DOWN to EARTH
December 2023
Kemper Construction Company Inc.
North Dakota firm focuses on heavy municipal underground work
The former owner of Kemper Construction Company Inc., George Kemper (center), is presented with a check from the company's new owners: (L-R) Scott Thompson, Steve Farden, Todd Farden, and Terry Hall.
A publication for and about General Equipment & Supplies, Inc. customers
www.GeneralDownToEarth.com
A Message from General Equipment
Dear Valued Customer: Jon Shilling
We sincerely hope that your year is going well. While the economy has seen its ups and downs, construction is one industry that has continued to be an overall bright spot even if some sectors have been somewhat slower lately. On a celebratory note, it is the 10th anniversary of Komatsu’s Intelligent Machine Control (IMC). What a decade it’s been for the factory-integrated GPS excavators and dozers that continue to improve. Companies of every size are seeing improved savings in both time and costs, and you can read some of their stories in this issue.
To help get projects done on time, properly maintain your equipment. Fortunately, most new Komatsu machines come with complimentary Komatsu Care for the first three years or 2,000 hours. Our trained technicians perform the services at your convenience to help limit downtime — typically after normal work hours or when your equipment is not being used. Komatsu Care also gives you certainty in your owning and operating costs. Learn about Komatsu’s new program, Komatsu Care Plus Cost Per Hour, in this issue. We believe it’s well worth the investment.
There has been a lot of information lately about artificial intelligence or AI. There are wonderful possibilities for the use of AI, including in construction. In this issue, we feature an article that looks at the potential effects AI may have on our industry. I think you will find it interesting and informative. As always, if there is anything we can do for you, please feel free to contact one of our branch locations. Sincerely,
Celebrating 10 years of IMC
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Jon Shilling, President & CEO
DOWN to EARTH
Corporate
Jon Shilling, President & CEO Don Kern, VP Aggregate Equipment Sales Matt Kern, VP Rolling Stock Sales Don Shilling, Chairman of the Board Jerry Kern, Vice Chairman of the Board &
Aggregate Sales Consultant Tom Hamm, Crane Sales Manager Mark Johnson, Used Equipment Sales Manager Shawn Justesen, PSSR Manager Dave Asleson, Rolling Stock Sales Manager Kurtis Lemar, Aggregate Sales Manager
In this issue
Sales
Kemper Construction Company Inc. pg. 4
Meet Teralyn and Steve Farden, whose company performs underground utility work throughout North Dakota.
Artificial Intelligence pg. 8
See the potential benefits of AI in the construction industry.
Guest Opinion pg. 13
Jon Christianson
Cell: 701-770-1360
Aaron Brothen
Southwest ND/ Northwest SD Cell: 701-541-3316
Listen to Joshua L. Coker's advice about cyber insurance.
Ryan Hokenson
Celebrate 10 years of Intelligent Machine Control (IMC).
Ryan Muehler
Delve into construction equipment electrification.
Wayne Slinger
A Decade of Data pg. 14
Innovative Technology pg. 18 Dollars and Sense pg. 23
Read about how Komatsu was selected as a Sourcewell heavy equipment provider.
Virtual Learning pg. 24
Take a look at Komatsu Academy, a new online training system.
Culture in Construction pg. 26
Discover why company culture in construction matters and how to make it better.
New Payment Option pg. 29
Learn about Komatsu Care Plus Cost Per Hour.
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Tech Talk pg. 31
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Salute to a
Customer
Fishing trip leads to change in ownership for Kemper Construction Company Inc., high-quality work remains
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Steve Farden has a whopper of a true fishing tale. “We already had our own business, Farden Construction Inc., and over the years we did a lot of work with Kemper Construction Company Inc.,” recalled Steve. “The owner, George Kemper, invited me to fish in Canada. Turns out, it was an interview. He was looking to sell Kemper Construction, and he wanted me to buy it. We decided to make the deal in a cabin in northern Ontario.”
Discover more at GeneralDowntoEarth.com
They sealed the deal in 2013, and since then, Steve has been leading both North Dakota-based companies. Kemper Construction is headquartered in Minot and focuses on heavy municipal underground with an emphasis on sewer and water installation for cities in North Dakota. Maxbass-based Farden Construction, which was founded in the 1930s by Steve’s grandfather as a house-moving company, became an oilfield service business and now provides general earthwork and crushing services. “It really was a good marriage of the two,” said Steve. “We needed to get more people involved in underground, and the best way to do that was to buy an established business like Kemper Construction. It has a very long history – since 1905 – with name recognition, so we decided it was best to keep it as a separate entity from Farden Construction.”
(L-R) Teralyn and Steve Farden are part of the ownership/management team at Kemper Construction, which mainly performs underground utility work throughout North Dakota.
He added that he also thought it was best not to be Kemper Construction’s sole owner. Steve teamed up with his brother Todd — who is also a third-generation owner of Farden Construction and runs its crushing operations — as well as Scott Thompson and Terry Hall. “There is a lot of experience here, and we have all worked together for a long time,” said Steve. “We are not big on titles. It’s about getting the job done and accomplishing things that others may not be able to do that drives us. In addition to us, there are some great people on staff such as Duane Haugen, Jordan Brown and Rodney Houle. My wife, Teralyn, has also been instrumental in our success and is basically our CFO/comptroller.”
