Equipment Type

Shop Overhead Data

In April, we published the results of our exclusive survey of shop overhead benchmarks. As we went to press, errors were detected in some of the numbers. To fully alleviate any doubts in what we were seeing, we opted to retabulate the entire study. Upon review of that retabulated data, we determined that the original conclusions were flawed.

June 01, 2005

In April, we published the results of our exclusive survey of shop overhead benchmarks. As we went to press, errors were detected in some of the numbers. To fully alleviate any doubts in what we were seeing, we opted to retabulate the entire study. Upon review of that retabulated data, we determined that the original conclusions were flawed.

Below, we've published corrected charts from our April report. We regret the error.

Maintenance/Repair-Cost Benchmarks
(by fleet-replacement value)
>$25 mil $1.1 – $25 mil <$1 mil
Source: Construction Equipment 2005 Shop Overhead Survey
Overall maintenance-and-repair cost should be the starting point for the benchmarking of a fleet's shop operations. Once total dollars is known, that should be converted into a percentage of fleet value and of revenue. According to Preston Ingalls, a figure higher than 15 percent of fleet value means a company's maintenance costs are draining profitability.
Total dollars, in thousands $10,686 $610 $35
As % of fleet-replacement value 11.6% 13.1% 9.3%
As % of revenue 8.4% 5.0% 2.0%



Maintenance-Facilities Benchmarks
(by fleet-replacement value)
>$25 mil $1.1 – $25 mil <$1 mil
Source: Construction Equipment 2005 Shop Overhead Survey
One in three fleets with replacement value less than $1 million do not operate their own maintenance facilities, but those that do differ only in size of shop when compared to the mid-range fleets. The Giant fleets, not surprisingly, have substantial investment in facilities and service fleet.
No. of permanent shops 3.1 1.3 1.1
Total indoor area at main location, sq.ft. 20,000 6,600 3,000
Total indoor area, all locations, sq.ft. 41,800 20,900 8,100
No. of service bays, total 13.1 5.2 2.8
No. of mechanics trucks 18.5 2.4 1.6
No. of fuel/lube trucks 9.8 2.2 1.2



Maintenance Materials, Parts Benchmarks
(by fleet-replacement value)
>$25 mil $1.1 – $25 mil <$1 mil
Source: Construction Equipment 2005 Shop Overhead Survey
For those fleets that operate parts rooms, managers must balance having the right materials and parts available with the investment tied up in the inventory. Slow-moving or extremely expensive parts must be identified so the right decisions can be made about stocking them.
Total materials cost, in thousands $2,455 $279 $21
Total parts room cost, in thousands $1,181 $136 $11
Inventory turn, per year 3.0 2.0 2.0



Maintenance-Labor Benchmarks
(by fleet-replacement value)
>$25 mil $1.1 – $25 mil <$1 mil
Source: Construction Equipment 2005 Shop Overhead Survey
Actual labor costs vary by geography, obviously, but the important comparison here is that between shop and field. Regardless of fleet size, companies seem to rely on two shop technicians for every field technician. When comparing cost per hour, remember drive time when evaluating field techs.
No. of shop technicians 9.9 3.1 1.6
No. of field technicians 9.9 2.0 2.2
No. of shop supervisors 3.1 1.2 1.9
No. of shop parts room employees 3.8 1.5 1.7
Total maintenance employees 25.6 6.0 3.4
Shop technician cost/hour $38.40 $40.20 $28.30
As % of revenue 14.0% 12.1% 5.2%
Field technician cost/hour $45.90 $37.20 $36.5
As % of revenue 13.6% 9.0% 5.6%



Maintenance-Function Benchmarks
(by fleet-replacement value)
>$25 mil $1.1 – $25 mil <1 mil
Source: Construction Equipment 2005 Shop Overhead Survey
Raw numbers are not as important as the ratios when it comes to evaluating maintenance performance. Shop philosophy, such as repair before failure, can be justified or defended by looking at how much emergency/breakdown work costs the company, especially in terms of overtime hours.
Preventive maintenance
total man-hours spent 4,635 1,746 235
% of total maintenance hours 39.7% 26.3% 23.5%
% of total overtime hours 20.8% 8.7% 8.6%
Scheduled maintenance
total man-hours spent 5,516 2,207 260
% of total maintenance hours 40.1% 35.3% 25.4%
% of total overtime hours 19.2% 11.6% 8.0%
Emergency/breakdowns
total man-hours spent 4,316 1,619 154
% of total maintenance hours 29.0% 22.1% 16.5%
% of total overtime hours 33.5% 25.5% 14.0%
% of maintenance that is planned 66.3% 63.8% 57.7%
% of maintenance charged to work orders 67.1% 35.5% 17.4%


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