Equipment Type

Construction Equipment Executive Institute

Learn the fundamentals of fleet management from our collection of articles and videos. The best in asset management for the construction equipment professional.

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Equipment Executive Articles

Efficient machine performance requires managing the relationship between actual costs and estimated costs.

Last month, we introduced the total cost diagram as a simple, easy-to-use graphic to define age zones based on the time in the life of a machine when the average cost per hour, life to date, reaches a minimum.

In my interactions with fleet managers around minimum life-to-date costs and the sweet-spot curve (see “Sweet Spot Revisited”), two valid questions often arise: “How do I explain the concept, and how do I make a clear distinction between annual costs and life-to-date costs?”

Complicated software problems often occur where workflows require one system to “talk” to another so that they can exchange data or perform different parts of the same workflow.

Sometimes we are so tied up with complicated, difficult problems that we overlook the solid fundamentals that make things work. The fleet numbering system is one of those fundamentals. Individual units in your fleet vary tremendously in terms of form, function, size, weight, productive capacity, and cost.

Many long and complex discussions have taught me that setting up an effective work-order coding system is more complex than it appears. Two problems occur frequently. First, the list of applicable codes is so long and complex that the final result is full of errors, misinterpretations, and mistakes. Second, it is unclear why codes are being entered and how they will be used.

Reading, writing, and arithmetic—if you get them right, you will be on your way to great things. The same is true for the repair/rebuild/replace decision. Get it right, and many of the requirements for success fall into place. 

We work in a very capital-intensive business with razor-thin margins. Ever wondered how it works? Ever wondered whether it was more important to make a profit than to reduce the amount of capital required to accomplish the job?

The intersection of cost (red line) and revenue (green line) is the break-even point for the equipment account.

We spend a lot of time discussing what it costs us to own and operate a particular machine. There is no doubt that this is important, but from a company and strategic level, it is not the final word. We absolutely need to know what it costs us to “own and operate” the equipment account as a business on its own and as a critical part of the company.


Session M/2 explains the principles and strategies of maintenance.

Session E/2 explains what is included in the hourly rate calculation, and how to do the actual calculation.

Session O/2 explains what role the hourly rate plays in an equipment-using company, and how the rate should handle transactions.

Learn how to understand and use activity metrics.

How to make your organizational structure work for you.

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