In the world of business and finance, there is one common truth to building wealth: obtain more assets than liabilities. Building assets and minimizing liabilities adds more value to your business, and more value equals higher profits. However, because assets are so valuable, they have to be protected. How does one protect an asset? The answer... asset tracking software.
Asset tracking systems provide visibility over all the assets a company owns. Having the ability to accurately keep track of your assets is a good business practice that can save business owners the headache of trying to find or replace any items that go missing. When deciding how to protect your equity, turn to an asset tracking software for your best solutions.
What is an Asset?
While your boss may say that you and other employees are the greatest assets to the company, technically that isn't true. Yes, I’m sure your boss values you and all off your work efforts, but an "asset", by this definition, you are not.
An asset is property, owned by an individual, company, or government, regarded as having value and available to meet debts, commitments, or legacies.
Assets are basically anything of value that can be converted into cash. Some examples of assets include:
- Cash and cash equivalents- certificates of deposit, checking and savings accounts, money market accounts, and treasury bills
- Real property- land and the structures that are on that land
- Personal property- everything that you own that is not real property such as boats, collectibles, household furnishing, jewelry, vehicles
- Investments- annuities, bonds, cash value of life insurance policies, mutual funds, pensions, retirement plans, stocks and other investments
Generally, assets can be divided into two categories: liquid assets and illiquid assets.
Liquid assets are possessions that can quickly be converted into cash with little to no effect on the price received. Stocks, money market instruments, and government bonds would all be considered liquid assets. However, illiquid assets cannot be quickly converted into cash without considerable losses in value. For example, houses, antiques, and collectables would all be examples of illiquid assets.
Naturally, companies that have amassed assets want to protect them. Every piece of hardware, machinery, and tools that a company owns contributes to the overall net worth (difference between a company’s liabilities and assets) of that company. So, in an effort to protect their equity, many companies take advantage of asset tracking.
Companies that are not investing in asset tracking software could be losing valuable time and money. Without inventory software, companies waste money on inefficient asset tracking practices.
When inventory, tools, or machinery go missing someone has to either find or replace the missing items. As a business owner, you lose money when employees take time from their duties to find missing assets. If that asset is not found, even more money and time have to be spent to replace it. This is a frustration that does not have to exist. After implementing asset tracking you eliminate the following pain points:
- Loss of time and money on labor and administrative cost
- Poor shipment tracking and late delivery times
- Lack of asset accountability
- Mismanagement of inventory
- Inefficient warehouse processes
As a business owner, implementing asset tracking provides multiple opportunities to optimize your processes and put money back into your pocket. Asset tracking lowers your costs, streamlines your business services, improves your customer service, and allows you manage your business with ease. Let's looks a little deeper in to this, now.
1. Cost Reduction
With proper asset management, you automatically lower labor cost. When personnel don’t have to track assets manually, they gain more time to perform other task. You may even free up enough time to assign employees other revenue generating assignments, adding to company profits. Implementing asset tracking also helps you reduce loss and utilize your assets more effectively.
Asset tracking adds a higher level of accountability to any company. When manager are able to keep detailed records of when certain assets are used, and who used them, you gain new information that can be used to solve preexisting problems. For example, you may learn that you are losing products in Warehouse A regularly. After looking into the matter you find that every time the new picker is sent to that location something ends up missing.
Without asset tracking you may have never noticed this was happening. Increasing the overall accountability of you system also discourages the mistreatment of assets by employees. When employees know that they are held accountable for assets they take better care of them.
3. Increase organization and efficiency
You can increase the efficiency of the physical space in your business with asset tracking. Whether you want to optimize the stockroom or warehouse, with asset tracking you can take control of your assets and their locations.You can identify items that are commonly used and create a better structure for your physical space based on the data collected.
For example, you may discover that two products in your warehouse complement each other and that customers usually purchase these products together, but they are currently located on opposite sides of the warehouse. Resulting in longer picking times whenever the products are ordered together. With this information you may decide to move the product locations closer together, which increases picker efficiency. Through proper asset tracking you will also be able to anticipate your company’s needs and identifying trends in advance.
4. Accurate asset management
In the chaotic environment of a warehouse, asset tracking can be especially difficult. When there is a high demand for your product, pickers and other employees are rushed to meet that demand. Asset tracking allows you to recover complex transactional information about your assets. Giving you the ability to create an optimal workflow that replaces chaos with efficient processes and methods.
5. Better Customer Service
Through asset tracking you can also achieve better customer service. There is nothing more frustrating to a customer than having no clue when to expect a delivery. Even if you provide delivery dates, customers still like to know where their packages is during the delivery process. Applying asset tracking to the shipping process also protects you as a seller from buyer fraud.
