Every minute a piece of equipment sits idle on your jobsite, it’s robbing you of time and money. Excavators, dozers and other machines are the workhorses of construction sites, and they cost—whether they’re working hard or sitting idle. That’s why it is essential to optimize the use of your equipment if you want to maximize profits.
The reasons behind low equipment utilization vary by jobsite, but the common denominator is that underutilization can create cost overruns and move a project off budget. Some typical reasons equipment sits idle are:
- Rental equipment is kept on the job longer than necessary
- Equipment is hoarded because procurement processes are too much of a hassle
- A lack of visibility across operating groups or projects creates a poor line of sight into the field
Too often, contractors have a blind spot around equipment utilization. And it’s understandable—you can’t manage what you can’t measure. Fortunately, blind spots can be resolved by leveraging digital tools, including low-cost sensors, GPS technology and equipment telematics, as well as today’s new generation of high-powered, cloud-based software and services.
Technology makes it possible to manage both owned and rented equipment more efficiently and provides valuable information about location, use and performance. These tools create a single digital record, which leads to more informed decisions. This can reduce days past due on rentals, pull unnecessary equipment off your rental books and increase the utilization of owned machines.
While the insights gained from digital equipment management are helpful, they are largely inward-looking. Many contractors want to know how they are performing compared to their competitors, not just their own previous work.
This approach to data is one way to help achieve best-in-class performance in the highly competitive construction industry. Some valuable questions are:
- How does my equipment utilization stack up against the industry average?
- Where does my company rank among its competitors in returning equipment on time?
- What kind of positive dollar impact can my company realize by changing a specific behavior?
The answers hold the secret to taking any gains generated by fleet management efficiencies to the next level. The process of scoring equipment utilization against industry benchmarks can pinpoint opportunities for improvement and quantify the dollar impacts involved.
The rental supplier a contractor uses should be able to provide data about how its equipment is utilized by market segment, job type and equipment specification—the starting point for benchmarking. This allows a company to understand where any utilization discrepancies lie. Only then can a contractor take the corrective actions that change operational behavior and sustain stronger financial results long term.
Through benchmarking, companies can view their performance holistically or drill down by focusing in on one jobsite or product type, or even by individual piece of equipment and project. This provides meaningful comparisons by showing how a company’s asset management stacks up against the competition.
The Connection to Profitability
At its core, benchmarking allows for a better bottom line. Bringing the contractor’s performance up to peer level through the use of the data translates to less money spent on rentals and increased company profits.
The remedy for improving the company’s utilization begins with understanding the problem and formulating corrective actions—always the best way to motivate permanent changes in operational behavior. Prior to benchmarking, this information was not available, or at least not with such depth and precision.
Businesses across many different industries have taken advantage of benchmarking to realize financial gains. Now is the time for construction companies to look more deeply into overall equipment performance to achieve better profitability.