Managing Your Capital Expenditures

Oded Ran
September 22, 2021
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Digitizing your company’s data and managerial information is not as complicated as you might think. By focusing on these key factors, you can quickly move from a contractor that manages based on last month's reports to one that’s acting on the field data of just an hour ago.

Making the right decision in purchasing new equipment requires a great deal of research. When planning to adopt new technology, contractors often make assumptions on how those acquisitions will affect their operating and capital budgets. Once those units are on the job, initial expectations are often subverted by unforeseen delays: mechanical issues, work order changes, crewing problems, etcetera. Suddenly, those carefully considered budgets seem like little more than pipe dreams. So, how do you know if you’re really eking out every aspect of productivity required to have a great return on your initial investment?

It comes down to accurate, actionable data. Contractors need to know the measured results of their capital decisions quickly. Too often, by the time you know your new purchase is a money pit, the damage is already done. Fortunately, there’s a class of software solutions that can easily become a linchpin in your business and operational forecasts. These softwares combine robust equipment data collection with accurate geospatial tools to create a database full of important criteria. This data can be easily mined with proprietary algorithms, which sends reports to the superintendent or project manager immediately. This allows machine learning to become a critical component of management analyses, making for accurate and swift decisions that positively impact asset productivity.

Where to start?

Digitizing your company’s data and managerial information is not as complicated as you might think. By focusing on these key factors, you can quickly move from a contractor that manages based on last month's reports to one that’s acting on the field data of just an hour ago.

  1. Track Everything

One challenge contractors face is getting the complete picture of what’s happening on a large project, or even across multiple job sites. Many providers generate reports and summaries at the end of a shift or workday. A solution that’s both comprehensive and agile is key here. It should enable you to collect and coordinate the data from all machines, regardless of type, age, manufacturer, or even whether it’s leased or owned. Many service providers offer their own equipment, but you should opt for a provider whose system integrates units through an Application Programming Interface (API), which is a software intermediary that allows two applications to talk to each other. The product should also allow you to connect back-office networks, such as ERPs, payroll systems, and other staffing programs to your fleet-related systems. By creating a team-based, interdisciplinary infrastructure, you can incorporate real-time financial information into your budgets.

  1. AI-Based Insights

Key to this option is a system that is both web-based or app-based, allowing managers to be kept up-to-date and able to make decisions when they are most relevant. Systems that leverage AI to track your assets minute-by-minute enables them to go way beyond just reporting a problem. They analyze fleet operation patterns and detect irregular activities: unnecessary idling, under-utilization, deviation from normal locations, etcetera. Some advanced systems auto-detect geofences, so that you don't need to create zones manually. They send you all the critical notifications you need to run projects without your manual intervention. A solution should also allow managers to monitor each piece of equipment individually, including operating status and productivity.

  1. Connected One-Click Maintenance

Many fleets often have two parallel systems monitoring their equipment: preventative maintenance and operational alerts. You should look for a system that embraces the end-to-end  process. This approach allows you to monitor a service from beginning to end and delivers a complete functional solution, usually without needing to obtain anything from a third party. With the right software solution, your equipment, crews, and systems are all interconnected and communicating fluently, turning maintenance into a streamlined, hassle-free process.

In addition, many of these systems include the operator's pre-shift inspection and hour meter reading to alert managers of impending service requirements. A good provider will remove the middle men, transforming fault codes into work orders with a single click. By removing manual input, these systems save time, eliminate human errors, and can forecast upcoming maintenance. Your solution should also offer real-time fault code alerts, so that you can get ahead of sudden problems. Some systems are robust databases that allow managers to attach images or videos with work orders, so that field operators can efficiently conduct inspections and repairs.

  1. Productivity

Knowing that your operation is productive, and how to make it more productive, is what a good software solution should do for your business. These systems can slice the data to watch each production cycle, offering insight into the loading, traveling, dumping, and returning of your assets. By including load-factors for the material moved, these systems can report load counts, as well as volume, tonnage, and type of the material being moved. These systems can also automatically extrapolate polygons of operation: load areas, dump areas, and roads. Because this data is visualized on a map, managers and supervisors can play back jobsite activity, giving them the ability to locate and address problems on the fly. It should offer measurable, visible metrics that allow you to understand and make granular decisions that improve the movements, timings, performance, and health of your assets. It should offer insights into what the best fleet composition is for your jobsite and be powerful enough to make supervisors aware that a particular machine’s load cycle has suddenly dipped below expected output. It should notify you of crew irregularities when they’re outside the work radius. A good software solution should automatically take over as much of the data entry as possible and implement a system of communication that allows managers to get away from Excel spreadsheets and emails and back to managing their projects.

Embracing the Systematic Approach to Profitability

By far the most important thing for project managers is to ensure that a project is being done as efficiently as possible. If your profit margins are between five to ten percent, a one percent change in cost translates to a ten percent increase or decrease in profits.

Oded Ran, Co-Founder and CEO, Clue Insights Inc.

At the end of the day, it’s about cost reduction and asset profitability; how do you make sure your capital investments are working for your team? The answer is to adopt software tools that track mixed fleets, people, and assets in a single platform. The software should allow you to set key performance indicators for your assets and maximize their outputs while reducing your total cost of ownership. This will result in the increased profitability of your capital expenditures.

So, this is the roadmap: track all your assets and know exactly where they are and what they’re doing, allow machine learning and AI to guide with minute-by-minute suggestions that make for rapid and relevant management, adopt an end-to-end maintenance system that proactively and robustly maintains the health of your operations, and finally, gain visibility into the metrics and measurements that help define how to be more productive with the assets at your disposal. All of this, the systematic, methodical approach brought by the right software solution will translate the grind and roar of construction into a language that makes dollars and cents.

The beauty is in how that understanding of your assets is cumulative; the well-oiled machine of data and insights builds a base of knowledge so firm that decisions on expenditures that were once gut-wrenching ordeals are now just good, sound investment.

What is Clue?

Clue is the first fully integrated solution to digitize, connect and optimize all aspects of construction fleet operations - off-road, on-road, tools and crew - in a single platform. Powered by AI and robust telematics integrations, Clue provides operations and fleet managers actionable data, a single ‘source of truth’ and a centralized place to manage their entire fleet operation. Our mission is to connect all construction resources to transform the construction to a more productive, efficient and greener industry.

Clue’s core features are:

Track 100% of your assets: any make, model, or year

  • Integrate all off-road & on-road assets in one platform: through 3rd party trackers or OEM telematics
  • On easy-to-use mobile and web (dashboard) platform
  • Customized reports by company and project types
  • All data available via API and CSV

Minute-by-minute productivity tracking with AI-based alerts

  • Track utilization, idling, fuel, and location
  • Self-reporting machine data and AI-generated site insights - by project, asset types, locations
  • Abnormal utilization, activity alerts

Fully integrated maintenance process with one-click Work Orders

  • Unified view of all diagnostics/engine codes with one-click Work Order creation
  • Customizable digital inspections
  • Streamlined preventive maintenance
  • Assign and track maintenance progress and attach images on the fly

The key benefits are:

90% Reduction in data collection time

  • No more pen & paper or spreadsheets
  • Normalized telematics to compare everything side-by-side, saving hours of manual data handling

12% Increase in fleet productivity

  • Fuel and depreciation cost savings
  • Increased utilization and avoid unnecessary equipment purchase or rentals
  • Maximize production volumes and cycle times
  • Optimize fleet composition and asset allocation

15% Reduction in cumulative downtime

  • Downtime prevention
  • Maintenance time and labor savings
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