An Introductory Guide to the Asset Lifecycle
If you’re working in asset management, you need to master the asset lifecycle. In other words, you need to choose right at the beginning what your asset lifecycle will look like and how you’re going to manage that process.
It’s essential to think about the entire life cycle of each asset that you possess. Then, you’ll have to look at how to maintain and modify them throughout their existence.
Don’t feel overwhelmed yet? Don’t worry, we’re going to help you out. Here’s a quick, easy-to-understand guide to the lifecycle so that you can feel more comfortable with the ecosystem in asset management.
What Is an Asset Lifecycle?
An asset’s lifecycle is the duration of time over which an organization held its asset. It is important to consider because the cost and risk associated with an asset change over its lifetime. For example, the cost to develop and deploy a new software application is high upfront, but the cost to maintain and use the application is low.
Thus, you need to know the entire stages and supportability analysis services of the asset lifecycle when making decisions about acquiring, deploying, and disposing of assets.
Various Stages of the Asset Lifecycle
Here are the asset lifecycle stages that go through during its lifetime, from acquisition to disposal.
An acquisition is a process of obtaining ownership of an asset. It acquires through purchase, lease, or some other means. The acquisition stage of the asset lifecycle is the point at which the asset is obtained and brought into the organization.
It is the act of putting an asset into service. It is the process of making an asset available for use and can involve moving it to a new location, such as shipping a product to a customer.
Deployment is an important part of the asset lifecycle because it is the point at which an asset becomes operational and begins to provide value.
It is when the asset is being used to generate value for the organization. To maximize its value, it is important to understand how it is being used and what factors impact its performance.
It is the process of preserving, repairing, and/or replacement of physical assets. Maintenance aims to keep the asset in an as-new condition or to extend its economic life.
It is the act of withdrawals from one’s savings or retirement account to support oneself during old age. Retirement takes place when an individual is no longer able to generate an income from employment.
After an asset has reached the end of its useful life, it must be disposed of in a responsible manner. This stage may involve recycling, selling, or simply discarding it.
The benefits of asset lifecycle management are many and varied, here are some:
- Improved decision-making throughout the organization
- Reduced risk of obsolescence and stranded assets
- Improve operational efficiency and productivity
- Reduced maintenance costs
- Improved health, safety, and environmental performance
Optimizing Your Asset Lifecycle
It’s important to understand the asset lifecycle to manage your organization’s assets and ensure they are being used most efficiently and effectively. Poor asset management can lead to underutilized assets, which can, in turn, lead to overspending and inefficiency. Organizations can use this guide to better understand the asset lifecycle and how to optimize their asset management processes.
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