How To: Track Equipment Utilization


1.  Background

The Logger's Edge allows users to track machine hours (through the use of time slips) and to distinguish between activities that are productive versus those that are non-productive.  These machine hours are used in the Equipment Utilization Report to show  utilization percentages for each piece of equipment.  If you plan to use  The Logger's Edge to track equipment utilization, it is important that you have the system configured and set up properly to achieve your reporting objectives. This document explains the way the equipment utilization reports work and outlines configuration settings that affect this report.

There are three reports within The Logger's Edge that focus on equipment utilization.  Both can be viewed through the Logger's Edge Reporter module.  The first, found under the menu item Equipment | Daily Utilization, allows users to review utilization statistics by piece of equipment on a daily basis, or on a summary basis (i.e., across an entire date range).   The second, found under the menu item Equipment | Standard Utilization, is similar to the Daily Utilization report in its layout, but available hours are determined in an alternative manner (as explained below).  The third, found under the menu item Block (Tract) | Block (Tract) Equipment Summary, shows overall utilization (across an entire date range) for each piece of equipment, but on a block-by-block basis.  

Before working through the mechanics of the report, it is worth noting that there are different theories about how utilization is best measured/defined.  In particular, one of the difficulties in defining utilization is to know what base -- that is, what denominator -- to use in calculating a utilization percentage.  Should productive hours worked in a time period (e.g., a day, a month, a year) be compared to pre-scheduled hours that the machine should have been able to work during that time period?  Alternatively, should the productive hours be compared to the number of total hours that were actually accounted for on the time sheet for the piece of equipment?  

In the current reports within The Logger's Edge, the utilization percentage is defined as:  the ratio of productive hours to available hours, where productive and available hours are defined as follows.

Productive Hours:  The hours that a machine spends in a day on activities that are defined by the user as productive hours.  For loggers, this time is generally time spent actually producing wood (e.g., bunching, skidding, processing, loading, trucking).    There are, however, other types of activities that are considered productive activities, but that do not involve actual production of wood.  Such activities might include road-building, road-maintenance, or silviculture activities.

Users control which of the activities they record on their time sheets will be treated as productive hours, which will be treated as non-productive hours, and which will be treated as pure maintenance hours.  Again, it is important that users spend time up-front thinking carefully about how they should classify each of their pay activities in order to get the desired reporting results.

Available Hours:  As noted above, there are different conceptual ways to define "available machine hours" for a piece of equipment.  The Logger's Edge uses two different approaches in each of the two basic utilization reports. 

The "Daily Utilization Report" uses an approach that defines available hours for a piece of machinery as all machine hours that are recorded in a day, except those explicitly tagged as "maintenance hours."  We will call this approach to defining Available Hours "Methodology 1."

In contrast, the "Standard Utilization Report" defines available hours based on the annual available hours set up for the particular piece of machinery in the Equipment Cost Worksheet (Setup | Equipment | Equipment Costing), prorated for the number of days for which the report was run.    For example, if the machine is set up with 2500 annual available hours, and the report is run for a date range containing 30 days, then the available hours displayed on this report for the piece of equipment will be 2500 hours /365 days (to give you the average hours the machine should work in a day) x 30 days, or 205 hours.  We will call this approach to defining Available Hours as "Methodology 2."

 2.  Configuration Steps

Set Up Pay Activities

When you enter an operator time slip, you enter the activity performed by the operator, and you enter the machine used by the operator (or you select NONE if the activity was something that did not involve a piece of equipment, such as traveling to and from a job site).  You also enter the "pay activity" associated with the time.  Your list of pay activities might include things like:   bunching, processing, loading, trucking, road-building, walking, service, repair, mechanical downtime, etc. Users create their own list of pay activities under the menu item Setup | Pay Activities.   Users should give thought to how they code their time on time sheets to ensure that the list of activities is reasonably reflective of the activities taking place on the job site, but is also a clean, manageable list.

Associate Pay Activities with a Particular Pay Activity Type

Each pay activity that you set up in The Logger's Edge must be assigned to one of 7 fixed pay activity types.

You can view the pay activity types under the menu item Setup | Pay Activity Types.

REG_PROD Production time, such as time spent logging, trucking, delimbing, etc.
EQ_MAINT Equipment maintenance (which does not affect utilization statistics)
EQ_MAINT_DOWN Equipment maintenance where the machine is DOWN (and thus not utilized)
NONWORK Non-work paid time, such as holiday, vacation, or paid sick time
NON-PROD CHARGE Other non-production chargeable time, such as road-building
OTHER Other non-chargeable time, such as staff parties and down time
TRAVEL Travel time

These activity types are used for classifying time into categories that should be counted as:

The Logger's Edge defines productive time (the numerator of the utilization percentage in the system's reports) as time spent on activities whose activity type has the "production time" flag set to true.

In general, we recommend that users have this flag checked for the activity type of "REG_PROD" and the activity type of "NON-PROD CHARGE."  That way, any time that you code to a pay activity belonging to one of these two activity types will be included in the numerator of your production utilization percentage.

