One of the largest, but basic, problems that the construction industry faces is how to capture accurate data from equipment. Collecting all the necessary information from equipment, such as fuel usage and meter readings, can be a daunting task in a large construction company. This information is necessary however for making decisions about equipment management.
Wayne Newitts, Marketing Director for Dexter + Chaney wrote an extraordinary article for Construction Business Owner Magazine. Newitts addresses this challenge and gives ideas on the best approach that some of the leading companies in the industry have taken.
In any given construction company, the equipment sucks up a huge portion of the budget for any project it’s working on. Any mistake, no matter how small or large can create havoc in the budget and the company itself.
Each piece of equipment needs to be accurately monitored for repair and routine maintenance to get the most out of it. Meter readings need to laboriously be documented on every piece of equipment. It is only then that the company will see an excellent return on their investment.
Owning costs are annually fixed and are established at the time of purchase of the piece of equipment. The amount is determent by depreciation of the machine, any interest being added, licenses needed, taxes, and of course insurance. It doesn’t matter how much or how little the machine is used, this cost stays the same.
Operating costs can vary hugely. Some factors that will affect this cost are things like fuel and oil, how much it costs and how much you use, and wear and tear on parts as well as repairs that are beyond routine ones.
Knowing exactly how much a machine is costing your company is essential and can only be done with accurate collection of equipment data. This will give you a view of how much any one piece of equipment is costing your company.
There is cutting edge software available to the construction industry that is designed for better equipment management. It automates the chore of you having to capture accurate data, recording that data, and creating a report on it. At any given moment you get a clear picture of a piece of equipment’s life cycle and can then determine when it is time to put it to pasture, so to speak.