Asset Maintenance Management In Woolworths Company: Analysis Of Existing Assets

Review of Existing Assets

Based on the work on Woolworths, Ltd, this particular report aim at reflecting on one of the options provided so as to offer more detailed idea on how asset maintenance management should be handled in this company. Therefore, for the purpose of this report aims at critically analyzing option A. That is, analysis of existing assets, plant or production line. This will assist the company to access various mechanisms and strategies to drive asset performance improvement. The optimization process of asset performance also tend to be very significant as far as this report is concerned. This will help the company to extend the operation life cycle of the assets under consideration.

For the purpose of these report, it is important to have a clear and distinct understating of some terminologies so as to ensure proper reflections of this important report. To start with, assets have a wide range of definitions depending on the context of the requirement. For this report, assets typically refers to items, property, human resources, physical resources that are used by any operation organization, companies, partnership organization and all income generation cohorts so as to enable proper execution of activities and objectives. In that connection, it is therefore very clear to understand that assets are key components in daily operations of these types of organizations. Assets reflect a positive return due to their ability to bring income and progress in the operations. Therefore, for any serious organization whose objectives are to see business growth, generation of income along with provision of goods and services, it is important to keep the liabilities low and maximize as well as optimize the size of the assets.

The other aspect to consider is asset management. Typically, this refers to all processes, strategies and mechanisms applied so as to ensure the activities set to be completed by these assets are well implemented without any reservation whatsoever and using minimum resources and costs as possible. This enhance success in operations and tenacity in overall management of these assets. This will also trigger asset portfolio management. This refers to the ability of a portfolio company to apply two or more assets in the operations so as to generate substantial income that will generate income so as to support the entire business operations.

In addition, it is very significant to note that the performance of assets is not always smooth during the entire operation life cycle. These assets are prone to wear and tear, complete breakdown, incapacitation as well as technical failure. This become very challenging to optimize the operation of these assets holding all other factors constant. There is need to lay down important mechanisms and strategies so as to maintain these assets in order to eliminate current losses as well as risks of uncertainty in the future.

Finally this report aim at analyzing a company called Woolworth Store, Ltd. This is a company that deals with running of retail stores with an aim of selling food products to different potential consumers all over the Australia. The assets of this company are very many. This include the human resources who represent all the workers in the company such as sales agent in the retail stores, in the groceries and many other workers. These assets also include the retail stores, equipment, facilities, food products and supermarkets. They also include property and products in the groceries. This report will review all the aspect underlying this company in terms of how to improve the existing assets by laying down strategies. We hope that the director of engineering and general managers will be in a position to ascertain the recommendations that will be provided by this report to promote assets maintenance and management.

Optimization of Assets Performance

The company that is applied in this report is called Woolworth Store, Ltd. The main operation is sale of food products in the retail stores, groceries and in the supermarkets. Actually it is food enterprise fare that applies skills and knowledge in food technology. The workers and other staffs use technical skills to sell food products as well as to maintain the assets of the company. Therefore, these experts forms part of existing assets in the company. This forms a portfolio assets for this company because they are applied together so as to meet the overall objectives of the company. Any failure in one of these assets will lender the entire operation difficult to undertake which will be recorded in the financial statement as a loss. This will also strain the budget for that particular period. For this company to operate effectively and efficiently, it is very crucial to keep monitoring these assets so as to make sure they are in good condition. This also help to ensure that any technical issues are detected in good time to repair, replacement or to improve assets performance. The company aim at reduces all loopholes that can bring losses to the company. This particular task force aim at analyzing these assets so as to figure out strategies to optimize assets performance in order to prolong their operation life cycle as well as to maintain the working condition for the remaining lifecycle.

The process of optimization of products, property, retail stores and equipment in Woolworth Company is very important since it forms the baseline of this report. These assets need to be optimized in order to enhance the performance in the remaining life cycle. This can be achieved via the following reviews.

The table below indicate the underlying existing assets of Woolworth Store Company. They are applied in providing goods and services in the retail stores, groceries and supermarkets on the sale of food products that are consumed all over Australia.

