Determining disposition options for idle assets is made simple by remembering the Seven R's. When Companies use one of these seven options for disposition, they will realize increased profits and make major contributions to the improvement of the environment. Adapt this to a SUSTAINABLE message within your organization.
The Seven R’s
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REUSE – A portion of the two to five percent of idle/surplus equipment can be reused internally through investment recovery programs. In addition to keeping salvageable equipment out of the landfills, reusing existing equipment instead of purchasing new reduces capital, depreciation, taxes and insurance costs.
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RECYCLE – Disposal costs and hazardous waste can be reduced with recycling. By converting oils, spent cleaning fluids and valuable chemicals, income is generated as well as resources reserved.
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RECONDITION – Rebuilding assets, such as instrumentations, valves, pumps and motors, to be put back into service or used as a backup is more economical than purchasing new. Toner printing cartridges can be rebuilt and refilled, disposable clothes and gloves reconditioned and cleaned and pallets repaired and rebuilt.
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RESELL – As used equipment and excess inventory markets which resell unwanted idle/excess equipment become more prevalent, finding new sales outlets for old assets reduces losses and increases income.
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RECLAIM – Spent solvents and chemicals, lube and quench oils and other chemicals can be reclaimed and reused. Recovering precious metals from x-ray, photo and plating operations further reduces waste, preserves natural resources and improves operating costs.
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RETURN – Unwanted new equipment, spare parts, materials and supplies can be returned to the manufacturer or vendor for future credits or hard cash.
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REMOVE– Removing excess/idle assets lowers the tax base and increases returns on capital.
SOURCE: Certified Manager of Investment Recovery (CMIR) Study Guide.
© Investment Recovery Association
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