Assets management strategy

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Assets management strategy

Assets management strategy

Task 1

Definition of Assets

About Short-Term Assets

Short-term, or current, assets are those a restaurant expects to use or convert to cash within a year. These assets include cash, inventory, accounts receivable, short-term investments and prepaid expenses, such as advanced rent payments. Cash includes money in bank accounts and physical currency on hand. Inventory includes the cost of ingredients, food, beverages and merchandise available for sale. Accounts receivable represents money that customers and credit card providers owe the restaurant.

  • Cash
  • Start-up inventory
  • Coffee beans (12 regular brands and five decaffeinated brands)
  • Coffee filters, baked goods, salads, sandwiches, tea, beverages, etc.
  • Retail supplies (napkins, coffee bags, cleaning, etc.)
  • Office supplies
  • Long-Term Asset

    Long-term, or non-current, assets are resources a restaurant expects to own for longer than a year. These assets include fixed, or physical, assets, such as kitchen equipment, booths, cash registers and buildings. They also include intangible, or nonphysical, assets, such as patents. Other long-term assets may consist of long-term stock and bond investments or notes receivable that will take longer than a year to collect.

  • Espresso machine
  • Coffee maker
  • Coffee grinder
  • Food service equipment (microwave, toasters, dishwasher, refrigerator, blender, etc.)
  • Storage hardware (bins, utensil rack, shelves, food case)
  • Counter area equipment (counter top, sink, ice machine, etc.)
  • Serving area equipment (plates, glasses, flatware)
  • Store equipment (cash register, security, ventilation, signage)
  • Office equipment (PC, fax/printer, phone, furniture, file cabinets)
  • Other miscellaneous expenses
  • Scope and purpose of strategy

    Areas of Assets management:

  • The Current State of the System’s Assets
  • Before implementing an asset management system, utilities must have a clear understanding of the current state of all existing assets. This provides a baseline for ongoing measurement, analysis, maintenance planning, and resource allocation.

  • Required Sustainable Level of Service
  • There are several elements that play a role in defining level of service and associated short-term and long-term system performance goals, including quality, quantity, reliability, and environmental standards. Customer demand, data from utility commissions or boards, and information from key stakeholders can also be used to develop accurate level of service requirements.

  • Assets Critical to Sustained Performance
  • It’s inevitable that assets will fail from time to time. But what really matters is how you handle and respond to these failures. Not every asset bears the same level of risk of failure; likewise, not every asset brings operations or services to a halt when failure occurs. The most critical assets are those at high risk of failure, which also pose major consequences when they do fail, such as major expenses, system failure, serious safety concerns, and other challenges.

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    Assets management strategy
    Last updated: Feb 2024

    Page 1

    occurs. The most critical assets are those at high risk of failure, which also pose major consequences when they do fail, such as major expenses, system failure, serious safety concerns, and other challenges.

  • Minimum Life Cycle Costs
  • About 85 percent of a typical utility system’s expenses consist of operations and maintenance (O&M) personnel and the capital budget. Asset management systems are valuable for determining the lowest cost options for providing the highest or desired level of service over a period of time. Asset management facilitates informed decision-making enables utilities to optimize the work operations and management crews are undertaking and choose the right projects at the right times for the right reasons.

  • The Best Long-Term Funding Strategy
  • A long-term funding strategy and smart financial decisions are critical in implementing an effective asset management program. The utility’s full economic costs and revenues is essential knowledge for accurate financial forecasting.

    Purpose of Assets management

    Good asset management can benefit your organization in many ways. Examples are:

  • Demonstrated compliance with the requirements and wishes of your stakeholders;
  • Better financial results because of better ROI and/or cost reduction;
  • Informed decisions from multiple angles, such as performance, profit and costs, risks and opportunities;
  • Risks managed when necessary and knowingly existent when acceptable;
  • Higher customer satisfaction;
  • Decisions also based on entire life cycle of assets (also when this exceeds the duration of other plans);
  • Stability of the production in the long term;
  • Improved reputation towards your stakeholders;
  • Demonstrated compliance with regulation and legislation;
  • Traceability of decisions;
  • Improved knowledge management;
  • Increased attractiveness for shareholders.
  • Assets purchasing strategy

    An asset acquisition strategy is the purchase of a company by buying its assets instead of its stock. An asset acquisition strategy may be used for a takeover or buyout if the target is bankrupt. Market knowledge, research and experience are important to a successful asset acquisition strategy. In some cases, a plan for selling the asset, called asset disposition, is built into the asset acquisition strategy.

    Tenders

    Tendering is the process of choosing the best and cheapest company to supply goods and services by asking several companies to make offers for supplying the goods and services.

  • Create procurement team
  • The procurement team will typically involve representatives from health and safety, human resources, quality management etc.

  • Develop tender & Evaluation criteria
  • The procurement team will need to agree what the tender will involve including

  • Specification or general requirement
  • Supplier requirements and mandatory requirements
  • Questions
  • Tender rules or instructions
  • (how it will be scored eg 60% quality / 40% price)
  • Contract (eg one-off, term or framework)
  • The tender procurement process
  • Pre…
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    Assets management strategy
    Last updated: Feb 2024

    Page 2

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