Adopting Asset Tracking Software
As you can tell, adopting an asset tracking system is essential to asset protection. However, there are several methods of asset tracking that you should consider before adopting the software. Companies can implement asset tracking either by using GPS tracking, RFID tracking, or barcode scanning. While there are other methods to asset tracking, these three are the most common.
As I mentioned before, there is a lot of wiggle room on what can be considered an asset. Dependent upon the type of business, you may have assets that are used off-site. For example, a construction company consistently has to send entire teams out to sites with tractors, jack hammers, bulldozers, and other machinery. Each piece of equipment is an asset to the company and needs to be accounted for.
It is because of industries like these that assets must have the ability to be tracked globally. Using software that combines the power of GPS systems and mobile devices creates effective asset tracking methods. When compared to other forms of asset tracking, GPS tracking is by far the most secure. With GPS tracking, owners can monitor all assets in real-time and easily track any stolen or lost property.
GPS asset trackers are very different from the GPS system you may have in your car.
These trackers rely on an internal battery for power rather than being hard-wired to a vehicle's battery. Asset GPS systems can be externally anchored to assets instead of hard-wired. Meaning that they can be used on any asset whether it is a boat, tractor, four wheeler, etc., repeatedly. After attaching the device, the owner is then able to monitor that assets movement via GPS. The device, placed on the asset, emits a frequency which can be detected on a mobile device from anywhere.
However, there are some drawbacks to using GPS asset tracking.
It is common for these devices to fail due to a phenomenon known as Faraday cage effects. The Faraday cage effect refers to anytime an electric field is blocked while in an enclosed space. This phenomenon occurs most often in asset transportation. Intermodal containers block signals from the GPS, leaving assets temporarily untraceable. Although troubling, the Faraday cage effect is a small inconvenience. Once removed from the containers, the GPS’s functionality is restored.
RFID stands for radio-frequency identification. RFIDs are electromagnetic fields used to automatically identify and track tags attached to objects. These tags contain electronically stored information that can be transferred to RFID reader’s via radio waves. As you may already know, RFID readers have a wide range of functionality. Asset tracking is just one such application for the technology.
This technology does have some drawbacks to consider.
RFID tags broadcast their location but have problems with reader/tag collision and have limited transmission range and power. Reader and tag collision happen when the signals from two or more readers overlap, leaving the tags unable to respond. System users must mindfully avoid this problem during the initial setup. Also, RFID readers can only store a limited amount of data. On average, an RFID tag is capable of holding 2,000 bytes of data or less. However, when implemented in asset tracking, 2,000 bytes is more than enough.
RFID tags serve the same purpose as barcodes and can be detected up to 6,600 feet. In a warehouse or storage setting RFID readers can be used to read the tags placed on various products and can be used to quickly count the number of available quantity on hand in seconds. The ease and quickness of RFIDs prove to be a valuable tool in asset protection and are worth looking into.
Barcoding is perhaps the easiest and most widely used method of asset tracking, and for good reason. Printing and scanning barcodes is cheaper than other methods and, coupled with the right inventory management software, can provide a wide range of functionality. Take SkuVault for example. Here at SkuVault, we use barcoding to streamline warehouse operations in the most versatile and efficient methods possible.
Skuvault is able to print product and location barcodes with ease. Our clients are able to use barcodes to organize warehouse layouts, eliminate misspicks, and catch shipping errors while experiencing 87% lower fulfillment times. Skuvault kills two birds with one stone when coupled with our other warehouse management features. You get the benefit of barcode asset tracking software as well as a supply chain solution that takes all of your separate systems and connects them into one convenient solution.
Barcodes virtually eliminate the possibility of human error. Errors occur when manually entering data, and barcoding significantly decreases the occurrence of errors with reliable laser scanning technology. Barcode scanning is fast and reliable, and takes far less time than manual data entry.
Aside from speed and accuracy, barcoding systems are inexpensive to design and print. Generally costing mere pennies no matter the use case. Whether for data collection, shipping, establishing location, tracking, or any of its other uses, barcoding is an extremely versatile supply management solution that can benefit any business.
Remember, the key to building wealth is to build assets, and the more the merrier! Assets can be obtained in a variety of ways, but the thing to remember is that if you own it and can liquidate it for equal or higher value you have a good asset, and good assets should be protected. You can protect your assets with a good asset tracking system, without having to train and house a guard dog.
When looking at what type of software you would like, consider what kind of assets you have and the best way to protect them. If you have larger, more expensive assets, then a GPS-based inventory management system may be best. However, if you have large quantities of smaller items that need to be tracked then it's time to decide whether RFID or the ever versatile barcoding method is right for you. Whatever you decide, take solace in knowing that you’re covered.