Asset Tagging

Updated on March 14, 2024
Article byPrakhar Gajendrakar
Edited byPrakhar Gajendrakar
Reviewed byDheeraj Vaidya, CFA, FRM

What Is Asset Tagging?

Asset Tagging is a process where businesses tag assets like machinery, equipment, hardware, computers, servers, etc., using durable labeling material to identify, distinguish, verify, and track different assets. The purpose is to assign precise and unique identifying markers to the assets a company owns and maintain up-to-date records.

Asset Tagging

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Through this system, entities have access to historical data in terms of purchase, depreciation, repairs, and maintenance, etc., in real-time. Asset tagging systems facilitate cost reduction and curb losses and theft. Irrespective of the type of asset, tool, assembly, stock, or part, a digital monitoring system with location tracking helps easily locate stolen or lost moveable assets.

Key Takeaways

  • Asset tagging refers to assigning and physically attaching unique labels and tags to company assets, such as equipment, tools, machinery, etc., for real-time maintenance and tracking.
  • It offers wide-ranging benefits, from asset management to quick documentation and compliance. 
  • By employing asset tagging best practices, companies can reduce paperwork, improve security, ensure compliance, boost productivity, and make data-backed business decisions. 
  • Modern logistics and supply chains involve companies operating with advanced tagging systems to support domestic and international business operations.

Asset Tagging Process Explained

Asset tagging is a simple yet important process of affixing tags and labels on assets, machinery, tools, and valuable properties owned by a company. Using labels and tags is a popular technique to monitor and maintain assets for data collection. Due to the advanced technology used across industries today, managing assets to ensure their full utilization, effective handling, timely maintenance, and efficient disposal have become easy tasks, particularly across organizations with large-scale operations.

Explaining asset tagging meaning to employees is important for enterprises that work with physical assets. This is because significant investments are made in assets, which are central to their business operations and revenue generation efforts. Companies use barcodes, Global Positioning Systems (GPS) trackers, Radio Frequency Identification (RFID) tags, and, in some cases, labels as simple as symbols and watermarks to meet asset identification and ownership objectives. Hence, tagging policies and protocols should be made accessible company-wide to ensure accountability. 

Nowadays, companies use cloud-based tools and rely on basic asset tagging templates for tracking. These are popular in industries like warehousing, logistics, healthcare, cargo shipping, defense, and many others. These systems ensure the safety and timely maintenance of assets at different stages of production—right up to delivery.

With modern technology, businesses have found new ways to control and install tags in different forms. The more precise it is, the better it helps in analytics, comparison, prediction, performance tracking, breach control, and business decision-making. Since labels and tags are not restricted to specific asset types, such systems enable companies to access a wide range of applications with technology. Asset tagging labels are widely used for better inventory management, maintenance, data collection, repairs, etc. Large organizations may implement Computerized Maintenance Management Systems (CMMS) for efficient tagging.

Businesses may also consider implementing Intelligent Maintenance Management Platforms (IMMPs) for local and international operations. Asset management is one of the key functions that IMMPs can streamline. As these are cloud-based platforms, leveraging the capabilities of Artificial Intelligence (AI) to improve operations performance and business results is possible. 

The global market share of tagging systems is expected to reach around $36.3 billion by 2025. Given these numbers, it is no surprise that asset tagging is gradually becoming a prominent and integral part of several industries worldwide.

Examples

Let us study some examples to learn more about this concept.

Example #1

Suppose Rachel is the owner of a hardware manufacturing company for computer parts. Her team works with several parts, equipment, systems, and machinery spread across multiple production units and manufacturing areas. To ensure effective use and swift handling of assets, Rachel decided to use asset tagging equipment.

She installed a unique barcode to each of her company assets, using barcodes as tags linked to an asset tracking system. This enabled Rachel to monitor her inventory, work in progress, and finished goods without a hitch. Since her capital investment and subsequent operational expenditure are both quite massive, Rachel found that asset tagging helped her prevent theft, misplacement, and damage right up to the point where finished products were shipped to customers.

Rachel uses the application-based software on multiple devices, including her phone. It helps her collect data, study analytics, locate assets (when needed), and make better decisions from production to sales.

In this way, companies operating in different industries can employ asset tagging systems to reduce costs, optimize inventory, and monitor overall operational performance.

