Maximizing asset ROI with smart asset management

The return on investment (ROI) on business assets (including vehicles, machines, tools, equipment, etc.), is a metric that indicates how much a specific asset is contributing to either cost savings or revenue generation.

Asset ROI serves as a crucial indicator of an organization's financial health and operational efficiency. With a clear understanding of asset ROI, you can align decisions about buying, repairing and replacing assets with your organizational goals and objectives. More importantly, if you can find ways to increase asset ROI – by prolonging asset lifecycles, reducing downtime or improving overall asset performance – you create more value for your business over the long term, boosting your bottom line and overall profitability.

Smart asset management can support that goal. Internet of Things (IoT) solutions deployed across your operations can collect data on the location and condition of your assets, generating insights that can help maximize asset ROI.

How asset ROI is calculated

To determine the ROI of any piece of equipment, you first need to calculate its total cost of ownership (TCO). TCO accounts for all costs associated with an asset: not only the initial purchase cost, but also the maintenance, repair and operating (MRO) costs over its entire lifecycle. MRO expenses can include:

• Costs of replacement/spare parts and other consumables
• Labour costs for operating, monitoring and maintaining the equipment
• Costs associated with equipment disposal once it reaches end of life

Understanding asset TCO, along with MRO, will help you identify areas for cost reduction and efficiency improvements, ultimately increasing ROI.

Of course, ROI is not solely about immediate gains, but also about creating sustainable long-term value. By strategically investing in and utilizing your assets, you can ensure continued success and growth in the highly competitive industrial landscape.

Three ways asset management solutions can increase ROI

IoT sensors can increase your asset ROI by continuously monitoring and collecting data about those assets. This makes it faster and easier to generate the insights you need to align asset-related decisions with your organizational goals. Here are some ways that IoT solutions can help maximize asset ROI.

1. Improve asset health and performance

IoT solutions can collect real-time data about the performance and condition of your assets, including maintenance trends and equipment failure patterns. This level of visibility allows for proactive and predictive maintenance, which is key to ensuring optimal asset performance over the long term.

Unlike routine maintenance, which follows a set schedule, predictive maintenance uses real-time data to determine optimal timing for upkeep. For example, if you know when a machine is likely to fail, you can schedule repairs during off peak hours to minimize disruptions. IoT can also help prolong asset life by identifying maintenance needs as soon they appear – preventing small issues from becoming bigger, more expensive problems to fix.

With the right data, you can adopt more efficient maintenance practices that extend the life of your assets while minimizing costly downtime and unplanned shutdowns.

2. Improve decision making with real-time visibility

IoT devices also make it possible to track the location of your assets in real time. This not only enhances the efficiency of your organization’s asset management program, but also lets you make faster, more informed business decisions to drive operational efficiency.

Real-time visibility ensures the right assets are available whenever or wherever they are needed, minimizing time wasted searching for the equipment or tools required to complete a task. This proactive approach also helps organizations avoid unnecessary costs associated with replacing lost or misplaced assets, contributing to improved efficiency and cost optimization.

3. Optimize asset utilization and efficiency

Using your assets to their full potential is key to getting the maximum return on your investments. IoT solutions can provide insights into asset utilization across your operations. With this information, you can identify underutilized assets, then redeploy or redistribute them to areas of higher demand. This can enable higher output levels with the same number of assets, while boosting operational efficiency and productivity.

By optimizing your existing assets, you can improve your bottom line by eliminating the cost of needlessly buying or renting duplicate assets to do the same job.

The right partner is key to maximizing asset ROI

IoT is a game-changer for asset management, providing businesses across many industries with the insights needed to optimize their operations and maximize asset ROI. As IoT continues to evolve, the potential use cases and benefits will grow as well.

To get those benefits, you need to work with an IoT vendor that can ensure the devices you deploy are securely connected to a reliable network, interoperable with existing systems and scalable to accommodate the evolving needs of your organization. With Canada’s best network, an unrivalled partner ecosystem and a team of security and IoT experts, you can trust Bell to be that partner and to ensure the successful implementation of any IoT technology.

Visit our website to learn how Bell can help you track, monitor and manage your assets in real time.