Manufacturers in almost every process industry have to deal with the issue of how to improve their return on large asset investments. Effective asset management calls for sufficient information and analysis because the equipment in this industry tends to be high-end consignment.
That said, one of the things manufacturing plants and production facilities have to confront at some point is the issue of asset recovery.
Unused assets lying idle could be taking up valuable space. They could be contributing to push insurance costs up. And if the assets involve machines that are still being maintained on some level, there is the issue of maintenance cost to think about too. This is why assuming a lean, mean approach toward unused assets could be beneficial in more ways than one.
It could lead to valuable space opening up. And assuming the space is the least of your concerns at the facility, the approach could still end up getting rid of clutter and in the process maybe create a safer environment. The unused assets – which are nothing but excess inventory – could be liquidated through various ways; to a competitor in need of that piece of equipment, for example. And if the asset can’t be sold as a machinery component it probably could attract value as scrap. Because, why is it still around yet you haven’t used it for years?
The point is, machinery that is lying idle is akin to an employee whose value you would be at pains to quantify. If it doesn’t have any business there, make it a point of extracting some value out of it by disposing of the same.
And it goes beyond just cleaning up.
It is also about establishing a productive work environment where every piece of asset, tool, and employee has its/their purpose. You would better realize the value of this if you had an occasional client or prospect tour your facility. Equipment that is not in use kind of gives a negative impression of a dated, inefficient facility. Or worse still, it can lead to the impression that probably your best days are behind you, which we know isn’t the case.
That said, getting rid of unused assets should be a priority when it comes to asset management. If the equipment is beyond salvaging for a coin, which shouldn’t be surprising in the manufacturing and production sector where machinery can last for ages, the best alternative available then is to donate the equipment to a reputable recovery solutions vendor.
This comes with its benefits, and the good news is that money is involved. Making room notwithstanding, donating unused assets means that you no longer have to pay asset taxes for them. Second, donating manufacturing and production equipment can earn you a tax deduction from IRS as high as half the residual cost.
Given it’s the last month of the year, it’s a great time to donate your unused assets so that you can reap the benefits as early as the coming year. Otherwise, that is food for thought even in the years to come. Just make sure to do business with a reputable asset disposition company to avoid lots of financial and legal drama, whether you’re liquidating or donating assets.