MANAGING EQUIPMENT THRU A REVOLVING FUND

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MANAGING EQUIPMENT THRU AREVOLVING FUND
Allred Managing Eqpt Rev Fund
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• Why should we manage our equipment?

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• It amounts to a large part of our Budget.
• If managed properly, it can reduce cost and save
  downtime.

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It is one of three components needed to
accomplish your work.
1. Personnel 2. Materials 3. Equipment
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How do you determine the right amount of
Equipment?
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Who should decide how much equipment is
needed? a. User b. Management c. Both
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What can the Equipment Section do to help the
user decide how much equipment they need?
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1. Take equipment away if minimum goal is not
reached.
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2. Show user the ownership cost of the equipment
by charging to his budget.
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3. Show cost, but does not effect budgets.
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Does your Maintenance Management System tell you
how much equipment you need in each Maintenance
area?
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Can you use it to determine how much is needed in
each Maintenance Section and Project, what the
usage will be based on dollars for that activity?
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What do you look for in a Replacement Program?
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1. Do you want a program that gives you the
lowest cost without regard to downtime or
production?
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• Or do you want a program that looks at overall
  cost, i.e., operating cost, down time cost,
  productivity and ownership cost?

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How much weight do you give to replacement cost
less salvage value?
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How much weight do you give to old operating cost
vs. new operating cost?
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What factor should you use for downtime?

• Cost of additional equipment like backups.
• Cost of changing activities.
• What is the cost to traveling public.

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Do you compare old equipment to new equipment and
look at the difference in productivity? How do
you weigh this?
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Alabama Approach to Equipment Management.

• 1. Charge user Depreciation Rate.
• 2. Charge user Replacement Rate.
• 3. Charge user Operation Rate.
• 4. Use fund collected from Depreciation,
  Replacement Sale of Salvage equipment to
  maintain Equipment Fund.

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In Alabama, we have an Equipment Management
Committee that consist of Chairman, Equipment
Management Coordinator Assistant Chief Engineer
Maintenance Engineer Three Division Engineers
and an Account Analyst.
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They are charged with looking at the program at
least once per year and recommending changes to
the Director.
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There are a lot of ways to look at Equipment
Management, but any plan that does not include
financing will not work.