“Equipment is a big asset, but it's also a big liability,” says Harry Moats, president of Precision Concrete Construction. “You've got to control your equipment costs, such as fuel and repairs. It's a large task, and that's why we built our own shop, employ our own mechanics, and do our own preventive maintenance.
“Having our own shop involves considerable cost, but it enables us to control downtime as much as possible, rather than having to do emergency repairs too often,” says Moats, who estimates that his Atlanta-based company will bring in $36 million in revenues this year. Precision has a large fleet of equipment that includes excavators, backhoes, skid-steer loaders, man-lifts, power trowels, and more.
No matter how you go about it, preventive maintenance for your equipment is clearly the key to avoiding downtime—which can be very expensive. “If a working concrete paver goes down, that can run you up to $18,000 an hour,” says Dave Gorski, shop administrator at K-Five Construction Co., Lemont, Ill.
For this article, Concrete Construction interviewed several contractors who keep their equipment in top-flight condition, and a number of keys to success emerged:
- Concern for equipment maintenance stems from top management and extends throughout the company.
- One person heads up the responsibility for equipment record-keeping and management. In smaller companies, that person may be an equipment operator who doubles as a mechanic.
- Detailed equipment records are kept up to date, and a system is in place to backstop postponed maintenance.
- Employees take pride in owning and operating clean, well-maintained equipment.
- Outsourcing an equipment-based function, such as backhoe work, or renting a machine, will shift the maintenance task to another company.
“I would say the biggest challenge we face is the abuse of equipment,” says Moats. “Employees might push dirt where they shouldn't be digging, or pull things they shouldn't pull. Sometimes they do things with equipment they know they shouldn't do.”
Recently Moats took steps to stop equipment abuse. Now, the company charges all equipment costs—including repairs due to abuse—to each project. Employees' bonuses are derived from each project's profit. “So if the equipment is abused, it goes right to the bottom line as a job cost,” says Moats. “And employees' bonuses are affected by profitability.
“We started the process four to five months ago, and we are starting to see some measurable results from it,” Moats continues. “We give the guys the opportunity to make some money, or they can lose money.”
Employees who drive company pickups must take responsibility for bringing them to Precision's shop for oil changes and preventive maintenance. The company does not take pickups to dealers for oil changes because that takes too long, Moats says. “By doing it ourselves, we can control our schedule better than having everybody running to 40 dealers,” he explains.
What's more, Precision does an extensive safety check on pickups when they're brought in for maintenance. “Brakes seem to be a big issue,” says Moats. “You can put brake pads on for less than $100, but if brake wear goes too far, it eats up rotors, and you're looking at a $400 bill. So every time our vehicles come in, we put them up on the rack and check the brakes—along with other aspects of the vehicle's safe operation.”
All vehicle repair bills come across Moats' desk. If an employee abuses a vehicle or fails to have it maintained, “we know about it and appropriate steps are taken to correct the situation,” he says. An employee can be subject to disciplinary action, but it rarely happens; a discussion with the employee usually solves the matter.
At the Layton Companies, a large construction group based in the Salt Lake City area, the holding company rents equipment internally to the operating companies, including the flagship Layton Construction Co. At any given time, the company is running 85 to 90 projects that can range from a $10,000 building interior to a $175 million parking structure.
Until two or three years ago, Layton used a fleet management software program. Such programs are designed to track equipment maintenance and costs, and provide reports about maintenance due. “But it was cumbersome and inflexible to our needs,” says Dave McClurg, a general superintendent at Layton. “It was designed more for fleets of vehicles.” So the company dropped the program in favor of a spreadsheet system maintained by Lance Wallentine, equipment and warehouse coordinator.
“I basically have a spreadsheet for each piece of equipment,” says Wallentine. “I track the number of hours on a machine, when services are performed, who did the work, and the cost of service,” he says. All costs, including depreciation, are accounted for. All equipment is tracked and placed with jobs on a weekly basis. Wallentine says he has a habit of calling project superintendents once a week “to check on my equipment.”
Layton's 15,000-square-foot shop in Salt Lake employs two full-time mechanics and has three large bays for repairing equipment. Because Layton holds very little extra equipment, machines are kept very busy. “Our biggest challenge is getting time to do the service,” says McClurg. “A lot of our equipment doesn't make it back to the shop between jobs. It goes directly from one job to another.”