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What are the differences between Asset and Facility Management?
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In the business world, terms such as "Asset Management" and "Facility Management" are often used, but not always understood correctly. Confusion between these two concepts is very common, but understanding the distinction between them is fundamental if companies are to operate efficiently in all sectors. In this article, we will explore these differences, clarify what the functions and objectives of each are and how both contribute to the success of an organization.
But what are a company's physical assets anyway?
A company's assets are all the resources that an organization possesses, which represent its physical assets, such as buildings, industrial machinery, a fleet of cars, office equipment and equipment for the employees themselves to carry out their work, such as cell phones or computers, among others.
Physical Asset Management consists precisely of the holistic management of these assets, seeking to maximize their profitability throughout their life cycle, thus contributing to increasing the company's profitability and its competitiveness in the market in which it operates.
Implementing a Physical Asset Management tool or system has several advantages for organizations:
- Using physical assets to their full potential, from acquisition to disposal.
A good physical asset management tool allows you to control performance, increase efficiency, achieve optimized and more sustainable performance, in other words, manage opportunities, improvements and threats. You will also be able to make the best choices and make the performance of physical assets more effective. For example, it will be possible at any time to decide whether it is economically more interesting to carry out a repair, upgrade technology or replace certain equipment, taking into account the economic, financial, social and environmental costs of these various options.
- Reduced operating costs
By identifying underused physical assets, eliminating redundant or unnecessary ones and optimizing maintenance and replacement processes, effective physical asset management contributes to minimizing operating costs and thus better financial planning. In addition, by accurately identifying maintenance costs and mapping out the ideal time to replace a piece of equipment, you'll also be able to plan the purchase of new equipment further in advance, thereby increasing your negotiating capacity.
- Increased team productivity
The quality of deliveries and productivity is closely linked to the materials and working conditions offered to the company's employees. Thus, if equipment, machinery and other work materials are obsolete and inadequate, they inevitably affect performance. By implementing a good physical asset management tool or system, you'll be boosting the productivity of your teams.
- Decision-making based on reliable, real-time data
Implementing a good physical asset management system involves mapping and cataloguing the company's entire infrastructure, making it easier to plan activities and make decisions, optimizing processes and making them more efficient.
- Risk mitigation
Proper management of physical assets can prevent risks arising from normal activity, for example through preventive maintenance of equipment, specific insurance appropriate to it, or replacement of obsolete assets.
- Maximizing ROI (Return on Investment)
In practice, ultimately, by optimizing the use of an organization's physical assets, we are making them generate greater value for the company and reducing its operating costs, making a strategic allocation of resources to generate higher financial returns.
An airline can use physical asset management systems to track the maintenance of aircraft and ensure that they are in optimum working condition by:
By using a physical asset management system that ensures all of the above, the airline can significantly improve the performance of its assets and provide a safe and efficient passenger experience.
Facility Management (or building management) involves the effective management and maintenance of buildings, infrastructures and associated resources, to ensure that a working environment or physical space functions properly to ensure the smooth performance of the company's core activities.
In practical terms, we could be talking about a factory, an office, a stadium or a hospital and it includes the maintenance of the buildings, infrastructure and equipment that make it up; but also the management of people, contracts with suppliers and their employees, such as cleaning services, surveillance, catering, IT, gardening, in other words, all the activities that, interconnected, make a company work.
The main benefits of implementing a facility management system in organizations are:
In practical terms, how Facility Management works:
- Allows for greater operational efficiency and consumption management
It ensures that installations run smoothly, reducing costs and increasing productivity, in particular through more effective management of resources and maintenance.
- Improves user experience and boosts productivity
It creates safe and comfortable environments for employees, customers and visitors, improving their satisfaction and well-being, acting on the ergonomics of spaces and equipment and controlling indicators such as temperature, air quality or noise levels.
- Supports strategic objectives
It aligns the facilities with the organization's objectives, while ensuring that operations comply with the company's legislation and compliance, making it easier to adapt to changes and boosting competitiveness in the long term.
- Cleaning and Hygiene Services
Since Facility Management focuses on managing the physical environment to ensure that it performs well, good management of cleaning and hygiene services is one of the many examples that can be given.
By hiring cleaning services, Facilities Managers can not only maintain the aesthetic appearance of spaces, but also prevent illnesses, reduce the risk of accidents and promote a healthy working environment. With an appropriate Facility Management system, you can control the periodicity, compliance with actions and SLAs of your external service providers.
A quality system that encompassesPhysical Asset Management andFacility Management will allow you to automate various activities in your organization, access data in real time and integrate operational processes, making your company more efficient and profitable.
Discover Nextbitt's solutions and take your business to the next level.
João Gonçalves
Consulting Director
