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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The way in which equipment rates and the job charging system impact job margins and company profitability is one of the most controversial subjects that I encounter on a regular basis. Under-recovered equipment costs must be absorbed somewhere in the organization, and job margins can easily…
By the time you reach my age, you are able to take a long-term perspective on things. Long ago and far away, we ran the equipment fleet with little emphasis on preventive maintenance. I spent many school vacations developing preventive maintenance check lists, and we did change the oil, adjust…
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We are too focused on cost when it comes to thinking about equipment replacement. It certainly is important to know what it will cost to own and operate a unit in the year ahead and to make wise replacement decisions when the old unit—the defender—is likely to cost more than the minimum…

Most conversations about overhead turn out to be complicated and emotional. People are confused about how it is defined, how it is calculated, and above all, how it is recovered. Everyone does it differently, and no one is happy.

Gone are the days when renting equipment was a small part of our business. Gone are the days when we did it as an exception and only when absolutely necessary.

Two things have happened to bring rental equipment into the mainstream. First, the rental-equipment industry has grown and…

Recently, someone said to me, “Mike, enough policy and philosophy, what would you do if you were responsible for implementing the material we have spoken about during the past four days. No fancy ideas, just hard realities?”

Policy and philosophy are good, but what are the fundamentals…

You can try to prepare the best meal in the world, but it won’t happen unless you have the ingredients in your pantry. The same is true with information and information systems. The data you have available, its definition, and its collection invariably limit what you can do to provide the…

Depreciation is a word that has so many meanings that it is almost meaningless. We know that it has something to do with the fact that equipment does not last forever and that we need to write down its value as it ages and is consumed in the production of work. We know that depreciation charges…

We continue to read about telematics and about the great work being done by AEMP and many others to help the technology achieve its full potential. We also read about significant investments made by at least two…

Should the shop make money?

It is surprising how often this question is asked and how much emotion is attached to almost any answer. Perhaps another way of looking at it is to ask, “Should the shop lose money?”

By “shop,” I assume we are talking about the equipment account. By “…

You cannot maintain the equipment of today with the tools, technologies and mindsets of yesterday.

The old rope shovel in the picture burned almost anything for fuel, oil was black and dirty, and water was all you needed for a coolant. Preventive maintenance was all but nonexistent, and…

A small book titled “Fundamentals of Earthmoving” published by Caterpillar in 1968 has a special place in my bookshelf. This is what it says about repair parts and labor:

“…

Ron is the CEO of a large and busy construction company. Life has been a blur, but the business is a success. It is growing and making money. Ron is a busy guy.

He is also your boss. You manage his fleet and are responsible for making sure that the jobs have the right iron in the right…

The difference between annual cost and full life cycle or life to date (LTD) cost is one of the most difficult things to grasp when it comes to understanding equipment costs. This is due to the fact that we have been trained to focus on next year’s cost and next year’s budget, which causes us to…

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