Stop Equipment Costs Eating A Hole In Your Pocket
By Business Desk
Sunday, April 1, 2018.
Whether in construction, warehouses, deliveries, or other industries that use them, your machines and equipment can be some of the most valuable assets at your disposal. They can just as easily be amongst the most expensive of ongoing overheads. Whether you have a fleet, a small collection of heavy machinery, or a factory’s worth of equipment, you have to take the time to make sure they’re not liable to sink your business under the weight of their own costs. Here are a few ways to reduce your equipment overheads.
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Keep training constant
Most errors, damage, and extraneous costs related to your equipment is the fault of the man, not of the machine. For instance, road accidents caused by unsafe driving and rocketing fuel costs due to inefficient habits. It is not enough to get your drivers and machinery operators certified then leave them to navigate their relationship with the equipment alone. A business owner must invest in constant training. By assigning superiors with training accreditations and safety officers, you can create an in-house system for identifying and fixing training needs in the moment rather than as a reactive response to high costs and accidents.
Create an effective maintenance schedule
Just as training should be ongoing, so should maintenance. In manufacturing settings, one of the most effective ways to improve equipment efficiency is to train the machine operators in the constant upkeep and maintenance of the machines as well. If you run a fleet, it might instead mean having a team of mechanics that regularly carry out scheduled health checks on all vehicles. You can also use this habit to identify the most common routine maintenance issues and develop the practices or purchase the equipment that can more efficiently solve them. Most potential issues that can cause downtime and breakdowns can be better identified in advance if you’re willing to spend the time regularly checking in on equipment. Sites like www.TheReliabilityBlog.com can help you identify some of those more common issues in advance rather than having to discover through trial and error, too.
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When to rent and when to buy
Not all businesses own their own equipment, however. Renting and hiring vehicles and machinery can be an effective way to get quick access to the tools you need. However, the more your business relies on a certain piece of equipment, the less cost-effective it becomes to keep renting it again and again. Services like www.RobSinclairFinance.com.au provide a solution for those businesses that can’t yet afford to outright purchase fleet vehicles but aim to own their own assets. Rent-to-buy arrangements give you that immediate access but without the wasted dollars of consistently renting equipment only to not the long-term benefit of actually owning the asset. Even as a business grows, occasional rentals can help you ensure you have the tools for more uncommon jobs or to meet the demands seasonal peaks that your current roster wouldn’t be able to handle. Buying when you don’t have the resources on hand to be able to pay for and maintain extraneous equipment can be just as costly if not more so. Make sure you have contacts in the industry that you can just as readily sell unnecessary equipment to.
Know your sources of downtime
As mentioned, downtime is one of the greatest sources of loss when it comes to your equipment. The more time your equipment spends out of commission, the more business you lose. You have to also consider that you’re paying for the ongoing ownership and the employment of the driver or operator without getting any return from them. Ensure your business is collecting all the data related to the most common causes of equipment downtime. When you identify them, build a proactive maintenance program that looks for the early signs of such issues alongside your regular servicing schedule.
Incentivise efficient use
We’ve already highlighted how many of the issues related to your equipment that leads to increased overheads can be down to human error. Training can help educate your team in how to better avoid such errors, but even the best-trained team will make mistakes. Their capacity for error might be influenced by current motivation, engagement within the team, and other emotional or mental factors. With a sophisticated rewards system as demonstrated at www.HRMOnline.com.au, you can tackle that motivation problem. Employees are much more likely to be thorough in maintenance, to take special care of safe driving habits, and to operate more efficiently if there is something in it for them. Whether it’s vouchers for services and products, an annual bonus or otherwise, use a rewards system to encourage behaviour that saves money while withholding those rewards from those who aren’t as thorough. This also increases the sense in your team that they are appreciated by their employer.
Choose your suppliers carefully
A closer look at who is supplying your equipment can help you mitigate some of the worst costs of owning equipment as well. For instance, does your supplier provide not only sales but the ongoing service and repair of your equipment when your team isn’t able to handle it? Are they able to quickly source and send replacement parts? What kind of warranties do they offer with the equipment that they sell? You should also be concerned with their own supply chain. Who is their supplier and what contingencies do they have to keep providing for you if their supply chain fails? The supplier and the customer (you) should have a transparent, long-term relationship that is profitable to both parties. But you won’t establish that unless you’re willing to take a closer look at who you do business with.
Thorough accounting, trustworthy suppliers, a discerning eye for equipment, and ongoing maintenance and training are enough to help most businesses avoid some of the most damaging costs associated with their equipment. Depending on the particular equipment your business relies on, however, it’s recommended you continue your research and get as specific as possible. Lacking that attention to detail is an easy way to see those overheads skyrocket.
