You are not a "Joe’s Backhoe Service" – So why are
you Managing Your Equipment the Same Way?
I was flipping through a copy of ENR and several other trade magazines the other day and was, yet again, disappointed by the unbelievable lack of information on how smart equipment owners are managing their fleets more effectively. I think it is this incredible void of good examples that makes this industry rife with equipment management methods that just plain suck.
Not one mention of machine Cost per Hour or costing methods. Not one headline. Not one specific, meaningful benefit of knowing and tracking cost. No case studies or testimonials.
What was there? Cute and clever ads asking you to buy a new machine or something. What about all the machines you already have? All that space wasted with meaningless fluff, and vague generalities – absolutely NO meaningful Machine and Truck Asset Management techniques to help make the machine owner money.
I’ve often wondered if more of the machine owners will ever wake up and actually hold each machine accountable for a measurable amount of work and profit instead of pumping millions of dollars into a black hole of terrible fleet & heavy equipment management practices.
Listen – as a business owner, you can’t afford to make dumb mistakes like this and the ones listed below. If you spend $1 today, you need $2 back tomorrow. Your fleet & equipment asset management practices have to be held accountable just as an estimator would be—if the estimator doesn’t produce, he or she get fired, plain and simple. After all, how long would you keep an estimator on staff who wasn’t producing winning bids or an estimator that was not bringing in profitable jobs? Would it be worth their salary and your time and effort to know that they are "at least getting your name out there?" Absolutely not – and your fleet management efforts and practices should be held to the same level of accountability.
The bad fleet and equipment asset management practices I am talking about are like these, to name just a few:
- Setting your price for a machine based on someone else’s price.
- Not knowing what each machine or truck in your fleet really costs you.
- Charging the same price for any and all type of work on a machine.
- Charging the same no matter which machine you use or bring to the job.
- Incorrect machine or truck costing based on fixed costs in place of Dynamic, ever changing costs.
- Incorrect machine or truck costing based on what your accounting system says it costs you. Accounting systems were never designed for costing machinery and trucks. Your Accounting system costs vs. real, true Dynamic Lifecycle Cost per Hour are entirely different!
- Incorrect machine or truck costing based on spreadsheets with partial costing information.
- Wrong Costing based on what some book says is your "Cost".
- Setting a price once a year (or maybe every three years) for a machine.
- Not tracking machine utilization rates and operating hours at least weekly.
- Not tracking fuel used and burn rates in gallons or liters for each machine by projects and work package.
- No Shop Rate established for In-house service. Comparing the cost you pay a mechanic of say $18.11 an hour to a dealer’s service rate of 75.00 hour and assuming this means you can do it cheaper.
- Using equipment management practices that worked when your company bought a gallon of diesel for $0.59 and a D-5 Dozer sold for $22,000.
Very small companies like our fictional "Joe’s Backhoe Service" with one or two pieces of heavy equipment might be able get away with not knowing their equipment cost, fuel and utilization information. But your company has grown larger. You have to run your company using the Best Management Practices available today to give you a hope and prayer chance of making money.
One of the problems you have today is that you may be showing a profit but loosing your shirt due to incorrect machine and truck costing and rates. I can help you with this, only once you understand why this statement is true.
When it comes to equipment management, you need to not only get the attention of your entire staff of senior managers, project managers, shop manager, estimators, superintendents and machine operators. You need to build trust and confidence and get them to respond so that they are moving in the direction of this change in business practices. That’s what I teach in the articles I write on this page, in the various software tools I sell, in the live events I conduct around the U.S. and in personal one-on-one engagements in your office.
Your equipment needs to generate a profit. If you don’t know your true cost (not accounting cost) and actual, accurate utilization, you cannot determine profit. Lowering cost and improving profits is the by-product of the type of equipment management methods I teach.
Some of our clients have started their business after working for a larger company. Unfortunately, many of the clients who come to me have to unlearn everything they’ve been taught to do by these big companies. They’ve been „sold" that you don’t need to know cost, only to learn what the competitions is charging. Being big is different than being good. They think that they have to meet all competitors’ price to get work. I will show you why this is NOT TRUE. As an example of this, recently I worked with a commercial contracting company doing $330,000,000 dollars a year and they never bid one job.
And if you want to unlearn the bad habits you’ve acquired in Equipment and Truck Asset Management and learn exactly what you need to do to generate a boost in new clients, sales, and profits, then get your butt and call me.
I will fly out to your company. Sit down with you and the senior managers of you company. Review your present equipment management policies and procedures. First I need to see the way you do it now. Next I will offer you a plan that is customized to your business that will get your company up to date. I will do all of this for $500.00 (Continental U.S. only) plus travel expense. If you don’t like our plan. That’s it. I go away and you go back to the way you are doing it now. No further expense or obligations.
Want references? Ok, I can give you a bunch. But come on, were talking about $500.00 and some valuable information that you can make up your own mind about. Do you really care if some guy in Bayonne, New Jersey or some place other place liked what I did for him. This is about you and your company and what I can do for you.
Right now, many days over the next 60 days are SOLD OUT (we are very close to 100% booked in December), and the days before and after December are going to sell out too.
You might guess that I cannot afford to fly around the country for $500.00 per day forever. This offer is for right now! I cannot promise you I can do this at this cost again. Once it’s gone, it’s gone. Do NOT miss this opportunity or you will be very sorry you did. The need to manage your equipment and trucks, and win more bids will never go away – so why would you let anything stand in your way of calling me.
One other thing you need to know. I cannot extend this offer to everyone that wants it. If we feel you will not benefit enough from this one-day engagement, I would rather tell you up front. So we have a few qualifications to receive this special offer. Call me and we will discuss if it makes sense for me to come you. If by chance you don’t qualify today, I will still try to help you by phone. So you have nothing to loose, Call me now, If I am tied up on the phone or out of the office, just leave a message with your cell phone on my personal extension 941-926-9260, Ext. 104. I will return your call.
Dedicated to your success,
Dan Rooks
President
Decisive Systems, Inc.
"The Owning and Operating Cost People"
In the U.S. Call 800-232-5767 International
941-926-9260
