How Asset Tagging Can Reduce Costs And Increase Productivity

By Tony Renkin.

An asset tagging program helps to increase an organisation’s productivity and reduce service costs by providing an effective way to keep track of office equipment, technology and other items a company owns.

Furthermore, when done well, it has the potential to save an organisation millions of dollars.

The Asset Tagging Process

An asset tagging program does not need to be complicated. It can be as straightforward as placing an asset label on company equipment and logging its location in a dedicated, asset management database. Assets are normally identified with a sequential number, barcode, colour code, department code or cost centre code.

Recorded information can include the item ID number, who the equipment was issued to, where it should be located, when it was last serviced, or is due for its next service, its cost and associated cost centre, as well as other features such as restrictions on its movement and licensing and warranty details.

Tags can also include company branding, service and repair contact details and warning messages.

A well-implemented and managed asset tagging program has a number of wide-reaching benefits for an organisation, including:

  • Reducing costs (minimising the theft, loss or breakdown of equipment);
  • Increasing productivity (by ensuring equipment is regularly serviced and available as needed);
  • Gaining an accurate overview of corporate assets;
  • More accurate asset tracking;
  • Logging employee responsibility for an asset.

Organisations that want to better understand where hardware expenditure is ending up need to know where a piece of equipment is located and who has responsibility for it. Asset tagging can answer crucial inventory management questions such as:

  • Where are our assets?
  • Who uses our assets?
  • How many assets do we have?

By adding a common identifier to each asset, its usage and service history can be monitored to reduce replacement and repair costs, and its location becomes immediately easier to track.  Asset tags can also be used to control access to sensitive parts of equipment. For example, an asset tag placed across the body of a laptop computer, where the hard drive cover meets the casing, will immediately enable you to tell if someone has attempted to remove the drive, and thereby possibly sensitive information, as the tag will be visibly broken.

Furthermore, ongoing reporting and monitoring will further drive an asset tagging program’s effectiveness.

Deployment can be streamlined, saving an organisation time and reducing further risk of loss or theft of valuable equipment.

Who is Responsible for an Asset Tagging Program?

Implementing an asset tagging program can be a labour-intensive process that reaches across multiple departments and requires significant resources.  Proper management from a senior manager – such as the Finance Director, IT Director or Facilities Manager – is needed to ensure it is completed effectively.

It is, therefore, vitally important to plan an asset tagging program carefully. As with any process undertaken within a business, thought and planning at an early stage can throw up ideas and suggestions on how best to move the project forward.

Organisations should initially assess which assets require marking and the most appropriate method of marking to be used. This will be determined by cost factors, moral hazards (such as the temptation to steal) and the physical properties of each class of item.

Start by considering a number of questions when defining your equipment groups to identify those items that should be included in your asset tagging program and those that should not.

For instance, you should weigh the effort of asset tagging, reporting and inspecting items against replacement costs, servicing and maintenance, the likelihood of theft, the cost to the company of downtime when an item cannot be used, the cost of retaining over rental periods, and who has access to the item at any given time.

You might also want to consider starting your asset tagging program with new equipment, rather than existing assets, to save time and alleviate any hidden costs that must be factored into the programs, such as significant human resources and the ongoing maintenance required to maintain a fully-functioning, effective asset management system.

What Assets Should be Tagged?

It’s common for need to be driven by function when determining which of an organisation’s assets should be tagged.  For example:

  • The IT department may want to tag assets such as PCs, laptops and tablets;
  • Items that require regular maintenance may need to be marked to indicate their next service date;
  • High-value equipment that has a history of going missing may need to be marked to prevent future losses.

While potentially every item in an organisation can be uniquely numbered and entered into a database, it’s quite likely this would create a procedural and bureaucratic nightmare.

A better way to manage a large number of assets is to begin by placing them into ‘asset groups’ that define their features and usage.  Common groups include:

  • Fixed IT equipment
  • Portable IT equipment
  • High value items
  • Business critical equipment
  • Temporary assignment
  • Leased or rented
  • New or old.

In fact, there is no limit to the amount of asset groups you can create and the more specific your groups, the better.

What Tag Options are Right for my Organisation?

There is a huge range of asset tagging solutions currently available on the market, from simple adhesive labels to radio frequency identification.  Determining which one will best suit your organisational needs will depend upon your program objectives. For instance:

  • If your aim is to reduce inventory stocktake times, bar-coded asset tags, a portable bar-code reader and supporting software are your best choice.
  • If you want to reduce service call out fees for damage or breakdowns, asset tags that prevent access are required, as well as regular reporting on items due for service checks.
  • If the goal is to prevent employee theft, your tagging choice should be as permanent as possible and be able to be checked regularly. RFID tags can tell you if an asset is being taken out of the building.

Establishing your organisation’s expected outcomes in the planning stage can easily identify the right processes, products and reporting requirements. Regardless of your chosen method, asset tags must be:

  • Tamper-resistant and tamper-evident. That means that they cannot be removed and replaced and will indicate any attempt to do so;
  • Highly-visible and identifiable as an asset tag;
  • Identifiable to an individual item, cost centre, service period or other reporting mechanism.

Adhesive asset labels are commonly used on IT equipment and high-value electrical goods. They act as a physical barrier to internal components as well as containing service and warranty information.  This can help to prevent damage or unauthorised access as well as reduce service costs.

Larger items, or those exposed to the elements, will be marked with a plastic or metal asset tag. These tags are pulled tightly around power cords or anchor points and contain similar content to labels. Such assets can also be directly marked or permanently etched with an appropriate identifier.

In recent years, radio frequency identification (RFID) tags have begun to emerge as an alternative, if expensive, solution. This is essentially a repurposing of the technology that allows employees to access restricted areas with identity cards, or for automatically billing motorists through tollways.

RFIDs are used in the manufacturing industry to track progress of goods during production as, unlike a bar code, the tag doesn’t need to be within line of sight of the reader and can be embedded within the tracked equipment/object. They’ve also been used to track pharmaceuticals and livestock.

RFIDs require an infrastructure that’s capable of reading tags and recording the information stored on them. As the relative costs of such infrastructure implementation are high, widespread use of RFID technology in asset tagging has been less popular.

Measuring an Asset Tagging Program’s Effectiveness.

As mentioned above, once an asset tagging program has been put in place, ongoing reporting and inspection requirements are essential for measuring its continued effectiveness. The finance department, under the supervision of the Finance Director, normally undertakes responsibility for this activity.

Periodic reports are typically prepared to highlight any equipment that requires service or maintenance. Other reports include spot checks, loss/replacements, asset location, licence or lease renewal and employee-leaving checklists.

Whatever approach you decide to use, it’s important to note that asset tagging can be a big commitment in terms of time, human resources and financial outlay.  However, when executed properly and systematically, it also has the power to instigate wide-reaching improvements across an entire organisation.  Furthermore, it is highly likely that the resources you initially expend on setting up your asset management program will see a significant return on investment over the months and years to come.

Tony Renkin is founder of Tamper Evident; an Australian company which specialises in tamper-resistant and tamper-evident products. Tony advises businesses on how to improve security in a range of areas such as transportation, education, healthcare, government and legal areas. Tamper Evident supply a full range of asset tags and security seals.  Contact them on 1300 726 711 or www.TamperEvident.com.au