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When an asset gets lost or stolen, it’s easy to only think of the replacement cost. In reality, a lot more expenses can be hiding under the surface. While it’s unlikely to calculate the exact cost of an asset loss or theft (hence the term unknown cost), you can calculate a rough estimate when you consider the many factors of what loss and theft costs your company.
Let’s explore some of those factors where further expenses can be lurking:
Value of the Stolen Asset: The cost will depend on the intrinsic value of the lost or stolen asset. This could range from physical assets like equipment or inventory to digital assets like intellectual property or data. (In the context we’re talking about, you most likely fall into the physical assets category.)
Recovery or Replacement Costs: If the stolen asset is essential for the organization’s operations, the cost may include expenses related to recovering or replacing the asset. This can involve procurement, installation, and setup costs.
Loss of Productivity: Asset loss can disrupt operations, leading to a loss of productivity. Quantifying this downtime can be challenging, but there is no doubt that wasting employees’ hours and time will be costly.
Reputation Damage: Asset loss can harm an organization’s reputation and have long-term financial consequences. Customers may lose trust, leading to decreased sales or lost business opportunities.
Insurance Premiums: If your organization has insurance coverage for asset loss or theft, filing a claim may lead to increased insurance premiums, which can be a hidden cost.
Legal and Investigative Costs: Investigating the theft, pursuing legal action, and prosecuting offenders can be costly. These costs are often unpredictable and vary widely based on the case’s complexity.
Supply Chain Disruptions: If the stolen asset is critical to the supply chain, it can lead to disruptions, delayed deliveries, or additional costs to source replacement components or materials.
Regulatory and Compliance Costs: Depending on the nature of the stolen asset and the industry, regulatory and compliance costs may be associated with reporting the theft and implementing security measures to prevent future incidents.
Customer Trust and Relationships: Loss or theft can erode trust with customers and partners, potentially leading to the loss of long-term business relationships. Once again, this is challenging to quantify in monetary terms.
You might think a loss or theft every once in a while won’t break the bank, but it does more than cause financial damage. It can affect productivity, efficiency, and operations. So, how do you help mitigate loss?
That’s right, GPS isn’t just maps and directions but can help you monitor and manage the location and status assets. Software of this technology can also help you gather data and better optimize and streamline your operations.
GPS can help specifically regarding theft and loss, keeping more money in your pocket. It does this by offering:
Geofencing is a feature of GPS tracking systems that allow users to define virtual boundaries or geographic zones around specific areas. When an asset equipped with a GPS tracker enters or exits these predefined zones, alerts can be triggered. This helps monitor assets in restricted areas and provides immediate notification if an asset is removed from a designated area without authorization.
The mere presence of GPS tracking devices on assets can deter potential thieves. Knowing that an asset is being monitored and tracked makes it less attractive for theft, as the risk of getting caught is higher.
In the unfortunate event that an asset is stolen, GPS tracking can assist in its recovery. Law enforcement can use the location data provided by the tracking system to locate and retrieve the stolen asset. This can significantly increase the chances of recovering the asset intact.
GPS asset tracking systems typically store historical data, including location history, speed, and routes taken. This data can be valuable for investigating theft or asset loss incidents, helping to reconstruct events, and identifying potential vulnerabilities in security protocols.
GPS tracking also helps optimize asset utilization beyond security benefits. Businesses can analyze data on asset usage and make informed decisions about asset allocation, maintenance schedules, and route optimization, which can indirectly reduce the risk of theft and loss.
Asset tracking systems often come with mobile apps or web-based interfaces that allow users to monitor their assets remotely. This is especially useful for businesses with a dispersed asset base, enabling them to keep tabs on assets without being physically present.
The unknown cost of asset loss or theft encompasses a wide range of direct and indirect expenses that can vary greatly depending on the specific circumstances of each incident. Organizations should implement robust security measures and risk management strategies to mitigate the potential impact of such losses. Protect your assets and start tracking.