Equipment Maintenance Management

While cost information for specific equipment operations generally varies depending on region, there are certain factors that affect cost regardless of location or ownership. Equipment management takes into account the combination of these factors. Good equipment management must incorporate a carefully planned and well-executed program where all personal both understand and acknoweledge their responsibilities.

The first step is proper equipment selection. This means selecting the equipment that matches job conditions and gives the lowest total cost. Lowest total cost is a combination of highest production, lowest operating cost, and lowest investment cost. Buying equipment based entirely on purchase price or production seldom results in lowest total cost.

Total cost can be expressed per unit of time or per unit of production. Since most jobs are bid on the basis of yards of dirt moved, pounds of steel erected, or yards of concrete placed, the most meaningful cost for the selection is based on production units. Maximum production must be evaluated in the contect of job conditions. For example, a 10-yard loader will outproduce a 5-yard loader, but if the job caonditions call for 5-yard capacity, the 10-yard machine should not be considered.

A new machine must also be evaluated as to ease of servicing to ensure that service downtime will not reduce available time for productive use. Important factors include the number of grease fittings and sealed bearings, the location of filters, and replacement of cutting edges and other wear items. Also important is the ability to remove a major component and replace it with a new or rebuilt component, so the machine can continue to operate with minimum downtime.

To assure lowest cost, the question of rental vs. purchase must first be analyzed. Rental of equipment can be beneficial, particularly for short periods, but the rental period must be determined beforehand. Renting equipment also allows evaluation of different manufacturers. If, in the value analysis, two or more manufacturers rate very closely, short-term rental will allow first-hand evaluation of production and establish actual operation costs.This information is beneficial in later purchase selection of equipment.

If the decision is to purchase, then a choice between new and used equipment must be made. The advantage of purchasing used equipment is lower initial investment, and therefore lower hourly depreciation for the new owner, because new equipment depreciates most rapidly on the first few thousand hours of operation. However, with used equipment more repairs will be required and more downtime should be expected. Used equipment may also become obsolete quickly because of major improvements.

Proper financing must be arranged for purchase. If cash is available, it can be used. However, elimination of interest cost may be offset by the value of cash kept on hand for emergencies. Financing can be arranged through commercial banks, commercial and dealer financing, or leasing. There is no way that is best for all circumstances.

To yield maximum profit, equipment must be properly operated by keeping it on the job and eliminating abuse and misuse. Proper service and maintenance keeps equipment working at peak efficiency; so service and maintenance should not be looked as a drain on income. Rather, they should be considered a contribution to output. The key to a good service and maintenance program is preventive maintenace. This includes the mechanical adjusting and tune-up of equipment and the detection and correction of small problems before they become major problems.

Preventive maintenance is the mechanical adjustment and tune-up required to keep equipment operating at peak efficiency. It involves seeking out and repairing minor defects before they become major problems. In practice, this involves daily visual inspections directed at finding obvious signs of possible trouble, for example, oil or coolant leaks, tire and track wear, structural cracks, cutting-edge wear, and excessive engine smoking. Items requiring attention should be reported. Repairs which are required must be scheduled first on the basis of the repair and then on their compatability with operating requirements. For example, a leaky radiator must be repaird immediately, while an engine using too much oil can continue to work until it can be scheduled compatibly with operations.

Records must be kept to provide information for planning maintenance and replacement activities so that they occur at the proper time. Records clearly establish the equipment’s productivity, problem areas, and repair costs. The equipment cost must be related to specific cost items to provide good background information for future use. Proper management of equipment requires a detailed inventory of all major items. This should include the manufacturer, model, year and number, attachments, and a list of the major components and parts required for normal service. This record should also provide a place to list major repairs.

A contractor who is going to continue to be successful in getting new jobs must have a well-planned equipment-replacement policy. As equipment ages, production falls vecause of increasing downtime. More downtime means more repairs and expense. And more efficient new machines may be introduced by manufacturers so older models may become obsolete long before they are worn out.

Good equipment management requires that everyone share the responsibility. The equipment department must make the best equipment selection and follow up on the problems encountered. The purchasing department, on the other hand, must procure the equipment at the best price. Finally, the field operators and mechanics must make sure the equipment is properly operated and cared for.