What Is Asset Tracking?

If your business has expensive assets like vehicles, tools, or machinery, it’s important always to know where those assets are. Tracking your assets ensures you know exactly what equipment your business owns and what it’s worth. It also helps you keep track of maintenance and reduce time spent looking for items.

The best way to manage your business’s equipment is to use dedicated asset tracking software. But first, it’s important to understand how asset tracking works. In this guide, we’ll answer the question, “What is asset tracking?” and explain the technologies used to monitor your business’s essential items.

What Is Asset Tracking?

Asset tracking means keeping track of your business’s physical assets. Examples of assets you might track include vehicles, movable equipment, power tools, office equipment, and IT equipment.

Asset tracking includes not only knowing where these physical items are but also how much they’re worth, when they need to be maintained, whether they’re in use, and more.

Assets vs. Inventory

Importantly, assets are distinct from inventory. Whereas inventory is designed to be held temporarily and then sold, assets are items that your business owns with the intention of long-term use.

Consumable and low-value items such as pens and paper are also not considered assets. For example, a printer would be considered an asset but the ink cartridges it uses would not be.

Tangible vs. Intangible Assets

In this guide, we’ll focus on tangible, or physical, assets like equipment. However, there’s another class of assets that your business needs to manage: intangible assets.

Intangible assets include things like contracts and intellectual property. Such assets should be tracked, but doing so requires a different process to tracking tangible assets.

How Does Asset Tracking Work?

Asset tracking involves using asset management software and tools to track individual assets.

Asset management software essentially provides a database of what your business owns. It includes important information about each asset such as where it’s located, whether it’s in use, and when it needs to be maintained.

Asset tracking tools include barcodes, QR codes, GPS tags, radio frequency ID (RFID) chips, and Bluetooth devices. These tools are affixed to each asset, giving that item a unique identifier that can be monitored.

Types of Asset Tracking Technologies

Several technologies are used to track physical assets, each with its own benefits and drawbacks. Let’s take a closer look.

Barcodes

Barcodes can be easily attached to most physical equipment using stickers. For equipment that doesn’t accommodate a sticker, you can attach a barcode to a plastic hanger and affix the hanger to the item.

The benefit of using barcodes is that they’re simple and inexpensive, keeping the cost of asset tracking to a minimum. However, you’ll need a barcode scanner to read them. So, you’ll either need to have employees carry scanners or place scanners at various locations around your facility.

QR Codes

QR codes are very similar to barcodes, but they’re optimized for scanning by a smartphone. This can be a major advantage because most of your employees are likely carrying smartphones with them already as they move around your facilities.

In addition, smartphones can transmit data over cellular networks. This means that employees can send data to your asset tracking software even if they are located beyond the range of your WiFi network.

GPS

GPS tracking devices are relatively expensive, so they’re best used for large and expensive equipment such as vehicles or heavy equipment. The benefit of GPS tracking is that you can check on an asset’s location in real time. You can also set up geofences around your business and get an alert if your asset travels somewhere it’s not supposed to go.

There are multiple types of GPS tracking devices. Some come with adhesive backing so that you can simply stick them onto items, while others come with mounting equipment. If your GPS device will be exposed to the elements, choose one with a waterproof casing.

RFID

RFID chips continuously transmit information about an asset. But the radio signals from these chips only extend a few feet, so an employee must be located near the asset to scan the RFID chip. In addition, they must have a dedicated RFID scanner. Most smartphones cannot scan RFID signals.

RFID chips and scanners are relatively inexpensive, so they can be a good alternative to barcodes or QR codes. The main advantage of RFID tracking is that you don’t need line of sight to scan them, so they can be placed on equipment in hard-to-access areas.

Bluetooth

You can use Bluetooth as an alternative to RFID tracking, but there are some important differences between them. Bluetooth trackers can be read by any smartphone, so you don’t need to invest in scanners. Bluetooth devices also have a slightly longer range than RFID devices, so it’s easier to pick up signals from your assets.

The drawback to Bluetooth is that the individual tracking devices are more expensive than RFID chips. So Bluetooth can end up being more expensive than RFID if you need to track a large number of assets.

What Is Asset Tracking Software?

Asset tracking software plays a central role in managing your assets and collecting information from barcode scans, GPS devices, and other tracking technologies.

First and foremost, asset tracking software provides a database of the assets your business owns. You can see basic details about each asset such as when it was purchased, its purchase price, and its current estimated value.

Asset tracking software also provides up-to-date details about each asset. If you use barcodes or QR codes to track assets, your software will show you when and where an asset’s code was last scanned. If you use GPS tracking, your asset tracking software will display an asset’s current location.

Many software platforms also include features for tracking maintenance. For example, you can get alerts when a piece of equipment needs to be maintained as well as see the entire history of maintenance and repairs for a specific item.

What Are the Benefits of Asset Tracking?

Implementing an asset tracking system can increase your business’s productivity, save you money, deter theft, and ensure you remain in compliance with industry regulations.

Increased Productivity

Employees can use asset tracking software to find out exactly where the piece of equipment that they need is located. So they won’t waste time searching and can get straight to work.

You and your employees can also see at a glance if a piece of equipment is currently in use or out of service. This is helpful for planning out work and avoiding delays due to a lack of equipment.

Cost Savings

Tracking your assets can save your business money in several ways.

First, you’ll never lose items. That’s a big deal for keeping track of tools and other small but costly items. If you’re not sure where something is, you can check its location using GPS or see where it was last scanned.

Another benefit is that if you know what assets you own, you won’t accidentally buy the same piece of equipment twice. At larger companies, having an asset tracking system can enable employees in one department to see that another department already has a tool they need. So they may be able to borrow the tool instead of buying another one.

You can also reassign equipment once it’s no longer in use. This is especially helpful for office equipment. For example, if an employee quits, you can reassign their computer and monitor to another employee instead of buying an entirely new desktop setup.

Theft Deterrence

GPS, RFID, and Bluetooth tracking devices can help deter theft. If would-be thieves know that your company tracks equipment, they’re less likely to steal since they know they’re more likely to get caught.

If items are stolen, your chances of recovering them are much higher if you have tracking devices. GPS trackers can lead police directly to your stolen equipment. RFID and Bluetooth tracking devices can confirm that a piece of equipment that’s suspected to be stolen does indeed belong to your company.

Compliance

In some industries, you’re required to track certain assets. For example, in the trucking industry, operators are required to know where their commercial vehicles are at all times. Asset tracking software and tools can ensure you stay in compliance with regulations and avoid costly penalties.