Heavy equipment is the most expensive asset in your toolbox, and if not properly cared for, is expensive to repair. Understanding the difference between life cycle cost (LCC), life to date (LTD) and annual cost, and acting on that difference highlights the importance in paying for proper maintenance, and how much money it saves you over the years.
How much does a piece of equipment cost to operate per year? This is a straightforward annual cost and because of the standard short-term view of looking at costs over the next year, this is the default financial perspective most assume operating and maintaining heavy equipment from year to year. It includes the cost of buying equipment and running it.
If you are one of those operators that believe in running equipment into the ground versus performing routine or scheduled maintenance – in the long run, failure to maintain your heavy equipment asset will costs you more money than it saves.
Life To Date (LTD) and Life Cycle Cost (LCC)
Developed by the U.S. military, a cost calculation was soon adapted by many other industries because of its effectiveness. The U.S. Department of Energy defines life cycle cost as:
The sum of all direct, indirect, recurring, non-recurring, and other related costs incurred in the planning, design, development, procurement, production, operations and maintenance, support, recapitalization, and final disposition of real property over its anticipated life span for every aspect of the program, regardless of funding source.
To calculate the life to date and life cycle cost you need to work with the following three different variables.
- Past scheduled work
- Reactive maintenance costs
- Forward projections
Importance of Equipment Maintenance
Understanding the specific details from each of these variables eliminates the need for guesswork to help calculate out of pocket costs you will incur with each piece of equipment. This allows for consistency and predictability in planning the operating expenses of your equipment per year, and highlights just how many thousands of dollars will be saved with regular and preventative maintenance.
Types of Breakdowns
When heavy equipment assets break down, all or specific aspects of construction come to a standstill. When construction budgets and schedules dictate a significant amount of progress be made each day, equipment failure and break downs can result in higher construction costs, delays, penalties, or loss of the project.
There are three types of mechanical failures:
- Gradual Failure: Preventable with routine maintenance and inspections. It is a known fact that old parts wear down and break. Gradual failures can easily be noted with frequent inspections and performing repairs or replacing worn parts before failure.
- Intermittent Failure: Also known as sporadic breakdowns. These show stoppers occur at random times and can be difficult to identify the cause or reason for failure. Intermittent failures and their resulting downtime can be costly. Intermittent failures can be prevented by performing routine inspections and equipment maintenance.
- Sudden Failure: This occurs when a machine or piece of heavy equipment breaks down with no warning. In such cases, the reason is usually obvious, as is the broken part. Though not entirely preventable, sudden failures can be reduced with routine inspections and preventative maintenance.
Breakdowns of heavy equipment are usually the result one of the three following causes:
- Thermally Induced Failure: This is where extreme temperatures, or extreme changes in temperature cause weaknesses, stressing equipment to perform below their normal operating capability, resulting in breakdowns.
- Mechanically Induced Failure: If you are an operator or owner that believes in the “run it into the ground” philosophy, this is where worn parts finally reach their breaking point.
- Erratic Failure: This occurs sporadically and only under specific conditions. It often involves overloads on electrical or hydraulic systems, as well as manufacturing defects.
Nearly every form of routine inspections and maintenance works to address one of these three causes, limiting the number of costly breakdowns.
Types of Maintenance and Breakdown Prevention
Commercial Equipment Storage Buildings
Bad weather doesn’t just pose a threat to halting work for the day, it also degrades your heavy equipment. Just as you wouldn’t leave a $200,000 luxury car parked outside to weather the elements - the same concern should be put on protecting your heavy equipment from the sun, rain, snow, sand, wind, and corrosive sea spray. An engineered fabric structure can be custom designed to create a storage facility for heavy equipment, extending the life of your valuable assets by creating a weatherproof building to protect your heavy equipment from the harshest of weather conditions. Fabric buildings offer many advantages over typical construction. They can be designed for quick setup or take down, relocated to different job sites, engineered to meet specific wind and snow loads for safety and durability, as well as insulated to create an energy efficient maintenance facility in hot or cold climates.
An engineered fabric structure used for heavy equipment storage and maintenance doubles to safeguard your equipment from theft, and provides a shelter for your workers if a sudden storm breaks out while on the job site.
Document Your Machine’s Service History
It’s impossible to mentally keep track of all of the service your heavy equipment, or fleet of heavy equipment has undergone. For this reason, it is recommended to create a repair or maintenance log by noting the piece of equipment being worked on, service date, serviced or replaced parts, costs.
If you plan to sell your heavy equipment in the future, having a repair log or keeping copies of inspection and maintenance reports will allow you to prove you have taken good care of your equipment, and give you the ability to ask for top dollar.
Follow Factory-Recommended Maintenance
Manufacturers of heavy equipment create recommended inspections and maintenance guidelines for a reason. Following the factory-recommended maintenance will help reduce failures and breakdowns of your heavy equipment, saving you both time and money.
Factory-recommended maintenance intervals provide a minimum standard to maintain your heavy equipment assuming normal operating conditions. If you are pushing your heavy equipment beyond standard rates of operation, or are operating your equipment in locations with extreme weather, temperatures, or locations that experience severe fluctuations in temperature, it is highly recommended to increase the frequency of checkups.
Depending on the manufacturer, failure to comply or perform scheduled maintenance may result in the equipment’s warranty being voided.