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July 2014   

How to Develop a T&E Cost Control Process (Part 2)

By: Norb Slowikowski

Last month we covered the first three steps necessary to setting up the often overlooked tool and equipment cost controls: ordering/delivery of tools and equipment at the start of the job; ongoing ordering of tools and equipment while the job is in progress, and transferring equipment for another job. This month we look at the three remaining steps that will complete the process of ensuring you have effective management of your companyís tools and equipment.

Step Four: Returning Equipment to the Warehouse While the Job Is in Progress
1) If the superintendent no longer needs a piece of equipment, he will complete the tool and equipment return/transfer form and send it to the warehouse manager for pick-up.

2) The driver will pick up the equipment and the superintendent will sign the driverís copy of the form. The driver will return the form to the warehouse manager.

3) If a piece of equipment becomes defective, the superintendent will affix a tag to the equipment specifying the problem. When the equipment is returned to the warehouse, the warehouse manager will then send the equipment out for repair, or repair it internally. If itís sent out for repair, the warehouse manager should maintain an equipment repair cost log that specifies the costs for all repairs.

Step Five: Job Site Inventory Process
1) On a quarterly basis, the warehouse manager will send the superintendent a tool/equipment checklist that specifies the equipment on the job site.

2) The superintendent will take an inventory of the items on the list, specify what is actually on the job site and will indicate any items that are missing and what happened to them.

3) The superintendent will return the checklist to the warehouse manager who will adjust the inventory and send a copy to the project manager so that a cost history can be developed.

Step Six: Returning Equipment to the Warehouse When the Job Is Finished
1) The superintendent will take a final inventory of equipment on the job site.

2) The superintendent will specify all items on the Tool/Equipment Return/Transfer Form and notify the warehouse manager to pick up the equipment.

3) The driver will pick up the equipment, and the superintendent will sign the form and give a copy to the driver who will return it to the warehouse manager.

4) The superintendent will keep a copy of the form.

Whoís Responsible?
The project manager or general superintendent must hold the job superintendent accountable for managing and controlling the costs of tools and equipment. That includes the following activities:

1) Coaching the superintendent on the importance of controlling these costs and the impact of these costs on the bottom line.

2) Following up to ensure that the superintendent knows how to complete the tool and equipment return/transfer form and that it is a job control that must be adhered to.

3) Making sure that the superintendent is planning his tool and equipment needs at least one week in advance.

4) Following up to ensure that the superintendent is maintaining a weekly inventory of the equipment on the job site.

5) Making sure that the superintendent trains people to operate equipment safely.

6) Making sure that tagging of defective equipment occurs as needed.

7) Making sure that rental equipment is removed from the job site when itís no longer needed.

In summary, while itís true that the superintendent is a major player in managing and controlling tool and equipment costs, for major impact to occur, it always takes a team effort. So each company must not only train the superintendent on how to effectively execute this skill, but must also strengthen the "Team TriangleĒ to ensure that ongoing effective tool and equipment cost control occurs on a continuing basis. Itís all about assembling a strong partnership to make the steps on the page come alive.

Norb Slowikowski is president of Slowikowski & Associates, Inc., Darien, Ill.

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