After understanding the purpose of managing physical resources, a business must follow an orderly procedure. This procedure is a sequence of steps that runs from planning what is needed to disposing of assets that are no longer useful.
Planning and acquiring
The first step is to identify the need — the type, quantity and specifications of the resources required. The business then acquires the resource through purchase, rental or leasing, choosing the supplier that offers the best price and quality.
Example
A cafe plans to buy a coffee machine. It compares quotations from three suppliers, chooses the one with the longest warranty, then records the machine in its asset register. The roughly RM6,000 machine is then scheduled for inspection every three months to prevent costly breakdowns.
Using and maintaining
The acquired resource is allocated to the department that needs it and used according to the correct procedure to avoid damage. The business then carries out scheduled maintenance — regular cleaning, inspection and repair — so that assets keep working.
Monitoring and disposal
Records and the asset register are reviewed to monitor the condition and location of each resource. When an asset becomes worn out or uneconomical to maintain, it is disposed of through sale, trade-in or scrapping, and replaced with a new one.
The importance of documentation
Throughout this procedure, every transaction is recorded in documents such as purchase orders, receipts and maintenance cards. Orderly documentation makes auditing easier, prevents misuse and helps management make better purchasing decisions in the future.
Remember
Remember the simple sequence: Plan → Acquire → Use → Maintain → Monitor → Dispose. Each step supports the next so that physical resources are used efficiently throughout their life.