SMR FORUM: ASSET PARSIMONY - MANAGING ASSETS TO MANAGE PROFITS.

In this paper, the advice of the popular press for businesses to replace their assets with the most modern, large-scale equipment available is challenged. It is argued that companies should first consider the risks associated with large investments; that is, will the investments ever be recovered? In making such a consideration, the view is expressed that managers should be aware of the need for the so-called asset parsimony, namely, skill at deploying the minimum assets needed to achieve the desired business results.