Figure 1

Assets class.	Their description.	Services these assets provide to the community.
Transport Assets	These assets include the motor vehicles that are used supply food products to the customers once they have been ordered. This company deliver grocery products to the customers. This is because the financial strategy is cash on delivery.	This involves transportation of goods and services from retail shops, groceries and supermarkets to customer’ place of preference at low charges. This also include movement of customers around the groceries, retail shops and supermarket area for business, recreation, shopping and for leisure.
Buildings and Parking	This offers space for customers and consumers who come to shop in the premises of Woolworth Store Company. They are able to park their motor vehicles for security purposes.	This supports the delivery of a many services to the community. This as well facilitates a large range of culture as well as community activities.
Waste Management	These include infrastructure to support waste recovery, waste acceptance and waste transfer activities. Assets to support the ongoing management of the Woolworth company.	This make sure that the community is able to dispose of waste materials in an appropriate manner once the consume food products from Woolworth premises. The company aim at becoming environmental friendly.
Employees of Woolworth Company.	This is a variable asset to the company. It include accountants for financial statements, sales representatives, security agencies and many other workers.	They assist the customers to get all the goods and services under one roof. They also ensure reliable and potential customers are delivered with food products to their homes when they order.
Facilities and premises.	They include retail outlets, groceries and supermarkets.	This is where potential customers come to shop food products as well as for recreation facilities. The supermarkets are well furnished with modern hotels for recreation.

From the data below, the following figures indicate how Woolworth Store Company Assets are distributed.

Financial status of assets of Woolworth Store.

Figure 2

Asset Class	Replacement Cost ($000)	Residual Value ($000)	Depreciable Amount ($000)	Depreciated Replacement Cost ($000)	Depreciation Expense ($000)
Transport Assets	450,000		200,000	190,000	43,000
Buildings and Parking	600,000		300,00	230,000	21,000
Waste Management	30,000		10,000	3,000	765
Employees of Woolworth Company.	200,000		65,000	67,000	34,221
Facilities and premises.	550,000		320,000	453,000	232,477

If this data can be analyzed statistically, then the following pie chart will be indicate the replacement cost of each asset.

 Figure 3

The Woolworth Company was set to deal with grocery and other products in the food industry based on the consumers’ needs. In the current operation of the company activities, there has been some challenges in terms of fluent operations due to some technicality in the assets of the company. In the last decade, the company has been making huge sales in the groceries, in the retail stores and there has been equitable supply to the demand for these products. This has been facilitated by the good conditions of the assets used in the operation. However, in the current condition, the company is facing challenges in carrying out these activities to due to some changes in the assets required to perform these activities. In that connection, the company is not making the profits as it used to do in the last decade life span. There is need to improve these assets so as to increase the cash inflows in the company. In the current operation, the company has not been able to achieve competitive advantage in the market. The power of competitive advantage is very important as far as market dominance is concerned. The marker for this industry is flood with competitors who tend to provide homogeneous commodities to those offered by Woolworth Store Company. This implies that currently the company have not convinced the customers and the consumers so as to outdo the competitors. There is a higher likelihood that these competitors are having a better management strategy in asset management that Woolworth Store company. There is a need to lay out more sustainable strategies so as to improve asset management that will help the company to regain the competitive advantage. All the assets need to be integrated and incorporated so as to prolong their life cycle which in return will eliminate the losses, gather more customers as well as to reduce the risks of uncertainty.

This is another aspect of this report that can be used to optimize assets performance. There are many strategies that the company can apply to maintain and manage assets. Woolworth Store Company requires to review on mechanisms to improve the assets of this organization as well as activities associated to asset management. This will help the company and all the retail stores outlets in prevention of uncertain risks as well as reducing the probability of recurrence. Any incident of failure in asset management, assets themselves as well as asset systems need to be identified so as to lay down concrete strategies, mechanisms and methodologies counter such incidents.

Typically, a strategy on asset management refers to extended level as well as very crucial document whose main aim is to guide the entire activities associated to asset management in Woolworth organization. This helps in exploration of long term issues so as to connect core plan to core strategy. This will indicate how asset portfolio will be able to achieve delivery of services that are highly regarded important by the customers and consumers in a potential market. In this case, the strategy will relate to food products obtained by consumers in the retail stores and groceries stores.

Assets management strategies in this company will be based on the following aspects.

1. Community engagement plan.
2. Community plan.
3. Social plan.
4. Environmental management plan.
5. Risk management plan.
6. Long term financial plan.
7. Asset management improvement plan.
8. Asset management plan.
9. Asset management policy.

