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Key performance indicators (KPI) are a valuable tool for any business looking to ensure that efficiency is being prioritized at the company. They allow you to effectively measure the success of everything from team members to business software, helping ensure that you hit the targets and deliver the results your organization needs.
This is especially true for asset management, as the ability to monitor the effectiveness of your asset tracking can make a big difference for your bottom line, whether you are in the construction, health service, or retail industry. After all, you want to be sure that the cost of asset management software is worth the investment, right?
In this guide, you’ll learn about some of the most useful KPIs for asset management, as well as how to improve asset tracking KPI performance across your business.
7 Essential Asset Management KPIs
There are a lot of different KPIs when it comes to asset monitoring, but we have done our best to narrow it down to some of the most important, so you can get started right away. Here are the top types of asset management KPIs to help your business.
1) Mean Time Between Failures (MTBF)
Mean Time Between Failures (MTBF) is a KPI that tracks the time between asset failures or breakdowns of repairable assets. It can inform your business on maintenance schedules, allowing you to ramp up repairs if it’s too frequently or save on maintenance if it’s notable infrequent.
2) Mean Time to Repair (MTTR)
Mean Time to Repair (MTTR) tracks how long it takes to repair a particular asset. This kind of information can be valuable in determining the durability of an asset, so you know whether to replace it or keep it in the rotation to be repaired again in the future.
3) Mean Time to Failure (MTTF)
Mean Time to Failure (MTTF) is a KPI that tracks the amount of time it takes for an asset to fail or breakdown permanently. This metric is typically used for un-repairable items that require replacement when they fail and can help you establish when you need to acquire new assets.
4) Return on Assets (ROA)
Return on Assets (ROA) is a KPI that measures how much money is generated by a particular asset compared to its value and overall investment. Figuring out an asset tracking ROI can help businesses establish where an asset is worth the time or if it’s time to move on.
5) Annualize Failure Rate (AFR)
The Annualized Failure Rate (AFR) describes the likelihood of failure by an asset within a year of use. This KPI can help businesses establish whether an asset has a defect or not, as typically assets should last longer than that.
6) On-Time Delivery (OTD) Rate
The On-Time Delivery (OTD) rate describes the tracking of how often a business delivers an asset at the agreed upon time and date. The value of this KPI feels obvious, as it allows you to easily monitor the efficiency and productivity of your asset delivery system.
7) Overall Equipment Effectiveness (OEE)
Overall Equipment Effectiveness (OEE) is a KPI that tracks the productivity of an asset over time. This is an obviously valuable metric to monitor as allows you to monitor progress to improve efficiency for your assets.
Benefits of Asset Management KPIs
Yes, that was a lot of acronyms and a lot of information about asset management KPIs. After all that, you’re probably wondering, why do I need to know all of this information about my asset management system?
Well, the reality is that asset management KPIs can have a lot of benefits for your business, as long as you’re tracking them accurately and effectively. Here are a few benefits of tracking asset management KPIs:
- Save money – Knowing how often an asset needs to be repaired or how efficiently it runs allows you to plan your expenditures accordingly, which can save you a lot of money in the long run.
- Mitigate risk – Knowing how your assets perform can help you keep catastrophes at bay, so you can solve problems before they cause too much of an issue.
- Set expectations – Asset management KPIs also let your team know what you expect of them, so they can ensure that assets are on track for a good month.
- Foster transparency – In addition to setting expectations, asset management KPIs for a sense of transparency in your organization, so you and your team can trust the process.
- Make improvements – The only way to know if there is a problem that needs fixing is to track it, which is why KPIs are so beneficial when it comes to improving your system.
As you can see, there are a lot of benefits when it comes to asset management KPIs, now you just need to learn about how to improve your KPI system for your business.
How to Improve Asset Management KPI Performance
The goal of any business is to improve over time, and as a result, improve your KPIS. Luckily, there are a few ways to improve your asset management KPIs to make productivity and efficiency a priority at your business. Here are some ways to improve your asset management KPIs.
Regular maintenance
If you want to see your KPIs improve for asset management, you’re going to need to schedule regular asset maintenance.
If you’re being reactionary to KPIs when it comes to asset repairs, you’re always going to be playing catch up, resulting in poor performance. With regular preventative maintenance, however, you’ll be able to stay ahead of breakdowns and failures in the long run.
While corrective maintenance, or fixing problems after they arise, is unavoidable for some kinds of assets due to wear and tear, it’s generally something businesses want to avoid as it’s more costly than the preventative kind.
Train your team
KPIs aren’t just created to track the productivity of assets. As a matter of fact, KPIs are often used to monitor how your team is performing, allowing you to find problem areas to solve and bright spots to praise. Subsequently, having a properly trained and equipped team will improve your KPIs, as they will be the ones actually doing all the work.
Consider asset management software
One way you might be able to easily improve KPIs is by checking out the best asset management software. These platforms are specifically designed to streamline operations and provide an in-depth look at all your assets in real-time. Many offer features that can give you an even more granular look at how your assets move, how your team interacts with them, and where you can improve the process overall.
If you don’t have the budget for a full-fat solution, there are some decent free asset tracking software options out there, too, even if their functionality pales in comparison to paid platforms.
Asset Management KPIs: Key Takeaways
While we have only listed a few, it is important to remember that there are a lot of asset management KPIs that you can track, and it will all by reliant on what you need them for. If you work with assets that need to be repaired often, tracking metrics that measure breakdowns and failures will be vital, whereas delivery focused businesses should prioritize on-time KPIs.
