Have you ever had a piece of equipment break down at a critical phase of a project? If you've been in the construction business for any length of time, you know what it feels like to have machinery give out when you really need it. That can seriously impact your schedules, your reputation and your company's profit potential.
Some people might shrug and say, "Hey, stuff happens. Equipment breaks down. It's part of the business." But it doesn't have to be.
Naturally, machinery and parts age and wear out-there's no avoiding the laws of nature-but with careful procurement, ongoing preventive maintenance and common-sense operating practices, you can get a lot more useful life and productivity out of most typical machines. That means you reduce downtime and increase jobsite productivity, while saving yourself a lot of headaches along the way. Beyond that, maintaining equipment will help to boost its resale value when the time comes to sell it.
Picking Your Equipment
Rent or buy? New or used? Selecting equipment usually comes with a lot of questions, and most of them come with the answer: "It depends." In other words, every situation is different, and you have a number of factors to evaluate before deciding how to best meet your equipment needs.
These factors include the amount of maintenance necessary to keep your equipment working properly. For example, when renting equipment, often a large part of the maintenance requirements are handled by the rental provider. However, when you purchase equipment, you are 100 percent responsible for the equipment's upkeep. Maintenance is an important part of equipment use and can have a negative affect on your bottom line if neglected.
In addition to maintenance, one key consideration when deciding to rent or buy is how much you plan to use a certain piece of equipment. When you own a machine, but it's not being used, you're still paying for it while it's not helping you generate income. You have investment capital tied up that you might put to better use elsewhere in your operation. Finally, in addition to its purchase price, you have taxes, insurance, storage and more, including interest on any money you may have borrowed.
Government and industry statistics (e.g., the Rental Rate Blue Book and Custom Cost Evaluator) have shown that in many cases you need to use a new piece of equipment about three weeks to a month to make it a better deal than renting that same unit.
Here's a specific example: A new skidsteer has an average purchase price of about $17,000-$22,000, not counting taxes or licensing. Next, consider ongoing regular maintenance (parts and labor), which, on a skidsteer, includes drive trains, hydraulic system, brake oil, filters, etc. Many manufacturers recommend maintenance every forty to fifty hours of operation. A hard-working skidsteer also goes through a set of tires in about a year. In addition, include warehousing costs, a truck and trailer to haul the machine, a driver for the truck and so on. The operating expenses of that skidsteer just keep growing. There's also the question of what your business could do with that capital if the purchase money were being used somewhere else.
Assuming an equipment usage life of five years, you're conservatively looking at a cost of about $10,000 a year to own that machine. Compare those numbers to a common rental scenario. Most smaller contractors are probably not going to need a skidsteer at their project sites for more than a week or ten days-maybe only for a few days at a time.
Based on some typical rental rates and depending on the size of the machine, you could order the exact skidsteer you need-and have it delivered right to your site-for only about $500 a week. To look at it another way, you could get ten weeklong rentals of a skidsteer for about half the cost of owning one for a year. You'd also save a lot of time and trouble during the process, because the rental company would be responsible for parts, maintenance, insurance and transportation.
"For us, the cost of renting equipment was lower than owning it," explains Molly Strauss, architectural designer/drafter at AB Systems, Inc., a commercial design/build contractor in Rochester, MN. AB has used rental equipment regularly since 1989. "We also save down-time because it's reliable equipment, and we get it delivered right to the jobsite."
But again, it depends. Suppose you do plan to use a piece of equipment quite frequently, so you decide that purchasing the unit is worth it. One popular alternative for many companies is to buy the equipment used instead of new. In this case, your outlay of capital will naturally be less, but there's a trade-off on the maintenance side. A used piece of equipment may not be as reliable as a new one, and there's typically no manufacturer's warranty protection.
Reliable Used Equipment
An effective compromise is to buy used equipment that's been well-maintained and not abused. That's an easy thing to say, but it's often hard to know the truth about a unit's history-so what can a buyer do to protect himself?
Fortunately, there are many ways to evaluate the quality of a used machine.
"A lot of it is simply visual, even the paint job," said Larry Pearce, regional fleet manager with RSC Equipment Rental. "If a machine looks like it's being kept together with duct tape and strings, it's probably not going to give anybody much reliability."
In most cases, it's a safe bet that newer, younger equipment will work more dependably than an older model. Newer machines generally haven't accumulated the same wear as older equipment. With that in mind, many leading rental companies strive to offer their customers late-model equipment with comparatively fewer hours.
Basic Preventive Maintenance
Whether you're renting equipment for a long period or buying it, you still have the issues of maintaining your equipment for maximum productivity and minimum downtime.
Proper service and maintenance will help assure that equipment keeps working at peak efficiency. Knowing that dependable equipment performance is critical to a project's success, you should view service/maintenance procedures as a smart investment, not an unwanted expense.
A good preventive maintenance program includes the same kinds of basic steps you'd perform on your own truck or family car, such as maintaining proper levels of lubricants and coolants, keeping correct tire pressures, and performing mechanical adjustments and tune-up of equipment on a regular basis. Manufacturers will generally provide you with recommended service intervals and steps for any given piece you buy.
Preventive maintenance also includes the detection and correction of anything on the equipment that seems out of order, or which may indicate possible trouble. Things to look for include structural cracks, bolt tightness, electrical connections, fluid leaks, wear pads, unusual engine smoking or sounds, and signs of excessive wear in tires, tracks or cutting edges. Your goal is to find and fix small problems before they have the chance to become big problems.
