Whenever you bring up the subject of equipment maintenance to a group of equipment owners there will always be at least one person in the group who will ask, "How many machines should I have before I start thinking about a maintenance program?" The simple answer is none; you should have a maintenance plan or program before you buy your first piece of equipment. The return on your equipment investment is directly tied to how well it's cared for. Back in the days of the old west, a cowboy would always take care of his horse before he took care of his needs. The horse was a critical part of his life. It was transportation, a tool for work, sometimes a friend and companion. The point is if something is critical to your life or lifestyle, taking care of it is the first step ensuring the continuation of your lifestyle.
The second most frequently asked question is, "What should I put on a maintenance program?" Answer: everything that is vital to your operation, its growth and success. There is nothing man-made that does not require some kind of maintenance to make sure it reaches its full life expectancy. There are some things that the only maintenance requirement is an inspection. The inspection should tell the owner when it is unsafe and uneconomical to continue using the thing.
There are two basic types of maintenance: 1. catastrophic and 2. planned, programmed or preventive. Catastrophic maintenance is no maintenance or such poor maintenance that you may as well not have it. Characteristically a catastrophic failure is so destructive that it wipes out a component or system. If an engine connecting rod goes it can destroy all of the parts in the engine and even the engine block. If the engine isn't totally worthless it probably has a short second life expectancy. Dirt getting into a hydraulic system can end up destroying the pump and all other components in the system. Generally, if a part fails in a component or system it causes damage to the other parts in the component or system. Catastrophic failures are expensive.
The sad part is that probably 90 percent or more catastrophic failures can be prevented. The more sophisticated the maintenance program the more control you have over your equipment owning and operating costs and the length of its life cycle. With a good maintenance program you are in control of your equipment fleet. You would know your owning and operating costs, schedule downtime, make repairs before failure, manage your service and repair parts and supplies, plan manage the replacement of your machines, maintain the equipment's peak productivity, know your manpower needs, and the list goes on.
The interesting thing about a good maintenance program is that there is no downside. Implementing a program will require a serious change in the way the business runs. There is an initial investment in people, training and technology. But it will eventually pay off and continue paying you back as long as you use it. The money saved on repairs can be used to purchase new equipment that features the latest electronic technology. The benefits include longer-lasting machines that feature lower emissions and a more comfortable working environment for the operators.
Gerald Green, customer product support manager, Product Support Division, Caterpillar outlines a five-step program that can get you started in the right direction to begin developing an equipment management plan. The Five Steps are not meant to be all-inclusive. They are simply suggestions to help get you started thinking about the tasks involved and how you might go about accomplishing them.Step 1 — Understand the entire equipment life cycle.
- Determine the expected ownership period to affect the overall equipment operating cost. With a true understanding and control of owning and operating cost, you can determine what each machine costs to operate and how much you need to charge for a project. You can even figure the resulting profit margin.
- Develop an ownership plan and build a maintenance schedule during equipment acquisition or immediately following equipment rebuilds. Consider a contractor that owns a wheel loader operating at 2,000 hours per year for 10 years, for a total of 20,000 equipment hours. During the life of the equipment, the contractor knows the major components will require an overhaul before reaching 20,000 hours.
- Depending on the expected ownership period, completing the overhaul too early adds risk to the planned equipment disposition. Yet, performing the overhaul too late inflates the overhaul cost and rebuild life. Relying on an equipment management plan, the owner decides the overhaul should take place at 12,000 hours — when a planned overhaul maximizes parts re-use and reduces downtime.
- Make informed equipment decisions. Deciding whether to buy, rent or sell is a lot easier when you take the entire equipment life cycle into account. By calculating life cycle costs, you can make an informed decision about each and every machine.
- Create an equipment management plan using software and related technology tools. To manage today's sophisticated equipment, you need more than anecdotal reports from the field and sticky note reminders that a machine needs an oil change. You need technology to help you leverage the full value of your equipment.
- Depending on the size of your organization, your technology solution may be as simple as installing an equipment management software application on your existing system. Or, your solution may require a robust rollout of onboard equipment technology linking to an online system. From the convenience of your office, you can connect to the Internet to download equipment use information, operator events, fault codes, fluid sample results, active and passive backlogged events, and other real-time information to make better decisions and manage costs. It's also becoming more common to use laptops and Pocket Technician™ software out in the field to diagnose equipment and locate parts via the Internet.
