The activity of physical asset management in the company is managing or utilizing every asset owned by a company which is a physical asset in the form of buildings, materials, machinery and others in effectively. Nowadays almost every company already has its own department that specifically deal with the management of assets owned, but there are also companies that are unable to manage their own assets. In this case the company will use the services of a third party who is specialized in the field of asset management of both physical and non physical assets.
How can asset management activities can work well? For asset management to work properly, then the team or the asset management department should be the first to know in detail each of the assets owned by the company. Why asset management teams should be the first to know every detail of the physical assets of the company? This aims to prevent duplication of assets and can present with certainty any value of depreciation and utilities that exist in the production process. Activity or process is also known by the term cost analysis, where any analysis undertaken will improve the economy and reduce failure of such components in case of theft and errors in the procurement of supplies and equipment.
Some examples of cases of activities that cost analysis can assist management in planning and predicting the amount of taxes and any applicable business solutions that can save the company from large losses. For example, the production lost when the machine used often damaged or die, it is actually reasonable, especially if the machine used was old. Companies can try to repair the machine by reason of saving money. With cost analysis can be compared to whether by repairing on their own the cost will not be as much than if they buy one unit of new machine as a replacement. Perhaps only, the company trying to sell the defective machines with reasonable price and then buy a new one instead. Another example, a company that has hundreds of branch stores as a place to display and sell their products, but not all of them making a profit. Cost analysis conducted to determine the physical assets that really not give revenue, might be a good idea to close it rather than continue these shops.
Many companies make this policy due to rising of fuel prices and the current economic conditions are slowing. Rather than take a risk for bankruptcy prefer to shut down several jobs and severance pay. Some companies that have made the policy include Starbucks coffee shop franchises, several American airline companies, JP Morgan and many more. Or choose other options such as merging or combining some companies to survive.
The core of the physical asset management in the company is that by making the management of physical assets owned by the company to be effectively and will provide new ideas and new innovations to the assets they own. The ultimate goal is to bring in profits for the company.