The machine rate is usually, but not always, divided into fixed costs, operating costs, and labor costs. For certain cash flow analyses only items which represent a cash flow are included. Certain fixed costs, including depreciation and sometimes interest charges, are omitted if they do not represent a cash payment. In this manual, all fixed costs discussed below are included. For some analyses, labor costs are not included in the machine rate. Instead, fixed and operating costs are calculated. Labor costs are then added separately. This is sometimes done in situations where the labor associated with the equipment works a different number of hours from the equipment. In this paper, labor is included in the calculation of the machine rate.

Fixed Costs are those which can be predetermined as accumulating with the passage of time, rather than with the rate of work. They do not stop when the work stops and must be spread over the hours of work during the year. Commonly included in fixed costs are equipment depreciation, interest on investment, taxes, and storage, and insurance.

Operating Costs vary directly with the rate of work. These costs include the costs of fuel, lubricants, tires, equipment maintenance and repairs.

The unit cost of logging or road construction is essentially derived by dividing cost by production. In its simplest case, if you rented a tractor with operator for $60 per hour – including all fuel and other costs – and you excavated 100 cubic meters per hour, your unit cost for excavation would be $0.60 per cubic meter. The hourly cost of the tractor with operator is called the machine rate. In cases where the machine and the elements of production are not rented, a calculation of the owning and operating costs is necessary to derive the machine rate. The objective in developing a machine rate should be to arrive at a figure that, as nearly as possible, represents the cost of the work done under the operating conditions encountered and the accounting system in use. Most manufacturers of machinery supply data for the cost of owning and operating their equipment that will serve as the basis of machine rates. However, such data usually need modification to meet specific conditions of operation, and many owners of equipment will prefer to prepare their own rates.

The used earthmoving construction equipment market in Africa has become a multi-million dollar business that has attracted not only many secondhand dealers but also online auction houses eager to tap into this fast growing market. Buyers in Africa are not new to the concept of used goods given their already insatiable appetite for used cars from Japan, Europe and Dubai. In the case of used cars several years ago it resulted in the collapse of several new car franchises in Africa which is a testament to how significant this market force is.Used machinery is here to stay and machinery franchise holders have even caught on the game by introducing what they call factory refurbished equipment in order to remain relevant to market expectations. And what are those expectations? Reasonable prices for reasonably good equipment.When buying used equipment five key pointers emerged when we interviewed various global second hand dealers. We highlight them in this article as well who to go to and have peace of mind.InspectionFirstly, just as with new equipment when buying used, a buyer needs to carefully inspect the equipment and enquire on any warranty availability. Inspection is key so check out for any oil leaks and welds on the structure of the machinery both of which can signal a poorly maintained machine or one which was used very roughly to the point of breaking, hence the welds. Heavy smoke when the engine is turned on is also a bad indication as is any seized parts and don’t be fooled by a smooth talking salesperson either who may tend to downplay these flaws. Dustin Graves of Hoss Machinery International says that you should ask for service history, oil samples and photos of the machine and if you can know who owned the machine originally that would even be better.If you are going to have to buy over the internet Bob Chafla of RLC Equipment based in California, USA advises that you can opt to appoint a local dealer or franchise holder in the region to inspect the machine on your behalf. This is far cheaper than paying for an air ticket and accommodation costs if you were to do the inspection yourself. Lieven Pauwels of Machinery Resale of Belgium adds that you can even ask for a video clip of the machine to see it in action though hidden problems will not be easily noticed.The way of the herdSecondly, going for equipment that is from the more popular brand names will ensure that parts will be available. You don’t want to get stuck with a brand name no one knows and hope to find spares for it round the corner when it breaks down. The scrap yard is filled with such machines that were purchased unwisely because of the unbeatable price offered and got grounded for lack of parts.PriceAnd that brings us to price. This should not be your only guide when buying a piece of equipment. Low price may result in upfront savings but misery later on with escalating costs due to downtime and repairs. Better to pay a little extra for a reasonable machine than rock bottom price for a doubtful machine. German Flores of Worldwide Group who sell and rent machinery puts it well when he says that you only get what you pay for.SimplicitySeveral dealers of second hand equipment tout the advantages of less electronics and this is with good reason because in Africa technical support may not be sophisticated enough to sort out an electrical fault with a computerized system . Your technical team will love you for choosing the old tried and tested models that are simply to operate and maintain not needing high-end computerized diagnosis when it fails to start up.With time however the old will give way to newer machines and as German of Worldwide Group says tier 4 machines will be in the secondhand market soon and with their more sophisticated electronics and special fuels to meet emissions restrictions in Europe and USA the machines will be pricier.Track recordLastly, nothing beats good referrals. A dealer with many satisfied customers is one to look up. Getting your hands on a second hand grader or earth mover is not hard these days. There are many second hand equipment suppliers and many dealers of the popular machinery brands also offer refurbished machinery. In addition to this the internet has introduced online auctions where one can bid for machinery in real time on websites for auctioneers who pride themselves on selling only quality equipment with referrals and testimonials to boot. Look for reputable firms and you’ll be off to a good start. Paul Hindle of Clements Plant warns however that there are many fake companies out there ready to swindle any would be customer with very nice websites but with no equipment at all, so buyer beware!

