Plant Hire Analysis Methodology

Mead Perry Group are able to provide an independent analysis and assessment of the administrative aspects of an organisation’s plant operation, including the recovery of overheads to assist it in the making of informed strategic decisions about the management and operation of its plant operation.
Mead Perry Group undertake a thorough review of all elements of the organisation’s plant operations and on-cost rates, to report on the findings and make any necessary recommendations. This will allow management to then make informed decisions on issues such as human resource management, utilisation rates of plant classes across the organisation, hire rates and overhead charging and will ensure that its operation is cost effective, its contract works are competitive and profitable and that the business activity is delivering a positive return to the community.
Through the undertaking of this process, Mead Perry Group, in consultation with relevant staff and utilising reports and data from Council’s corporate business system, will:
  • Review the performance, utilisation and profitability of Council plant and operations;
  • Review management and HR practices in the plant operations area;
  • Review the allocation of plant related costs.
    • Operating costs, including maintenance.
    • Workshop overhead allocation.
    • Depreciation expense.
    • Return on capital.
  • Review Council on-cost rates (incl. plant and wages);
  • Review plant asset register;
  • Calculate “full cost” plant hire rates and on-costs; and
  • Report on and recommend necessary alternative rates, procedures, policies, etc.

 

Examples of Analysis Approach and Outputs:
Plant table
This table, from our analysis spreadsheet, displays maintenance costs and highlights the fact that although one machine (highlighted in red) has a high maintenance cost of $78,741 in 2011, however overall the average maintenance costs for the life of the machine is $23.40 per hour, lower than its sister machine at $25.12 per hour.

Fuel Management

 

 

Fuel management can be an issue for many businesses.   Our analysis of available data can provide information and trends on fuel usage across the fleet.
Costs variations due to differing work requirement, price of fuel, operator capabilities are considered in our reporting.

 

Plant replacement

 

 

Plant replacement has various inputs, one is a consideration of past and potential future maintenance costs.  Our report analyses these costs and provides commentary on potential options available for management.