 The primary purpose of an equipment management system is to provide the right equipment at the right time and place at the lowest possible cost. Other purposes include minimizing equipment ownership costs, reducing downtime, and increasing utilization. An equipment management system provides tangible benefits in terms of expanded cash in the operating budget, reduced ownership costs, and more efficient execution of the work program. Reduced ownership costs accrue through better planning of fleet sizes by extending the useful life of equipment through better maintenance by increasing equipment availability and by replacing equipment at the end of its economic life. Reduced operating costs occur because of proper sizing of equipment for job requirements and better purchasing practices for parts, tires, fuel, and other supplies. Reduced maintenance and repair costs occur through establishing more effective preventive maintenance programs and tailoring equipment specifications to job requirements. The potential for reducing costs through improved management is estimated at 5 to 15 percent. The illustration here shows the specific potential for cost savings by type. An equipment management system helps to meet your objectives by providing guidance and information in the following areas, optimization of fleet size and mix to meet user needs economically, replacement of equipment at the most economical point in its life cycle, improvement of internal management policies for more productive operations, and monitoring actual performance in relation to plans. To be effective, the system must address the following stages. Authorize, purchase, deploy, use, maintain, and replace. Four subsystems are involved. Inventory planning and control, equipment maintenance, parts and supplies management, and financial management. The inventory, planning, and control subsystem contains tools that assist the equipment manager with the following functions. Inventory, fleet planning and authorization, equipment purchasing and replacement. The equipment maintenance subsystem has four components. The first is the preventive maintenance program. It establishes preventive maintenance service levels, schedules, workloads, manpower, and equipment requirements. It also includes methods for program evaluation, quality control, and safety inspections. The second component is shop operations. It includes techniques for improving the daily management of the shops, such as work orders, job standards, job prioritization, job scheduling procedures, performance criteria, and evaluation of in-house versus commercial repair costs. The third component is personnel. It combines the preventive maintenance and repair workload so mechanic staffing can be projected. It also develops staffing guidelines for non-mechanic personnel. It projects needed skill requirements and training for mechanics. It evaluates work shift requirements and develops an operator and mechanic certification program. The fourth component is facilities. This element identifies required physical facilities for the shops by adopting standard shop layouts, identifying requirements for work bays and support facilities, evaluating the effectiveness of portable facilities, and establishing standard shop tool and equipment requirements. The parts and supplies subsystem involves five components. The first component is stock numbering and classification. It develops a parts numbering scheme. Second is stock selection and stock levels. This component establishes the most economic stock levels by evaluating in-house stock versus local purchasing. Third is inventory control. It includes procedures to ensure effective control of parts at stock locations. Fourth is inventory management. It includes procedures for automatic ordering, evaluation, and monitoring of stock. And fifth is fuel and oil management. This component provides effective fuel and oil inventory management. The last subsystem, financial management, involves three components. Cost accounting, which identifies and distributes all costs related to equipment. Budgeting, which establishes budgets for all operating entities. And rental rates, which ensure effective control of an equipment revolving fund by defining cost elements of ownership, developing a rental rate structure to capture total cost by equipment class, and establishing billing procedures. An effective equipment management system requires the input of a wide range of personnel. Development representatives must be fully committed to providing the necessary backing and resources for the development and implementation of the system. The fleet manager plays a key role in any organization implementing the system, but will normally be too busy with other duties to serve as project manager for the system. But the fleet manager will have a key role in overseeing the efforts of the project manager. The fleet manager will have primary responsibility for the operation and management of the system when it is completed. The maintenance manager must provide the equipment manager with accurate and timely forecasts of equipment needs. The director of public works seeks approval for the project from the governing body, approves the appointment of a project manager for development of the system, and oversees the utilization of resources. The parts manager needs to initially establish usage levels of parts and supplies as well as reorder parts and safety stock levels. After the system is operational, this person will have to carefully monitor the parts and supplies management function. The project manager manages an in-house development team or an outside consulting team. The accountant will be responsible for providing current and historical data on equipment ownership costs such as depreciation, insurance, and operating maintenance costs. After the system is implemented, this data will have to be monitored to refine initial guidelines and optimize the agency's system strategy. There are a number of considerations and pitfalls that will influence the success of the system. The first is commitment and support by government officials. The development and implementation of the system requires a substantial investment of time and resources. It is not simply buying new software computer systems. Fundamental changes will need to be made in the way that equipment operations are planned, scheduled, performed, reported, and controlled. Training of staff will be required. Outside consultant assistance may be required. To obtain funding for the system, the governing body must be informed of the objectives, benefits, operational characteristics, and cost of the undertaking. Citing the successful experience of other agencies with such a system is often helpful. The second consideration is sound planning and scheduling. A work plan and schedule for system development must be adopted. Resource requirements must be estimated. Staff responsibilities must be clearly assigned. And a project manager must be appointed. Another consideration to avoid is excessive development efforts. There is no point seeking refinement beyond the realm of practical application. Attempts to define excessive numbers of activities to cover every conceivable item, or conducting time and motion studies, are generally unnecessary. Once the system is implemented, changes can be made as necessary. Also consider the human element. There is always resistance to change. The best way to overcome it is to keep employees informed of the objectives and benefits of the system, and to involve them during system development. It is particularly useful to involve them in development of standards and optimal work methods. You should also consider coordination with other functions. The best planned systems may not be successful unless efforts are coordinated with other activities of the agency. This is especially true if several different units in the same agency use such equipment. Unless each of the units puts forth an effort to define the equipment needs well in advance of planned use, and to coordinate work schedules, there will always be conflicts in equipment availability. You also need to consider automation for the system. Considering the price of computers today, most agencies can afford an automated system using a PC-based system. Automation will require suitable software and hardware, and training will also be required for all personnel involved. Proper data collection is necessary. This will require the selection of people who have the capability and training necessary for accurate and consistent data collection. Also, don't forget to involve the staff and listing the support of employees at all levels in the development process makes for greater acceptance of end results. In this program, we have covered the basics of an equipment management system, including inventory control, fleet planning, purchasing and replacement, maintenance, parts and supplies management, financial management and management information for timely decision making. Each element of the equipment management system will be discussed in more detail in the five following videotapes on equipment management. For more information on this or other IRF videotapes, write to the International Road Federation or call the numbers on your screen.