APPLYING BEST ASSET MANAGEMENT
PRACTICES TO THE INDUSTRIAL SECTOR

Dramatic changes in the Industrial Sector are rendering some products obsolete, requiring rapid development of new products and processes. Many companies now outsource manufacturing steps to others who can get the job done more economically and flexibly. Acquisitions and mergers can significantly alter the manufacturing landscape, leading to idled facilities. These all highlight the need to find creative ways to utilize physical assets more efficiently. The better this is accomplished, the lower the cost of doing business. Higher utilization efficiency means A. more funds available for other programs and priorities within the company, and B. greater profitability to shareholders.

 

Significantly improving the Identification and Management of Underutilized Property is a critical success factor. Many companies believe that effective "management of capital" --using systems such as Economic Value Added (EVA®)-- is the "ultimate" economic metric. Best Asset Management and Investment Recovery Practices are important tactical contributors to an EVA® strategy. Companies pursuing Total Life Cycle Management strive to eliminate all waste. Underutilized property is "waste". Finally, companies better managing assets during times of prosperity will be better served during times of scarcity.


 

Failure to eliminate underutilized or LAZY ASSETS® has a cost (The Unintended Price of Disregard). Together we can make an intelligent SWAG of what the bottom line might be for the readers' company. During periods of "prosperity", it's hard to focus on the unglamorous task of identifying and eliminating these assets. It's hard to assign a high priority to Investment Recovery (IR) when a company is basking in the light of growth. But diligent management at all times is especially rewarded in periods of "scarcity", where well-practiced IR can mean the difference between profit and loss.

 

Perhaps one is experiencing --or anticipating-- significant mission changes, be they downsizing, consolidations, or expansions. Perhaps one is concerned about supporting needy but under-funded programs. Perhaps one is experiencing a budget crunch, and needs to show significant cost savings, without jeopardizing mission integrity.

 

In any of these cases, I trust one will want to learn more about Re-Logistics' Best IR Practices Programs, and explore with us how, in partnership, the practices and processes of IR can be exploited. IR is far more than merely optimally redeploying surplus. Note Re-Logistics' commitment to improve the Identification and Management of Underperforming/LAZY ASSETS®, which may spearhead a paradigm change in property management in the coming years.

 

From a capital authorization perspective, consider how much easier it will be to justify new appropriation requests when it can be demonstrated that one has identified and eliminated all assets not contributing to the current mission, i.e., when it can be shown that every self-help opportunity has been realized.

 

Please feel free to contact Matt Gross if you believe a face-to-face meeting would be beneficial.