Construction Asset Management: Definition, Examples and Processes.
Introduction
Equipment malfunctions on a construction site can bring daily operations to a screeching halt. Construction project delays, whether big or small, can have drastic financial consequences in terms of emergency repair costs, delayed project deadlines, and damage to a company’s reputation. This is why construction asset management is critical for successful project outcomes.
Asset management in construction has a very specific scope. Its purpose is to track, maintain, and optimize the distribution and use of assets, equipment, and other resources. This can encompass everything from heavy machinery to small tools, as well as intangible assets like data and licenses. Effective asset management can help project managers reduce downtime, costs, and waste.
To maximize benefits, organizations can support this process with an advanced asset or maintenance management solution. LLumin’s Computerized Maintenance Management System (CMMS+) is a trusted solution in the construction industry. It gives users the tools and features to keep construction projects on time and running smoothly.
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What Is Construction Asset Management?
Asset management is a process of managing and optimizing how companies use an asset from its initial purchase to retirement and disposal. Administrators optimize every part of the asset lifetime, from planning and acquisition to use and maintenance. At the end of its lifecycle, the asset must be properly disposed of in accordance with company guidelines.
Though necessary across many industries, asset management in construction focuses on overseeing and tracking construction equipment, tools, and resources to ensure they remain in excellent working order, are safe to use, and are used efficiently. Many companies require asset or maintenance management software to streamline this process.
For example, LLumin’s CMMS+ advanced tools and features can manage equipment throughout its lifespan, track asset health in real-time, and automate all asset maintenance tasks.
Effective asset management enables a company to reduce cost and waste, eventually building and increasing wealth over time. Why is this? Because wasteful (or excessive) spending and investments, especially in heavy equipment and tools, can result in huge financial losses.
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Types of Construction Assets
Construction projects rely on a diverse range of assets that vary based on project size and type. For larger projects that require many assets, including heavy machinery, vehicles, and tools, the right management software can help reduce human error and ensure assets are properly monitored, tracked, maintained, and utilized.
| Asset Types and Examples | |
| Heavy Machinery | Excavators, bulldozers, cranes, and loaders. |
| Vehicles | Trucks, forklifts, and utility vehicles. |
| Tools | Hand tools, power tools, and specialized equipment. |
| Technological Assets | Drones, software, and sensors. |
| Consumables | Spare parts, fuel, and safety gear. |
When companies manage multiple project sites, it’s easy to see how challenging asset management can be without an effective way to monitor and track assets. Such lack of awareness leads to issues like running out of fuel and other consumables or lacking the tools and vehicles necessary to complete a project. Furthermore, it can also increase the likelihood of theft.
Value to Construction
Construction crews operate in hazardous environments, which makes access to safe and reliable equipment essential for success. Relying solely on standard safety checks and last-minute repairs is not enough to mitigate risks on the job site.
Imagine if a construction crew showed up on site only to realize they had no safety gear and that their equipment needed fuel. Or worse, the heavy machinery malfunctioned or the vehicles were simply missing from the project site. These are the real outcomes of asset mismanagement.
Company stakeholders and project managers must maintain clear visibility into the location and status of critical assets to use them effectively. They also need insight into how well these assets perform over time and the demand for their continued use to make informed decisions about investments and budgets.
If an organization lacks visibility into equipment performance or demand, it can end up overspending on equipment that should be disposed of. Brand leaders can also spend too much or too little on mission-critical assets to ensure operations run at peak performance levels.
Construction asset management is a cornerstone of responsible ownership as well as project management, with far-reaching implications for efficiency, safety, and cost control. By providing a structured approach to tracking and maintaining assets across multiple sites, asset management helps companies avoid delays, minimize unexpected costs, and ensure compliance with state and local regulations. This proactive strategy supports operational excellence and drives long-term project success.
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Benefits of Construction Asset Management
Construction asset management offers several benefits that enhance project success and financial performance. A clear understanding of your assets—what they are, their location, and their condition—is essential for maintaining a smooth and efficient operation. Because construction sites are particularly vulnerable to accidents, equipment failures, and theft, effective asset management is more than just a popular buzzword, it’s a critical practice central to your project’s operations.
Equipment monitoring is effective for simple tracking purposes and monitoring conditions throughout an asset’s lifespan. In the past, companies relied on visual, in-person inspections to validate the good working condition of their equipment. This process was time-consuming and risky, as technicians traveled through hazardous facilities and environments to reach equipment.
This process is being replaced with Internet of Things (IoT) technology, machine-level sensors, artificial intelligence (AI), and machine learning (ML). These solutions enable companies to monitor their equipment’s real-time location and condition remotely. With the data collected from condition monitoring, organizations can implement more proactive maintenance management strategies that improve equipment and asset performance and lifespan.
LLumin’s CMMS+ provides the tools your teams need to optimize asset utilization, mitigate risks, and ensure your projects stay on track and within budget.
Improve the lifespan of heavy construction equipment with tailored maintenance solutions.
| Benefits of Construction Asset Management | |
| Improved ROI | By extending the lifecycle of equipment and maximizing usage, companies see higher returns on their investments. |
| Efficiency | Properly maintained assets reduce the likelihood of downtime, ensuring projects stay on schedule. |
| Cost Savings | Predictive and preventive maintenance helps avoid expensive repairs and replacements. |
| Better Planning | Data insights from asset management systems enable better resource planning and allocation. |
| Safety and Compliance | Regular inspections ensure adherence to industry safety standards. They can also help reduce the risk of theft. |
Effective Implementation
Effective construction asset management starts when stakeholders and upper management agree on larger organizational goals. Following that process, the best implementation plans include steps to complete an inventory audit and risk assessment.
