How much is unplanned downtime costing your construction company?

If you don’t know the answer, it’s likely a lot more than it should be.

When equipment fails unexpectedly, you’re left with more than just the cost of repairs. And if you’ve got dozens, or even hundreds, of large, complex assets, the costs can grow exponentially.

Thankfully, with the right strategy and tools in place, you can reduce your unplanned downtime, saving yourself time, money, and frustration. 

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How to calculate the true cost of equipment downtime

When equipment goes down, the job site grinds to a halt. While some downtime is necessary over the course of the heavy equipment life cycle, when it happens unexpectedly, it’s detrimental to productivity.

And repairing the equipment is not the most expensive part. When equipment fails unexpectedly, you’re now dealing with a lot of collateral damage that significantly increases your costs.

On top of repair costs, you must continue to pay workers for being on the clock, but they can’t get any work done without their equipment. If you’re missing the parts you need, you have to pay extra for a rush shipment. And, of course, if the equipment goes down at the end of the day, now you’re paying your technicians overtime so they can fix it before the next shift starts.

Let’s look at a practical example of how unplanned downtime can be prohibitively expensive.

Most construction companies determine their yearly costs for equipment based on ownership cost and the number of hours the asset will be in use. If a backhoe costs you $50,000 per year, you might hope to run that backhoe for 2,000 hours per year at a rate of $30 per hour, which more than covers your annual ownership costs.

Of course, you need to factor in some planned downtime, but that can easily be done based on manufacturer recommendations or historical maintenance data. It’s the unplanned downtime that’s the expensive part.

In the construction industry, most companies expect to experience somewhere between 20-30% of unplanned downtime for each piece of heavy equipment they operate. And the leading cause of unplanned downtime is preventive maintenance.

If the backhoe spends 30% of its time offline, you’re only getting 1,400 hours out of it during the year. With the ownership costs ($50,000) and the rate you’re charging ($30/hour), it’s actually costing you $8,000 per year to operate that backhoe (1400 x 30 = 42,000).

So now you’re paying extra in wasted labor and rush shipping for parts, and if you have to rent equipment to keep the project on schedule, you’re spending even more. There are even more potential costs to consider with unplanned downtime, but the point is, the costs can quickly add up and your profits can quickly start to shrink year-over-year without a system in place to keep your assets online.


How to prevent unplanned downtime with preventive maintenance

The good news is that there is a proven way to significantly reduce unplanned downtime. It is even proven to extend the useful life of assets.

We are, of course, talking about preventive maintenance (PM), the industry gold standard for maintaining assets. The idea behind preventive maintenance is to make small repairs throughout the use of your equipment to prevent larger issues from developing which could lead to failures.

A classic example of preventive maintenance is replacing the oil in a work truck. Based on historical data and manufacturer recommendations, we know that replacing the engine oil every few thousand miles can prevent the engine from seizing, which is a more expensive repair.

How to use software to get the most out of preventive maintenance

Preventive maintenance is significantly more cost-effective than simply running equipment until it fails, then making repairs. And with connected technology like preventive maintenance software, you not only cut costs, your entire maintenance program becomes more efficient.

PM software helps you:

  • Streamline maintenance workflows
  • Retain valuable maintenance knowledge
  • Manage maintenance tasks more efficiently
  • Keep your team connected anywhere
  • Unify asset and maintenance data

Implementing the right preventive maintenance software at your organization is vital to not only keep your equipment running, but it helps you optimize your entire maintenance operation.

Eliminate complicated maintenance workflows

There are still many maintenance programs that use pen and paper or spreadsheets to manage maintenance operations which are inefficient and time-consuming. It’s easy to miss critical maintenance tasks when you have to try to cram information onto a single piece of paper, then track down a technician every time a new job comes through.

Spreadsheets help the problem a little, but only just. Work orders are now digital, but they can be difficult to read on a small device like a tablet or smartphone and the only up-to-date version of the spreadsheet is the one that lives on the computer in the maintenance office.

