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3 Ways Inaccurate Asset Data Costs You Money

Would you start on a trip without knowing how to get to your destination? Without checking how much gas is in the car’s tank? Without ensuring you had a credit card, traveler’s checks or at least some good ol’ cash in your pocket?

Of course, you wouldn’t. It’s nonsensical at best, risky and dangerous at worst. So’s running your plant without reliable, correct, verified and real-time data. That’s what operations and maintenance managers that rely on paper-based processes are doing. As a result, they’re increasing their chances of suffering unplanned production shutdowns, hurting efforts on reducing preventable equipment failures, and paying higher taxes and insurance premiums.

Let’s look at three key areas of plant operations – asset monitoring, maintenance planning, and decision making – and how incorrect data negatively affects each.

Industries like oil and gas, mining, chemical processing, and utilities are asset-intensive. It takes a lot of equipment to extract crude oil from the ground, transports it to a refinery, processes it into a usable form and then moves the final product to market. Quite often, the oil is found far from any facilities and requires extensive pipeline networks to take it from upstream production sites to downstream refineries and processing plants. Each asset represents a significant cost to acquire. It takes more funds to maintain and keep them in usable condition. Once an asset is on the firm’s books, the company must also pay insurance to cover its potential loss. However, the organization can use the asset’s depreciating value over time to reduce taxes.

Three years ago, a reciprocating engine wore past its usable life at a hypothetical oil giant’s remote pumping station. A maintenance crew examined the engine and replaced it. Not only that, they took the engine apart and cannibalized several parts to repair other equipment. The oil company uses a paper-based asset monitoring system, one that’s filled with errors and inaccuracies. So, the tech’s paper report detailing the engine’s demise was never filed. The engine instead remained listed on headquarters’ asset ledger as a potential spare. The corporate accounting department has been paying taxes and insurance premiums for three years on a piece of equipment that no longer exists, except as a costly ghost asset on a ledger.

The ghost engine causes more problems, this time for corporate maintenance planners. This engine still exists according to their ledger. A similar engine now threatens to go down at another pumping station in the same region. A planner decides to take needed parts from the first engine to repair the second. Only, the paper ledger is wrong. All the parts from that engine have already been used. Worse, there are no similar engines or accessible spare parts available within the company. As feared, the existing engine then fails, causing the pumping station and the pipeline to shut down for several days while a replacement is found and shipped at extra cost. All this could have been avoided had the company’s paper ledger been accurately updated in a prompt fashion.

In this hypothetical example, inaccurate, paper-based data cost this oil company serious money in lost production, equipment replacement, taxes, and insurance. It also resulted in considerable wasted time and effort.

How? By adopting a mobile-first digital enterprise asset management system. Such a system helps users:

  • Cut error-prone paper processes.
  • Produce accurate financial statements.
  • Identify cost-savings opportunities.
  • Respond quickly to trends or problems.
  • Reduce wasteful duplication of effort and resources.
  • Make calculated business decisions.

Innovapptive, a mobile-first digital transformation provider, offers asset management solutions. These solutions enable companies to monitor assets in real-time and know each’s current operational status. Executives, directors, and managers receive verified, high-value data to make informed choices. Operational and financial benefits include:

  • 90% reduction in downtime and production delays.
  • 90% fewer preventable failures.
  • 20% cut in an overpayment of federal, state and property taxes.
  • 15% drop in insurance premiums.
  • 99% accuracy of fixed asset financial statements.

* Based on previous customer results. Your results may vary. 

Discover how Innovapptive’s enterprise asset management solutions can improve your monitoring, planning and decision making.

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