Why Equipment Programs Leak Money (And the Fleet Management KPIs that Help Fix it)
- William Hipp
- September 18, 2026
Not too long ago, I sat down with two like-minded people who think about construction equipment for a living: Rich King, CFO at Schlouch Incorporated, a single source provider of site design and construction services to residential, commercial, industrial, energy, and governmental customers in eastern Pennsylvania, and Craig Gramlich of Lonewolf Consulting, who spends his days simplifying complex ideas for contractors, helping them become more efficient and profitable.
What struck me most throughout the conversation was a line Rich borrowed from his own COO at Schlouch when discussing internal misalignment:
“We’re not doing it wrong, we’re just not doing it together.” — King, paraphrasing his COO
An underperforming equipment program often times is the result of poor communication, not incompetence. The fleet team knows their machines, operations knows the project, and accounting knows the numbers. Each group is doing good work.
However, when left to their own devices, what they are doing alone can erode interdepartmental trust. For instance:
- Accounting gets an expense invoice lacking information and codes it to the same place as the last one without checking.
- Construction encounters an unforeseen production problem, and knee jerk reaction results in a superfluous rental unit.
- Equipment has a machine in the shop for a major repair and doesn’t check to see if the machine is needed or has budget to substantiate it.
These are just a few examples of perceived incompetence that are really the result of communication breakdowns. That space between teams is where strategy goes by the wayside and money begins to leak.
The following article is a working system to improve communication and align teams before the weak link breaks.
I’ll highlight the weekly habits and meetings, fleet management KPIs, and the operational data layer that construction orgs can rely on, backed by real life insights from Rich and Craig, two people who are well-versed in fixing such problems.
The Internal Equipment Triangle: A Quick Primer
Before you can fix a misaligned equipment program, you need a shared vocabulary for describing it. Gramlich and King have strikingly similar concepts that evolved independently from one another: the Internal Equipment Triangle.
It consists of three departments (Equipment Management, Construction Operations, and Accounting/Finance) that each work towards one shared purpose, to build the work safely, on time, to budget.
The framework: three departments, one shared purpose. Source: Lonewolf Consulting
Rich’s team at Schlouch first brought this concept to life after learning about AEMP’s (External) Equipment Triangle.
“The Equipment Triangle philosophy serves to remind those in the heavy equipment industry that in this relationship everyone is entitled to receive the respect they deserve and all transactions are to be win-win for all concerned. After all, a rising tide raises all ships.”
The team at Schlouch turned this philosophy inward:
“We had a number of people start going to AEMP and get certified… They brought the idea back and we kind of turned it inside, and looked at if we can align accounting, fleet and operations, we can really get some great synergy.”
The equipment team is focused on keeping machines available while controlling costs, and operations needs to keep work moving safely and on schedule. Accounting looks at how those decisions ultimately affect profitability.
Each group has their own noble mission, but silos and echo chambers can cause perceived imbalances that directly impact culture, focus and yield. In other words, when left unmanaged, the falling tide sinks all ships.
“When your teams work together, costs shrink, efficiency soars, and profitability follows.” — Craig Gramlich
The Warning Signs Your Triangle Is Misaligned
You don’t need a root-cause analysis to know your triangle is off. Listen for the arguments themselves.
Gramlich describes the tension that arises between teams: The operations team wants more machines, but feels that the equipment team’s rates are too high. Equipment is being protective of the assets, while Operations is focused on output. The accounting team ends up getting stuck playing referee.
“Your accounting team is going to be left almost like wearing a referee shirt, trying to figure out, ‘I don’t know who to believe, which one’s right, but I just want a return on the investment.’” — Craig Gramlich
| Equipment | Operations | Accounting | |
| Sees itself as | Guardian of assets | Revenue generators | Objective judges & protectors of capital |
| Day to day, that means | Maximizing ROI and providing reliable machines at the lowest cost per hour | Building the work, equipment is a destructive means to an end | Confirming the cash consumed in day to day operations is classified appropriately |
| When ignored, it sounds like | “We shouldn’t own that.” “Stop breaking the equipment.” | “That costs too much, we should just rent.” “Send me equipment that works.” | “Who authorized that purchase?” “I don’t know which story to trust.” |
Communication is the only way to get true alignment. Inherently, departments have different goals and objectives, which makes it hard to run off a shared truth.
