How machine idle times impact your profits
7 August 2018
We all know an idle machine isn’t making you money, but many don’t realize how much money an idle machine is actually costing you. It’s a discussion I often have with our customers, and the question I usually get back is, “Well, what’s an appropriate idle percentage for my fleet?” While every site is different, I think the important thing is to make sure you’re tracking idle percentages and setting goals for improvement. Even small changes can make a big difference to profitability, and that’s why we’ve made fleet utilization reporting a big part of our ActiveCare Direct program.
Here’s a look at just how much improvements to idle time can impact your profitability.
Decreased resale value
Imagine two of the exact same machines doing the same amount of work on the same job site — but Machine A runs with 50 percent idle time and Machine B is idling at 25 percent. Machine A runs about 2,000 hours each year, whereas Machine B runs about 1,500. While it may seem small at first, the difference quickly adds up. After five years, Machine A has accumulated 10,000 hours whereas Machine B only has 7,500. This difference of 2,500 hours can cost you up to $20,000 in resale value, depending on the machine size and type — all because of increased idle time.
Increased maintenance costs
In addition to slowing depreciation, I’ve seen operators lower their maintenance costs by reducing idle times. In the earlier scenario, Machine B would require five less service intervals than Machine A (assuming 500-hour service intervals). This equates to an estimated $9,000 difference over the ownership period.
It’s also important to note that any existing warranty on the machine would be spread out over a longer portion of the ownership of Machine B versus Machine A — potentially resulting in additional maintenance and repair cost savings. Beyond idle times, of course, Volvo provides 24/7/365 machine monitoring as part of ActiveCare Direct, alerting you and/or your dealer only when an action is necessary — thereby improving predictive maintenance and catching problems before they occur.
Determine a realistic goal
In order to prevent machine idle times from unnecessarily impacting your profits, set a realistic goal for your job site. Remember, it’s important to first evaluate similar machines to determine if there’s a large variance in idle percentages. Then you can determine if machines running at higher idle percentages are simply due to operator behavior (such as letting the machine idle during lunch breaks) or if it points to another issue like having the incorrect number/size of machines for the job.
We’d encourage you to work with us or your Volvo dealer to determine the root cause of idle time problems and set realistic goals for improvement. If you need help working through idle time improvements, we’d love to hear from you.
Source: Volvo Construction Equipment