If you buy a car for the family, you will experience different stages. There’s the research and selection process for deciding what to buy, and the budgeting stage to see what you can afford. If you’re forward-thinking, you’ll look at the running and maintenance costs of your shortlist. And maybe even resale value.
Now, if you’re a company operating in the yard, dock, shop, or plant, and you buy machinery that is essential to your product or service, you’re not just moving 2.5 kids and the weekly grocery shopping. You’re buying your ability to make a profit; your ability to grow. This blog will look at how Shepherd’s Rotating Assets feature removes the guesswork from whether that purchase is a success or not. And it’s really rather elegant.
Clarity on Machinery Value and Performance
Rotating Assets allows a company to bring a machine into action, to replace another, be it planned or to cover unexpected situations. All the while, the machines involved will all be tracked, be they running as planned, to cover a shortfall, or offline for maintenance. They will be monitored for the work they each do and the costs they each incur. And if a unit is removed from circulation, it can return to active duty without there being a break in its residual value, cost, or financial history.
All this is core to how a business can assess the value of machinery and the work it performs. For that profit to come about, the cost of buying the machine, powering it, manning it, and maintaining it must be smaller than the sum of the revenue it generates and the resale value it holds.
Balancing Precaution with Profitability
Companies can stand to lose large sums of money if their production line stops for one reason or another. Output is one, contractual penalties another. A company for which a piece of machinery is absolutely vital to that production line can very easily spend the same amount again buying a backup. Maybe even a third or a fourth, so that they are as sure as can be that nothing will interrupt their operations.
Thames Water is one of those companies. Being responsible for keeping water running to the UK’s capital, missteps have financial, reputational, and political implications, too. Any one of its pumping stations will have multiple pumps, with only a certain number working at any given time.
The rest are ready to take up the mantle if the main is down due to preventative maintenance or, worse, mechanical failure. Having these backup pumps in place is prudent. Arguably, you can call it essential. But that does not mean their cost impact can be ignored. This takes us back to what Shepherd’s functionality makes possible.
From Customer Need to Core Feature
The whole concept began with a customer and a challenge they faced. Rotating Assets is the culmination. Think of Shepherd’s Rotating Assets as a dial. There’s a needle and a financial value scale going from the positive all the way to the negative.
Different inputs, such as purchase price, depreciation (which is sometimes dictated by tax law, not just condition), inventory or active status, maintenance, and revenue, are all monitored. The result is that the needle will shift back and forth based on the asset’s history and current status, always showing the real-world value of that asset at any given point.
This allows the company to take the necessary contingency steps needed to preserve its revenue stream, in an informed manner, and without losing track of what it costs over the course of a machine’s service life. This, in turn, ensures that procedure and precaution do not come at the cost of profit and prosperity.
It is this complex system of inputs and variables that Rotating Assets turns into something digestible, usable, and reliable for Shepherd’s customers, and why it is a feature its development team is particularly proud over. The fruit of a customer-led development to solve real-world challenges, it is now part of Shepherd’s EAM product, available to all.
If you, too, want certainty over speculation when it comes to your assets’ value in the grand scheme of your profitability, why not book a call to discover this and the whole NetSuite-native Shepherd EAM solution?
