Optimizing site equipment utilization for maximum productivity is one of the biggest challenges that businesses face.
The fact of the matter is that most companies are wasting money, largely due to low utilization rates. Research has discovered that 40% to 45% idle times on some machines is not uncommon at job sites.
In other words, almost half of the time, some of your equipment does not do anything.
Fortunately, there are some workarounds to optimize site equipment utilization. You can expect to learn the following:
- Why equipment utilization matters for all types of businesses
- The unseen costs of idle site equipment
- 5 Strategies to maximize site equipment productivity
- How technology is revolutionizing the industry
Read on to get your answers.
Why Equipment Utilization Matters For Every Business
Site equipment utilization measures the percentage of time equipment is used and the time it is sitting idle.
In other words, consider this
All site equipment represents an investment. When the equipment sits idle, a company begins to lose money on depreciation, storage, and maintenance without getting any return.
The statistics won’t lie, site equipment costs account for nearly 20% of all project costs. That’s a significant part of the budget for any business. When companies are in need of reliable Tuscaloosa site equipment solutions to support all their work, choosing the right partner becomes important. It is essential that the site equipment and business strategies are aligned.
However, here is where things get interesting
The typical utilization rate in the industry is between 65% and 85%. In other words, even for a well-run operation, there is room for improvement.
Achieving a closer number to the 85% mark will make the difference between a successful project that is profitable and one that loses money.
The Hidden Costs Of Idle Site Equipment
Idle site equipment might not seem like a big deal on the surface, but the costs pile up quickly.
Financial Drain
Insurance costs continue to be paid, which depreciates and still has a storage space requirement, even if it is not in use.
Even worse, warranty hours continue to run even if the equipment is not working or producing any value. A warranty package that costs between $11,000 and $15,500 for a $390,000 unit.
Nobody wants to burn through those costs when the equipment is idle.
Lost Productivity
Idle equipment is time wasted, each second that the equipment is not in use is a second that could have moved a project further.
In a study by the Association of Equipment Manufacturers, by using the right equipment and optimizing utilization, productivity increases by up to 25%.
In other words, the same resources can produce a quarter more output.
Cascading Delays
One thing that most people tend to miss is that idle equipment does not just have an effect on one task.
There is a domino effect on a project, creating losses across the operation. Workers have to wait for the equipment to be used, and then the equipment is then required at another stage. Deadlines are missed, and costs start to spiral out of control.
The company in this example said that by reducing idle time by just 10% to 15%, it was able to save about $388,000 annually on a fleet that was worth $32 million.
Pretty significant, isn’t it?
5 Strategies To Maximize Equipment Productivity
If you are ready to start to improve site equipment utilization, these tips will work no matter what your industry or size of business.
Match Equipment To Tasks
This may seem like a no-brainer, but it is often overlooked. Using the wrong machine for the job can waste time and resources.
Factors to consider
- Size and power requirements for each task
- Specialized attachments that might improve efficiency
- Composition of the overall equipment fleet
The goal is to ensure that the right site equipment is matched with the task at hand. An undersized piece of equipment is going to struggle, and cause delays. Oversized site equipment, on the other hand, is going to waste resources.
Implement Preventive Maintenance
Waiting until equipment breaks down is a productivity killer.
When something malfunctions, it results in unexpected downtime, emergency repair costs, and a missed deadline on a project. Preventive maintenance stops problems before they become issues.
A maintenance schedule should be based on:
- Manufacturer recommendations
- Operating hours, which should be tracked regularly
- Environmental conditions that the equipment works in
The better the equipment is maintained, the more efficiently it will run, and the more extended period it will last. That is as simple as it gets.
Train Operators Properly
Even the most superior site equipment will run poorly with an untrained operator.
Skilled operators know how to:
- Minimize unnecessary idle time
- Avoid overloading the site equipment
- Use the right attachments for each task
- Follow safety protocols and avoid accidents
Training also does not stop once an operator is on the job.
Technology is changing all the time, and operators need to be updated with the latest features and best practices.
Optimize Scheduling And Planning
Idle site equipment often comes down to poor scheduling.
If procurement teams, the field crew, and management are not communicating with each other, equipment will be stranded or double-booked.
A balanced work schedule means equipment moves from one task to another with minimal downtime.
Materials and tools are also delivered when they are needed, and the workers will be aware of what is expected next.
Track Everything
What is measured, can be managed.
Tracking fuel consumption, operating hours, and idle time can help point out patterns that would otherwise remain hidden.
Important metrics that you can track and monitor include:
- Equipment utilization rate
- Operating hours of each machine
- Idle time percentage
- Productivity output per hour
With this data, you are better informed to make the best decisions on when it is time to buy, rent, or sell your equipment.
How Technology Is Changing The Game
Technology is revolutionizing how companies manage their site equipment.
Telematics Systems
Modern telematics systems provide managers with real-time information regarding equipment location, usage, and performance. If there are any problems, they will be instantly visible, no matter where the managers are based.
Telematics systems also monitor fuel consumption patterns and spot excessive idle times and send alerts to prompt preventive maintenance before a breakdown.
GPS Tracking
GPS tracking allows managers to know where every piece of site equipment is located at any given moment.
This means time is not wasted searching, and it also reduces the risk of theft and improves logistics planning.
Automated Alerts
Setting up automated alerts to let you know when a piece of equipment leaves a designated area or reaches a certain threshold for maintenance will keep things running smoothly.
The good news is these technologies have become more affordable than ever for companies, no matter their size.
Wrapping It Up
Optimizing your site equipment utilization is one of the best ways of boosting productivity and increasing profitability.
Optimizing site equipment utilization can save a business:
- Time – having to wait for equipment to be available
- Money – idle machinery and emergency repairs costs
- Effort – operations that run smoothly
The strategies are straightforward, and they are listed as follows:
- Matching the right equipment to specific tasks
- Implementing preventive maintenance programs
- Training operators on the equipment
- Optimizing schedules and plans
- Tracking utilization metrics
Technology is making these things easier than ever before with tools like telematics, GPS tracking, and automated systems to give companies visibility that was previously unavailable.
Companies that master equipment utilization have a significant competitive advantage. Those that do not will be left behind.
The best way to start is by measuring the current utilization rates and identifying where the biggest gaps are. Improvements can then be made to the equipment and work one step at a time.
The results will speak for themselves.