The Logger's Edge identifies maintenance time that should be excluded from utilization reporting altogether as the pay activity type where the "Maintenance Time" field is set to 1.  If, for example, an operator performs a half-hour of routine maintenance on a machine at the end of each shift, that time should not affect the utilization percentage at all.  That is, it should neither be counted as productive time nor available time.

Important Recommendations & Considerations

It is straightforward to know how to classify certain activities, such as skidding or loading, because it is clear that hours spent engaged in such activities are productive hours.  These hours should appear in both the numerator and denominator of a utilization percentage.

It is equally straightforward to classify other activities such as "Delay Time" or "Down Time" as clearly non-productive.  These hours should appear in the denominator of the utilization percentage, but not in the numerator. 

Other activities, such as walking a machine to a new job site, or repairing a machine, are more ambiguous, and you should give careful consideration to how you want such hours to affect your utilization percentage so that you can set them up accordingly.

Harvesting Activities:  Harvesting activities such as bunching, skidding, loading, trucking, etc. should be classified as belonging to the type called "REG_PROD"  and the REG_PROD "production time" flag should be checked.

Non-Harvesting Productive Activities:  Non-harvesting productive work such as road-building or culvert building should be classified as belonging to the type called "NON-PROD CHARGE" and the NON-PROD CHARGE "production time" flag should be checked.

Delay and Down Time:  Activities that are non-productive, and that cut into the overall available hours that the machine should have been working should be classified as "OTHER" and the OTHER "production time" flag should be unchecked.  Such activities would likely include things like "Delay" or "Downtime."

Routine Service Time:  Routine service time should be classified as belonging to the type called "EQ_MAINT," assuming that you want these hours to have absolutely no effect on your utilization percentage.

Maintenance Time Where the Machine Should Have Been Working:  Service/repair time that interrupts a shift should be classified as belonging to the type called "EQ_MAINT_DOWN,"  In contrast to routine service time, which generally happens before or after a shift and does not affect the time available for the machine to work,  maintenance (repairs) time that forces a machine to stop, counts as both maintenance time and as down time.  Because it cuts into the normal shift, this time should be included in available hours.  Thus, it is added to the denominator of the utilization percentage, as long as it is of pay type "EQ_MAINT_DOWN."

Walking Machines:  If you want walking to be treated like down time (that is, to be excluded from the numerator of the utilization percentage, but included in the denominator), then you should set its pay activity type = "OTHER."  If, however, the machine is walked after hours, and you do not want the utilization percentage to be affected by the time spent walking, you might consider entering the operator's time card with an equipment = 'NONE.'   That way, you can ensure that you pay the operator for his time, but the walking time does not affect the utilization statistics.  (Of course, if you want the time to be treated as productive time, you would set its pay activity type equal to "NON-PROD CHARGE.")

Repair Time:  This time is probably the trickiest to code.  Let's work through a few different scenarios to illustrate the potential pitfalls.

Scenario 1:  Suppose you have a machine that breaks down at mid-day.  Let's assume that the operator spends the remainder of that day fixing the machine.  (He just so happened to work as a mechanic in a prior job.)  Let's assume you code his time as "Repair."  If the "Repair" activity has a pay activity type = "EQ_MAINT," then the time the operator spent repairing the machine will not be counted at all in the utilization percentage.  (It will be excluded from both the numerator and denominator.)  That is not likely your intended result in this case.  If instead, you code the "Repair" activity as "EQ_MAINT_DOWN",  the lost time  will count against the machine's utilization and the employee's time will be charged against the machine's operating cost (in the machine operating cost report).

Scenario 2:  Again, suppose you have a machine that breaks down at mid-day.  Let's assume that the operator spends the remainder of the day down (let's say 4 hours), and his time card is entered as such.  In this case, the down time does affect the utilization percentage in the intended way.  Let's also assume one of your mechanics goes out to the job site to repair the machine after hours.  This time, it is entirely correct for the mechanic's repair time (let's say 2 hours) to have no effect on the utilization percentage, because the repair time is not cutting into available hours that the machine should have been performing productive work.  In this case we want the 4 hours down to be charged against the machine's utilization, but not the two hours of mechanic time.  We do want the 2 hours of mechanic time to be charged against the machine's operating cost.  In this case,  the "Repair" activity should have a pay activity type = "EQ_MAINT,"  (In fact, you may want to have a pay activity called "Repair" (whose type is EQ_MAINT" and a separate one called "Repair-Down"  (whose type is "EQ_MAINT_DOWN", as noted below).

Scenario 3:  Again, the machine breaks down at mid-day, but let's say the machine must be brought back to the shop for major repairs.  The operator records his half-day of down time, but he is re-deployed onto a new machine and carries on with his productive work.  Now, the staff mechanic spends two days working on the machine in the shop, and it takes a half-day to bring the piece of equipment to the shop and re-deploy it.  You have now lost three days of productive time for that machine, and you want to be sure that the time is reflected as down time.)  If your mechanic simply enters the time as "Repair", and the repair activity has a pay activity type of "EQ_MAINT", that time will have no effect on the utilization percentage for the piece of equipment.  If instead, the "Repair" activity has a pay activity type = "EQ_MAINT_DOWN" the mechanic time will count against the machine's utilization and the employee's time will be charged against the machine's operating cost (in the machine operating cost report).