This is one of important asset management strategies. This is based on level by which the community is engaged to the organization. For the case of Woolworth Company, the engagement to the community is not fully furnished. The customers are not fully engaged to the operations of the company so as to attract them to become reliable customers in the future. Therefore, a community engagement plan is a real strategy that can help the company to reach the customers who form part of that community. This can be achieved by engaging them in raising views on the nature of product they would like the company to offers in their services. This make the community feel that the company care on their well-being. In the process, Woolworth Store Company will be able to retain the competitive advantage. It is also good to listen to responses

This is one of important asset management strategies. This is based on level by which the community is engaged to the organization. For the case of Woolworth Company, the engagement to the community is not fully furnished. The customers are not fully engaged to the operations of the company so as to attract them to become reliable customers in the future. Therefore, a community engagement plan is a real strategy that can help the company to reach the customers who form part of that community. This can be achieved by engaging them in raising views on the nature of product they would like the company to offers in their services. This make the community feel that the company care on their well-being. In the process, Woolworth Store Company will be able to retain the competitive advantage. It is also good to listen to responses provided by the community that form part of this company reliable assets that need to be managed with ultimate level of professionalism.

This is another asset strategic plan that will propel this company to greater heights. This plan aim at appreciating the community where these grocery stores operate. This is because, the community surrounding your business determine at a higher extent the rate at which your assets will grow. Since Woolworth Stores deals with sales of food products in grocery stores, retail stores as well as in the supermarkets, it is important to involve the community. This will involve buying their products such as farm products with an aim of resale to other potential customers at a higher price. This can be done through value addition to these products. This is what we call asset management and improvement in real sense. By doing that, the community will gain confidence in the company mode of operation. This will be of great benefit to the company overall growth. A business with reliable customers from the surrounding community will manage the operation even during recession economic cycle.

This asset management strategy is based on how close the organization deals with social aspects. Recall the assets of this company are people or rather the community, food products, property, employees, supermarkets and retail stores. All the assets have social aspect in them. Without social plan, these assets become null and void. They cannot improve in performance as well as in reliability in the operations.

This strategy is very important to determine the level of asset management and improvement. In order to achieve this aspect, it is important for Woolworth Stores Company to critically analyze the environment under which the company operates. This is because the environment will determine the level by which assets improvements and management will take place. This as well indicate the effect of the assets to the environment. Assets that tend to destroy the environment will be discouraged by the stakeholders involved in their management. Therefore, they need to be environmental friendly so as to attract the attention of these assets to asset management.

This is a very important strategy as far as asset management is concerned. Organization such as Woolworth Store Company need to investigate all the risk that can affect the assets so as to lay do mechanisms of improving them. For the case of this business, the risks would include the fact that the food product can be perishable if they are not consumed. In that case the company need to secure equipment such as refrigerators so as to maintain the good nature of these products. This will reduce the risk associated to damage of these assets under consideration. The other risk that is likely to affect this business is power failure, these would lender these refrigerators irrelevant. Therefore the company need to have alternative measures and strategies such as generators to keep these equipment in operation. Lastly, the risk of uncertainty. This need to be forecasted using trends such as time series analysis so as to forecast future changes that can affect the management of the assets.

This involves budgeting process of a company. The company need to make sure that the operations of activities involving asset management is based on reasonable budget. The company should never operate outside the recommended budget. This will ensure that the asset column is undergoing growth while the liability column reduce. There should be sustaining budget so as to meet all the anticipated expenditure of Woolworth Stores. This strategy will ensure that the assets of the company are not stressed beyond optimum limit. This will reduce cases of wear and tear before the asset fully achieve the objectives of the company. This also reduces the level of consumption of unbudgeted capital by the company. Long term financial plan also indicate the sources of resources for the company to reduce last time rush that may delay the performance of the company as well as management of these assets. This will help the company to reduce cases of insolvency.

This is another very significant strategy of maintaining the life cycle of the assets. There are underlying reasons of improving the assets of a company. First, it assist in production process thus making the operation of activities more effective and efficient. This strategy work closely with asset management plan and asset management policy to fully ensure that all the underlying assets of Woolworth company form a portfolio so as to work together in profit generation and reduction of cases of losses and other related risks of the company altogether. There are specified programs based on actions along with other available and relevant resources and assets needed so as to attain the lowest main asset management maturity. These resources are determined by conducting asset management maturity assessment. Therefore, these underlying actions require to be put in operation so as to improve the current asset management practices as well as current situation of Woolworth Store Company.

Finally, these strategies can be summarized in a table as provided below.