Retain valuable knowledge from senior techs

A complete preventive maintenance software solution is the best way to manage work orders. Input your asset information, including recommendations from the manufacturer and valuable knowledge from your senior techs, then build custom work order templates for your team so everyone has all the information they need to get the job done right.

desktop dashboard-1

Allocate resources seamlessly

Easily manage maintenance schedules with the drag-and-drop calendar to quickly get resources where they’re needed most. And since all your data lives in the cloud, everyone gets access to the same information and any updates are reflected in real time.

Keep your entire team connected from anywhere

The best PM software also offers mobile applications so your team can stay connected no matter where they are, from any Internet-connected device. Operators can scan a QR code on each asset to perform inspections and request work, and technicians can scan their own QR codes to instantly pull up any open work orders and any other relevant information.

Unify your data into a single connected database

With all your maintenance data in the cloud, everything is updated instantly. The moment you assign a work order, the technician gets a notification on their device to begin working. If you need to make changes to the work order, those happen instantly so no one misses any important information.

How to develop a strong preventive maintenance program

There are many aspects to developing a strong preventive maintenance program, but the most important component is using the right tools to connect as many aspects of your maintenance and asset operations together as you can.

The best solution is to adopt a full-service enterprise asset management (EAM) solution for your organization. EAM software is more than just one tool for your maintenance program, it’s an entire toolbox that helps you manage every part of your operations.

An EAM platform like ManagerPlus helps you:

  • Optimize inventory
  • Manage vendor work
  • Improve asset performance
  • Generate detailed cost reports

Connecting all these components helps you streamline your entire operation and improve the performance and ROI of your assets.

PM tablet

Always have the right parts in the right place at the right time

A lack of parts can cost you as much as half of all unplanned equipment downtime, so you need to make sure your techs have the parts they need, right when they need them. Track every inventory item from the moment you receive it until the moment it’s used or scrapped so you always know what you have, where you have it, and when it’s time to order more.

Eliminate the hassles of working with contractors

Working with third-party contractors is just a part of doing business for most organizations. However, the endless back-and-forth of emailing and phone calls to try to get work done is frustrating and time-consuming. Use the Vendor Portal in ManagerPlus to generate, assign, and track vendor work orders with the same ease that you manage internal workflows.

Get more from your assets

Your assets are complex and require significant investment so it’s important that you get the most bang for your buck over their life cycle. Track all your asset data, including costs, for each piece of equipment you own so you can see which ones are performing well, and which aren’t.

Gain detailed insight into your equipment

Data is only useful if you can analyze it and use it to make better decisions. Leverage the business intelligence tools within ManagerPlus to generate detailed reports on assets and operations and customize them based on the KPIs that matter most to your business.

Next steps

A robust preventive maintenance program is the best way to keep your assets online and prevent unplanned downtime. One ManagerPlus customer slashed their reactive maintenance by over 67%, just by implementing the solution at their organization.

Are you ready to move from reactive to preventive maintenance and increase your construction equipment uptime? Getting started with ManagerPlus is easier than you might think. The best way to do it is to talk with one of our experts.

Schedule a call with our team today to discuss one-on-one the challenges your team is facing preventing equipment failures and our experts will listen and help find the right solution for you.


Executive summary

Unplanned equipment downtime costs your company more than you might think. Aside from the cost of repairs, sometimes the job site can ground to a halt, and now you’re paying employees to do nothing. Not to mention the collateral costs of potentially renting equipment, hiring contractors, or rush shipping parts. The best way to keep your assets online is with a preventive maintenance program backed up with robust EAM software.

With it you can:

  • Slash unplanned downtime
  • Improve maintenance operations
  • Generate detailed cost reports
  • And more

The best way to get started with EAM software is by talking with the experts who know it best.

About the author

Jason Cockerham

Jason is a storyteller at heart with a career spanning everything from film and TV to iPhones. Just don't expect much before his first cup of coffee.
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