What Is an Asset Register?
Asset management, in general, includes the procedures and methods used to monitor the performance of a company’s assets and maximise their value.
It involves the process of organising and managing the purchase, use, maintenance, replacement, and disposal of organisational assets. Asset management does not only reduce costs and risks but also increases the delivery potential of assets. Positive capital improvement over the asset lifecycle is guaranteed through timely and adequate asset maintenance and the effective deployment of systems, people, and procedures.
This simply means that businesses can reap advantages like all equipment running as intended, cheaper operating expenses, and a higher ROI on their assets when they use strategic asset management.
And since your organisation’s core is made up of its assets, downtime, manufacturing losses, or subpar quality have no place in your business. Although maintenance teams play a key role in keeping assets operational, businesses get the most value out of their assets through efficient asset management.
This is where the asset register comes in. But what is an asset register?
Here, we’ll discuss what an asset register is with a focus on its use in the mining industry, the importance of having an asset register system and how asset register software can help.
The Asset Register – What It Is and Its Purpose
An asset register is essentially a comprehensive list of all company assets. It contains information about assets, such as their location, ownership, and condition.
Its basic function is to give businesses access to information about each asset, including its status, date of acquisition, location, price, depreciation, insurance coverage, warranty, and current market worth.
With an equipment asset register, for example, you’ll not only find the above data but also information about any maintenance and repair activities involving the machinery as well as the inspection schedules, issues raised, barcodes, models, and other relevant notes about each asset.
In the mining industry, such assets may be defined as the plant, equipment, machinery, and structures purchased or acquired for the purpose of extracting minerals and related activities. Aside from physical assets like these, there could also be an information asset register which is a record or index of the company’s information assets. It could be filed in a specialised piece of software, a database, a Word document table, or a spreadsheet. Whatever format it’s in, an information asset register must be accurate and kept up-to-date to serve its purpose.
Even though creating and keeping an exhaustive asset register on a daily basis may involve what seems like a lot of administrative labour, it can ultimately benefit a company’s bottom line.
Benefits of Using an Asset Register
Equipment management and maintenance often accounts for between 30 and 50 percent of the overall operating expenditures of mining companies. Any operational component bearing such a substantial part of the cost demands your attention.
Mining businesses can reduce costs and risks while increasing production and safety by enhancing asset management and maintenance.
Efficient asset management provides the following advantages:
1. Lower maintenance costs
The reduction of maintenance costs is the most obvious way better asset management can contribute positively to a mining operation.
Emergency maintenance can cost between three and nine times as much as planned maintenance. Therefore, investing in preventive maintenance remains a tried-and-true way to cut maintenance costs.
Preventive maintenance results in minimal downtime, longer functional lifespans for equipment, and a reduced incidence of unscheduled repairs or unplanned maintenance, as well as equipment efficiency.
Conversely, with no preventive maintenance strategy in place, equipment malfunctions can become more frequent, leading to unexpected downtime and production losses. Downtimes also force your personnel to spend time responding to equipment breakdowns, taking up valuable time. When certain replacement parts aren’t available in your inventory, they need to be shipped in fast, adding to the wait time and cost.
2. Higher equipment or asset utilisation rates
Mining operations can benefit from increased asset utilisation rates across a number of mining locations through the conduct of diligent and regular asset tracking and maintenance.
Simply put, measuring how well your mining equipment is used and performing is known as equipment or asset utilisation. The major parameters used to calculate utilisation rates may include engine hours, fuel consumption, and ignition on-off times. GPS-based location information or sensor data from scales, for example, are examples of more advanced measurements.
With an asset register, you’ll have a picture or snapshot of utilisation by gathering data such as the asset location, how long its engine has been operating, and whether basic maintenance duties have been carried out.
3. Reduction of business risk
Having a plan in place to reduce or eliminate losses due to equipment failure is key to controlling asset risk. Using an equipment asset management software, for example, can assist you in setting up established procedures to detect, measure, and rank risks associated with asset failure, like those involving regulatory compliance, environmental and safety issues, and asset downtime.
Effective asset maintenance plans can give you the structure to build controls and adopt mitigation techniques to lessen the impact of these risks in addition to giving you insights into the risks.
4. Better access to spending and maintenance data
Many mining firms lack the knowledge and useful data necessary to maximise the value of their assets.
Asset and maintenance solutions give you access to specific metrics about your mining assets and equipment, so you can access the information you need to plan when to replace outdated equipment, buy new equipment, or move assets to a better or strategic position.
5. Working capital enhancement
Increasing the productivity and durability of existing assets becomes more crucial as it gets tougher to obtain financing for both investments and operational needs. Effective asset management can help with improving your mining company’s working capital by boosting productivity and reducing expenses.
The best use of mining assets is frequently considered as a compromise between operations and maintenance, with little connection to financial success. All operational expenditure reductions, however, turn into considerable financial advantages when you consider how equipment management and maintenance can account for 30 to 50 percent of your overall operating costs.
Considerations When Developing and Using an Asset Register
In the process of developing an asset register, an organisation must export all assets included in their accounting or asset management software. Aside from the export of assets, there are other essential steps involved in creating and using an asset register.
1. Physical audit
The export of assets should be immediately followed by a physical audit of the assets. If the company uses barcodes or RFID tags on their assets, the physical audit could be a lot simpler.
