Written by: Holly Welles, The Estate Update
Published: December 10, 2019
Cost and resource management is a big component of running a successful construction operation. Despite that, construction expenses continue to grow to monumental levels. It should come as no surprise that many organizations are looking to cut down on costs any way they can.
Besides labor and supply expenses, equipment costs are one of the most influential factors of a project budget. It’s about more than just the purchase, though. It's also the longevity and how you’re using and caring for the items. Any team that has to replace damaged items regularly is going to see much higher associated costs.
What can be done to mitigate equipment costs? More specifically, what strategies can be applied to prevent expenditures from ballooning beyond a manageable limit?
How to Reduce Construction Equipment Costs
1. Consider renting vs. buying equipment.
In some cases, it may be much more cost-effective to rent a piece of machinery or equipment, especially for one-off or relatively small jobs. Renting eliminates the need to deal with maintenance and high resource costs. Other benefits include no storage expenses, access to more up-to-date equipment, tax deductions, and no debt.
For example, heavy machinery rentals will only need to be fueled or powered throughout the scope of a project. You don’t have to worry about gassing it up between projects and transporting the gear from site-to-site. Instead, the equipment is sent directly to a worksite by the owner or rental company.
Maintenance and repairs are also handled entirely by the provider. The downside is that there is a chance the equipment will be in bad shape or may break down in the middle of a project. However, the provider will be on the hook for sending a replacement and covering the costs of repairs, so potential time wasted is the biggest concern with rentals.
You might also consider selling equipment you don’t use often. If you don’t want to rent but don’t need brand new items, leasing or buying refurbished goods is also a good option.
2. Deploy preventive maintenance.
Most maintenance plans are designed to be reactive and call for action after a problem has occurred. A more efficient and cost-effective solution is to deploy preventive maintenance routines, including regular checkups under a strict and well-documented process.
To make things simpler, it’s a great idea to either install or activate data-driven protocols. That’s precisely where IoT or connected sensors and devices come into the equation. By outfitting machinery and equipment with the proper data collection devices—or using smart technologies outright—the system can be automated.
With a neglected piece of equipment, a notification might be sent out to select contacts as a reminder. When crews review the machine, the system scoops up the data and reinitializes all alerts. This would work just fine with a manual process and a traditional paper trail, too.
3. Monitor usage and performance, and use backups.
Generally, a fleet consists of several active pieces of equipment with backups waiting in the wings. Judicious substitutions can ensure the items remain in tip-top shape, and it’s not being burned out or overused. A thorough documentation protocol should be put in place to track it all, which measures time used, performance, and similar factors.
Periodically, you should swap out equipment with a backup. It is necessary for any machinery that’s being exposed to strenuous or extreme conditions, such as high temperatures or heavy loads.
4. Offer high-quality training.
For all aspects of construction, it’s necessary to deliver proper training to workers and sometimes even partners. You don’t want to send just anyone out into the field, especially when it comes to handling expensive machinery.
Focusing on training programs for equipment operators will ensure they know how to take care of the equipment, use it without damaging anything, and even how to conserve resources. You might train your employees to turn off heavy machinery when it’s idle, for example. It seems like a small detail, but the associated costs tend to add up. Leaving equipment running while it’s sitting for 10-20 minutes consumes a lot of fuel and wastes money.
The same is true with poorly handled machinery, as it likely sees a lot of unnecessary damage. Sometimes people need these things pointed out or adequately explained to ensure they don’t happen during day-to-day operations.
5. Choose the right storage.
Just because the equipment was built to last and can handle outdoor and extreme conditions does not mean it should be kept outside all the time. Owned equipment should always be stored properly to preserve its health and performance. That means any garages or sheds where the items are kept must be enclosed appropriately. Leaving machinery exposed to the elements is never a cost-effective solution.
Equipment left outdoors will deteriorate faster, which means more maintenance requirements and a higher chance of breakdowns. To save money, store all hardware correctly and document the entire process.
Reducing Construction Equipment Costs
Starting up a construction or contracting business requires significant expense. These tactics will help your team’s equipment costs decrease considerably. Implementing these tips will allow you to funnel more money into profits and help your business grow.
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