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.
Registration is open for the next Institute, May 15-17, in Chicago.
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The equipment rate—the estimated cost to own and operate a given machine for a given period of time—is not a simple number. It is a complex, high-risk estimate that plays a major role in many aspects of the business.
There are three things to understand about equipment rate: the risks involved in…
Job costing can be described simply as charging each job or each phase code for the resources they used to produce work, and crediting the job or job-phase code with the budgeted value of the work done.
The labor portion of a given job phase code is accurately and quickly known through the payroll…
Every dollar received in a capital expenditures (capex) budget must be returned to the company treasury one way or another. In “The Depreciation Cycle,” we described that process.
Above: This…
Equipment fleets represent a large and special kind of capital investment that does not last forever. Machines wear away in the production of work, so there is a constant need for replacement—of both the unit itself and of the capital investment it represents. Maintaining a well-capitalized…
Everyone agrees that downtime costs money in terms of lost productivity, impacts on other operations, and the cost of returning the machine to work. There is, however, little agreement on how to quantify the impacts and include them in the equipment cost calculation. It is a controversial…
Last month, we introduced lifecycle cost as a subject that many people talk about but few people really understand. We devoted Part I to two things: the calculation of the hourly operating cost for an example…
Many people and organizations talk about “minimum life cycle cost per hour” or “minimum hourly cost of ownership.” Few know exactly what they are talking about, and few, if any, provide the tools needed to implement the concept and understand how cost per hour varies over the life of the machine…
Life is often not as difficult as it seems, and it is a good idea to ratchet back on complexity, keep things simple, and stick to what is important.
The input/process/output diagram above helps us do exactly that, and it can improve the way we measure and manage maintenance effectiveness…
The Financial Accounting Standards Board (FASB) has issued a new standard on accounting for leases (ASU 2016-02), and these will need to be fully implemented by public companies in 2019 and by private companies in 2020. Certain aspects of the implementation and transition methodology is…
We constantly wrestle with the replacement decision. Sometimes it is relatively easy, and we know we have made the right call. Most days, however, we go home and wonder if it would not have been better to keep the old unit a little longer.
The replacement decision is complicated because…
We are very good at collecting data when the transaction in question has a dollar sign attached to it. Every transaction on your credit card is recorded in detail and processed almost instantaneously because it is a commercial transaction. Transactions that do not have dollar signs attached to…
Equipment management is a complex and difficult task that affects almost every aspect of a company’s operations. The skills required vary from the master mechanic to the finance specialist, and organization structures depend more on the personalities involved than careful planning and…
Accurate equipment cost hinges on the answers to two different questions: What does it cost to bring the machine into your fleet and keep it there, and what does it cost to put it to work? To answer the first, you must know and understand owning costs. To answer the second, you must know and…
A work order coding system exists not simply because the computerized maintenance management software (CMMS) has a field to be filled in. It exists to provide information required to run your business. Before you design and develop it, you absolutely must decide on your key performance…
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