Figure 4

No	Strategy	Results anticipated by the end of asset management process.
1	The Woolworth company will shift from preparation of Annual Budgets to preparation and implementation of Long Term Financial Plan for proper asset management.	The underlying long term implications of Woolworth Company are based on the annual budget deliberations for the desired time flame.
2	The company need to develop as well review the annual Asset Management Plans. This will be required to at least cover 5 years for all core asset classes (70% of asset value).	This will assist the company to distinctly Identify goods and services the community require at a given point in time as well as to offer funds needed to optimize and improve on these assets used in the process of provision of goods and services.
3	The Woolworth Company need to lay down strategies to initiate Long Term Financial Plan that will be based on 5 years so as to incorporate asset management plan expenditure. This will allow future forecasting as well as projections. In return there will a sustaining fund positions.	This will result to a model that will display a sustainable plan on assets and proper management in the anticipated time of 5 years or more.
4	Apply the first fiscal year of Long Term Financial Plan revenue together with anticipated expenditure in determining the projections involved in preparation of annual budgets that need not be surplus nor deficit in planning of resources for Woolworth company.	The process of planning the long term finances of Woolworth Store Company will result to budget deliberations which will be applied in improving the assets of the company.
5	The stakeholders of Woolworth Company need to review as well as update annually the asset management plans. This will as well involve updating the long term financial plans when the company have fully adopted the correct annual budgets. Finally the stakeholder need to offer annual report on issues that bring risks to the assets during the entire process of provision of goods and services to the potential consumers.	Woolworth Store Company along with the community need to be informed on major shifts of service levels as well as costs associated to the process of making proper judgments and decisions in the budgets.
6	The stakeholders need to offer information on the Woolworth Company financial position at Fair Value. This is highly based on the Accounting Standards of Australia, sustainability of financial information as well as performance. This will be based on strategic aims in Annual financial Reports.	This kind of information is available to any stakeholder who wish to scrutinize the sustainability of financial information twice a week within the working days of Woolworth Store Company.
7	The company need to make sure that the decisions are made based on reliable, accurate as well as from the current and updated information in asset registers and documents. Also is should be based on service level performance, costs along with other relevant costs in the entire life cycle of the assets.	This will improve in making proper judgment and viable decision making on how to improve the assets of Woolworth company.
8	All the stakeholders need to report the resources as well as operational potential to offer goods and services required by the community in the Annual Report and in the targeted fiscal year indicated in the budget.	Goods and Services offered to the community need to correspond to available resources as well as in operational capacities.
9	All stakeholder of the company need to make sure that responsibilities for asset management are determined as well as integrated into staff position descriptions and requirements.	Responsibilities concerning the asset management need to be defined clearly.
10	The management team of Woolworth Store Company need to implement desirable Improvement Plan. This will assist the company to realize the main maturity for the financial and asset management in a span of 3 years. The employees of Woolworth Company need to report seven monthly to the company management and to the General Manager on development as well as in the implementation of Asset Management Strategy.	This will result to improved financial and asset management capacity in Woolworth Company. This will as well be used to improve the assets applied in execution of activities involved in production of goods and services.

There are various improvement plans that need to be incorporated in assets management of Woolworth Company in terms of goods and services offered to the community. There are various actions needed to attain major financial as well as asset management maturity.

 Figure 5

Action or plan.	Target date	budget
Make sure that the Strategic Plan as well as Corporate Plan priorities along with other desirable performance strategies, methodologies and measures are connected to community as well as in the technical levels of provision of goods and service for potential customers of Woolworth Store Company products.	Annual plan review. Pre June each year.	Internal resources.
It is very significant to put into consideration all polices in improving the assets in the following update of the Strategic Plan commentary. This will indicate the important role these assets plays in attaining strategic objectives as well as the future outlook for Woolworth Company.	When next review occurs.	Internal resources.
Another plan is to review the commentary in the budget. This will be based on the completion of updated corporate plan in order to offer a statement of whether the budget will achieve the company overall objective of improving as well as maintaining the assets of the company.	Completed in the desired time frame	Internal resources.
Consider the actual State of the Assets reporting in annual report to indicate the service levels trends e.g. % or assets at poor/fair/good condition, function and capacity. This will provide an annual snapshot of service level trends.	This plan need to be completed by the end of targeted fiscal year.	Internal resources.
Make sure that the maturity improvement plan for these assets forms portion of the ongoing strategy by considering the underlying cost, benefit as well as risk incurred by Woolworth Store Company.	This plan need to be completed by the end of targeted fiscal year.	Internal resources.
It is also very crucial to adopt a charter for the Asset Management Working teams for the company.	This plan need to be completed by the end of targeted fiscal year.	Internal resources.
Make sure that the entire life costing outcomes gathered from capital upgrade as well as expansion projects correlate to the company financial plan in a particular fiscal year together with annual budgeting process.	This plan need to be completed by the end of targeted fiscal year.	Internal resources.
Make sure that the current register is kept up to date and asset condition is monitored and reported as part of the annual review on Woolworth objective time frame.	This plan need to be completed by the end of targeted fiscal year.	Internal resources.
Offer a data management improvement program as a portion of the asset management improvement program that need to be based on benefit, cost as well as risk. In addition, offer a knowledge management strategy so as to enhance the progress of identifying skills as well as knowledge required for the technological options, data options as well as audit trail along with security measures. The anticipated development of the strategy need to be done in conjunction with the proper implementation of the asset management strategies.	This plan need to be completed by the end of targeted fiscal year.	Internal resources.