During times of high growth, that disconnect will only be exacerbated. Different departments scale at different rates. And as those teams scale, they bring in more specialists, who have increasingly less insight into interdepartmental workflows. Communication becomes harder to manage, and that’s what ultimately creates the gap between the triangle’s points.
Misalignment in practice: Three departments, no shared center. Credit: Lonewolf Consulting.
Signs Your Triangle Needs Work
- Equipment: Missed preventive maintenance, longer periods of time in shop or at the dealer, downtime events increasing in number or duration, and growing reliance on rentals to cover availability gaps
- Operations: Missed equipment charges, utilization below target, project wins aren’t communicated timely, equipment not arriving on time, unsafe loading/unloading zones
- Accounting: Surprised by capex purchases, run away rental equipment spend, delays in month end close or other deliverables, and acting as referee between departments
The fix isn’t picking which department is right or finding a better way to referee the conversations. The fix is making sure every department communicates regularly, works towards the same shared goals, and has data they can’t argue about. Operationally, that comes together with the right software and data layers, and the right internal collaboration tactics.
One Fleet Management KPI Per Corner, and the Twist That Makes It Work
Cross-Assign KPIs to Different Teams
At first thought, it would make sense that everyone should own the metrics they live and die by. Operations would own equipment utilization as a KPI, equipment would own down time (i.e. machine availability), and accounting would own over/under recovery or overall profit and loss on an asset.
But again, without shared skin in the game, departments can develop their own assumptions or be protective of their own metrics.
To combat this, Gramlich suggests flipping the KPI ownership across teams:
“The most impactful KPIs you’re ever going to get are interdepartmental. And that would be your equipment team tracking utilization, your operations team tracking availability.”
In this system, the equipment team reports on utilization and the operations team reports on downtime. Both teams share the responsibility for the results, which forces them to look at how their decisions affect the business as a whole, rather than only optimizing for their own numbers. With that, the focus shifts to whether the business as a whole is getting the most from its equipment (without the accounting team having to arbitrate).
Alignment in practice: Three departments, one core business. Credit: Lonewolf Consulting.
The payoff for bringing the separate corners of the triangle together is measurable. Gramlich said, regarding an organization he worked with to baseline costs:
“At one organization, we did that and a year later the shop costs were 39% lower.”
He added, “the operations team is like, ‘we’re actually seeing an improvement in our support,’ but it’s by pulling the triangle in. There’s huge costs to be saved, and waste that was there that may not have been seen otherwise.”
Give the Cross-Check Something to Run On
This signals the importance of having a computerized maintenance management system (CMMS), because it puts real, centralized data behind inter-departmental fleet management KPIs, giving each corner of the triangle a shared source of truth to validate those equipment metrics.
For a contractor still running on pencil, paper, and whiteboards, that can sound like a lot to take on at once. The goal isn’t a perfect system on day one, however. The goal is a system that keeps the house in order well enough that when a KPI moves, someone can actually trace back to why, instead of making an educated guess or placing blame on another department.
Practical Application: Schlouch’s Thursday Morning Triangle Meeting
Make It a Standing Meeting, Not Ad Hoc
None of this works if it only happens when something breaks. Filling the space between triangle points requires proactive and ongoing interdepartmental conversations.
So, make a standing meeting for operations, equipment, and finance to discuss equipment, job backlog, and budgets. Schlouch has done this every week for close to 15 years.
“Every Thursday morning at 8:30, fleet operations and finance are meeting together to discuss all things equipment from acquisition to operation to maintenance to that midpoint check-in to dispose. So that’s how it’s worked for us. And I think we’ve been meeting as a group for about, I don’t know, close to 15 years now,” said King.
The meeting let Schlouch’s equipment team hear about upcoming bids before jobs were won, opening a conversation about fleet capacity versus rentals. When the warehouse-construction boom hit Eastern and Central Pennsylvania, that early visibility let Schlouch buy ahead of demand.
When the backlog dried up, the same visibility let them sell off assets they’d already anticipated wouldn’t be needed, in some cases with guaranteed buybacks negotiated up front.
The payoff shows up before any problem gets expensive. The time dedicated to proactive communication helps ensure that inefficient costs never show up. The time invested in these meetings can be hard to prove out in a ROI calculation, however, companies that do this right know what happens when focus begins to drift.
