Do you know what your equipment costs are for your various construction projects? Some clients we talked to estimated that 20% of their costs came from the equipment they owned or rented from rental companies. But in truth they weren’t sure–they had no good way to measure exact costs since that was difficult to track and associate back to the job.
If you think of your job-site as a cost center, then what you really need is a system that will let you track and charge the project or job site at a meaningful rate for the use of the equipment while it is on site. If you rent equipment in from one of the large rental companies, their rates are calculated by working out the cost of maintaining, depreciating, moving and servicing their rental fleet and ensuring that they make a reasonable profit from you (their customers) at the same time.
It can be very helpful to think of your own equipment the same way. You don’t need to make a reasonable profit from your job site, but you do need to make sure that when you provide the equipment, your internal charges cover the cost of maintaining, depreciating, moving and servicing that equipment fleet.
So what kind of software do you need to track equipment on construction job sites?
Oddly enough rental software, the same stuff your vendors and suppliers use, is one of the best ways to control all your equipment costs. It makes sense if you think about it. You need to track utilization, manage costs and calculate accurate charges just like the rental companies. The two key differences are that you aren’t looking for to generate a profit and you need to track those costs at project, sub code, WBS code or task code level.
When it comes to renting equipment in to top up your internal equipment fleet, why not use the same processes that rental companies use. Rental companies rent from each other all the time. They rent when they run out of equipment, just like you do. They then pass that rental and the additional cost onto you. Rental companies call it sub-rental or re-rental and you can use the same software they use to track those pieces of equipment. You can make sure that you return equipment promptly to the vendor, utilize them efficiently and keep track of the costs.
What do you think? Do you want to see how software developed for rental applications is really built to manage equipment tracking for construction jobs? Or read more about it in this free series of e-books.
Please follow us on our Linkedin page for other discussions you might find helpful.