Once the physical audit is over, the team can cross reference the list of assets from their asset management or accounting system with the physically audited assets. It is at this stage that businesses inevitably discover discrepancies between their asset list and the audited assets. Technically speaking, ghost assets—which are usually written off—are missing assets.
2. Lifecycle cost computation
Many business owners make the error of merely factoring in the price of the original acquisition. However, they should compute the full lifecycle expenses of each asset if they want their asset management plan to be accurate.
Additional expenses including maintenance charges, condition and performance modelling, as well as disposal costs that are likely to occur during the asset’s life cycle.
3. Setting levels of service
Setting service levels comes next after calculating lifecycle costs. This entails describing the entire capability, quality, and function of the many services that the assets offer.
The business owner can then decide what operations, upkeep, and renewal procedures are required to keep each asset in optimum condition.
4. Long-term financial planning
The asset management strategy a business owner adopts should ideally be simple enough to integrate into their long-term financial planning. The owner can then choose which goals need to be prioritised and which ones are viable, with a solid financial strategy in place.
Another crucial aspect in how to develop and maintain an asset register involves the formulation of an
asset register policy within the bigger asset management policy which sets out what your company does in terms of managing your assets.
You should also create a registry structure that addresses how you intend to organise or record the information. You can have a physical asset register kept in files in a folder in a designated filing cabinet, or maintain an online asset register, or both.
If you opt for a digital asset register, rather than using spreadsheets, you can use an asset register software that provides the flexibility to categorise and group assets, and make depreciation calculations so much easier.
Stakeholders Using the Asset Register
Asset registers are frequently employed by business owners to assist in keeping track of all their fixed assets and the information pertaining to them. It helps to keep track of each asset’s true value, which is important for managing and controlling the assets as well as for tax purposes.
Other people who may use data within an asset register include accountants and auditors, external regulators, maintenance schedulers, engineers and technicians, plant superintendents, planners and registrable plant-appointed persons.
Key Information Records Required by Stakeholders
As mentioned earlier, typical key information and data points recorded in an asset register in addition to the asset ID, number, name and description may include the:
- Barcode or serial number
- Equipment location
- Cost centre
- Date of purchase or acquisition
- Purchase price
- Asset owner/user
- Insurance coverage
- Current value
- Depreciation method used
- Warranty terms
- Maintenance information
- Remaining life of the asset
- Estimated resale (salvage) value
The register may also contain the next inspection date, plant registration/design registration, etc. The register must always be updated when you acquire or dispose of a plant.
If your company uses the AME Asset Inspection System (AIS) for inspections, relevant information is updated automatically on the system.
Structure and Hierarchy of Assets
The ISO 14224 standard provides a hierarchical pyramid of nine levels of taxonomic classification, with level 1 indicating the type of industry and level 9 representing a part or piece (as the lowest level). Moreover, the pyramid shows that levels 1 through 5 pertain to each asset’s usage and location.
Naming Convention and Asset Numbering System
An asset numbering system (aka asset naming convention) specifies how assets are identified (using a name or number) in a system. The asset naming convention or numbering system provides a means to give the assets in your database unique IDs that will make it easy to find them.
The system you choose typically depends on your plant management system (e.g., SAP, Pronto, etc.) so the format can vary from site to site.
AME API integration is currently being developed so that a client’s own asset register or plant management system can be integrated seamlessly with the AME AIS.
You can stay updated on the progress of the integration work and be the first to know when it’s complete and ready by signing up for AME’s official newsletter.
Spreadsheet vs Asset Management Software
Tasks like asset management and inspection just can’t be managed by guesswork or estimates; they require rigorous procedures to guarantee things get done correctly. Some businesses use spreadsheets, paper or physical files, or software designed specifically for asset management.
Paper and physical files take up valuable space and are not eco-friendly, so they are typically reserved for important meetings or presentations.
Meanwhile, spreadsheets are low cost and simple; that is, only up to a certain extent. Creating more complex sheets with voluminous data and various formulas or calculations requires proper training. The extensive use of spreadsheets can also lead to data entry fatigue which can result in data inaccuracies.
Asset management software, as opposed to spreadsheets, can:
- Process far more complex information and track changes over time, including the date/time and location of when asset is damaged or broken, repair costs, the name of the vendor who fixed it, and the date of asset replacement. Quick access to this data makes knowing the lifetime value of your assets easier and aids in planning for future requirements.
- Handle the intricacy of various types of inspections, including those involving equipment, tools, etc. By using asset management software, you can define what you want to examine more precisely and have thorough documentation.
- Minimise the need for frequent data entry. In fact, typical software allows you to set alerts or triggers for inspection dates.
- Store data on the cloud, so fears of losing valuable data in the absence of a backup become a thing of the past.
AME’s AIS allows for all these and more. Our AIS also has the functionality to easily export data into a spreadsheet if necessary. This is a useful feature for providing hard copies of important presentations and reports to stakeholders.
Why Use AME’s Asset Inspection System for Plant Management?
By opting to use the AME Asset Inspection System, you get all the benefits provided by asset management software, including ease of use, the ability to store and process complex information, and data integrity. Moreover, AME’s AIS can send you automatic reminders to companies that your registerable plant is due for an inspection.
If you need further information about AIS or any of our asset management services and solutions, please get in touch today!