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Background: Leveraging the true Value of your Test Assets

We live in an era where technology companies can be vast, sprawling operations with numerous different sites. This means that it is increasingly difficult to keep complete visibility of the test equipment held in stock. Often an item that could be of particular use to an engineer within an organisation might be located in a corner of some dusty storeroom, effectively forgotten about. As all technology-related sectors look to slowly drag themselves out of the acute global slump that COVID-19 has caused, there is a real need to make testing workflows more efficient and to maximise utilisation of the assets involved.

It is estimated that there is a total of $100 billion worth of test equipment assets currently situated in R&D laboratories, production facilities and field service depots around the globe. These items can go all the way from simple multimeters right through to very complex (and expensive) equipment. Unfortunately, much of this equipment is not used to the extent that it should be and, conversely, in other cases the demands placed on certain pieces of equipment are simply too high.
Getting the balance right is difficult. If not enough items of a particular equipment model are carried, then prolonged lead times in acquiring one can result. This can have a significant impact on throughput, as well as causing frustration for the end customer as important installation projects are held up. For OEMs it can mean product launch dates get pushed back and windows of opportunity are missed. In contrast, if too much equipment is kept it can be a financial burden. Stocked equipment that is not utilised will represent an ongoing financial drain - adding to the organisations’ day-to-day costs, while its actual value in monetary terms keeps on depreciating.

There are several actions that can help make an organisation’s test activities more efficient and cost-effective. By reducing the size of the equipment inventory (without impacting the ability to meet test demands), an array of different operational expenses can be circumvented - such as maintenance, recalibration, storage, insurance, etc. If some of that inventory can subsequently be sold off then it will be beneficial to the operation. Not only will the unwanted operational costs stop, but also the resale value of the equipment may be reinvested in items of equipment that are going to prove more useful.
Alongside this, better availability of existing test assets needs to be a core objective. If this is achieved then unplanned equipment procurement to satisfy sudden shortfalls can be avoided. Sharing the test equipment pool across the whole organisation is critical here - rather than the siloed management that are often seen, where each individual department or division keeps hold of its own assets (even though they could be put to good use elsewhere).

All this calls for employment of a cutting-edge asset management system. Through such a system, staff can be provided with accurate real-time data on the test hardware stocked organisation-wide, covering multiple locations. Details on the technical specifications of an item of equipment can be accessed, as well as information on where it is situated, whether it is currently assigned to a particular project, if it is in need of servicing, etc. From this, staff will be able to make better-informed decisions on how to go about allocating resources so that elevated efficiency levels are assured. It also means that they will be able to judge if more assets need to be acquired to keep up with projected demands.

The following are just a couple of examples illustrating how advantageous superior asset management can be. A leading defence contractor needed to overcome some serious logistical problems. Staff at the contractor were frustrated that critical testing assets were often unavailable, with 12% of equipment lacking the proper calibration specifications. To make matters worse a large proportion of items were found to be outdated and no longer fit for purpose. All this led to significant delays and unplanned purchasing expenses being accrued on a number of major projects. By implementing an AO solution, the contractor’s spent lab staff spent 20% less time managing and sourcing assets - thereby freeing them up to take care of other duties that could enable projects to be completed quicker and help to generate additional revenue. Likewise, a large scale semiconductor manufacturing company was able to resell the test equipment that it no longer had use for and in doing so added an extra $2 million to its cash reserves.

  ER Dashboard

Figure 1: An Example of the Dashboards Produced by the Electro Rent AO Solution

The Electro Rent Asset Optimisation (AO) solution allows for this kind of large scale test equipment inventory management. It enables a thorough examination of workflows, along with pinpointing potential problems. Test requirements can be aligned with asset availability via the parameter search feature. This is far more sophisticated than a standard database search (relying on a model number entry, etc.). This can markedly accelerate the search time needed for staff to check the suitability of a piece of equipment, find out where it actually is, and ascertain its state of availability. The time thereby saved can then be devoted to other tasks, allowing the engineers to be more productive.

The question for you is, what money is tied up right now in the unused assets stored within your organisation?

Author: Dominique Dubois, Business Development Manager Asset Management Europe, Electro Rent

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