The construction industry is highly complex, with projects on tight deadlines, change orders, etc., where contractors often try to juggle between multiple tasks to keep the project on track. Before you know it, one thing leads to another, and the result is cost overruns, which ultimately affects client relationships.
Implementing asset management strategies help construction businesses and project owners to maximize the usability of assets and improve efficiency. Contractors and project managers need to make sure everything is running smoothly, and there are no surprises down the road. This is where asset management comes in.
Best Construction Asset Management Practices To Follow
According to the ISO 55000, asset management is “the coordinated activity of an organization to realize value from assets.” Therefore, here are some of the best practices to improve asset management at your construction sites.
1. Create an Asset Management Cell/ Team
Asset management is all about balancing the costs and maximizing the value of an asset over the life cycle of a project. As the owner of a construction business, you need to be able to monitor every aspect of your business, including each and every asset. But personal supervision can be challenging so, consider finding a reliable person or a construction project management company to help you manage your assets.
For a small business, one or two people may be more than sufficient to supervise asset management. Large-scale construction businesses may require a team that is dedicated to managing all the assets, including machines, equipment, and operations. This is highly essential if you want to deliver projects successfully and increase your profit margins.
2. Record Lifespan of All Assets
The second step to efficient asset management in construction is to diligently record the lifespan of your assets. A regular estimation will help you decide when to replace and update old equipment with the new one. Don’t wait for your machines to get obsolete and damaged before replacing them, because you don’t know when they will stop working – even in the middle of a project.
By calculating the depreciation of your asset periodically, you can know the fixed value of your asset, which will help you make purchases more wisely, especially when it comes to heavy equipment. It is also essential for your overall business in terms of taxes and ensuring worker’s safety by continually upgrading machines.
3. Evaluate Conditions of Your Assets Regularly
Make sure to assess the condition of your assets, including machinery, equipment, and supplies, at least once every three months. This will help you stay up-to-date with your inventory and help identify issues that happened in the past with a piece of equipment to maintain it regularly. This periodic check will help you avoid damages and on-site incidents.
A professional quantum expert can help you with material and asset escalation assessment and cost assessment so you can mitigate risks and potential damages earlier. This will not only make your construction site safer but also increase the life cycle of your assets with regular upkeep and maintenance.
4. Look out for Construction Theft
Gone are the days of protecting an active construction site from theft with fencing and “do not trespass signs.” These modest security measures have not been able to stop the theft of valuable construction supplies, construction management tools Melbourne, and equipment. In 2019, construction theft totaled at one billion dollars in the US construction industry alone.
According to the study conducted on the US Construction Industry, the following table shows the top 5 theft targets in the construction sector.
| No. | Property Type | Percentage of Incidents |
| 1 | Tools | 39.8% |
| 2 | Heavy Construction Equipment | 12.1% |
| 3 | Building Materials | 11.3% |
| 4 | Household Goods | 5.4% |
| 5 | Vehicle Parts and Accessories | 4.6% |
Sadly, the situation is the same everywhere in the world. Business owners further aggravate the issue by not taking precautionary measures like CCTV cameras, alarms, and bright parameter lights because they think its “useless.” With proper security measures, you can limit the opportunity for theft.
5. Invest in Digital Asset Management
Experts brand construction industry as one of the least innovative sectors that have not yet absorbed the new technology in this digital age. Contractors and business owners are reluctant to invest in new processes and technology, but it has been slowly making its way into different areas of construction.
One area that can significantly benefit from digitalization is asset management. Instead of relying on old methods of paper, construction business owners need to digitalize their daily operations to automate asset management and be able to track everything. If you are reluctant to adopt new technology, consider approaching construction management companies to help you digitalize your processes.
Maximize Project Delivery and Productivity!
Effective asset management is essential for all contractors and construction companies because it focuses on creating value. This value is not only translated into the life cycle of your assets but your entire construction project. Consult with professional companies for construction project management to implement these practices effectively and look for alternatives and new ways to improve overall efficiency and reduce labor costs.
Asset management should be implemented throughout the life cycle of a project to avoid budget overshoots and cost overruns.
