Life Cycle Management: Controlling the Costs

Life cycle managementConstruction equipment is expensive. There is no question that the expense doesn’t end with the purchase price.

Granted, contractors are likely to experience some sticker shock when they’re in the market for equipment.

A new bulldozer can cost anywhere between $30,000 and $200,000 depending on the equipment size and features. The most commonly purchased models range in price between $75,000 and $175,000.

But it doesn’t end there. Maintenance and repair costs throughout the life of the equipment can also add up.

Contractors have to meet ongoing expenses, such as parts, maintenance, fuel and wages.

So it comes as little surprise that construction professionals want to take good care of these valuable pieces of equipment and keep them in the fleet as long as they remain in good condition.

Yet, when it comes to fleet maintenance, making the best possible decisions can be a little tricky.

After all, decisions related to equipment are critical to a construction company’s success. Knowing when to replace is key.

Clearly, the more data a contractor has to work with the better.

Equipment that has outlived its useful service life will ultimately cost a construction company money and negatively impact the bottomline.

If it’s not replaced at the right time, maintenance, repair and fuel consumption costs will far outweigh its value at the jobsite.

Komatsu, a leading construction equipment manufacturer, has a fairly simple approach when it comes to decisions regarding heavy equipment.

First, there should be no downtime, especially that caused by mechanical failure. Second, companies should recognize larger profits as a result of more work at reduced costs.

Fortunately, there technology tools designed to help construction professionals make important decisions regarding equipment.

When it comes to maintaining construction assets for operational efficiency, contractors should focus on three key elements, says Kurt Nantkes, senior vice president, Zonar Systems, a developer of fleet management solutions.

These components are asset tracking, predictive maintenance and monitoring vehicle run times.

“A key element to maintaining fleet equipment is managing where it is,” Nantkes says. “Utilizing GPS (global positioning system) asset tracking can increase productivity, precision, compliance and accountability.  With GPS-enabled asset tracking, fleet managers can accurately locate their assets quickly and efficiently.”

Additionally, GPS allows contractors to locate equipment while in motion.

“This is particularly useful for larger companies with a higher number of assets,” Nantkes says. “Due to the larger amount of equipment in their fleets, these companies need an effective way to locate all of their assets at any given time.”

He adds that keeping a strict maintenance schedule offers multiple benefits at the jobsite.

“Timely maintenance greatly extends the life of your heavy equipment and keeps your projects on schedule,” Nantkes points out. “With telematics/GPS-enabled remote fault code diagnostics, fleet managers get realtime actionable data on the performance of their equipment.”

As a result, if something goes wrong, contractors can develop a plan for the equipment and determine if it can continue to operate or needs to be taken out of service. The data also helps managers determine the parts and time frame that will be needed for the repair, Nantkes says.

“In addition to engine diagnostics, when equipment operators perform electronic verified pre- and post-trip inspections, fleet managers receive immediate updates on the status of their heavy duty equipment,” he says.  “This provides them with more actionable data on equipment status.”

Combining the data from engine diagnosis with that of the pre- and post-trip inspections allows fleet managers to move from reactive to proactive if not predictive maintenance practice, Nantkes explains.

“Lastly, critical data to contractors includes the runtime of their assets," Nantkes says. “They want to know how long their assets idle. This information can be used to identify opportunities to improve operation off the vehicle, reduce greenhouse gases and fuel use.”

Mark Bravo, media relations director, US Fleet Tracking, agrees with Nantkes assessment of GPS solutions.

“The use of modern GPS tracking and the technology inherent within has stretched far beyond a location-based offering,” Bravo says. “Consider the ability to monitor your vehicle’s maintenance needs or remind your team to take care of any and all service requirements for your entire fleet.”

The technology can also record hours of operation to determine maintenance needs, preventative action or outright replacement, he says.

Relatively new to the suite of products now included in some live GPS technology is the vehicle maintenance module, Bravo says.

“This feature lends not only the ability to determine when maintenance is due, but also can be prompted to automatically trigger alerts in the form of warnings, when actions are nearly due, and continual reminders that assure these items don’t fall through the cracks,” Bravo says.

Maintenance alerts can be set for any type of reminder desired, such as an oil change, transmission or parts inspection or basic fluid levels.

“Power takeoff devices measuring hours of operation or number of engagements are capable of being monitored and alerts set to forewarn scheduled maintenance,” Bravo adds.

The inherent data gathered can establish usage trends, which helps contractors make critical business decisions and determine where changes would benefit their operation.

“Use of this vehicle maintenance module in concert with alerts and reports offer this value-added aspect of live GPS technology without the need of constant system monitoring,” Bravo points out.

The IoT (Internet of Things) is also playing a role in equipment maintenance.

The technology can help contractors measure and track information like engine load, fluid temperatures and pressures, and other operational parameters.

Better data and analytics can lead to less downtime by enabling more predictive maintenance, so contractors only perform basic maintenance needs or repairs when necessary.

In fact, the worldwide IoT market is expected to reach $1.7 trillion in 2020 with a CAGR (compound annual growth rate) of 16.9 percent, according to International Data Corp. (IDC).

Devices, connectivity and IT (information technology) services will make up the majority of the IoT market in 2020. Together, they are estimated to account for more than two-thirds of the worldwide IoT market in 2020, with devices (modules/sensors) alone representing 31.8 percent of the total, IDC predicts.

In construction, the IoT’s growth is partly driven by progressive construction companies relying on the technology to convert raw data into actionable information.

Rising Rental Market

Some contractors have met equipment maintenance challenges by turning to the rental market.

In fact, the construction equipment rental market is expected to reach $84.6 billion by 2022, according Grand View Research.

The availability of a wider range of modern, productive machinery in rental fleets coupled with infrastructural development occurring at brisk pace is projected to drive demand.

Additionally, factors such as the cost associated with equipment replacement and the technical changes pertaining to machinery requirement are also key drivers.

Reduced burden of upfront investment and eliminated risk of expensive breakdown repairs is expected to offer lucrative growth opportunities. 

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