If you invest in resourcing projects with the best tools and equipment on the market, you likely want to know where they are, if they are missing, and if you're getting maximum usage and ROI from those assets.
That’s where asset management comes in: track, assign, transfer, and maintain your assets efficiently to get projects done and get the highest utilization and ROI. Sounds simple, right? The problem is when contractors start actively managing their tools and equipment, they often struggle to understand which metrics to track. Well don't worry, we're here to help!
After partnering with thousands of construction businesses over the years, we’ve broken down the top asset management metrics you should be tracking and how to start calculating them today.
The asset metrics contractors should track depend on your operational goals. To get started, here are the most common metrics construction businesses are tracking today:
The utilization rate tells you how often you use your assets and whether certain tools are just collecting dust in the warehouse or sitting unused on jobsites. When you know your utilization rate, your team can:
To measure asset utilization, you should look at:
Downtime for tools and equipment tells you what percentage of time your asset is not in use due to issues such as maintenance and repairs. When machines are unavailable for too long, they can end up costing you more than you make from them. Understanding downtime for your high-value assets helps contractors:
To measure downtime, you should look at:
It’s common to find that tools and equipment “walked off the jobsite” at the end of a project. However, this norm has hidden costs linked to decreased productivity, increased labor costs, and delayed project delivery. The loss rate helps you measure how often assets are lost, misplaced, or stolen. With this information, you can:
To measure the loss rate, you should look at:
Tools and equipment depreciate in value over time. The useful life of an asset is how much time an object will remain in profitable use. This isn't the same as the actual life of an asset. Useful life measures how long it takes until it financially makes sense to replace an asset instead of repairing it. Understanding useful life helps contractors:
To measure useful life, you should look at:
The best way to determine the ROI of assets is to job cost them and compare the billable hours to the amount you pay each month, including loan payments, maintenance, and repairs, storage if applicable, and any other costs directly associated with that asset. This information will tell you if you are making money off the assets you own or if they're costing you more than they're bringing in. This can inform you of billing rates for these assets and/or future decisions about renting versus purchasing assets.
To measure maintenance costs, you should look at:
Tools and equipment aren’t a one-time purchase. Over time, assets get worn out or misplaced. The inventory turnover rate tells you how often your assets are replaced or cycled out of use. This information helps contractors:
To measure the inventory turnover rate, you should look at:
Assets move between multiple job sites and warehouses every day. And it’s your team’s job to make sure those assets are at the right place at the right time so your crew can get the job done. With location accuracy, you can know how often your tools are correctly located at the right jobsite. This information allows you to:
To measure tool and equipment location accuracy, you should look at:
As you probably realized, it is not very practical to track this information and calculate these metrics manually. You really really need an asset management system that stores and summarizes this data for you. For example, here are some of the reports that come pre-configured with Align:
| Asset Management Reports in Align | |
| Tool Reports |
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| Transfer Reports |
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| List Reports |
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| Barcode Label and Badges Report |
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| Purchasing Report |
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| Service Report |
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| Billing Report |
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| Fuel Report |
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| Count Report |
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Explore Align's Reporting Capabilities
The platform you choose should also allow you to schedule reports so you can frequently monitor your asset performance without the hassle of setting reminders and doing the math yourself.
Although you do need a digital system, managing your assets doesn’t have to be complicated. If you want to centralize your asset management, platforms like Align give contractors visibility and control over asset operations, meaning there's no need to calculate asset metrics by hand.
To learn more about how Align helps contractors streamline asset management, book a demo with our team today!