Using Asset Management Software to Minimise Opportunity Cost

Almost every choice we make comes with an opportunity cost. The definition of Opportunity Cost as stated on Investopedia states "...the cost of an alternative that must be forgone in order to pursue a certain action."  We are typically dealing with limited resources, and choosing to use them one way inevitably means forgoing the benefits of using them in the next-best way. If the opportunity cost outweighs the profits gained from using an asset in a particular manner, then your company is not necessarily losing money; however, your company is forgoing the opportunity to get more out of the asset. With the right data, you can estimate the opportunity cost of using your assets in a variety of ways. This will help you get a better sense of how much a project costs as well as helping you get more out of your assets.

The first step in determining the opportunity cost of an asset is to identify its alternative uses. In some cases, that could mean the use of an excavator in one site versus another; in others, this could mean maintaining a piece of land or building versus renting or selling it. The more options you consider, the more accurate your assessment of your operations' opportunity costs will be.

Next, you will need to valuate the alternative uses of your assets. In some cases, this data is best gleaned from your own records of similar assets' past performance. In other cases, this data can come from current research regarding different uses of assets similar to yours. At this point, you'll likely find that asset management software will come in handy for collecting data and presenting it in an easy to analyse form. Analysing the opportunity cost of alternative uses of your assets will help you make sure you're using them in the most efficient way possible. 

Once you've gotten a good sense of the opportunity costs involved with your use of your company's assets, it's important to keep this valuation up to date. Technological advances and other market events may change the value of alternative uses of your assets, resulting in dramatic increases in opportunity costs which you need to be able to track. Again, asset management software provides you with an efficient means of tracking the opportunity costs of the current uses of your assets.

Staying competitive in almost every industry requires getting as much value as possible out of every asset. Recognising the opportunity costs involved with the way you use your assets is one step toward using them as efficiently as you can. Because collecting and analysing a great deal of data is important to calculating your operations' opportunity costs, asset management software is generally very helpful for this task. We at Reduxo recommend using Sprocket; its advanced reporting system can easily collect and manage the information needed to calculate and update the opportunity cost of your operations.  If you don't have the resources to collect the initial asset information, we can assist with a physical asset audit.

Reduxo provides best-of-breed software solutions and services, contact us for more information about Sprocket and other services we offer.

Do You Know Why Maintaining Medical Equipment In The US Relies On The CMS And A CMMS?

The simple answer is money.  However, the question, why maintaining medical equipment relies on a CMMS, (Computerised Maintenance Management System) is too complex for just a one word answer.

CMS is the acronym for The Centres for Medicare and Medicaid Services in the US, which is the agency responsible for establishing requisite conditions that hospitals must comply with in order to receive federal Medicare funding. Currently, the rules are fairly stringent and straightforward - Hospitals must follow the manufacturer’s guidelines for maintenance on each individual piece of medical equipment as approved by the Food and Drug Administration (FDA).

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Reports began surfacing in July that CMS is proposing a change in the requirements for maintaining the equipment. Specifically, CMS would allow hospitals in the US to deviate from the manufacturer’s maintenance guidelines. The proper maintenance of medical devices is a critical component of patient care and safety, as well as a standard security practice required in hospitals.

Many medical organisations support the current CMS guidelines, which were issued in 2011. These groups have been voicing their concerns to CMS about the potential dangers of the proposed changes.

In a letter to CMS in July, the president and advocacy committee chairwoman of the Society for Vascular Ultrasound wrote "The new standards will weaken the safety requirements that protect Medicare patients by allowing hospitals to forgo the manufacturer’s maintenance standards." Adding that "The correct use of properly maintained and serviced ultrasound equipment not only saves Medicare dollars, but also ensures appropriate health care and reduces the risks associated with other more expensive or invasive imaging modalities, which may present more significant morbidity and mortality risks."

More recently some Members of the House have gotten involved in the battle by reaching out to CMS, who has still declined to comment on the speculations about changes in requirements. 

Rep. Tim Murphy (R-Pa) said, "Weakening of equipment maintenance standards could have some severe consequences for health and safety." Murphy was one of five members of Congress who wrote to the CMS this week warning that the change "may put patients and healthcare personnel at unnecessary and avoidable risk."

Prior to issuing any official deregulation of the current maintenance requirements, Congressional Representatives basically requested that CMS go through a formal process to establish new rules, which should include a chance for public comments.

The necessity of having a CMMS system to ensure that medical organisations are adhering to the current and future rules is indisputable whether here in Australia or anywhere in the world.  Numerous companies worldwide already utilise a CMMS, which is a cost-effective, proven asset management tool allowing medical facilities to streamline workflow processes to save thousands of dollars in unnecessary maintenance and operating expenses as well as ensuring they provide their core business, that is, attend to the health of our society. 

