If you’re on top of your business equipment requirements, chances are you’re using equipment tracking software. No matter what business you are running, equipment might very well be one of your most important investments. To keep it running efficiently is of immense importance. After all, your business operations depend on it! As the saying goes, you cannot actually improve a process without measuring its performance. But the question is: What are the most crucial equipment metrics your business should be measuring right now?
If you are setting out to improve anything, the first thing to do is establish a baseline. Bill Gates uses the steam engine as a great example of this. The criteria for a successful steam engine is quite clear-cut. It needs to have a superior design which can make it light, cheap to construct, fuel efficient, and powerful. And there you go, that’s your baseline for the best steam engine possible! The same kind of thought process can go into equipment management. There are tons of performance indicators that can be used to improve and measure performance, and ensure that any workflows surrounding equipment are as streamlined as possible.
KPIs (Key Performance Indicators) empower you with tremendous insight, allowing you to take action when something’s off. The message is unmistakable and clear; if you don’t take action to reverse a downward trend, the future results are going to end up being even worse. You can either bury your head in the sand and accept your fate, or take the plunge and fix the problem before it threatens your profitability. Let’s learn more about the plunge!
Equipment tracking software and KPIs
Business priorities require more efficient operations and more efficient operations call for use of technology. With a robust asset tracking software, you can excel at maintaining your company’s physical assets by getting insights grounded on key performance indicators. You have to know where resources would be best used, what needs to be prioritized, which routine preventative measures should be taken regularly, and the kinds of items that need work in order to allow your equipment to reach its fullest potential.
The aim is the smallest possible human resource expenditure, minimal downtime, and the guarantee that all your equipment will last longer so that it doesn’t become a liability instead of an asset. It is only through measurement that you can understand the scope of projects, and with that, you can practice control and actually make improvements. The absence of a robust data-analysis process only puts you at risk of wasting valuable equipment and precious work hours. All this could lead to a huge loss in potential revenue. You can easily reverse this and collect, track and analyze data using an equipment tracking software.
For this post, we’ve gathered the most critical KPIs that your organization can utilize to get a much more well-rounded picture of your business assets. Let’s delve deeper and take a look at these valuable performance metrics!
Root cause of failure within an asset lifecycle
A great metric to track is your MTBF (Mean Time Between Failures). Run a report and see whether your equipment is being checked into maintenance a little too much, indicating poor performance. The very next thing you should do is identify the part of the equipment’s life cycle that is causing the problem. It could be the quality of replacement pieces, the actual maintenance routine, or maybe the intensity of day to day operations.
Collecting information regarding the reasons for failure is crucial in helping your business practice better asset lifecycle processes. If your equipment failed today, it has a root cause in the past that towed it down to where it is today. Therefore, a report about equipment maintenance can help you decide where you should be focusing your equipment reliability efforts. Is it the low quality parts used by the maintenance team? Is it the poor workmanship that is causing the failure? Do the operators need equipment training? Is it because the equipment is very old? Find out the answers to this, and you’re well on your way to having equipment that lasts longer and performs better!
Asset availability and custodianship
Just imagine this scenario for a second. The project management team is unable to assign the required amount of equipment and tools to its workers because it isn’t sure about the availability or current status of the needed items. This seriously jeopardizes the ability of the workers to finish their tasks efficiently and on time! This can only end up in the slowing down of work, or even a costly delay which is something no business wants. The timely completion of projects is something every organization is looking for, and regular deadline extensions can severely damage your credibility and lower worker morale.
Automated tracking minimizes delays and helps complete projects on time
If there are frequent delays in your projects because of equipment, then they probably need effective tracking. This can help track the day-to-day productivity of the workforce, know who has custody of which item, and enable you to assign equipment to employees based on what is available and what’s not. Metrics on asset availability and asset custodianship therefore streamline your operations, and help you save time. Automated asset tracking also minimizes the time needed for audits and report generation, whereas traditional spreadsheet tracking would lead to inefficient tracking and work processes.
Missing or stolen equipment
The National Insurance Crime Bureau (NICB) has reported the annual cost of stolen equipment to be between $300 million and $1 billion. Your business loses money unnecessarily every time your equipment goes missing! Keeping track of tools and equipment can save you thousands of dollars every year. For instance, construction sites usually have little to almost no security which means anyone can walk into the site and take away vital tools or equipment from right under your nose. Of course, employee threat is even more prevalent, resulting in a huge deal of inventory ‘shrinkage’ every year.
Having data on lost or missing assets is particularly important if you’re planning for future purchases. Paying for lost asset in the form of taxes or warehousing costs means you are not left with much of a budget for buying new equipment. With equipment tracking software, you can make sure that workers are held accountable and do not take all the access they have for granted. It is not unreasonable to set a threshold for the amount of missing assets that can be acceptable for the company, but if the missing rate happens to be much higher, improvement plans needs to be formulated. For that, you need an efficient solution that not only logs equipment details, but also has detailed histories of who was last responsible for an asset. This, coupled with options like notifications, alerts and automated reports about the status of equipment not only makes it less likely that your equipment will go missing, but also enables you to take quick action when the rare theft does happen.
When your employees are not able to locate equipment they need, they become inefficient. This means they are simply going to roam around waiting for the arrival of the equipment, losing you valuable labor hours. Of course, there are other reasons your employees might have low productivity too. Perhaps the instructions given to them aren’t clear, or the operational process they’re following isn’t as efficient as it can be. Work orders would be a great way to get this all organized. You can set specific tasks for employees, set a priority for it, and note down all the tools and equipment they’d need to get the job done. This would make it easy for your employees to follow instructions, have access to exactly the tools they need, and see when the job is expected to be completed.
Equipment failure can negatively affect business operations.
Companies can save lots of dollars using equipment management software by better tracking task completion, which could include details such as maintenance needs, workforce availability, fuel consumption, usage and downtime. This yields a great side benefit as companies will be able to calculate ROIs accurately, giving them a bird’s eye view of all business operations so they can easily minimize unnecessary spending.
Unexpected equipment maintenance
Just imagine a heart patient walks into a hospital and requires an immediate ECG. At the very moment, the ECG machine goes down abruptly. It not only puts the life of the patient at risk but also leads to patient dissatisfaction along with maligning the name of the hospital. Similarly, if a skid steer goes down at a construction site, it can be a major blow for the construction project bringing in unwanted costs and wasting their precious time.
Everything requires maintenance, even light fixtures and concrete stairs! When companies don’t track warranties and maintenance records of equipment like cranes, ECG machines, drills, tractors and other equipment that different industries use, they are going to stay in the dark about repairs, replacements or other preventative maintenance needs.
Equipment management software updates maintenance schedules and reports into the system which lowers the chances of important equipment breaking down all of a sudden. You can now stay up-to-date on why an item broke down suddenly, and take actions to ensure this doesn’t happen again. Reports and alerts add to the knowledge of management about when maintenance is required, lowering the likelihood of last minute replacements or costly repairs.
Do you have any queries about our equipment tracking software?
EZOfficeInventory is the leading equipment management software used by companies worldwide. You can use our product to measure the performance metrics of your equipment and keep track of your assets more efficiently!
You can try us out by signing up today for a free 15-day trial. For more assistance, drop us an email at email@example.com.