Australian businesses lose $4.3 billion of assets per year - could a simple solution be the key to securing against future loss?

In 2019 Telstra commissioned a study to analyse and estimate the direct costs of physical asset loss. The study was representative of the top 54,307 operating businesses in Australia. Their research assessed that the direct costs of poor asset management equated to a loss of $4.3 billion in lost assets per year in Australia. Almost $600 million of that was simply due to the loss of small assets such as keys and key cards. Whilst smaller assets such as keys and access cards have a lower unit value in comparison to other assets, the flow-on effect of disruption to a business due to the loss of these assets has further-reaching impact above the loss of the physical asset itself; which is not included in these figures.

This study continued that the most common causes of physical asset loss were that they were misplaced by employees (46%), the asset not being properly stocked in the first place (36%), stolen by employees (29%), lost during transportation (27%), in possession of contractors (26%), the status of the asset not properly recorded in the system (25%), forgotten at client sites (18%) or stolen by people outside of the organisation (14%). Understanding the causes of asset loss highlights why small assets such as keys and access cards account for such a high proportion of physical asset loss. Whilst construction assets and machinery accounts for $298million worth of asset loss per year on average, it’s a lot harder to lose an earth mover than a set of keys.

Small asset loss creates a money pit for businesses where money is spent in just trying to secure assets vital to business functions. Employee time is spent doing a stocktake of small (and large assets) and when lost assets are realised employee time is then spent to try and track down the lost asset. 82% of organisations that had lost assets in the last 12 months had made attempts to recover the lost asset, but only 22% of the time was the asset successfully recovered. That’s if the asset is even noticed to be missing with only 44% of businesses doing a stocktake at least once a month.

50% Of Businesses Still Track Assets Manually

There are a variety of technological solutions to aid with asset loss but 50% of businesses still rely on manually logging assets and 35% of businesses will have employees walk around the premises to locate assets when needed. The wasted cost of having employees spending time on asset management rather than their jobs should not be underestimated. These inefficient systems for asset management also contribute to the quantity of asset loss.

When it comes to small asset management for keys there are many physical solutions and software solutions designed to manage access to keys and to log who and where they are supposed to be. These management systems do not account for what the employee or contractor does with the keys after they have been signed out. These systems also do not have any method to lockout keys when they are lost. In 2016 the College of William & Mary, the second-oldest higher education institution in the United States, lost a set of master keys which forced them to re-core approximately 3,000 locks throughout their campus at a cost of more than AU$700,000.

Fix The Real Problem – Remove The Physical Key

Most of these solutions essentially move the burden of small asset management around in an effort to avoid asset loss and business disruption. But there’s a better way to avoid the loss of keys. Remove the keys. Employees and contractors can’t lose the asset if there is no asset to lose.

This is achieved by using digital locking systems. The iLOQ S50 range is one such digital locking system that has batteryless standard profile locks and batteryless padlocks that do not use physical keys. The key to open these locks and padlocks is stored on your smartphone. The iLOQ S50 range also harvests power from the smartphone to check the digital key credentials and power the lock to give access. The key can be allocated to individuals via SMS using the iLOQ management software meaning no travelling to pick up or drop off keys. The software also allows the keys to be revoked remotely, set key expiration times, remotely change access rights and to track where, when and who has accessed what all in realtime.

Due to the batteryless nature of the iLOQ standard profile locks and padlocks they can be used in all sorts of scenarios allowing far better asset security. They can be used in remote areas, construction equipment, vehicles, shopping malls, universities or any business that focuses on securing assets or controlling access. Not only does moving to a system such as the iLOQ S50 mean that your business won’t have to worry about being part of the $600 million of small asset loss per year, but you will be properly securing your larger assets to reduce other losses.