This process is necessary to ensure that asset management follows a controlled process built on an accurate understanding of asset inventory, inventory types, and their associated risks of failure. This is essential because when different types of assets fail, they have different consequences and impacts on daily operations.
For example, if a crane experiences full mechanical failure, it will have a greater impact on operations than if power tools stop working. Replacing a power tool creates fewer costs and results in less downtime than it does to replace or relocate a crane. Assessing equipment type and criticality should drive your asset management objectives.
Monitor equipment in real-time with condition-based maintenance solutions.
The steps listed in the table below offer some general guidelines to help your organization implement a new asset management strategy. However, working with a software developer that provides responsive customer support and training before, during, and after implementation will also be critical to ensure success.
| How To Implement Effective Asset Management | |
| Inventory Audit and Risk Assessment | Perform regular inventory audits and categorize your asset types. Complete a risk assessment that considers the impact of malfunctioning or unavailable assets. |
| Data Integration | The goal is to create a centralized database that eliminates data silos and improves your ability to monitor and manage assets. Appropriate tools and software, like LLumin’s CMMS+, will be needed to complete this step. |
| Preventive Maintenance | Implement a preventive maintenance management strategy that performs regular inspections and repairs and seeks to address the underlying factors contributing to breakdowns and malfunctions before they escalate. |
| Training | Asset management in construction is most effective when your employees have the required skills and knowledge to use newly implemented tools and technologies. They should also have a clear understanding of the overall benefits of asset management. |
| Monitoring | Continuous monitoring will supply the data you need to identify inefficiencies and areas that require improvement. |
Deployment Challenges
While construction asset management offers significant benefits, it can also present unexpected challenges. Unfortunately, some organizations remain reluctant to implement a new management strategy until it becomes absolutely necessary to reduce risk.
The success of a new management strategy often hinges on proper planning, direction, and support across its initial, immediate, and long-term phases. During the preliminary stages, unclear objectives, high implementation costs, and difficulties integrating new software into existing workflows can cause significant delays.
As the project progresses, insufficient training, limited resources, and inadequate IT support or infrastructure can create additional obstacles. Addressing these challenges requires a proactive approach to ensure the strategy is effectively implemented and sustainable over time.
| Challenges of Deploying Construction Asset Management | |
| High Initial Costs | The investment in new technologies and training can be substantial. Upon closer inspection of these costs, a company may opt to take a reactive management posture that ultimately leads to inefficiency and higher costs later on. |
| Integration | Incorporating new tools into existing workflows can be time-consuming. Furthermore, when new software and tools lack compatibility entirely, it leaves companies in an untenable situation. |
| Regulatory Compliance | Maintaining compliance with applicable federal, state, and local codes and regulations is an ongoing process that requires regular review and procedural updates. This process plays an essential role in guiding asset management efforts but can also become a significant obstacle to deployment when mismanaged. |
| Change Management | Employees may be hesitant to adopt new systems or processes. This reluctance can escalate if they are not offered training and informed of larger organizational goals and reasoning. |
| Data Management | Collecting, analyzing, and securing large volumes of asset data can be daunting. Companies that lack the IT infrastructure to store large datasets would be better served with finding an asset management software provider that provides these extended services. |
This is why working alongside your asset management software developer can be extremely helpful – especially when your provider offers extensive initial and long-term training options. Your software provider can and should be capable of setting your employees up for success. This could mean that they’ll provide your team with a range of support options, from one-on-one to group user training throughout all implementation phases.
Partner With LLumin
Construction asset management is an essential part of responsible ownership, with far-reaching potential impacts on an organization’s level of risk, costs, employee safety, and more. Unfortunately, companies often postpone or delay the implementation of an effective strategy that could help improve outcomes. This hesitation often leads to safety and compliance incidents, reputational damage, and ultimately, produces poor project outcomes.
At LLumin, we understand the challenges and risks inherent to construction assets. That’s why we’ve designed a CMMS+ software that can help expedite and support your efforts. With LLumin, you’ll have access to a powerful set of asset management tools and features designed to support the construction industry. You will also benefit from a honed implementation process and ongoing support to help ensure that your teams hit the ground running and start applying best practices of effective asset management.
LLumin’s CMMS+ provides powerful tools to improve performance and efficiency, and reduce costs. Whether you’re managing heavy equipment, vehicles, tools, or other resources and assets, we have you covered. When you choose to work with us, you can start experiencing the benefits of asset management and better project incomes from day one.
Getting Started With LLumin
LLumin develops innovative CMMS software to manage and track assets for industrial plants, municipalities, utilities, fleets, and facilities. If you’d like to learn more about the total effective equipment performance KPI, we encourage you to schedule a free demo or contact the experts at LLumin to see how our CMMS+ software can help you reach maximum productivity and efficiency goals.
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Ed Garibian, founder, and CEO of LLumin Inc., is an experienced executive and entrepreneur with demonstrated success building award-winning, growth-focused software companies. He has an impressive track record with enterprise software and entrepreneurship and is an innovator in machine maintenance, asset management, and IoT technologies.