportunities for further investments.
  • You can be assured that you’re meeting all requirements and getting the most out of your process improvements, eliminating potential mistakes or errors.
  • Asset management (ISO 55001) enables small and large organizations to standardize and simplify assets, reducing maintenance costs and training to manage the assets.
  • Effective asset management (ISO 55001) ensures the safety of workers by reducing the risk of injury and catastrophic events. Proactive risk and operation management lessen the probability of accidents.

Types of Assets

Methods of tracking assets:

  • Traditional method – The pen and paper method is the primary method that is simple and easy. Although it has some disadvantages, employees spend more time searching for asset details, which leads to decreased productivity.
  • RFID – Radio Frequency Identification (RFID) is a technology that allows for reading data from an object without touching or making physical contact with it. RFID makes it possible for companies to automate processes like counting inventory or monitoring equipment. One company that has successfully integrated this technology into its business model is Wal-Mart.
  • NFC – Near Field Communication (NFC) technology is used for contactless communication between two very close devices. NFC tags can be embedded into assets like shipping containers, trucks, and pallets. This allows companies to track their assets globally in real-time, which ultimately helps them save money and improve efficiency.
  • GPS – Tracking assets within a company is no easy task. Even when you use an excel spreadsheet, it can take hours to complete, and there are always errors that need to be corrected. However, with the help of GPS technology and satellite imagery, we can now track our assets like never before with detailed reports and analytics tools. The system includes satellites, receivers on the ground, and computer software.

Requirements of an asset management(ISO 55001) system:

  • Scan asset labels – It is crucial to know the asset details like the features and warranty, so assets will have labels or QR codes tagged. All the related information will be displayed on your screen when the asset is scanned. These tags can easily be scanned by phones with built-in cameras or, specialized apps that need to be downloaded.
  • Depreciation management – Depreciation is an accounting process where the value of an asset is calculated and declines over time. This helps accountants calculate how much money should be allocated against income every year, given the planned usage of the asset.
  • Real-time alerts – Real-time alerts are provided as soon as the date is collected. The data collected can be saved and used for future analysis. The alerts provide you timely information of any new asset added, modified, upgraded or discarded.
  • Maintenance – Preventive maintenance scheduling is done to reduce or prevent any risks and potential failures to solve them earliest. This saves the organization’s expenses in the long run, which may reduce profitability.
  • Software license management – Software License Management is a term that refers to the process of monitoring, controlling, and tracking software licenses. The purpose is to ensure that all licensed software programs are being used per the terms of their rights. This includes making sure that only authorized users have access to these programs and ensuring compliance with any licensing restrictions against concurrent use or use on specific computer hardware.

Key Steps to Implement ISO 55001

Key steps to implement ISO 55001

  • Business objectives – The objectives are framed from the planning activities and are documented by the management. The asset management (ISO 55001) requirements are inclined towards the goals, and any pitfalls are detected.
  • Asset management policy – An asset management policy is a set of rules that govern how an organization manages its assets. These policies are generally put in place to ensure the company’s best interests, security, and profitability. The principles followed by the company need to be documented in the policy as well as the asset reports need to be linked with financial statements needs to improve the organization’s efficiency.
  • Strategic asset plan – The Strategic Asset Management Plan (SAM) is an important document that guides the care and management of organizational assets. It helps to ensure that there is a systematic approach in place, which ensures that all relevant issues are addressed.
  • Asset performance evaluation – Asset Performance Evaluations are an essential part of any company’s asset management (ISO 55001) strategy. They allow for tracking and benchmarking against industry standards while also assuring that assets are being properly utilized to maximize value. These evaluations can be done internally or by a third party, depending on the needs of your business. With these valuable tools in place, you can make confident decisions about which assets to divest and which ones to acquire, ensuring that your organization is optimized across all levels.