Asset management: strategies and benefits in constructions

Every construction company needs to have  or purchase new equipment and machinery; it’s a vital part of operational cycles and their management is necessary for better uptime and performance.

However, asset management in the construction industry is often overlooked or taken less seriously than it should be. Proper asset management ensures maximum productivity and safety, improves efficiency, and, in turn, enhances the company’s returns.

Let’s explore precisely what asset management means and the benefits it brings to the construction industry.

What is asset management in construction?

To understand asset management in construction, it’s useful to grasp what an asset represents in this sector. Generally, an asset represents something owned by a person or a company and thus holds monetary value. In construction, assets are numerous, they vary according to the workflow stage and typically fall into two categories: equipment and machinery.

Asset management in construction thus represents the process of managing the patrimonial assets of a construction company. This management includes actions of development or acquisition, management and maintenance, renewal or upgrading, and disposal of the assets needed by the company throughout various project and execution phases. Managing these assets is divided into:

• Asset procurement: This phase involves asset procurement, intercepting and acquiring the necessary assets for the company. To ensure the investment is useful and advantageous, a crucial planning phase underpins asset procurement. Before a purchase, it’s necessary to demonstrate that:
  • It’s an essential asset for the company;
  • It meets the standard requirements for the company, especially in terms of safety, efficiency, and costs;
  • It’s a certified asset to deliver the desired results.
• Asset tracking and maintenance: This phase includes, as the term suggests, monitoring and maintaining resources. The asset management process doesn’t end once a resource is acquired; it continues to ensure the efficiency of the purchased asset. Specifically, this phase encompasses:
  • Maintenance;
  • Renewal or refurbishment;
  • Disposal and replacement.

An innovative approach to these activities can be the use of the digital twin in asset management, a technology that allows assets to be monitored and managed in real time, improving operational efficiency and reducing costs.

Components of the asset management process

Why is asset management in the construction sector important?

Managing assets in construction is important because it helps to maintain the company at its peak efficiency. Whenever a resource isn’t managed well—be it its purchase, maintenance, or disposal—it’s the company and the ongoing project processes that suffer in the short or long term. If a resource temporarily stops working or breaks down, it triggers unforeseen downtime, increasing inefficiencies across the entire process.

Proper asset management, supported by the right tools, will instead:

• Save money;
• Respect profit margins;
• Meet regulatory requirements;
• Manage safety risks;
• Reduce downtime;
• Manage resource conditions;
• Increase consistency and uniformity on-site.

What are the types of assets in the construction sector?

As previously mentioned, resources in the construction world are diverse and vary according to the project’s design and execution phase. They typically fall under equipment and machinery categories. However, let’s delve deeper into the primary types of assets in the AECO sector:

• Construction equipment: These are high-value assets used by companies to carry out heavy work on construction sites, such as cranes, bulldozers, excavators, shredders, finishers, and various other specialized equipment based on the ongoing construction work. Their size, value, need for specialized personnel, and fuel usage make them particularly important to manage;
• Vehicles: Vehicles like cars and trucks are considered separate assets from other construction equipment, especially when used off-site for errands or transportation;
• Computers and other devices: Computers, cell phones, tablets, or other technological and electronic devices are ubiquitous in companies and construction sites. These devices require management both for functionality and cybersecurity;
• Tools and accessories: Even small and less technologically sophisticated tools and accessories need management and maintenance. If a worker needs a tool for a specific job and it’s either absent or malfunctioning on-site, it will cause delays and economic losses. Hence, maintaining an accurate inventory of tools and monitoring their usage and wear is crucial;
• Structures and services: Every construction site, depending on its size, has small support structures for workers like toilets and washing stations. These should also be monitored within the asset management plan.

What are the benefits of asset management in the construction sector?

