Hello from Las Vegas! It’s been an exciting week here at World of Concrete, and I’m proud to announce that the latest version of our construction management software, Spectrum Construction Software v14, was launched this week. I don’t usually talk about Dexter + Chaney’s products, but given that this new version drastically changes the way users operate and interact with the software, I couldn’t help myself.

What’s New in Spectrum version 14?

In the last year or so, there’s been a lot of talk about “The Cloud,” and how it is going to change software. We’ve also seen increased use in mobile devices, such as smart phones and tablet computers, with easy to use interfaces and applications. With all of this in mind, we’ve designed Spectrum version 14 to be easy to use and access.

Accessibility

Our customers told us they wanted to be able to access Spectrum anywhere – whether they were in the field, the office, or snowed in at home. Because version 14 is web-based, there is no software to install, upgrade, or maintain. The user simply needs to login on an Internet connected device.

Information a Click Away

Spectrum’s user interface has been completely redesigned to give it the look, feel, and usability of other web applications. Simply put, all the information you need is one click away. In Spectrum v14, you start with a dashboard that you can customize with the apps you need to do your work. Once you pull up a job screen, you’ll instantly see all of the links related to that particular screen, such as vendors, subcontracts, and cost projections. Just as you can open web links in tabs, Spectrum v14 allows you to open multiple tabs or screens so all the information you need is in front of you.

Affordability

Perhaps one of my favorite aspects of Spectrum v14 is that it’s more affordable than ever. Because Spectrum v14 is web-based, users don’t need to purchase, maintain, and constantly update hardware, operating systems, and databases just to use our product. With v14, users don’t need to install software and maintain the software on every user’s computer, because it’s all accessed from the web.

I hope you find this dramatic change in construction software as exciting as I do. We also happened to launch a new product for construction operations at the World of Concrete, but I’ll let my colleague Mark Reich explain this new addition.

Anyway, enough about me – what do you think about the changes we’ve made?

At Dexter + Chaney, we’ve been spending some time talking with Dr. Mike Vorster, probably the leading construction equipment thinker in the industry, and who we have teamed up with to provide our customers with a world class equipment management system. As a result of these conversations, I have come away with some interesting thoughts.

After working with contractors for 30+ years, it still concerns me how many do not have a real handle on their equipment costs. It often sounds like this: “I am pretty sure we are close.” Or, “Labor is the only variable I have control over.” Or, “We do our best to gather equipment data, but I know it’s not always right.”

Know Your Fleet’s Health

I think that the days of not knowing accurately your costs per hour for a piece of equipment, a class of equipment, and your entire fleet are (or should be) long gone. With the number of companies bidding on each job increasing and the margins getting smaller, it is imperative that you know the true health of you fleet. The following chart shows the health of an example contractor’s fleet of Class M Excavators:

To understand this graph, imagine that you have separate data on both the current cost of owning and the cost of operating for these pieces of equipment. Notice that the horizontal axis represents your operating cost budget, and the vertical axis your capital (i.e., cost of owning) budget. If both the owning and operating costs for a piece of equipment are exactly what you planned for, then the “dot” for that piece would be placed in the center of the graph. Equipment that is performing better than expected with respect to operating costs move to the right of the graph. Equipment that is cheaper to own – i.e., being used enough to generate better-than-expected return on investment – they move up the graph.

4 Categories of Equipment

This creates 4 quadrants that are powerful indicators about how best to manage each individual piece of equipment in your fleet. Equipment can be categorized as:

1. Well utilized and economical to operate
2. Well utilized but expensive to operate
3. Underutilized but economical to operate
4. Underutilized and expensive to operate

Putting Equipment Data to Work

With this understanding, let’s look at our example company’s fleet of Class M Excavators again. As a whole, the class is a little underutilized, but economical to run. By gathering repair, maintenance and ownership costs, and accurate meter readings from each piece of equipment, the equipment manager of a well run operation can know how each piece of equipment within a class is performing, and keep rates constant by making proper repair/replace decisions within the fleet. This in turn lets the estimators use equipment rates that are spot on when estimating forthcoming work, which helps to get new work, and bring that work in profitably.

A combination of smart data collection and the right construction software can help tremendously with this process. First, you need a system that can gather both expenses and ownership costs for each piece of equipment. These range from depreciation and license costs, to fuel and repair costs. As a piece of equipment ages, the ownership costs go down, and the operating costs go up. With proper systems in place, determining the “sweet spot” for a piece of equipment – how much you should use it and whether it’s time to replace it – moves from an exercise in guess work to a business decision based on real data.

Determining your equipment costs is only part of the equipment management process. Please join Dr. Mike Vorster for a webinar on Wednesday, November 30 as he outlines the Roadmap to Equipment Excellence.