Gold from Iron: professional asset managers turn fleets into powerful profit centers
By Stan Orr
Treasure hunters, truth seekers and even scientists have searched for the secret to changing base metals into gold and silver since antiquity. Over the centuries, these alchemists never quite discovered the combination of elements and processes that lead to the philosopher’s stone. Today, there is a profession that has figured out how to squeeze gold from iron. Every day its practitioners help their companies gain efficiency, save money and make more money, all from their equipment.
They are professional asset managers. They come by their experience, expertise, knowledge and skills honestly, both from on-the-job experience and through advanced coursework. They’ve become experts in a range of interrelated areas that impact the bottom lines for cities, counties and other municipalities of all sizes that use machines to get the job done.
An Art and A Science
Asset management has come a long way since the shop technician was responsible for getting more value out of equipment. Over the years the technician became the shop foreman who became the fleet manager. And, like the early alchemists who created a framework of theory, terminology and techniques of the scientific method, these fleet managers developed the foundation for the discipline.
Today’s asset managers have likely completed advanced study in areas such as finance, information systems, and customer service. Often their training comes through the Association of Equipment Management Professionals (AEMP) and, in many cases, they have passed the Certified Equipment Manager (CEM) exam.
Unfortunately, even in increasingly complex operating environments, many government entities have not yet grasped the value – and the high return on investment – of an asset manager.
For forward-thinking cities and counties, professional asset managers are involved in everything from procurement to benchmarking, evaluating life-cycle costs to purchasing technological tools, parts management to safety assurance. They ensure equipment is maintained and safe, that the right equipment is on the right job at the right time, and monitor equipment to make sure each piece is operating at peak capacity and in perfect harmony with all other equipment on a particular job.
They have the expertise, experience and knowledge to fully comprehend how equipment can be optimized to add value. They are analytical, financially astute and mechanically inclined, and they are driven by an uncompromising dedication to efficiency. They’re techies, too – professionals who use advanced technologies to collect, interpret and apply data to both equipment utilization and high-level planning.
No other employee group brings the same breadth of understanding across disciplines. And because of that, good asset managers pay for themselves again and again.
Asset Management is the Future
As thousands of companies across the globe will attest, much is at stake when it comes to a company’s fleet. Proper care and utilization can add thousands or even millions to a P&L, depending on the company’s size. But improper management can take those same dollars away in a hurry.
The same holds true for the public sector. The tighter the ship is run, with data-driven decision making and best practices applied consistently across the board, the more likely the company will be to thrive. Asset managers have the experience, knowledge and understanding of how all elements of profitability are interrelated and impact one another, and because of that they are able to provide valuable advice and guidance.
For your city or county to move beyond age-old and misguided philosophies for equipment, to turn the “necessary evil” into a profit center and get tangible profit out of your iron, you need a professional asset manager. If you don’t have one, hire one.
Stan Orr is president and CSO of the Association of Equipment Management Professionals (AEMP)