Source: 5 useful tips when importing used construction equipment | Forestry South Africa

Tip 1 – Determine your needs The very first step you should take before buying equipment is to determine what kind of machinery your company truly needs. If you’re choosing between an excavator and a dozer, write down their pros and cons, then decide which one will benefit your company more. Construction equipment comes with a hefty price tag, and you don’t want to purchase blindly.

Source: 5 quick tips to buying new or used construction equipment

Scheduling is the art of planning your activities so that you can achieve your goals and priorities in the time you have available. When it’s done effectively, it helps you:Understand what you can realistically achieve with your time.Make sure you have enough time for essential tasks.Add contingency time for “the unexpected.”Avoid taking on more than you can handle.Work steadily toward your personal and career goals.Have enough time for family and friends, exercise and hobbies.Achieve a good work-li

Source: Effective Scheduling – Time Management Training From MindTools.com

1. Stay on top of large machinery operator trainingMany types of large machinery have multiple operators. One of the ongoing inspections on any checklist should be overseeing the correct operation of the equipment.Large machinery should be inspected as soon as it is purchased. Operator training is usually done at that point, but training needs to be kept up. Employees come and go, skills become rusty and poor operation leads to breakdowns.Operator manuals can be revised for the specific work situation. They can be rewritten in simpler language. A short manual can be provided to each operator for easy reference. And, if you operate in a paperless environment, you can rest assured operators use the most current version of each manual.One other note is to identify best practices, which can then be applied to other facilities or geographic locations. The knowledge you learn about how to maintain your equipment can become quite valuable – be sure to best leverage this important knowledge and use it at every applicable location.

Source: 5 Tips on Machinery Maintenance | MT Blog

2. Add and test lubricants frequentlyLubricants reduce friction around any moving part. A schedule of good lubrication maintenance extends the life of large machinery equipment and parts.Lubrication is one of the first and most important of maintenance checks. Look for signs of excess oil or grease build-up on pistons. Check for leaks around oil seals.Be sure to use the right lubricant. There are specific kinds of oil and grease for every component. Check the manufacturer’s recommendations.Getting the lubricants checked is a good way to diagnose problems with large machinery. Experts analyze particles in the used oil. The makeup of any contaminants will indicate which part may be suffering from wear or breakdown.

Source: 5 Tips on Machinery Maintenance | MT Blog

Vibration, shock, high temperatures, friction and age all contribute to the breakdown of parts in heavy machinery.Vibration can come from gears and belts that are out of alignmentShock can come from accidents and from poor operator techniqueHigh temperatures can come from extended use, friction, poor lubrication and worn parts, among other reasonsAge affects many key components. Over time, belts will warp. Seals will dry and crack. Bolts will loosen and stretch out of shape. Age is a factor to monitor in equipment.Should you discover wear and tear on any moving parts within your heavy equipment, be sure to quickly perform the necessary replacement of any worn parts.

Source: 5 Tips on Machinery Maintenance | MT Blog

4. Keep large machinery clean, and maintain a clean environmentThere are many seals and filters in place on heavy machinery to keep working parts clean and free of contamination. Seals should be inspected regularly to make sure they’re in good condition. Filters should be inspected and changed regularly. Breathers should be kept clean to avoid creating a vacuum in the cab which will suck contaminants into the cab. The electronics in the cab are susceptible to breakdown if contaminated. This impacts the clutch, for example.Large machinery should be stored in a shed or other building if at all possible. Exposure to wind and weather can lead to rust and rot. The machinery should be run periodically if it is not in use.

Source: 5 Tips on Machinery Maintenance | MT Blog

5. Have a maintenance and repair schedule, and keep good recordsFluids, tires, tracks and electrical systems are among the components that have to be checked regularly for preventive maintenance. Know what needs to be inspected and when. Here are some examples.Power transmissions have many moving parts that need to be maintained in top condition. Gearboxes need to be checked for lubrication, vibration and damage to parts.Friction materials, seals, gaskets and bearings all need to be inspected for wear and replaced. Gears and shafts usually last a long time and don’t need to be replaced often, if at all.Drive train components need constant monitoring. Check pulleys and v-belts on CVT transmissions for alignment and wear. Check sprockets for correct meshing with chains and for breaks.Test the oil to diagnose problems. Change filters frequently.Bearings keep great amounts of force running smoothly and are vital to large machinery performance. Check bearing lubrication often. Maintaining bearings well extends their life.Lubricate gears frequently.Do a seal check to prevent bearing raceway contamination.Run torque checks on the bolts. Bolts can elongate and creep over time.To conclude, following the above 5 steps can significantly extend the useful life of heavy machinery, improving the Return on Investment from these important purchases. In today’s global manufacturing world, even greater value can be extracted if you have a global knowledge capture and distribution system such that this knowledge of machinery maintenance can be effectively shared across your organization – letting you reap even greater benefits on a much wider scale.

Source: 5 Tips on Machinery Maintenance | MT Blog