To avoid the potential pitfalls noted above, you should develop a set of standards for tracking your time in each scenario.  One solution might be to have a "Routine Repair" activity with a pay activity type of "EQ_MAINT" and a "Non-Routine Repair" activity with a pay activity of type "EQ_MAINT_DOWN."  The Routine Repair activity can be used any time the repair work should not affect the utilization percentage.  The Non-Routine Repair activity can be used any time the time should be counted as part of the available hours that the machine should have been productively operating.

In Scenario 3, you also want to make sure that there are equipment hours entered for the 1/2 day it took to transport the machine back to the shop, and the 1/2 day it took to transport it back to a job site.  If this transport time (down time) does not appear on an operator's time card, you can enter an equipment time slip under Data Entry | Equipment | Enter Slips for these hours to ensure the hours affect the utilization report.

Another consideration for coding maintenance time is to which block the time should be charged.  In The Logger's Edge equipment costs are charged against a block by using a "standard costing" methodology that may already incorporate the cost of routine service.  If this is the case, then all maintenance and repair time should not be charged against a working block.  Rather, you should put the time against an "Internal Cost" block.  In this way you can avoid double-counting maintenance time on both time sheets (whether it is performed by a mechanic or an operator) and then a second time as a cost embedded in your standard equipment cost.

An alternative to this approach is to code routine maintenance against the block where the machine was operating.  If you do this, though, you must pull the maintenance cost out of the standard cost of operating the machine.

 3.  Utilization Reports

Equipment Utilization Report

This report is found under the Equipment | Daily Utilization menu item in the Logger's Edge Reporter.  Generally, users like to sort this report by Equipment, and view it in summary mode, as indicated by these selection criteria settings:

An example of the summary version of this report is shown below.

There is also a detailed view that provides a day-by-day listing of the hours worked and those for maintenance, down, repairs, etc.

In this report, the utilization percentage is defined as:  the ratio of productive hours to available hours, where productive and available hours are defined as follows:  productive hours are those that have an activity type coded as 'Production';  available hours are defined as all machine hours that are recorded in a day, except those explicitly tagged as maintenance hours (those coded as EQ_MAINT but not those coded as EQ_MAINT_DOWN).

Example.  A machine has 5 hours of regular production time, 1 hour of walking time, 1 hour of maintenance time (EQ_MAINT), and 2 hours of repairs (EQ_MAINT_DOWN).  The utilization percentage will be 62.5 percent (= 5 / (5 + 1 + 2)).

Standard Utilization Report

This report is found under the Equipment | Standard Utilization menu item in the Logger's Edge Reporter.   You select a date range and one or more equipment units.  (If it is not enabled, you can enable it by selecting Admin | Reports from the Logger's Edge Reporter menu selection. Then click on the "Show Active and Inactive" icon (to the right of the Export to Excel icon).  Find report #133 in the list, and click the active checkmark.  Select OK.  Then close the Reporter entirely, and re-open it.  The report will now be in your list.)

The report output shows the daily hour distribution for each selected equipment unit.

The utilization statistics are calculated differently in this report than in the daily utilization report above.  In this report, the utilization percentage is calculated as production hours (those that have an activity type coded as 'Production') divided by 'Budgeted' hours.  Budgeted hours are calculated as follows: take the total days for the report, calculated as all days between the start and end date for the report (in the example above, there are 21 days) and multiply this count by the 'average daily hours' for the machine for the year.  The average daily hours is calculated as the annual available hours (set up in the equipment costing worksheet) divided by 365 days.  Thus, if an equipment unit's annual hours is 2,400, the daily average is 6.575.  The report also shows the unit's budgeted utilization percent (Budget Util (%)), which is also an input in the Equipment Costing Worksheet.  This percentage is shown for comparison purposes.

Both the annual equipment hours and the budgeted utilization percent are entered in the equipment cost worksheet, as noted above.  (See How To Manage Equipment Costing).

Block Equipment Summary Report

This report is found under the Block menu item in the Logger's Edge Reporter.  (If it is not enabled, you can enable it by selecting Admin | Reports from the Logger's Edge Reporter menu selection. Then click on the "Show Active and Inactive" icon (to the right of the Export to Excel icon).  Find report #133 in the list, and click the active checkmark.  Select OK.  Then close the Reporter entirely, and re-open it.  The report will now be in your list.)

This report will look something like this:

This report uses Methodology 1 for defining available hours.

Equipment Operating Cost Report

This report is found under the Equipment menu item in the Logger's Edge Reporter and is titled 'Operating Costs'

In this report, the payroll cost of all mechanic's or operator's service, repair, or maintenance time is shown for each equipment unit.  The time that will be shown here are for hours coded as EQ_MAINT or EQ_MAINT_DOWN.  The report will also show any expenses that have been charged against the machine.


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