12-04-2023

Buy, Rent and Lease of Equipment: Buying

Procurement process

Construction Equipment Points in Favour of Buying

• When the equipment is used

Points against Buying

• When the equipment can

Calling Enquiries

Management
for most of the construction not be used for its full life, Technical and Financial Evaluation
period and likely to complete then owning may be more
almost its full life while expensive than hiring. Ordering
working on the project. • The purchaser is required to
• It remains available for use do a huge investment Contract making/Purchasing
CMT 522 whenever it is needed. initially, which otherwise he
may need for other
Session 15 – Equipment Buy-Rent-Lease, Maintenance & • It is basically owned
purposes.
Transporting
equipment and hence it is
Spare Parts Management kept in better mechanical • Contractor may have to face Assembling and Installation
condition and is more the danger of obsolescence.
reliable. Operation/Commissioning

Aritra Halder
| Aritra Halder | Assistant Professor
Assistant Professor | School of Construction

Buy, Rent and Lease of Equipment: Renting Buy, Rent and Lease of Equipment: Leasing
• It is basically a short-term alternative to direct ownership. Leasing - Features
Advantages of Disadvantages
• Quippo Infrastructure Equipment Bank-
Formed in 2002 By SREI Infrastructure
• Company can pick a machine that is exactly suitable for the job.
• Used when the job is of short duration and there is no continuous need for
Finance Ltd and CIDC. IFC Washington, FMO
Netherlands, Sweadfund International AB,
• Lease is basically a long-term agreement to
use the equipment.
Leasing of Leasing
the equipment. Sweden and an international equipment
manufacturer, Ingersoll Rand, together hold
• In this contract Lessor will always hold the
• Only limited machines are available for rent. ownership rights. Lessee will give the
more than 54 % of Quippo’s stake. Working capital is Only limited
• No assurance of availability of equipment at the required time.
• iQuippo (www.iquippo.com) is India's first
payments to Lessor in return for providing not tied up in machines are
the machine. equipment. available on lease.
• Renter is responsible for Fuel and lubrication of the machine and one of the leading digital marketplaces

• Renter is responsible for the repair of the machine. for a variety of products such as construction • Lease contracts are binding legal
equipment, commercial vehicles, farm documents and non-cancelable by either
• Rent rates are based on per day (8 hrs), per week (40 hrs), or per month basis party. Lessee gains a tax
equipment, Scrap, liquidations, and a lot No assurance of
(176 hrs). deduction because
more. Buyers and sellers may connect, • In most lease agreements user is availability of
lease payments are
negotiate, and conclude deals on our responsible for fuel, lubricants, repair, and equipment at the
treated as an
required time.
platform in a quick, transparent, and cost- maintenance. expense.
effective manner.

| Aritra Halder | Assistant Professor | Aritra Halder | Assistant Professor

1
 12-04-2023

Downtime & Equipment Economics Objectives of Maintenance

• Downtime:
The duration from the time when equipment goes under breakdown to the time
To maximize the availability of machinery and
when it is restored to service and includes time for reporting of failure, time
facilities needed for smooth production.
required for reaching to site and initial inspection of the equipment, actual repair
time, time required for final inspection and trial. To minimize downtime due to the breakdown
• Downtime can be reduced by – of machinery.
a)Speedy Fault Detection
b)Speedy Fault Diagnosis
To ensure the long life of machinery.
c)Speedy Repairs
d)Reduction in waiting time
• Economics of maintenance – To avoid a high rate of depreciation of capital.

| Aritra Halder | Assistant Professor | Aritra Halder | Assistant Professor

Breakdown of Equipment Types of Maintenance

• Breakdown of the machine can occur due to the following • Breakdown or Repair Maintenance can be followed for non-
reasons: critical equipment and where failures are unpredicted.
–Incorrect operations, Inadequate servicing, Lack of • Corrective Maintenance should be adopted for frequently failing
inspection. components.
–Due to unpredictable accidents which cause the failure of • Preventive Maintenance helps to find out the reasons leading to
machine breakdown and to rectify them when they are in initial stages.
–Due to the gradual wear and tear of parts

| Aritra Halder | Assistant Professor | Aritra Halder | Assistant Professor

2
 12-04-2023

Preventive Maintenance – Objectives & Functions Preventive Maintenance – Advantages

Objectives • Reduction in production downtime
• To ensure the breakdown-free • Lesser overtime payment for maintenance staff.
Functions or
operation and optimum life of the
Elements • Lesser number of standby equipment
equipment.
• To reduce cost by reducing downtime • Inspection or Check-Ups • Less expenditure on repair
• Servicing
of equipment.
• Planning and Scheduling
• Lesser spare parts needed to remain in the store
• To keep the machine in proper • Record and analysis • Safe operation of equipment
condition so as to maintain the quality • Training of maintenance
of the product. staff
• To ensure safety during the work. • Storage of spare parts
• To keep the plant or machinery at the
maximum production efficiency.
| Aritra Halder | Assistant Professor | Aritra Halder | Assistant Professor

Requirements of Good Preventive Maintenance Phases of Maintenance Planning

Correct, clear, and detailed
Good supervision and A good lubrication
instructions be given to Operators should be well Evaluation of
administration of the program should be chalked
the maintenance crew and trained work
maintenance department out Follow up and
to the operators
check up
Development
of maintenance
Proper coordination Preparation of
Proper maintenance information
Adequate stock of repair All repair tools must be between maintenance, maintenance
records should be system
should always be kept. available planning, and purchase Manpower schedule
maintained
department. planning
Anticipation of
maintenance
Before transportation of work
Standardization on types
Establishment of a well- equipment from one
of equipment deployed to
Use of mobile service vans equipped service and project to another service
control inventory and to
repair workshop or repair it and then
have specialization.
transport.

| Aritra Halder | Assistant Professor | Aritra Halder | Assistant Professor

3
 12-04-2023

Aspects of Equipment Maintenance in Sites Maintenance Planning – Some Indices

• Utilization factor =

• % Capacity Utilization = × 100

Servicing Field Repairs Inspection
• Equipment Availability =

• Cleaning • For day to day • Preventive measure • % Equipment Availability = × 100

• Cooling repairs • To check the • Frequency of breakdown =
• Lubrication • Workshop intensive performance
• Checkups works before and after • Effectiveness of planning = =
( )
servicing ( )

| Aritra Halder | Assistant Professor | Aritra Halder | Assistant Professor

Spare Parts Management Spare Parts Management Techniques

Objectives Sl. No. Technique Basis Application
1. Maximizing equipment availability 1 ABC Annual Consumption value in rupees Inventory Control
2. Reduce spare part inventory level
2 HML (High Medium Low) Unit Price of Material Delegation of purchase power
3. Reduce operating cost
4. Achieve unstopped production from equipment 3 VED (Vital Essential Desirable) Operational Characteristics Storage Point

4 FSN (Fast Slow Non Moving) Issues from Stores Obsolescence Control

5 SDE (Scarce, Difficult, Easy) Availability of Items Purchase Strategy

6 FAN (Failure Analysis) Design of Spares Reliability Engineering

7 GOLF (Govt., Ordinary, Local, Foreign) Source of Origin Purchase Strategy

| Aritra Halder | Assistant Professor | Aritra Halder | Assistant Professor

4
 12-04-2023

Thank You!
Contact Me
at
ahalder@nicmar.ac.in
+91-8504017164

| Aritra Halder | Assistant Professor