Rolling stock and construction equipment is one of the main resources that a construction contractor relies on to achieve their mission. This is the expense item in which he puts the most money after human resources. It is therefore in the order of things that he pays the greatest attention to them, making sure to maintain them well.
This is what Jean-Bruno Lapointe, President of Globaction Management, a Saint-Jean-sur-Richelieu company specializing in business and supply chain management, told us in an interview.
At first glance, it specifies that a contractor can own equipment for several reasons, as long as he can justify its use for at least 50 percent (%) of his business. “The uses and frequency of use of its equipment are two factors that weigh in the balance. Added to this is the criticality of the work to be carried out at the right time. Hence the importance of being able to count on well-maintained, in good condition and safe equipment to work on construction sites and do good business.
If the contractor works in excavation, earthworks, roads and civil engineering, for example, he needs various machinery, trucks, transport trailers and other equipment. The same goes for companies specializing in construction, whether for carpentry, masonry, plumbing or electrical work. In fact, every specialized contractor uses a variety of equipment to perform the work they have contracted to do.
Of course, it is always possible to rent equipment or subcontract the work that requires it, such as drilling a tunnel, using a mobile crane or a concrete pump of great span and capacity. But this should not be the case for equipment of common and frequent use, a question of being able to have this equipment when the contractor needs it, without depending on a supplier. Especially since the rental will cost him 30% more, with the risk of unavailability or being less competitive on the contractual level.
The unavoidable dilemma of maintenance expenses
The management specialist believes that a company that does not provide proper maintenance of its equipment is not at an advantage. For him, the calculation is simple to do. “What is expensive, when there are breakdowns or mechanical breakdowns on site, due to lack of maintenance, is not only the cost of repair. It is also an investment to bear that does not bring income to the company for as long as this equipment is no longer available to perform work. »
At $200 and more per billable hour, the loss of revenue from this immobilized equipment is rapidly mounting. It can even reach several thousand dollars if the defective equipment paralyzes a construction site of several workers. In reality, this loss can even amount to tens or even hundreds of thousands of dollars.
The question then arises: is the company able to maintain its equipment internally or should it entrust it to the external? The answer is less simple. It is worth it for the company to take care of it itself if the equipment park has some value or if it is strategic for the company’s mission. Especially in a preventive perspective that limits emergency corrective interventions likely to deprive it of income and provided that it ensures the grain from an accounting point of view.
Different types of equipment management From the outset, Jean-Bruno Lapointe emphasizes the strategic role of equipment maintenance for a company. This maintenance activity consists of “performing various operations that preserve the potential of the equipment to ensure continuity and quality of production as well as operational safety”.
It distinguishes between two main types of maintenance: corrective maintenance performed after a breakdown or mechanical breakdown, and preventive maintenance performed to prevent breakdowns, premature wear and breakage. Both involve various interventions, either in emergency with loss of productivity in the first case, or from a schedule established outside the shifts without restricting production in the second case.
In corrective maintenance, which often occurs during an equipment shutdown, the intervention may be temporary to ensure its troubleshooting, or require a repair with immobilization of the equipment. It may also imply the addition of improvements for the removal or reduction of failures. Jean-Bruno Lapointe says that this is the type of maintenance that is usually done on construction sites. “The equipment breaks or breaks down and then it is repaired.”
Preventive maintenance involves structuring and planning interventions. They can be done on the basis of routine monitoring, adjustments and minor corrections; self-maintenance by equipment operators; on a periodic basis based on time or operating cycles; or systematically for critical components of equipment according to their service life and reliability characteristics; or in conditional mode following measurements or signals revealing the state of degradation (predictive analyses of oils, vibrations, thermography).
The specialist believes that this is the most advantageous approach to reduce repair costs and lost revenue, to increase the productivity of the company, in addition to improving the safety of workers and extending the life of the equipment. What’s more, the implementation of a preventive maintenance program will make it possible to collect a wealth of data on each piece of equipment used. Data that will provide a better overview of the state of the company’s equipment, allowing it to anticipate and plan its investments for their eventual replacement. It ensures that an investment in preventive maintenance pays off on average over a period of a year or two.
Less an expense than an investment…
According to him, there is no doubt as to the profitability of the year in the accounting balance. The savings generated are much greater than the costs of developing a preventive home maintenance service. Depending on how they are accounted for. An expense made to improve equipment, he gives as an example, is not just an expense; it can also be an asset on the balance sheet. “Unfortunately, many companies put all maintenance expenses in one basket. This situation leads the company to make decisions based on bad indicators.
If its inputs do not give a good view of reality, it is as if the indicator of the fuel level of the equipment gives an indication of its temperature in the dashboard. When we talk about equipment maintenance, it therefore pays more to think long-term and consider interventions in terms of investment than to consider immediate expenses.