Is Your Construction Business Losing Money on Your Equipment?

Increase profitability by better managing your construction equipment

If you search Google looking for statistics on the cost of job site equipment to the average construction company you’ll find virtually no information. In fact, understanding exactly what you are spending when it comes to equipment at the job site is the #1 question most of the construction companies we talk to want to address in an era of reducing margins and cost cutting.

Part of the problem is that traditional construction ERPs like Oracle, CMiC, JDE and Timberline, really don’t manage equipment or even rentals of external equipment particularly well. These systems are driven by project costing or job costing principles and are good at handling labor and materials, but equipment is just a line on the fixed asset register. They don’t really connect to the physical management of the asset which is absolutely fundamental to actually managing those pieces of equipment in the field and for your job sites.

This is where the search for an equipment management software solution needs to begin. You need to address the key business processes below that any equipment solution should manage.

Managing Demand from the Job Site

Being able to interact in real-time with job site demand and providing end-to-end visibility for your foreman, supervisors, your equipment facility and your project managers.

Fulfilling Equipment Demand

Once you’ve got the demand you need to have the flexibility to respond to that demand dynamically. Fulfilling the request using your own equipment, moving equipment from elsewhere or renting it in from outside should be easy to manage. Understanding where your equipment is and isn’t being utilized is essential to being able to deliver a cost-effective fulfillment solution.

Equipment Logistics

Equipment logistics is more than just entering a move date in a fixed asset register and updating a status field to “on-site”. It is critical to produce the delivery paperwork, confirm it’s arrived on site, handle breakdowns, and the re-deployment of equipment in the field.

Project Costing/Job Costing

Whatever your equipment management solution delivers it has to be able to connect back to your core ERP project or job costing solutions. You need to capture job cost data from the moment demand is identified right through to being able to interface charges and accruals for equipment in the field back to your job cost solution.

How much does job site equipment cost your business? If you can’t answer that question anything more specifically than “too much”, then check out our new e-book entitled the “Best Practices for Improving the Management of Job Site Equipment”. Click here for a free copy.

Post written by Helen Sowerby, Director of Business Development.

Leave a Reply