Example #2

ServeU, a facilities management company, moved from barcode and Quick Response (QR) systems to NFC-powered tagging. The decision was primarily attributed to incorporating the benefits that technology offers to support efficiency, cost-effectiveness, and productivity objectives at organizations.

As part of its service commitment to its clients, ServeU aims to enhance customer experience through its NFC-driven asset tagging services. Users can track asset history, request maintenance, and raise service tickets using the app. This shows how important asset management is for organizations targeting growth and customer retention.

Best Practices

In this section, let us study some best practices in asset tagging.

  • Tagging Critical Assets: High-value or critical assets are prioritized and tagged to ensure their safety. All assets that can cause significant financial losses by grinding operations to a halt or causing significant disruptions require the maximum attention. Even the impact on a company’s reputation must be weighed while making tagging decisions related to critical assets.
  • Recording Significant Asset Data: Data storage constraints need consideration since most businesses deal with extensive data in today’s times. To ensure only essential information is stored, it is pivotal to identify the information that holds value in the long term. Different companies will have different tagging requirements. Companies may choose to identify and track their assets using specific identification numbers or codes. They may also store other information, such as location, maintenance, department connections, watermarks, security-related information, etc., in a need-based manner.
  • Selecting Appropriate Asset Tag Type: Asset tagging formats classify the available asset tags and labels and promote an environment where tags can be used for a long time in different scenarios. Companies can choose tags based on their budget, usage frequency and style, environment, space availability, digital display needs, compliance requirements, etc. For example, plastic or waterproof tags are best in areas with heavy rainfall, or the use of aluminum, polyester, or tamper-proof tags may largely depend on the weather.
  • Choosing the Right Asset Tagging Technology: Technology plays a vital role in tagging. Companies can choose from barcodes to Radio Frequency Identification (RFID) and watermarks to Quick Response (QR) codes. The nature of the business and asset type are key considerations for decision-making. Based on its budget and other needs, an entity may select a suitable technology like Near Field Communication (NFC) tags, Global Positioning Systems (GPS) tags, and Internet of Things (IoT).
  • Using Asset Tagging Software: Tagging software systems offer companies swift access, centralized processing, chronological data recording, and reduced complexity. Such software systems or platforms are designed to help corporations derive analytics, comparisons, and charts to boost performance and make better business decisions.

Benefits

The benefits of such systems have been discussed in this section.

  • It allows companies to collect data about asset purchase and price, performance, depreciation rates applied over the years, maintenance and replacement expenses, etc.
  • These technology-based systems outline and determine asset ownership and movement details. Locating lost assets is easy, and companies can prevent theft and fraud.
  • Fixed asset tagging enables automated data collection, documentation, and compliance for fixed assets, resulting in cost savings and better labor utilization.
  • These processes rationalize crucial functions like warehousing and logistics, making the entire supply chain efficient and productive.
  • With technology, data accuracy and precision become achievable goals, while remote maintenance and repairs have become commonplace in rapidly developing industries.
  • These systems allow companies to tag intangible assets, too, which is a boon for businesses. As data, trademarks, intellectual property, patents, etc., have become increasingly important to businesses, tagging keeps such valuable assets safe.

Frequently Asked Questions (FAQs)

1. Why is asset tagging important?

With growing complexities at every stage of the production process, warehousing, logistics, and supply chain, asset ownership and accountability are of great importance. Tagging systems are instrumental in reducing efforts, resources, and inaccuracies. They also improve productivity, cost-effectiveness, workflows, compliance, and customer satisfaction. Hence, they are highly valued across organizations operating in different industries.

2. What are the steps of the asset tagging process?

The process involves categorizing assets, assigning unique identification numbers or codes, determining label types, selecting asset tracking systems, attaching tags, feeding asset data, and implementing tracking and verification processes. Training employees to use these systems well is a crucial step, too. This is a simplified overview of asset tagging solutions.

3. What types of assets are included in the asset tagging process?

Tagging is not limited to a particular type of asset. It can be used for moveable and immovable assets located at different locations, warehouses, factory sites, and production facilities. It can be employed to identify, monitor, and track machinery, equipment, servers, computers, peripherals, accessories, IT hardware, furniture, tools, etc. Intangible assets like data can also be tagged.

This article has been a guide to what is Asset Tagging. Here, we explain the concept along with its best practices, examples, and benefits. You may also find some useful articles here –

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