To learn more about the benefits of a CMMS and share your thoughts about , please contact us.

Emergency Preparedness Starts And Ends With Asset And Facilities Management Software

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If you are looking to improve your emergency preparedness then a great place to start is with utilising asset and facilities management software or computerised maintenance management software (CMMS) that complements your ERP environment. Most emergency situations are unpredictable, but many can be prevented with adequate preparation. Some are caused by variables that are outside your control and the only thing that can be done is ensuring the emergency situation is controlled quickly with the least amount of damage and fewest number of injuries as possible. When the emergency situation is resolved and you are able to once again think about the future, your asset and facilities management software or CMMS will will be a tremendous help in the rebuilding process.  

Prevention is key. The time you take to conduct a thorough facility and asset audit will help you establish an accurate register of the state of your assets and facilities. This will help you catch assets or sections of your facility that may be in need of maintenance or repair. Implementing an ongoing maintenance program and routine rolling audits with the help of an expert will ensure that nothing falls through the cracks.   

In the unfortunate event that you have an emergency situation, asset and facilities management software will enable emergency personnel to respond in a more timely and efficient manner. With accurate data in your asset and facilities management software, emergency personnel will be able to use your program to better evaluate the circumstances and best way to respond. A more responsive crisis management solution will reduce the number of injuries, severity of injuries, and damage to your assets and facilities. 

Finally, dealing with the catastrophic after effects of crises and recovering from them is not easy emotionally or physically, but there will come a day when it is the right time to think about rebuilding the lives, assets, and facilities affected. Having a complete and accurate stocktake of your assets and facilities input into your asset and facilities management software solution will help you rebuild in several ways. First, your insurance claim will be processed in an expedited fashion because of the excellent organisational structure of your register and you can be certain that all of your losses are accounted for since you have an accurate register. Second, once you rebuild your facilities and purchase replacement assets you will be able to input their data into the solution. Third, there will come a day when your business grows beyond where it once was and your asset and facilities management software is scalable so you can add in your new facilities and assets with ease.

Thinking about emergency preparedness is disheartening, but not thinking about it is dangerous. There is some point to being aprehensive about crisis management; it helps us attempt to prevent what we can potentially prevent, prepare for the best possible emergency response humanly possible, and have a plan to rebuild the business and our lives after the fact. If you are considering improving your emergency preparedness and would like to speak with an asset and facilities management software expert about how to get started, please contact us so we can find a time to discuss your unique needs.  

Asset Management Software Helps You Share Well With Others

Sharing well with others has always been important from the time you were a toddler and now more than ever it is important in the business world. The complexity of assets, the speed at which things are changing, and the need to adapt to changes in order to reduce risk and save money are making communication and collaboration essential for almost every organisation. Asset Management Software makes it easy to share well with others; your parents and teachers would be very proud if they saw you utilising it at your business. You could even write them a note over the Christmas holidays to brag about how well you are sharing with others (thanks to the asset management software) that looks something like this:

Dear Mrs. Witchmeyer,

I hope you are well. I am doing very well. You would be very proud of how well I am sharing with others; your advice and encouragement to do so while in your first grade class have really made a significant impact on my life. My company is utilising asset management software that is facilitating incredible communication and collaboration within our organisation. All of the employees have access to key data about our assets in real time which ensures we are all informed about how efficiently our assets are performing and their current status.

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Since we are using an asset management program that works well with our current ERP environment the connectivity and integration across all of our systems is incredible. We worked with an asset management software expert (which is another example of me working well with others) and they assisted us in the process of implementation. With the expert's assistance we had the opportunity to have a highly knowledgeable and well-trained professional help us configure the required data fields correctly, and it is now benefiting our company in a multitude of ways that I never even thought possible.

For example, we now are able to share asset data and insights we gather from our analyses with decision makers in real time. This is empowering them with the ability to spot trends in our utilisation, maintenance, and repair schedules in order to optimise our productivity immediately.  More uptime, equals more production, equals more revenue. With the cost reductions and revenue increases we are experiencing I am hoping my boss will share more of his money with me in the form of a raise.   

Even if he doesn't share more of his money with me it is nice seeing the various departments aligned (like operations and finance). The finance department now sees exactly why we need the resources we need and how we are using the resources they are allocating to our department. This clarity and transparency is not only improving our business but also our relationships. I owe it all to you, the asset management software, and the expert who helped us.

Sincerely,

Timmy

If you would like to see how an asset management software expert can help your business improve communication, collaboration, and productivity (and make your teachers and parents proud) please contact us to discuss your organisation's specific situation.