Before we get started on the life and death of assets, we need to know: what is an asset? An asset is pretty much anything that keeps your facility functioning. There's what's called facility-related assets that include HVAC, desks, lights, signs, appliances, and even floors. There is also information management assets like printers, copiers, computers, and IT equipment. And finally, there is personal equipment, which includes safety equipment, vehicles, mobile devices, badges, etc.
Every single one of these assets in your facility has what is known as a lifecycle. An Asset lifecycle is not dissimilar to the lifecycle of a person. In the most basic terms, a person goes through birth, life, and death. An asset goes through acquisition, useful life, and disposal, with each step meaning much the same step as the respective one in a person's lifecycle.
For maintenance departments, it's important to understand each of the lifecycle stages, not only to properly perform asset management, but because assets are one of, if not the, largest expenditures of a facility.
The Stages of Asset Lifecycle
Like we mentioned before, there are three parts of an asset lifecycle: acquisition, useful life, and disposal. Here is a little more on each sector of a lifecycle:
The "birth" stage of the asset lifecycle. This is when you acquire the asset (either when it was purchased or when you put it into use). This is the very start of your asset’s lifespan and should be when you begin asset monitoring and tracking using asset management software.
The "life" stage of the cycle, this section is the biggest part of most assets. Note the word "useful" life rather than just life. This stage is not just about how long your asset runs. It is the stage that encompasses performance and the entire time for which your asset will be economically feasible for your facility.
What does it mean for something to be economically feasible? It means the time during which the asset is working or running, but how long it is in service while continuing to earn revenue. Basically, the useful life stage is the time during which the profit you're making in relation to your asset being in service is more than the cost of keeping the asset in service.
Fixed asset management software can help you understand, track, and manage your asset's useful life. A CMMS with asset management capabilities is highly recommended for facilities with multiple assets (that's pretty much literally every facility).
And we finally get to the "death" stage. This is the point at which the cost for maintaining your asset is not longer "worth it." However, disposal doesn’t necessarily mean that you throw the asset away (though it can mean that). It simply means the time at which the asset has come to the end of its life for your facility. You may still sell it, re-purpose it, or recycle it if you can.
Lifecycle cost is what encompasses total cost of ownership or TCO. The lifecycle cost covers from start to finish – from acquisition and useful life, all the way up until the asset is ready for disposal, no matter what means of disposal that is.
The facility manager has to consider how important any given asset is to the operation when considering life-cycle replacements. If an asset is critical, it might move up in the priority of replacement over something that is not critical but has a higher FCI and is already past its useful life.
Knowing all about the lifecycle of each of your facility’s assets allows you the better understanding of the value your assets bring to the facility. With fixed asset management software like a CMMS, you'll be able to understand, manage, and maintain your facility's assets in much more efficient and organized manner.
If you're interested in getting this type of management for your facility, you've come to the right place! Check out the free demo of our maintenance management software, or choose from one of three Editions to get started using it in your facility.