Turn Surplus Into Maximum Recovery

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5 Steps to an effective investment recovery program

Introduction

At any given time, almost 20% of a typical organisation’s assets are surplus to its needs. From office equipment to production machinery to entire facilities, these assets lie idle or in storage, depreciating in value and representing potentially millions in untapped value for your organisation.

Successful investment recovery programs help organisations maximise the total value of their surplus assets by intelligently managing, redeploying and selling them. Today’s business leaders realise that investment recovery should be optimized as a core business function. The haphazard, decentralized, reactive, low tech programs of the past are being replaced by a more strategic – and profitable – approach. Through a high-performing program, your organisation can maximise cost savings and recovery, simplify and standardize operations, enhance productivity, inform business decisions and measure results to drive continuous improvement initiatives.

Since investment recovery remains a non-core function and strategic area for most organisations, your business may lack the time and resources required for a high-performing program. The ideal solution is often to select a trusted partner to handle this area. An expert partner has the proven strategies and partnership ability, standardised global processes and asset management expertise needed to build, implement and manage an effective investment recovery program.

This white paper presents a straightforward five-step process outlining how your organisation can leverage an expert partner to develop and maintain a successful investment recovery program that meets your goals.

Step 1: Develop Proposed Solution to Secure Buy-In from Key Personnel

Your organisation’s Procurement, Sourcing, Supply Chain, Facilities and Finance departments, as well as plant leaders, could all be involved in the investment recovery process. If you need to present a fully developed investment recovery program to top leadership, you must secure buy-in from these business unit leaders. To do so, you must demonstrate how your new program will run and, if it has one, how it will be more effective than your organisation’s current investment recovery process. An expert partner will help you develop a plan for a “proposed state” program that you can pitch to stakeholders. Your partner’s proposed solution should include the following elements:

Standard Redeployment Process to Maximise Cost Savings

A systematic redeployment process allows your organisation to identify, search for, view and transfer surplus assets across your entire organisation. Ideally, this process will be facilitated by web-based, enterprise-wide asset management software. When consistently used across your organisation, a comprehensive system will maximise redeployment of your surplus, generating substantial cost savings by reducing the need to buy new equipment.

Sales Program to Optimise Recovery

In the proposed solution, surplus assets that aren’t redeployed should be sold in the second-hand market for maximum recovery. The approach should leverage multiple sales channels to drive sales proceeds, including online auction, live auction, “Make an Offer” and “Buy It Now” sales. The plan should also include multichannel marketing strategies – from traditional targeted print ads to social media posts, email marketing campaigns, search-engine optimization and search-engine marketing strategies – to generate awareness of and interest in your surplus. For best results, find a partner that can tap a vast global buyer base to sell your surplus anywhere in the world.

Complete Sales Support

How will your partner manage all aspects of selling your surplus, including payment, storage, removal and compliance with applicable regulations? Make sure your partner’s proposed solution includes a plan for handling these elements. Ideally, your partner will facilitate payment processing and integrate compliance into your program to ensure your organisation adheres to all regulations associated with selling and managing surplus. Storing surplus externally isn’t ideal, since your goal is to avoid spending another cent on unwanted assets. A trusted partner will have warehouse facilities at which to store your surplus when you’re in a time crunch, want to disassociate your brand from the assets or avoid the logistics of buyers visiting your site for inspection and removal.

Before giving consent, organisational leaders may also ask you to provide a “proof of concept” for the program. Through a pilot project, you will need to measurably compare the effectiveness of your proposed solution versus the current approach. An expert partner will work with you to build and implement this pilot project.

Be sure to highlight your program’s ability to drive better results in the following categories:

  • Total Program Value: cost savings through redeployment + proceeds from surplus asset sales
  • Number of sites and business units redeploying surplus
  • Number of individuals bidding on or buying your surplus, the provinces and, if applicable, the countries they are buying from.

By demonstrating that your proposed solution is measurably more effective than the current state, you’ll make a strong case for the program and secure buy-in from the right personnel.

Step 2: Identify Infrastructure Needs and Pitch to Leadership

With key personnel on board with your plan, you must now determine what your program’s infrastructure will look like. The most vital components of your infrastructure are the program and site champions. The program champion drives the program’s success and adoption across your organisation. If applicable, each site also needs a site champion, who leads and manages the investment recovery process on site. The more widely your program is adopted across your organisation and the more consistently it’s executed, the more capital your organisation will generate. The champions job is extremely important.

Here’s a closer look at the site champion’s responsibilities in the investment recovery process.

Roles and Responsibilities of Site Champions

  1. Proactively identify surplus assets on site
  2. Maximise redeployment and sourcing of surplus assets to and from the site
  3. Work with the investment recovery partner to sell assets for maximum recovery
  4. Provide approval before assets are sold or redeployed
  5. Partner with Finance to ensure approval/redeployment/sale process for surplus assets is mandated in internal policies
  6. Engage appropriate departments throughout process, including Finance, Compliance, Shipping, and Health & Safety

If you adopt such a tool, you also need to identify a team member to serve as systems administrator for your asset management software. This person will give users access to the software, facilitate the asset identification/redeployment/sale process, keep asset listings up to date, load assets into the system if needed and pull sales/redeployment figures to help determine program ROI.

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