"LAZY" ASSETS ®
THE UNINTENDED PRICE OF DISREGARD

 

In a perfect business there is no waste, all assets are used to the utmost. In reality this is never the case. Assets become expendable over time, often slowly and subtly. In extreme cases purchased assets are never used. If an owner has a good program to identify these idle or underutilized or LAZY ASSETS®, then effective strategies may be employed to deal with them, either to cost-effectively re-deploy them, internally or externally, or have a sound and compelling business reason justifying paying the price to keep them.

What is this price? Each month that passes without recognizing (let alone doing something about) underutilized assets under a manager's control, four unfavorable factors combine to eat away at an owner's ability to cost-effectively run the business:

     1.     VALUE DECLINES. The LAZY ASSETS ® decline in value, for all the obvious reasons:
             age; obsolescence; degradation; and in some cases "shrinkage"
     2.     COST TO KEEP MOUNTS. Great sums may be spent, for: maintenance; labor;
             compliance; taxes; insurance; footprint allocation; utility; security, others
     3.     RISK INCREASES.  LAZY ASSETS® are more likely to be misplaced or lost. Uncontrolled,
             they can lead to compromises of sensitive information, financial losses,
             environmental and other liabilities, and allegations of mismanagement.
     4.     OPPORTUNITIES ARE LOST. The opportunity to do something more productive
             with the money generated and saved by eliminating the  LAZY ASSETS® is lost.

These factors can add up to 25% per year of the original acquisition value, or more. In the case of highly capitalized organizations, the total potential savings can be staggering.

Owners on the cutting edge of property management do a good job keeping LAZY ASSETS® to a minimum by installing effective Asset Management Systems. They use a variety of techniques to evaluate asset productivity. Leading companies use property databases that capture pertinent productivity information. Through new and appropriate performance drivers, it soon becomes every department's business to contribute to the elimination of LAZY ASSETS. Property managers trained with these skills become very proficient in overseeing these activities over time.

Many owners starting out will want quick successes. There are proven places to look. Some are obvious, others are more subtle. Early success inspires people in all levels in an organization to understand the true value of eliminating LAZY ASSETS ®, and generates short-term returns to fill immediate needs.

IN SUM: What can be the long-term payoff? greater profits, benefiting all stakeholders; extra cash for under-funded programs; reduced likelihood of harm or mishap; a balanced budget. Owners employing better property management techniques outperform the competition.

 

Contact Matt Gross; 610-283-3444; mjgross@re-logistics.com. FSS Cont. No. GS-10F-0066L