- • Correctly managing your equipment is critical to maintain your return on investment
- • Replace equipment after repair and maintenance costs are greater than 30% of the machine's resale value
Always maintain complete records
Keep a vehicle history file jacket for each piece of equipment and record all maintenance and repair work. Full, comprehensive records can assist you in predicting machine productivity and operational expenses, such as working hours, fuel use, and maintenance costs. When it’s time to replace your machine, well-kept records can help you receive a higher resale or trade-in value for your used equipment.
The 80-20 Rule
20% of machine problems account for 80% of maintenance and repair costs. Identify these common or recurring issues and take steps to fix them before they drain your operating budget, leading to unnecessary and expensive downtime.
Proactively maintain equipment
Active and preemptive maintenance helps keep operational costs steady and decreases downtime and related repair expenditures by recognizing minor problems in advance, before they turn into major issues. By enrolling in a preventive maintenance contract, you’re able to rest easy knowing that routine maintenance is documented and performed at recommended intervals.
Make use of machine monitoring tools
New telematics technology is able to accurately monitor your machines, collect data, and convert raw data into practical and usable information. Tracking programs are typically available online to find issues with your equipment and to identify machine operators who need additional training by observing things like idle time.
Routine fluid analysis is a must
Routine fluid analysis is a necessary practice to avoid preventable downtime and expensive repairs. By examining fluids and comparing the amount of contaminants to standard wear rates, you can spot impending problems with components before you have major failures.
Keep track of years of ownership
The average overall expense of owning and operating machine equipment follows a parabolic slope. Total cost declines in the initial years of equipment ownership as capital costs are extended throughout a greater length of time. Nevertheless, operating costs go up throughout the same time period, ultimately leading to a rise in average total cost. When the sum of ownership costs and operating expenses reaches its lowest point is the best age for operating equipment efficiently. It is critical to stabilize fleet average age around this point so that the total cost of ownership stays down.
Replace vs. rebuild
When determining whether you want to rebuild or replace a piece of machinery, apply this easy formula to compare costs:
Cost to rebuild (new equipment price x .5)/equipment life (estimated hours x .75) = cost per hour
For instance, a new piece of equipment that is $140,000 with a projected life of 10,000 hours would cost $14 per hour to operate. For comparison, calculate the cost to rebuild.
($140,000)(.5)/(10.000)(.75) = $9.33 per hour
If the cost to rebuild is $70,000 for an estimated equipment life of 7,500 hours, at $9.33 per hour, it is more cost effective to rebuild than to replace.