by Gary Stover

Navigating through these tough economic times is hard on everybody—families, employees, and businesses. This is a tough time for everybody.

The business landscape is constantly changing because of the economic turmoil, and it is paramount that management needs to be in tune with key issues and concerns. Communicating to your employees during organizational change or transition is heightened. Your employees might get anxious if change is anticipated and it is the responsibility of management to respond accordingly. There are a few things to remember that will aid you when working though a volatile environment:

by Darrell Wysong

The balance sheet is constantly under the microscope. Cost-effective solutions are more acute and companies are continually evaluating cost saving measures that will have the impact needed to the bottom line. The need to evaluate the best options when it comes to Ground Support Equipment (GSE) has become more heightened for the aviation industry during the struggling economy.

The question companies have to ask themselves when it comes to GSE is should they lease, refurbish, or buy? The number one factor when determining GSE requirements is reliability. The aviation industry is a time conscience environment. It is important to determine what your operational needs are when you are making decisions about GSE.

Lease

Leasing is a popular option, especially for seasonal equipment or replacements while equipment is getting fixed. Leasing GSE equipment has gained momentum during the economic recession. Leasing equipment is a great way to update or change your fleet quickly to meet your changing operational needs.

Refurbish

The most unpredictable part of GSE is the maintenance part. When equipment ages and is used regularly, everyday maintenance may not be enough to keep your operation running smoothly and without delays. Rather than purchasing new, refurbishing old equipment to zero-time has seen an upward trend over the last decade. The return on investment is achieved quicker versus purchasing new equipment.

Buy

Due to economic uncertainty, companies are shying away from purchasing costly equipment. Companies are identifying opportunities to invest available cash in other areas of potential growth rather than tying it up in equipment. In the current financial climate, this option is less likely. However, organizations need to evaluate the life cycle of its equipment to determine if it is time to buy new equipment to update its fleet to match changing industry standards.

Whatever option you decide, be sure that you evaluate all possible scenarios. Work closely with your operations team to ensure you have a clear understanding of their needs and requirements to run a safe and efficient operation.

by Jim Osborne

Most will agree that maintaining facilities and equipment by preventive maintenance to obtain optimum value from your investments is a solid business approach. However, preventive maintenance has been more promoted in principle than in practice. It is hard to determine the financial relationship between the cost of preventive maintenance and returns of other cost savings initiatives.

Figuring out where to start can be the most daunting task when trying to decipher the value of preventive maintenance. It is estimated that repair and maintenance costs can be around 15 percent of total expenses. In fact, most organizations claim that its preventive maintenance programs are not executed correctly. There are a few things you can do to determine what impact preventive maintenance has on your organization.

Understand Your Preventive Maintenance Program

First, you need to determine what is your preventive maintenance program. Do you have one? What does it consist of? What is involved in your preventive maintenance program: facilities, equipment, or vehicles? Once you understand what your program entails, you can evaluate what is the current financial impact.

Conduct a Financial Analysis

Take the current state of your preventive maintenance program and develop a model/budget that shows expenses for the last year and projected expenses for the next year. The key is to understand what is the current cost of your preventive maintenance program.

Develop a Preventive Maintenance Program that has Impact on the Bottom Line

This might be a little more difficult. As mentioned earlier, preventive maintenance is a logical business approach but showing future financial impact is complicated. A good start might be to take your data from your analysis and work with someone in your financial group to see how your organization assess depreciation and expenditures. Together you can develop an analysis that shows financial impact for your company.

The value of preventive maintenance can be found when your facilities aren’t impacted by unscheduled downtime, minimizing costly repairs, and your equipment lasts longer. By developing an effective preventive maintenance program your organization can avoid expensive capital outlay, and the longer the capital expense can be delayed your return on investment will only continue to increase.