The need to manage resources grows as firms take on more projects. Executives must have a strong handle on the location and status of the company’s equipment; every moment a piece of equipment is idle or in the shop drags on profitability.
A certain amount of risk is involved in purchasing a new piece of equipment: Will it perform to specifications? Will it spend more time in the shop than in the field?
To maximize the productivity of a piece of equipment, contractors should consider an integrated software solution that can deliver accurate information in time to make crucial equipment management decisions. Having an integrated system for customers, project management and financials allows a firm to develop a potential profit and loss picture for all new investments and ensures the right equipment purchasing decisions are made.
Maintenance, Training and Compliance
Equipment owners need a way to accurately produce and track maintenance records to establish the equipment’s productivity, problem areas and repair costs. A software solution can deliver this information to the right people to help prevent any potential maintenance problems and keep the equipment running in optimum condition. Averting maintenance issues before they occur positively affects the bottom line.
Once the equipment is in the field, the company must make sure the right employees use it. Allowing unqualified or insufficiently trained employees to operate expensive pieces of equipment raises the risk metric and threatens profitability. A firm’s software solution can track who is operating the equipment most efficiently and who is maximizing billings. A system with integrated human capital management can provide the information to determine who has the necessary skills to best operate equipment.
Another aspect of equipment maintenance is complying with permit requirements. Moving equipment can be a logistical nightmare. A company’s software solution should provide the information necessary to make decisions about moving equipment and obtaining permits.
Integration Is Essential
Firms must have a totally integrated system that provides accurate information in real time to help key employees make the best equipment management decisions. This system also must have single-data entry and be designed with the architectural, engineering and construction industry in mind.
To illustrate the need for such a system, consider XYZ Construction Company, a prototypical general contractor that possesses its own equipment fleet. Listed on Engineering News-Record’s Top 100 General Contractor’s list, XYZ also performs construction management and design-build services. XYZ has been using a hodge-podge of project management, financial and construction resource management systems to handle business operations.
Using its current systems, an average equipment management procedure takes 13 steps. First a project manager at the jobsite enters the request for equipment, which is then reviewed and the availability is confirmed. Then the equipment inspection takes place, followed by the decision to either rent or buy the equipment. When the equipment is bought, the information is kept in a folder, the funding is determined, the receipt is entered, and the invoice is received and manually approved.
Next, accounting personnel scans and processes the invoice and waits for the CFO to review it. The capitalization summary and data replication occurs in other systems, followed by invoice generation and check production. A maintenance work order is created on meter readings, and followed by a reverse work order with a real order. The accounts payable invoice is processed on the corporate system, and manually re-entered into another application. The work order is closed and an invoice is generated, and the job is tracked by a spreadsheet.
In contrast, using an integrated system takes only eight steps. The request is reviewed for availability and is entered into the system. With the push of a button, the request can be confirmed. The equipment inspection is followed by processing the accounts payable invoice to charge the job. Next, the receipt is issued and recorded, and the accounts payable invoice is generated and automatically routed for allocation, depending on approval, using an imaging and workflow solution. Then the accounts payable check is processed, and the work order is generated automatically based on schedule rules. Finally, the work order is closed and the actuals are recorded.
A firm successful in winning new jobs and executing ongoing projects must have a well-planned equipment management system. As fuel costs continue to be unpredictable and as equipment ages and becomes obsolete, executives must use every resource available to optimize their equipment fleet. An integrated software system is the best tool on the market to make equipment management run smoothly and, more importantly, profitably.
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Wednesday, February 8, 2012