Carelessness in the field results in the type of repair that frustrates equipment managers as they strive to reduce the costs associated with neglect and abuse. Maryland-based Facchina Construction Co. tackled it three years ago, and equipment manager Chris Sullivan says incidents of neglect and abuse have dropped.
"Project managers and operators are taking better care of equipment," Sullivan says. "They report damage immediately, and equipment is in better condition."1 Split equipment operations
Facchina has a separate division that owns the equipment and rents it at an hourly rate to its projects. These costs are built into the project at estimate.
Previously, damage caused by accident, neglect or abuse was charged directly to the piece of equipment and, consequently, to the division. But, the cost to repair damage to equipment rented from a rental house was charged directly to the jobsite, a system that inspired the division to move accountability for its owned equipment to the jobsite.
"We started doing what the outside [rental houses] were doing," Sullivan says. "We started treating the equipment division as an outside rental company."2 Set up reports, accounting
Facchina created a separate job code for billing purposes, a code termed ANA for accident, neglect and abuse. Jobsite damage is cost-coded to this new account. With every incident, a summary report shows mechanic's time and parts expense. ANA now appears on project cost reports, sent to project managers monthly.
"If they have a large amount of damage, they know they have to get on their operators," Sullivan says. "They take it a lot more seriously now that they're paying for it."
Project estimators will now have more accurate numbers to use in building their bids. "Estimators have always included an amount for accidents in their bids," Sullivan says, "but the ANA system allows us to capture the cost in that job rather than absorbing it in the equipment department."3 Make note of damages
Project managers report damage to the equipment division, at which point head mechanic Gary Gilliland visits the site. He determines whether the damage is accidental or abusive and completes a report. Other damage is recorded by the field-and-lube serviceman, who visits the majority of equipment on a daily basis, Sullivan says.4 Allow for adjudication
Of course, project managers have and will take issue with some determinations, so Facchina management will step in to make the judgment calls, Sullivan says. "We haven't had many instances of conflict," he says. "More often than not, it's pretty clear that it's wear and tear or it's abuse."
Initial debates result in a compromise or with Sullivan standing his ground. But if the project team can't work it out with the equipment team, Facchina vice president David Anderson, who oversees both operations, meets with Sullivan, Gilliland, and the project manager.
"Sometimes it's hard, given that the damage is discovered days [after it occurred]," Sullivan says.5 Train operators
Of course, the new accountability had to be transmitted from the equipment management team to the project teams. Facchina accomplished this through its project managers.
"The project superintendent and manager hold safety meetings every week," Sullivan says. "They [now] stress equipment safety and maintenance. They are responsible for the operators and for getting them to take care of the equipment."
The equipment division supplies an inspection book for each type of equipment. Operators inspect the machine and fill out the book every day. Project managers receive a copy of the completed checklist or check the book for compliance.6 Monitor savings
Facchina has been building a historical database of ANA costs for three years. Eventually, enough data will be collected to give the company the ability to accurately predict ANA costs in its estimates. The data will also enable Sullivan to better manage equipment costs.
Actual savings since implementation haven't been determined. "Our ANA system is in the third year and is still in the developmental phase," he says, so accurate numbers on the saving in repair costs are not available. That, coupled with a growth in revenue over the three-year period the ANA system has operated, has made it difficult for Sullivan to ascertain if the number of incidents has declined.
"But it is safe to say that the number of incidents in proportion to the volume of work that we are performing has decreased."
Although he cannot put an exact number on the savings yet, "it is not hard to see the change in attitude that the [jobsite personnel] have toward the equipment now that they are held financially responsible," he says. "As we expand and develop our ANA system, we will have records to show the percent of equipment costs on a job that are ANA costs.
"With enough historical data, we will be able to compare job and manager performances."