Strategizing with Transparency: The Tri-Axle Example
Age-based replacement planning paired with fleet demand forecasting is essential for maintaining fleet balance. When replacements bunch up, equipment rates spike unpredictably, disrupting both operations and accounting projections.
King walked through a real example: Schlouch runs 15 tri-axles with a target replacement cycle of one unit every 18 months. Periods of high utilization broke that pattern. The fleet aged unevenly, creating a surge of nine units that suddenly needed replacement, and the normal 18-month interval compressed to just four months.
Deferring those purchases wasn’t an option, because machine uptime and repair costs would have suffered.
The timing hit hard. Equipment prices climbed 20 to 30 percent over a few years. When 60 percent of a rate class gets replaced all at once, the 12-18% impact on the equipment is going to turn heads. It disrupts competitive advantages. It potentially halts operations.
This is where collaboration mattered. Operations, Accounting, and Equipment Management sat down and built a systematic approach. Rather than absorbing the price jump all at once, they feathered the increase in overtime using a churn chart-like approach.
The process allowed Schlouch to work through their existing backlog of work at the old rate, add new backlog using the feathered approach, and maintain a fair cost allocation method. Without the regular triangle conversation, operations might have seen the rate shift as a hostile move instead of a necessary adjustment. The feathered approach kept pricing sustainable while modern equipment costs phased in gradually.
Just as important, the change then gets communicated in those standing meetings. Every two weeks, King and the estimating team walk through updated rates and why they’re moving:
“I explain to them the same process of what we’re doing and why that rate is going up, how we’re approaching that and what the alternative was. And they seem pretty open to that. They’re never happy when the rate is going up, but I think having that transparency can definitely help close the loop.”
Meetings like this matter because you’re demystifying the rate and reducing the unhealthy tension. If you generate the rate in a box, without sound assumptions, the result is tension and conflict.
Once you have an open and honest discussion to demystify the rate, it makes things a whole lot more fluid for the organization.
Three Weekly Rituals: Planning, Connection, and Money Meetings
Run These Every Week, No Exceptions
In the example of Schlouch, the Thursday meeting had the right people, agenda and outcome in one place. Some organizations might be able to knock this out in one meeting while others requiring broader audiences might have to break it up into other targeted touchpoints.
Specifically for people on the Equipment side, Gramlich recommends three rituals to have on a weekly basis:
- Planning Meeting: Early in the week, dedicate time to short term planning and long-term planning. From a short-term focus, map which PMs are due and which job sites have breakdowns to work around, or what moves are coming up. From a long-term perspective, what projects are starting soon, what projects are we bidding on, and does the fleet composition meet the need.
- Connection Meeting: This is your “client” meeting. Meet with Ops directly to bring them something of value and simply ask, “how’s it going?” Either join an existing Ops meeting or get out onto jobsites in a true coffee-and-donut fashion.
- Money Meeting: Have a recurring session (Gramlich jokes about “Finance Friday” or “Money Mondays” to make it fun) spending 30 to 60 minutes looking at anything with a dollar figure attached, a cost report, unapproved invoices, or internal rates.
Craig’s summary is blunt: “If you do those three things, lather, rinse, repeat every week, you will be successful as a fleet person.”
Where to Start If You’re Still on Spreadsheets
Start With Cost Categories
If you’re not tracking anything in a structured way yet, start by segregating your costs.
King’s advice: Break rates into owning cost, fuel cost, and repair cost at minimum, and put a real work order system underneath them. Evaluate the rates that you’ve set compared to what your actual results are. Document the operational assumptions used when calculating the rate.
Without that baseline, there’s no clean number to build fleet management KPIs on top of later.
Pick One Metric and Expand From There
The information age has made data more readily available. As such, there are many KPIs from which contractors can pick. That can seem like a daunting challenge to tackle at once, so pick a single number and start tracking it, any number.
Gramlich’s advice:
“It doesn’t really matter what you pick to start with, pick something… If you don’t really know what your fleet count is today, start there. And from there, you can then expand by category… You can expand into number of mechanics, availability, utilization, and things like that. Pick a metric, two or three to begin with, and start tracking.”