Woolworth Store has a case study for loss of opportunity in Australia. This involves the fact that the company tried to convince the customers and consumers on the product the offer in the field of grocery and other food products. The company tried to gather information by engaging the community comprising the potential customer. The loss of opportunity arise when there competitor of Woolworth Store Company achieve the competitive advantage in that competitive market place. The company deals with homogeneous products in that perfect market where completion tend to increase. Therefore, unless that strategies applied in assets managements are improved, then the company will still incur major loss of opportunities across all parts of Australia.

This part will identify the key loss areas that have led to major loses for Woolworth Company in terms of downtime, loss in generation of power, unavailability for the operations  service as well as disruption to customers. These areas of losses make the company to lose many potential customers. At that point in time, the competitors are benefiting. When we consider the unavailability of operation as an area of loss, we find that with Woolworth Company engaging in operations, then it means all the assets will remain un utilized yet these assets need maintenance. The company will be forced to use extra money outside the budget to maintain these assets as well as improving other assets. This is definitely a loss to Woolworth Company. Another area of loss is disruption of customers. Customers are the key assets of Woolworth Store Company. If they are disrupted by any instability, then the company will incur huge losses. Many of the products in the grocery will be damaged thus making asset maintenance difficult in both short and long run. Lastly, the issue on downtime will results to delays in the operation of activities in Woolworth Company. This will result to losses associated to risks of uncertainty.

This will be based on how the company has been performing. The Woolworth Company was set to deal with grocery and other products in the food industry based on the consumers’ needs. However, the operation of the company activities have faced several problems in terms of fluent operations due to some technicality in the assets of the company. In the last decade, the company has been making huge sales in the groceries, in the retail stores and there has been equitable supply to the demand for these products. This has been facilitated by the good conditions of the assets used in the operation. However, in the current condition, the company is facing challenges in carrying out these activities to due to some changes in the assets required to perform these activities. In that connection, the company is not making the profits as it used to do in the last decade life span. There is need to improve these assets so as to increase the cash inflows in the company.

This will be based on asset and asset information system along with equipment replacement reliability, availability and maintainability. On the area of asset and asset information system, Woolworth Company has indicated in asset improvement action plan it should be maintained. This is indicated in figure 6.1. In summary, the cost planned maintenance area for asset and asset information system need to be done across all the assets of the company. This is because, failure of one asset of the company result to a loss to all the activities conducted by Woolworth Store Company. On the other hand, in terms of equipment replacement, reliability, availability, availability and maintainability, the company can use the following data to indicate the level of the assets based on those facts.

Figure 6

Asset Class	Replacement Costs.	Reliability	Availability	Maintainability
Transport Assets	450,000	70%	87%	87%
Buildings and Parking	600,000	74%	88%	65%
Waste Management	30,000	66%	77%	44%
Employees of Woolworth Company.	200,000	82%	92%	44%
Facilities and premises.	550,000	59%	88%	34%

The above data or rather figures indicate how equipment or assets distribute in terms of replacement, reliability, availability and maintainability. If we analyze this data statistically, then we can see how this trend as obtained from Woolworth Store Company.

This trend indicate how the assets of Woolworth Store Company in terms of replacement, reliability, availability and maintainability.

Figure 7

Assets Distribution.

Conclusion.

In conclusion, this information will help Woolworth Company to improving the assets life span and to enhance the implementation of strategies and action plans. Therefore, the company will be able to carry out the activities of provision of grocery and other food products in all over Australia. Asset management will be achieved and the company need to realize that all the assets play equal roles in performance and in improvement of company data and information so as to enhance profits and to reduce losses.

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