As construction transitions through 2010 to a rebound in 2011, equipment-management teams should use the time to accomplish eight key tasks.
1) Contain costs. With fewer jobs, more organizations will be bidding against yours. Profit margins will continue to underperform. Don’t let equipment costs add to the erosion. Monitor, review, adjust...continuously.
2) Maximize machine life. Keep an eye on fleet age, maintenance costs, components. Work to obtain maximum life without sacrificing utilization, residual value, efficiency or safety. Capital budgets will be tight, so they will have to be spent wisely.
3) Be frugal without being foolish. Continue to evaluate and monitor both capital and maintenance budgets. As revenue stays weak, managers will be asked to do more with less. Work to move some of the capital savings into maintenance.
4) Manage management expectations. There are contradicting forces when you simultaneously attempt task #2 and #3. There will be trade-offs, and management must understand the risks of extending machine life without accounting for the increase in maintenance required to keep those machines operating safely and efficiently.
5) Prioritize purchase strategies. Watch used-equipment prices.
6) Don’t forget fuel. Many budgets have been reduced simply because fuel prices have fallen from a couple of years ago. That will not last.
7) Motivate and encourage staff. This may be the hardest task of them all. Encourage them that when business returns, this staff will be primed and ready to perform.
8) Stick close to proven suppliers. Talk more deeply about how his business can make your fleet stronger. Keep those existing relationships strong and talk about ways to make them stronger. The loyalty shown today will pay dividends down the road.
A fleet professional told me that “times like these make better managers out of us.” That’s not bad advice.
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