It's always a good idea to perform a pre-operation inspection on every piece of equipment every time the machine is used. On some equipment, such as lifting devices, it's an OSHA requirement. A pre-operation inspection is often called a "walk-around," which accurately describes what's typically involved: the operator of that piece of equipment has to literally walk around the unit and visually examine it before starting his work shift. In the walk-around, an operator should be inspecting for any loose parts or fasteners, disconnected wires or hoses, bad tires and so on. The entire process takes only a few minutes. If anything looks abnormal, it should be checked more carefully before the machine is operated.
Operators' manuals for many pieces of equipment will list specific key items to look for in a pre-operation walk-around, such as checking fluid levels for the hydraulic system, or the unit's safety devices.
Fluids and Filters
Checking levels of lubricants, coolants, batteries, etc., should become almost second nature in a preventive maintenance program, but another important related step is the consistent use and timely replacement of quality lubricants and filters.
Tiny particles of grit inside a diesel engine can damage it quickly, and water in the fuel lines can also do serious harm leading to costly engine repairs. Likewise, a clogged air filter can lead to sluggish performance, poor fuel economy, and inadequate system protection. Proper maintenance with the appropriate filters (fuel, oil, hydraulic or air) will help prevent such occurrences.
When changing the oil in your equipment, don't try to save a few cents by going with cheaper brands. Generally, higher-quality engine oils actually can provide more protection to the machine's system and help extend its usable life.
If you operate equipment in cold weather, you should pay extra attention to the fluids in your equipment-not just oil and anti-freeze, but especially hydraulic fluids.
"All hydraulic equipment is affected by low temperatures because the fluid turns thicker and then the pumping mechanisms have to work harder to push it through the lines," said Orrin Knapp, RSC fleet manager. "That slows down the equipment and puts a lot of extra strain on it, which will increase the unit's chances of breaking down."
To help maintain equipment's productivity in cold weather, bring it indoors if possible, or plug the machines in near heaters. There are also various portable heaters that can be mounted onto the side of an engine to protect it from freezing. Heated jackets can be wrapped around equipment to warm it and keep fluids flowing. Another critical concern is to make sure the anti-freeze in every radiator is maintained at proper levels and temperature ratings.
Another aspect of preventive maintenance on equipment is simply to operate it in a smart, safe and efficient manner. One of the fastest ways to shorten the useful life of a machine is to abuse or misuse it. By expecting a piece of equipment to do a job it's not intended for or by exceeding its limits and capacities, you're inviting breakdowns and safety risks.
Operating equipment smoothly not only helps you perform your job more safely, it also helps to prolong the life of your equipment. Avoid rough, jerky motions that can damage a number of components. When using a bucket, keep it low to the ground and approach a pile squarely. That minimizes corner loading, which may put uneven strain on machine linkages.
Avoiding Theft and Vandalism
Another equipment-related threat to your profitability is theft. According to the National Equipment Register (NER), incidents of stolen equipment have increased about 20 percent every year since 1996. Theft rates have now reached an all-time high, costing the construction industry almost $1 billion annually.
Fortunately, security technology has also grown, and many effective products are now available to help reduce the risks of equipment theft or vandalism. Jobsites and storage yards benefit from a wide range of new surveillance options. Low-cost motion sensors can be installed to deter intrusion, and they can be interfaced with security cameras that activate, pan and zoom when motion is detected. However, just like your equipment, computerized security systems and devices must be properly maintained to ensure protection.
Industry experts say one of the easiest and most cost-effective ways to protect equipment is still tried-and-true fencing around the perimeter of your jobsite or equipment storage area. The best fences are at least eight feet high, with barbed or razor wire at the top. Perimeter fences can be made even more secure with new electronic technology that immediately identifies any point of attempted intrusion along the fence line and directs security personnel to the location.
If fences are not an option, try constructing alternative barriers such as low walls or ditches. Those will make it more difficult for a thief to tow or drive equipment off the site. In addition, consider removing hitches and other transporting devices to help prevent equipment from being towed away.
Individual pieces of equipment also can be secured with immobilization devices. Many larger machines offer hidden disablers known as "kill switches." When triggered, these switches cut off the equipment's battery and electric system. You can even add computerized security features-like those offered on various cars-to eliminate unauthorized people from starting the machine.
"A large amount of equipment theft occurs simply from keys being left inside the equipment," comments one industry spokesperson. "Having a programmable security system completely eliminates the need for keys, so you reduce the likelihood of theft."
There are many other low-tech ways to guard and protect individual pieces of heavy equipment. The NER suggests anchoring machines into the ground using large, brightly colored chains or cables. Another traditional security measure is putting up floodlights to illuminate your equipment area at night.
If you do have equipment stolen, report the theft as soon as you discover it. The more information you can give to the authorities, the better chance you have to retrieve your property. It's important to keep detailed inventory data on file, including the equipment's manufacturer, model and serial number.
If you haven't compiled such inventory records, you'll appreciate the online computer software programs offered by some large rental companies to help customers manage their equipment fleets-the units they own, as well as the ones they rent.
Staying On Schedule
To make a difference, effectively maintaining your equipment isn't just something you do once in a while-it takes constant awareness and a disciplined commitment to regular periodic service. Comprehensive records should be kept to provide information for planning maintenance and replacement- activities, so they can happen at the scheduled times. In those records, keep accurate notes about your equipment's performance and service history.
Reputable rental providers usually uphold strict maintenance schedules because they can lose customers quickly when a machine doesn't perform as it should. When comparing equipment suppliers, dig beyond the age of their machines and rental rates. Ask for specifics about the company's maintenance programs.
"We insist on maintaining equipment regularly," adds RSC's Pearce, "because for one thing, it's a lot easier than spending hours trying to repair it if there's a major problem later. Maintaining equipment is a big responsibility, but it is cheap compared to the cost of the equipment not working, and then having to shut everything down."
Construction Business Owner, March 2006