At first glance, finding a second home for surplus assets within your own organization should be easy. Like a ride in the park, right? After all, it obviously fit into corporate standards at one point, and the fact that you are even considering redeployment indicates that there is still useful value, even if some in the organization see it as an asset that has traveled its last mile. Four seasoned Investment Recovery professionals share some of their insights into the redeployment process.
In a tough economic environment, probably the largest single factor to stimulate redeployments is lack of capital. When the coffers are low and budgets are tight, used assets become much more desirable. Environmental concerns and “Green” initiatives provide further support for asset redeployment. While it is generally held that the most valuable option for surplus assets is to reuse them within the organization, in many cases these plans have been unsuccessful despite having redeployment programs advertised through internal websites or email distribution lists. Clearly, technology and written policy alone will not suffice when dealing with intra-company surplus transfers. Successful redeployment plans must be actively managed by an involved IR program manager.
NEW vs. USED
REDEPLOYMENT FINANCE : 1 +/- 1 = > Value @ < $
Financial issues play a surprisingly major role in redeployment decision-making. All public companies are controlled by strict accounting guidelines, especially regulated industries such as the utilities that make up such a large part of the Investment Recovery Association membership.
A Redeployment Success Story.
Inspection—Key to Satisfaction.
One last recommendation to help achieve a successful redeployment track record: To avoid misunderstandings and hard feelings, the receiving unit should be obligated to physically inspect the asset before it’s removed and shipped to the new location. If it is process machinery, a representative from the receiving unit should be on site during the removal and loading process, and don’t forget to make certain that all parties to the transaction – including Finance – have a firm understanding of the values and costs attributed to the transfer ahead of time.
Redeployment is the area where Purchasing, Finance and Investment Recovery departments need to forge the closest bond. It’s crucial for these groups to communicate closely to determine what purchases are being planned, how they might mesh with idle assets in company inventory, and critically, how to allocate value between the originator and receiver of the asset.
Ron Brooks, CMIR, ASA, Weyerhauser Co.
Sherry Detloff, CMIR, State Farm Insurance Co.
Dennis Knutz, CMIRF, ASA, Investment Recovery Exchange
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