Either starting point works. What doesn’t work is waiting until you have a perfect system before you start measuring anything.
How Tenna Connects the Triangle With Real-Time Data
Every fix in this piece depends on the same thing underneath it: Trustworthy data moving between the three corners without someone re-keying it by hand or applying their own assumptions.
Here’s how that impacts each corner of the triangle.
Equipment’s Corner
Equipment utilization tracking and asset management pulls engine hours, location, and idle time straight off the iron through TennaINTEL, TennaCANbus, or TennaFLEET hardware, so utilization comes from the asset itself, not a field report.
Work orders get categorized as they’re created, preventative, corrective, unplanned, giving maintenance a real source to run against for availability, downtime, reliability, PM compliance, and so on.
Operations’ Corner
Resource management and dispatching shows real-time equipment location and schedule availability before a piece gets committed to a job, catching double-booking and last-minute rental scrambles before they cost a day.
Field crews get that same visibility from a mobile device instead of a radio call back to the yard.
Accounting’s Corner
Asset Financials turns that same equipment activity into job costing and internal equipment revenue. Thus, turning equipment into a self-reporting entity that has a defensible audit trail behind it.
That eliminates the most contentious element of job cost, the equipment charge, making a real time P&L constantly available. No more excel gymnastics.
The cleanly structured data along with ERP integrations with platforms like Vista, Sage, Spectrum and others, allow finance teams to streamline cumbersome processes without adding additional work.
Bringing It Together
Ultimately, centralization is the point. Equipment, Operations, and Accounting aren’t working off their own version of the data. While they’re doing everything mentioned above, they’re also pulling from the same platform, the same asset history, the same rate, etc.
When a rate changes the way it did with Schlouch’s tri-axles, a shared source of truth allows everyone to see the approved rate and the assumptions in it, while reducing rate sheet sprawl.
That’s what actually cuts down on friction. Nobody has to take another department’s word for why a rate moved or why a piece of equipment wasn’t available, the context is already there.
That’s the same idea behind the triangle itself: Three departments working toward one shared core instead of three separate versions of the truth. A standing meeting, shared fleet management KPIs, and a few weekly habits build that alignment by practice. Centralized digital data drives visibility into that alignment constantly reinforcing the culture outside of dedicated meetings.
If you’d like to check out the full conversation with Rich and Craig, you can watch that here.
Frequently Asked Questions
What is the Internal Equipment Triangle?
The Internal Equipment Triangle is a way to align Equipment Management, Construction Operations, and Accounting/Finance around the same equipment decisions. Each team sees the fleet from a different angle, so the framework gives them a shared way to discuss cost, availability, utilization, and profitability.
What fleet management KPIs should equipment, operations, and accounting each track?
A strong approach is to cross-assign KPIs across Equipment and Ops. Equipment can track utilization and Operations can track availability or downtime, while Accounting tracks financial performance such as over/under recovery or asset profitability. That creates shared accountability instead of each department managing only its own numbers.
What's the difference between equipment availability and utilization?
Availability measures whether a machine is ready to work when needed. Utilization measures how much that machine is actually being used. A machine can be fully available and still have low utilization if it spends most of its time sitting idle.
How often should equipment, operations, and finance meet?
At least weekly. A recurring meeting gives the three teams a regular place to review upcoming work, equipment needs, downtime, costs, rates, and other issues before they become expensive.
How do you communicate an equipment rate increase to estimators?
Explain what changed, why the rate is increasing, and what assumptions are behind it, using real data. Estimators need enough context to understand the cost change and price future work accordingly. Regular communication also helps prevent a rate increase from feeling arbitrary.
What should a contractor with no formal tracking do first?
Start with the basics. Separate equipment costs into categories such as ownership, fuel, and repair, then pick one or two metrics you can track consistently, and start tracking. Fleet count, utilization, and availability are all reasonable starting points. The goal is to establish a reliable baseline before adding more KPIs.
About William Hipp
As Senior Product Marketing Manager at Tenna, Will translates complex construction technology capabilities into clear, practical solutions for field and office users. Will brings a decade of experience as a Certified Public Accountant across Big Four accounting, multinational manufacturing, and construction equipment management. His background in finance, analytics, and construction operations helps ground Tenna in practical industry knowledge, customer value, and disciplined business outcomes.