Implementing an asset management plan in the construction industry brings numerous advantages, such as:

• Real-time monitoring of all resources: This allows planning resource management and maintenance, avoiding incidents that could compromise worker safety and cause unforeseen delays;
• Reducing on-site theft risks: Unfortunately, construction sites can be targets for theft due to the high-value assets involved. By implementing construction asset monitoring, this risk can be mitigated. Moreover, using specific facility management software helps geolocate assets, improving on-site security and creating a stress-free environment;
• Performance assessment: Real-time monitoring allows companies to assess the most utilized resources and those that could be rented instead of purchased due to lower-than-expected usage, etc;
• Understanding the life cycle of construction assets: Asset management enables monitoring of all equipment and machinery for repairs, maintenance, disposal, or sale. This ensures readiness and optimal conditions when starting a job;
• Optimizing on-site safety: Establishing an asset management plan means knowing the state of equipment and machinery and when intervention is necessary, even through predictive maintenance. Naturally, having monitored and maintained resources increases on-site safety.

Benefits of asset management

4 best practices to implement asset management strategies in constructions

There isn’t a universally valid method for proper asset management; there will always be variables based on the specific company and individual projects. However, there are best practices beneficial to all construction companies:

1. Having the right people in the right positions: A proficient asset management process always involves qualified personnel;
2. Ensuring teams understand equipment life cycles: For example, it’s one thing to know your excavator is 11 years old, another to understand its remaining useful life;
3. Evaluating assets regularly: Some equipment or machinery may simply need to be scrapped and replaced. Regular evaluations are crucial to pinpoint resources that have reached the end of their life, thus avoiding safety risks;
4. Investing in specific and professional asset management software: Utilizing targeted technology enhances team productivity and streamlines asset management.

There are also other tools supporting asset management activities, such as construction issue management software that I recommend implementing in your work team to handle issues arising in different construction project phases, always meet deadlines, ensure customer and team satisfaction, or simply for managing equipment interventions by opening tickets!

Use of Innovative Technologies

The use of innovative technologies in construction asset management is revolutionizing the management and optimization of assets, improving efficiency, sustainability, and profitability.

Building Information Modeling (BIM) enables advanced digital management of buildings, reducing design errors and improving predictive maintenance.

Digital Twins, virtual replicas of physical assets, allow for real-time monitoring of performance and condition, supporting data-driven decision-making.

Read also Digital Twin in Asset Management: complete guide and insights.

IoT (Internet of Things), with smart sensors, provides detailed data on energy consumption, material wear, and environmental conditions, enabling predictive maintenance strategies. Additionally, the integration of AI and Machine Learning allows for the analysis of large amounts of data to optimize operational management and reduce unexpected costs.

The integration between BIM and GIS also contributes to the holistic management of an asset (whether it is an infrastructure, a building, etc.), combining the detail of BIM models with the geospatial information of the context in which it is situated.

Read also GIS for Asset Management: the complete guide.

Finally, the use of blockchain and smart contracts ensures transparency and security in transactions and contracts, reducing risks of fraud and bureaucratic inefficiencies.

These technologies are transforming the sector, making asset management more strategic, sustainable, and efficient.

FAQ on Asset Management in Construction

What is asset management in the construction sector?

Asset management in construction is the process of managing, maintaining, and optimizing the resources of a construction company, such as equipment, machinery, vehicles, and technological devices, in order to ensure efficiency, safety, and cost reduction.

What are the main benefits of asset management?

Benefits include reduced downtime, improved safety on site, effective maintenance planning, lifecycle management of assets, and containment of operational costs.

What technological tools can support asset management?

Among the most commonly used technologies are Building Information Modeling (BIM), Digital Twins, the Internet of Things (IoT) with smart sensors, artificial intelligence, and machine learning for predictive analysis, as well as blockchain for secure contract management.

How does asset management help reduce the risk of theft on site?

By implementing advanced monitoring and tracking systems, such as IoT and facility management software, it is possible to geolocate assets in real-time and prevent losses due to theft or misplacement.

What are the best practices for effective asset management?

Best practices include assigning qualified personnel to asset management, periodic evaluation of resources, understanding their lifecycle, investing in management software, and adopting predictive maintenance strategies.

What is the role of predictive maintenance in asset management?

Predictive maintenance allows for the prevention of failures and malfunctions by analyzing real-time data on assets, thereby reducing unexpected repair costs and improving workplace safety.