Siva Umapathy

Traditionally, a wide chasm between what enterprise asset management (EAM) systems and asset tracking systems do for manufacturers has limited their benefit. Manufacturers have been unable to connect their assets to customer-facing projects, resulting in costly blind spots in their business operations.

At one end of the spectrum are EAM systems, like ERP and inventory management, which are financially focused (think value of assets). At the other end are asset tracking systems, which track the location of actual assets used on the floor. If you need a hammer, asset tracking can tell you if it is available and where it last was. In effect, EAM deals with white collar issues and serves CFOs and heads of finance. Asset tracking is all about blue collar issues, and speaks to the operations staff.

It’s that lack of connection between the two classes of applications that’s the crux of the problem. Asset tracking is an operational task, and doesn’t concern itself with working capital. It generally informs dashboards at the supervisor level, not at the VP level. But it’s the VP level that sets the stage for process improvement, visibility to customer-facing workflows and change management.

Asset Management – Filling the Gap

So how do we fill the gap? We need asset tracking processes to use more business data and decisions. And we need business processes and systems to understand these low-level movements so they can provide better visibility and efficiency.

This is where asset management systems come into play. It’s not enough to know about where a tool is. Manufacturers also need to know about the processes around their tools as well. Is a specific tool fit to use for the next job? Was it calibrated properly? The answers to these questions can lead to an improved process.

These answers fill that middle spectrum that EAM and asset tracking systems ignore, addressing the needs of an enormous number of employees that manage the utilization and process of how equipment is used. By itself, asset tracking can cut down the time it takes to locate equipment, but it doesn’t improve the overall work process. Assets need to be associated with work orders (business outcomes, customer order statuses) to improve productivity.

Consider what happens when manufacturers take the next step beyond asset tracking toward asset management. By tracking the multi-dimensional aspects of business, all business groups — including finance, operations, compliance, auditing, etc. — can have visibility into a tool or material that has relevance to them. In effect, asset management connects the dots, allowing each group to view particular “dots” through their own lenses.

And asset management can go above and beyond what can be tracked with RFID. These systems often include the entire spectrum of capital assets, including barcode, part marking, RTLS, contact memory button and serial numbers. So even when very small tools can’t be tagged, they can be managed.

Trends Calling for Asset Management

A number of recent trends are making asset management even more attractive. Equipment is proliferating and having a greater impact on balance sheets than in the past. In aviation, for example, some equipment costs tens or sometimes hundreds of thousands of dollars. And still, people often can’t find that equipment, so they sometimes replace it unnecessarily. If they could manage their assets better, they could map that equipment so they were knowledgeable about location and processes, and thus save utilization and waste costs by eliminating inefficiencies and even the unnecessary duplication of equipment.

Another trend is that manufacturers are looking for more work-in-process transparency, in part because much more is being built to order. In such cases someone in Receiving creates a work order, the part arrives at a specific time, individuals are assigned and work commences. The problem is that these workers may have visibility into the work order, but not have a collective view of what else is happening in the plant, including whether there is a more urgent project — say an aircraft in the hangar that must be ready to go in two days. If they had that information, the manufacturer would be in a better position to more efficiently assign staff, reset priorities, etc. That’s critical since every delay may result in huge financial consequences.

With the advent of new programs and processes (e.g. composite manufacturing, advanced materials), we’re also seeing greater scrutiny of tools and equipment and more frequent audits. Any equipment or tooling that is not properly maintained, calibrated and set aside for specific programs is subject to quality issues, fines and potential breach of contract. Because of this, there is an increased need for transparency in work processes. Consider materials in advanced manufacturing environments that degrade outside freezer environments. The life of such materials may affect multiple works in progress, so making sure they are used at the right time in the right manner is critical. Advanced optimization of their use is based upon granular information about those items, including their locations at various times. Having that knowledge can enable manufacturers to map out the most efficient use for the life of that material.

Connecting Different Parties with Individual Interests

Now consider what asset management might mean when used in more complex environments, such as a maintenance repair and overhaul (MRO) operation. We’ve discussed how asset management systems can map to different dimensions of a business. Consider an MRO, which may need to send parts from the same aircraft in need of repair to individual repair facilities. Perhaps there is a coffee machine that needs repair at an electrical shop. Then there’s that wing part going to a mechanical facility. In such cases, there may be fitters or technicians involved. A supervisor is there to ensure items are going out in time. A director level person may be in charge of all mechanical shops, as would the same level person at the electrical shop. Then there’s the VP person in charge of ensuring that the plane is repaired on time and back in the fleet. That’s multiple people at different tiers in different departments all focused on the same asset — the plane. What each of them does impacts the same process and work order, but their individual interests — and priorities — may be different. Asset management connects all of these different parties who have individual interests so they can take the right actions that benefit the company as a whole.

Let’s take another case of a manufacturer at which someone needs a specific drill that is lying somewhere on the shop floor. That person may use an asset management system to locate the tool and reserve it for a block a time. He would notice that there were no alerts on the tool for recalibration and he had a right to use it immediately. After the tool was checked out, the asset management system would track the tool as it moved through various portals — until it was returned. If a higher priority situation arose in which that tool was required, someone with that authority could obtain the tool when required. It’s clear how having this level of visibility would provide tremendous benefits to the manufacturer.


If you are looking into asset management systems, ensure they offer capabilities that truly fill the gap. For starters, they need to track attributes other than location, and integrate with more than just shop floor systems. That ensures that multiple functions and levels of management in the process can be involved and the results are actionable. They should also incorporate assets regardless of whether they are RFID tagged or not.

And for complex manufacturing processes, they should automate documentation and leave clear audit trails. So, for example, if a tool was ready to be replaced, an audit report would be sent to backend systems so that it could be re-ordered. This improves the overall process and ensures compliance.

The competitive global market has proven that the longstanding void between operations and finance is no longer acceptable. Asset management systems can improve process efficiency and lead to change management. Using such systems, manufacturers can leverage dynamic business solutions to get the whole picture — and compete at the highest levels.

Siva Umapathy is a Senior Solution Architect at OATSystems, a division of Checkpoint Systems