KPIOperations & Supply Chain

Equipment Utilisation Rate

Construction – percentage of available plant and equipment hours used on productive site work

What is Equipment Utilisation Rate?

Equipment utilisation rate is the percentage of available equipment hours that are used productively. It shows how well expensive machinery is put to work.

Idle equipment costs money in ownership and hire, so utilisation is a key measure for construction and engineering firms.

How this KPI is measured

Function
Operations & Supply Chain
Sub-function
Equipment
Industry
Construction & Engineering
Type
Lagging
Impact
Efficiency
Unit
%
Measurement frequency
Weekly / Monthly
Formula
(Productive equipment hours / Total available equipment hours) × 100

How to calculate it

Divide productive equipment hours by total available equipment hours, and multiply by 100.

For example, if a machine was available for 200 hours and worked productively for 130, utilisation is 65%.

Use consistent definitions of available and productive time, and track by machine and by project.

Where it is used

  • Right-sizing the fleet

    Decide what to buy, hire or sell.

  • Improving scheduling

    Reduce idle time.

  • Controlling cost

    Reduce hire costs.

How to improve it

Tips and common mistakes

  • 100% is not a realistic target, since maintenance and set-up are needed.
  • Compare with hire cost.
  • Track by machine type.

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