- Develop integration with existing processes and systems, and Smart Products. If you haven't already heard of Smart Products, chances are you soon will. Integrated with other systems, Smart Products "think, act and communicate." Smart Products combine the best in satellite communication technology, web security, e-commerce, Global Positioning System (GPS), and mapping technology to provide you with a common view of your entire fleet.
- Smart Products possess information sensing capabilities, on-board diagnostics, controllers, and networking communication capabilities. They also present data to managers as an information display based on individual preferences and unique needs. The most robust systems automatically prioritize alerts, allowing you to manage by exception and focus your resources on critical areas.
- Tap the expertise of your equipment dealer and OEMs. Your equipment dealer should be able to make recommendations on the technology and application best aligned with your business. Many OEMs also provide staff training programs on the effective use of technology. Most also make it convenient for you to order parts online. So be sure to consult with your dealer to find out what's available.
- Embrace this as a change management initiative. For some in your organization, the implementation of an effective equipment management program may initially create some uneasiness. That's understandable, since they may have been working in a reactive, "put out the fires" mode for years. For others that are less technically savvy, they may doubt their ability to learn a new system.
- To erase their fears and doubts, train everyone in your organization on the basics of your equipment management program, from your accounting manager to your mechanics. Communicate both short- and long-term goals and successes to convince your team that this is a long-term strategy. It is your organization's future.
- Designate an equipment management program champion. When you designate the right person to champion the cause, implementing an equipment management program within your business will be more focused and timely — which translates to greater rewards at an accelerated pace for your organization.
- Analyze your job sites, maintenance departments, maintenance products and management systems.
- Discover needed products, systems and support to get the most effective and efficient use of your equipment.
- Review existing resources.
- Determine specific gaps in resources and equipment.
- Construct a plan for every piece of equipment you own.
- Register all equipment, assets and records about scheduled events in a project management system. As a first step, enter all of the basic model and serial number information about your equipment into the system. Using the serial number, the system should allow you to make knowledge-based decisions about component life, before- and after-failure risk, and the timing of preventive maintenance for specific machines.
- Provide proactive information regarding those events, using the system to schedule resources and then record each event's completion. For example, suppose the system alerts you that 16 of 40 pieces of equipment are scheduled for an engine overhaul within the next 18 months. You prepare a schedule to minimize equipment downtime. In addition, you develop alternative solutions, e.g., rental options. Then, record completion of each event immediately after it takes place.
- Use manage-by-exception systems to track the success or failure of your planning. With a solid understanding of your business environment, needs and resources, you can detect opportunities for improvement. For example, the system notifies you that a particular model you own is always behind on preventive maintenance. You realize that your technicians lack the tools and expertise to complete the work on that particular piece of equipment. Now that you know, you can take action to get the equipment back on schedule.
When you outsource equipment management, you shift the risk and responsibility from your business to the equipment dealership. To help determine if you should take a closer look at outsourcing, ask yourself these questions:
- People — How will I find, train and retain competent equipment maintenance personnel?
- Management — Where will I find the leadership within my own organization to move from unplanned, reactive maintenance to planned, proactive maintenance?
- Performance Measurement — Do I have the people and processes in place to perform equipment analysis, elevate the use of equipment management technology, and learn and adapt from performance measurements?
- Parts and Maintenance Supplies — Where will I find time to address repairs, procurement, management, ownership, warranty administration, and total cost of ownership issues?
- Costs — How do I maximize the value of every dollar spent on maintenance and reduce the costs associated with poor maintenance?
If you readily know all the answers to these basic questions, if equipment management is truly a core competency at your business, then you can concentrate on improving your maintenance organization. But, if you're struggling for answers, then outsourcing all or part of your equipment management becomes a viable option.
There are dealer organizations that can help you either in establishing your own equipment maintenance program or functioning as your maintenance provider. There a variety of contract maintenance programs available all the way from complete and total maintenance with guaranteed uptimes and the simplest inspection program.
If your business plans include surviving and being profitable for an undetermined number of years into the future then you need to have an equipment management mentality, commitment and program. Equipment is an essential component of your business you need to cover your assets to make certain you get the maximum return on your equipment investment.