Business & Leadership Behaviors Project Management Thoughts

Strategic Management of Assets – A View from the Front Yard

Holiday movie season has started at my house. One of the movies that I caught was Christmas with the Kranks. Early in the movie, there is a reference to how much money the main characters spent on Christmas the year before. Let’s just say – it was FAR more than I would have thought a family of three would spend – and they seemed to have the same shocked reaction that I did.

I don’t even want to know what was spent at my house last year.

Last weekend, we had beautiful weather for putting up holiday decorations outdoors and I found myself up on a ladder in my annual battle with the light strings. And, despite my denial of our holiday spending, I couldn’t help but think of the investments most of us make around the holidays.

Don’t get me wrong – I’m not going all Grinch on you here. I just couldn’t help but think of all of the time and money spent on my street alone. There’s garland, lights, ribbon, those inflatable things (that look a little creepy when deflated, if you ask me), the power to run all of that stuff and the time to select/purchase/transport/install it all. It can add up quickly – and that’s just in the front yard.

Once the holiday is over, you then have to pull everything down and store it. And storage may require purchasing containers – not to mention taking up precious space in your basement/attic/garage.

We all work hard for our income – as individuals and companies. So it makes sense that we give a little time and effort to the things that we choose to invest in with that income – whether that’s our organization’s assets or our household holiday assets.

When we’re working with our clients on a solution – whether it’s an asset management or supply chain solution – we typically begin by looking at what they have, where they have it, what their current processes are and what the end goal is that they are trying to achieve.

In an asset system, for example, that end goal is usually meeting inventory reporting requirements. This is typically done through a manual inventory. Staff go out to locations across their organization and record what they have and where they have it. When done, they turn in whatever results and the information is entered into their ERP or whatever system of record they use for their reporting.

Attacking the decorating of my front yard at Christmas does actually follow a similar path:

What is the Goal?  Make sure the yard meets my wife’s plan and timeline – and doesn’t embarrass her in front of the neighbors

What is the Process?  Pull front yard decorations out of storage, inspect for status (test lights, check breakage, etc.), sort into order of installation, install

What is my Inventory?  Various items in 6 tubs marked for the front yard

Where is the Inventory Location?  3rd & 4th shelf of the Christmas boxes in the south corner of the basement

Just like the assets that you use in your organization, you need to know where things are and what shape they’re in so that you can get the use out of them that you intended when you purchased them. And you don’t go out and buy things that you already own but can’t find (like 10 extra strands of lights…)

Most people would agree that, ideally they would like to have that data. But the biggest urgency for many is completing the inventory reports. Reporting deadlines are important goals – but they can introduce costs.

That deadline can create the urgency to get an inventory done quickly. Unfortunately, the quality of the information captured may be sacrificed for speed. It’s understandable – who wants the visibility of not meeting financial reporting requirements – and the potential repercussions that may follow.

The key becomes balancing those two goals – accurately capturing information and meeting reporting deadlines. The latter goal is critical (and often mandated), but not having a solid understanding of what you have, where you have it, and what shape it’s in when you need it – can easily blow your budget out of the water later on (and result in more wreaths and garland than your house needs).

So how do you achieve the balance? It may take a little time up front, but that time and the right tools can get you there. Here are three areas to consider:

Make a List – Take the time to account for all of your assets, their location and their operational status. Manually, this can take a while. An automated solution can speed up the process and help to ensure accurate and complete data is going into your ERP.

Check it Twice – Do you really need to keep 12 typewriters around? Would you use those laptops if they were fixed? Hanging on to things you don’t need or can’t use still need carry a cost. Make sure what is useful is put in condition to be in circulation and let go of anything that no longer serves a need.

Stay on the Nice List – Put together a process to stay on top your assets. It’ll help to avoid panic situations when those pesky deadlines loom. A good place to start is to look at the areas where you have critical assets, high-turnover assets, problem assets – whatever gives you headaches at reporting time. Once you identify the source of the headache – you can start identifying how to mitigate that problem and fine tune your processes.

I won’t tell you the end of the movie (you’ll likely have a few hundred opportunities to see it on TBS over the next few weeks) – but suffice it to say, taking a look at what your goals truly are may give you some insight as to how you can adjust your approach to managing your assets – and avoid panic spending on lights so you’re not the last house on the block decorated – or worse – without lights.