Equipment Utilization

Calculating your equipment utilization rate helps you assess the efficiency of production processes and take a better, more strategic approach to equipment management.

(Free) Maintenance Acronyms Guide

What is equipment utilization?

Equipment utilization data measures how efficiently businesses use machinery, vehicles, heavy equipment and other assets. Calculating these figures helps manufacturers and other businesses understand their productivity and begin making more informed decisions to improve their processes. 

Effective utilization of equipment is crucial for minimizing excess maintenance costs, optimizing equipment performance, and extending the useful life of each asset. Failing to use equipment as effectively as possible leaves organizations vulnerable to unexpected shutdowns, injuries, and more.

Asset utilization and equipment utilization

The term asset utilization is often used interchangeably with equipment utilization. They are not, however, always synonyms. In some contexts, asset utilization may have a broader meaning than equipment utilization

Some organizations include human “assets” in their calculations. Equipment utilization, on the other hand, refers exclusively to pieces of equipment like machinery, construction equipment, and the vehicles in a fleet. 

Key metrics related to equipment utilization

A number of important metrics can help you better understand how well you’re using your equipment and production time. Tracking and improving on them is an essential component of effective asset management.  

  • Overall Equipment Effectiveness (OEE): Calculated for individual assets or full production systems, OEE offers deep insights into productivity and performance. OEE combines availability, quality, and performance to rate an asset or system’s effectiveness against its full potential. Once you’ve calculated OEE once, you’ll have a useful benchmark for making incremental improvements across your maintenance program. This combination of performance data offers a roadmap for identifying bottlenecks and other issues to optimize maintenance workflows and equipment usage
  • Mean Time Between Failures (MTBF): This stat tells you how long repairable pieces of equipment remain operational before requiring maintenance. A high MTBF suggests that you’re scheduling maintenance tasks effectively and getting a lot from your assets. A low MTBF could point to machinery that needs replacing or processes that need updates. 
  • Unplanned equipment downtime: Unexpected breakdowns are one of the primary sources of waste and inefficiency in manufacturing sources. Emergency maintenance costs add up quickly and so do the other direct and indirect costs of stoppage.
  • Good products/parts made: You can only consider your machines truly productive if they’re consistently producing defect-free parts. 
  • Maintenance spend: Perhaps most important of all, you’ll want to know what you’re spending on your maintenance program and each associated asset. Digging into maintenance costs is crucial for spotting inefficiencies and taking the right corrective action. 

For fleet managers, equipment utilization reports are best understood in terms of mileage. A telematics solution like Samsara can offer real-time insights that simplify calculations.

Calculating equipment utilization rates

The simplest way to calculate equipment utilization involves subtracting non-productive time from the total amount of time (in hours) in a year. First, add planned downtime to lost operations time and production hours lost due to intentional underutilization of assets. Next, account for unscheduled downtime, quality losses, and production rate losses. Finally, once you’ve calculated all these losses, subtract them from the total number of hours in a year. 

Equipment Utilization = Total Losses (Planned downtime + lost operations time  + unscheduled downtime + quality losses + production losses) – 8,760 hours

You might choose to calculate equipment utilization against total available time or total scheduled time rather than the number of hours in a year. 

High equipment utilization means that you’re making the most of your available capacity and production time. Your machines and vehicles are working at or near their full potential. Low capacity, on the other hand, points to production efficiencies. 

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Steps for improving equipment utilization

If your equipment utilization rates consistently come in below your targets, consider these best practices for boosting efficiency and uptime.

  1. Buy high-quality equipment and replacement parts: If you always look for the budget option, you’ll wind up spending more on repairs and new equipment in the long run. Incorporating fault tolerance at the design stage ensures equipment is built to last. 
  2. Get to the bottom of failures and inefficiencies: Introduce a Corrective and Preventive Action (CAPA) solution to investigate failures, trace them to their source, and ensure they never happen again. 
  3. Keep an eye on the right metrics: Paying close attention to performance metrics like MTBF and OEE will help you identify equipment utilization issues early. With time, you’ll minimize stoppages, idle time, and other inefficiencies while building a culture of continuous improvement.
  4. Train your team effectively: You can’t expect your team to deliver on equipment utilization if they don’t understand the metric, everything that goes into it, and why it’s important. Ensure you establish quality maintenance training programs supported by documentation to facilitate an open transfer of subject matter expertise.
  5. Implement a CMMS platform: Computerized Maintenance Management Systems (CMMS) offer dashboards to simplify reporting, equipment tracking tools to generate valuable performance insights, and all sorts of features to ensure you maximize the value of every asset on every job site. Learn more in our guide to CMMS platforms.

The Essential Guide to CMMS

Download this helpful guide to everything a CMMS has to offer.

FAQ

Why use CMMS software to track maintenance metrics?

Using CMMS software simplifies tracking complex maintenance metrics, fosters data-driven decisions, enhancing efficiency, reducing downtime, and aiding in regulatory compliance all in one.

Is Limble Mobile CMMS app user friendly?

Limble is consistently rated Easiest-to-Use CMMS on review sites like G2, Capterra, and Software Advice. And our customers agree. With our mobile CMMS app, teams experience 30%+ better productivity, on average, requiring little to no training or ramp-up time. Our CMMS app can travel with your team, no matter where they go! Visit our App Store or Google Play for more information.

Can I connect to other systems?

Limble provides seamless, pre-built CMMS Integrations with the most widely used software systems. That means no help from a developer or your IT team is required. Learn more about our integrations.

How secure is the Limble CMMS platform?

At Limble, our world-class data security practices ensure your account information is safe. We use state-of-the-art technologies and industry best practices to maintain a secure infrastructure, including SOC-II Type II certification, regular penetration testing, and continuous security training for our staff.

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