More and more frequently, corporations are outsourcing the services for the performance of surplus asset management and disposition services. Increasingly, these proposals and recommendations are being issued by purchasing departments who till now were at the helm for disposal as well. The reason for these could be many, but dynamic industrial environment, new generation machinery leading to niche market segmentation and under staffing could be prominent. The organization has to map this function in the matrix to reach to the conclusion. One recipe is not for all ailments.
It is critical for the responsible corporate decision maker(s) to be able to specify and prioritize the tasks to be performed by the contractor that are necessary to meet the expectations of management. These tasks must be specific. The corporation and contractor must both know and understand what specific tasks are expected, who will perform them and what the expectations/deliverables are to be. Some of the common functions expected out of the asset recovery team:
1. Physically identifying, inventorying and cataloging assets for possible redeployment or sale.
2. Construction / turnaround / outage project support to ensure site cleanup and optimization of value of residual materials, inventories and equipment.
3. Redeployment of identified surplus by providing an electronic means of making the surplus easily visible to the potential corporate users; how this will be done.
4. Marketing the non-redeployable surplus assets by selecting the most suitable sales technique and, given business constraints, asset value and market conditions, utilizing all sales venues and techniques. Not all sales strategies are equal in potential return, appropriate for all types of assets and consistent with the corporate culture and philosophy.
5. After-sales services, including ensuring all paperwork is completed, payments are made, pickup (or removal) is coordinated and reporting is completed.
6. Demolition support services to ensure that maximum value is obtained from the assets that are associated with a facility to be demolished, before the demolition process begins.
7. Development of an ongoing investment recovery process to include training of corporate personnel.
Reasons for Needing an Asset Recovery Service Provider
There are various motivations for a company to choose to employ the use of third-party surplus asset service providers.
Permanent Change of Corporate Organization Model: Corporate organizational retirements, realignments, downsizing initiatives, reorganizations, acquisitions and divestitures and redefinition of “core function” all can impact how a management team staffs the asset recovery function.
Under-staffing of Asset Recovery Resource: Statistics have shown that there is a general trend toward reducing the level of in-house staffing of the investment recovery function.
Expansion of the Scope of Work: Corporate acquisitions and permanent expansions of facilities often result in an increase in the scope and responsibilities of the Asset Recovery function. Most companies are reluctant to add permanent staff, so there can be a need for outside resources.
Temporary Project Driven: Surplus generated as a result of demolition projects, turnarounds, outages and construction projects create an opportunity for a temporary workforce to supplement the in-house workforce to accomplish the work in a timely manner.
Third-party service providers can supplement the existing process to provide workforce resources on a permanent or temporary basis based upon operating and budgetary requirements. Operating requirements that suggest the incorporation of third-party service providers into the process can be either permanent or temporary. When contracting with a third party for asset recovery services, one is contracting for their experience, expertise, and intellectual knowledge of the process, market knowledge and networking assets.