Business assets take many forms, from raw materials and finished goods inventories to intellectual property and software. From an industrial maintenance perspective, those that matter most are the machines and other equipment used to make what the business sells.
These are listed on the fixed asset register, which is a record of all the physical assets a business owns. It forms the basis of maintenance planning and supports equipment lifecycle management. It’s also something the Finance function needs, as a fixed asset valuation is an important component of the balance sheet.
A carefully designed, well maintained fixed asset register improves the effectiveness of whatever maintenance strategies are employed. This blog was written to help maintenance and other managers understand how to implement and maximize the value they get from this tool.
What is an asset register?
In its most straightforward form, an asset register is a list of assets. Examples of the assets that might be listed include materials held in inventory, intellectual property assets, and digital assets. At a minimum, the register includes the value of each item on that list, but it becomes more useful as more relevant information is added.
The fixed asset register should cover all the production machinery, plus equipment like fork trucks, fume and dust extraction systems and water treatment systems. Ideally, it will be a comprehensive record that tracks the details, status, and value of all physical assets owned by a company.
A fixed asset register forms a core component of the computerized maintenance management system (CMMS). Linked to purchase and maintenance records, it helps industrial companies keep track of their equipment, monitor its usage and plan maintenance and eventual replacement. Without a well-maintained register, it’s almost impossible to ensure assets are receiving the attention they need for reliability and a long life.
Key information included in an asset register
To be a useful tool for industrial asset management, the register should hold extensive information on each item listed. The following list covers what most manufacturers find helpful, but this can be expanded to suit specific needs. It’s also prudent to check the asset register-related functions of the existing CMMS maintenance software.
Key information should include:
- Asset identification: Each asset needs a unique number and should be clearly marked with the same.
- Description: What the asset is and the manufacturer.
- Location: Where the asset is located. This is especially important in larger plants or those occupying several buildings.
- Age and/or date: When it was put into service.
- Value: Start with the cost when acquired. Work with Finance to agree where depreciated value information will be kept. (It could form part of the asset register.)
- Warranty: Documentation on what’s covered, for how long and who to contact.
- Condition and status: Notes on the asset’s current condition and usage.
- Service agreements: If any agreements are in place, capture the details here.
- Maintenance records: Past repairs, upgrades or rebuilds, maintenance schedules and condition assessments.
- Responsible person/team: The person or department responsible for the asset’s operation and upkeep.
Types of asset registers
Asset registers can be categorized by type of asset and by the format in which it is held.
By convention, assets are separated into variable and fixed. Variable assets, primarily materials in inventory, are recorded in the production planning and control or inventory management system. Fixed assets, defined as those with a useful life measured in years, have traditionally been the manufacturing machinery, some tooling and the buildings.
Today, the fixed asset category has expanded, with the emergence of digital assets and heightened recognition of intellectual property (IP) assets.
Digital assets include software, particularly source code, along with videos, instructional material and some designs. These should all be recorded in a digital asset register.
IP assets are patents, trademarks and material over which a company may assert copyright. These should all be logged in an IP register.
Traditionally, manufacturers created their asset registers on paper, and many subsequently migrated these to spreadsheets. These are difficult to maintain and there’s a risk of differing versions being used throughout an organization.
To address these limitations, many manufacturers now use the fixed asset register format available through their CMMS software. This provides a single source of truth, integrates with other business systems, is easily updated and allows retention of information related to the condition and maintenance needs of individual assets.
How to create and maintain an asset register
The following five steps capture the process if starting from scratch. Most businesses will already have some form of asset register, but the five steps should provide a framework for determining upgrades and improvements to enhance the usefulness of the existing document.
Step 1: Asset identification
Begin by listing all physical assets and assigning unique identifiers such as serial numbers to each item. In a large plant, it may be helpful to develop a coding or classification system. Also, consider attaching a QR code with the identifying number to the asset.
Step 2: Data collection
Gather relevant details like purchase price, current value, manufacturer, condition and location, along with maintenance records. This will come from multiple sources and may take time to pull together.
Step 3: Organize the register
Choose a method to record all asset data systematically, ensuring it’s easily accessible. In a very small plant, spreadsheets may be enough, but a CMMS will provide more flexibility and accessibility.
Establish Standard Operating procedures (SOPs) for adding and removing assets from the register.
Step 4: Regular updates
Write SOPs to cover required register updates such as repairs, relocation or decommissioning of assets. Define responsibility for making these changes and the frequency with which they should be made. (An out-of-date or incomplete registry is of very little help in asset management.)
Step 5: Periodic audits
Conduct regular audits to verify the accuracy of the asset register and ensure compliance with regulations.
Importance of an asset register for industrial maintenance
In many organizations, it was the Finance department that needed and maintained records of machinery and equipment useful life. This was to calculate depreciation and fixed asset values for the balance sheet. However, effective maintenance also needs a comprehensive record of the manufacturing assets to be cared for.
Three benefits are:
- Supports maintenance planning: Industrial preventive maintenance (PM) can only be planned and managed once detailed information about manufacturing assets is available.
- Improved CapEx utilization: Helps identify underutilized or outdated equipment, which supports decision making around where capital should be spent. (For example, increase capacity by redeploying an existing machine instead of buying new.)
- Asset life cycle management: Tracks equipment lifespan and supports calculation of the Maintenance Cost as a Percentage of Replacement Asset Value (MCRAV) metric. Ensures a rolling program of asset upgrades or replacements is in place.
Support for improving asset management
Planning effective asset maintenance is practically impossible without comprehensive information on the manufacturing machinery and related equipment within a plant. The modern asset register goes beyond what the Finance function requires by capturing relevant information to support maintenance decisions and, ultimately, replacement plans.
ATS helps manufacturers optimize maintenance activities, reducing downtime and lowering operational costs. If you’re struggling to implement or improve effective asset management, we can help. Contact us to learn more.