With a staff of about a dozen employees, Kemper Construction is not a big company, but what it lacks in size, it makes up for in experience, according to Steve. “It was a huge help that the purchase included a staff of gentlemen who knew how to get the job done and stayed with us,” Steve emphasized. “Many of them are still on board, and George is even still involved in helping with project management. We run a couple of crews who do a limited number of sizable projects each year. We made a conscious decision not to get bigger and stay specialized.”
Old and new methods
Steve said a current project for the city of Bottineau is a perfect example of the kind of work Kemper Construction has completed during its nearly 120 years of operation.
“We’re doing an underground replacement of water main that started with pavement removal,” explained Steve. “We put in temporary water service and installed new lines. There are a lot of old pipes in North Dakota, so jobs like this remain a big part of our workload.”
Steve added, “Kemper Construction also performs pipe bursting, which George started doing in the late 1990s. It involves setting up a machine, pulling a tool through old pipe, breaking it out of the way, and then pulling in brand new lines. The advantage is that you don’t tear up streets, so the impact to the city is reduced. It turned into a vital part of the business and
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An operator places material in a pile with a Komatsu PC360LC-11 excavator.
really distinguished Kemper Construction from other companies.” Steve estimated that the two methods were evenly split among Kemper Construction’s projects in 2023.
“It varies year to year, depending on what municipalities are planning,” noted Steve. “It looks like 2024 could be heavily weighted toward bursting jobs.”
Operators want Komatsu excavators
Hanging on the walls of Kemper Construction’s office in Minot are a vast number of historical photos that include projects the company completed with horse-drawn carts, as well as steam-powered shovels, trenchers and draglines.
“It was a different world then,” proclaimed Steve. “Things have obviously changed a lot. We use the most modern equipment today, including Komatsu excavators, which Kemper’s operators who stayed on recommended because they had been using them for so long and liked the power and production they were getting. We inherited some when we bought Kemper and have added more over the years.” Kemper Construction’s Komatsu excavators range from a 68-horsepower PC88MR to 362-horsepower PC400 models.
“Each job is different, and you need to be able to do all aspects of underground projects with the right tools for the job to be most effective,” said Steve. “Every one of them gives us good performance. The PC88 is great for smaller installs and working in streets and around obstacles. As the trenches and pipe get bigger and deeper, the larger excavators are extremely effective and productive.”
Kemper Construction uses a Komatsu PC88MR tight tail swing excavator for smaller digs and when working in areas such as a lane of traffic.
Continued . . .
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‘General Equipment is always there for us’ . . . continued
Kemper Construction acquired its Komatsu excavators from General Equipment & Supplies Inc. and worked directly with sales representative Ryan Hokenson on its most recent purchases. Hokenson also helped source attachments such as a vacuum lifting system the company has utilized on several projects, including the installation of 40 miles of pipe a few years ago. “General Equipment is always there for us,” declared Steve. “If we need anything, they have a distinct ability to come at a
moment’s notice. We have bought a lot of equipment out of their rental fleet, and we have never worried about it because we know it’s well maintained and will get the job done. We do a lot of our own service on the older machines and rely on their technicians’ expertise to diagnose and fix any issues on the newer excavators. We have had very little downtime because of that. In addition to Komatsu for Kemper Construction, we have worked with General Equipment quite a lot over the years for crushing equipment for Farden Construction.”
Focused on maintaining high-quality work
Steve’s fishing tale is even more impressive considering it may have played a part in the acquisition of another business, Stevens Welding, about three years ago because the former owner was also on the trip. The nearly 80-year-old company is based in Glenburn and performs welding and fabrication services for a wide variety of customers — including General Equipment.
(L-R) General Equipment sales representative Ryan Hokenson talks with Teralyn and Steve Farden at their office in Maxbass, N.D.
“Stevens Welding is also run as a wholly separate entity from Farden Construction and Kemper Construction,” said Steve. “It fits right in as another well-established business. We don’t see any of them really getting bigger at this point. Our focus is maintaining the high-quality work that we do, and from the construction side, there is plenty of that coming as the state continues funding infrastructure updates for the municipalities. It seems there’s an endless amount of work for the foreseeable future.” ■
Kemper Construction uses a mix of older and newer Komatsu excavators it has acquired from General Equipment & Supplies Inc.
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Artificial Intelligence
AI such as ChatGPT offers potential benefits for the construction industry
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Driven by the emergence of artificial intelligence or AI, the construction industry finds itself on the brink of a potential transformation. Some tasks that traditionally require a person can be solved by AI tools. At the forefront of this development stands ChatGPT, an innovative AI language model created by OpenAI. ChatGPT is a type of generative AI that can create content or responses such as sound, images, and — in ChatGPT’s case — text.
“Generative AI is a type of artificial intelligence focused on content creation,” said Trent Miskelly, Chief Operating Officer at Document Crunch. “It has been popularized recently with ChatGPT, which is a company built on OpenAI’s large language models. You can think of a large language model as basically a database of the entirety of the internet. You can ask questions and get responses back.” Miskelly continued, “In its most basic form, generative AI is a prediction engine. Whatever question it is asked, it is going to do its best to respond to that question and hopefully be helpful to you.”
The program can support some functions of a construction operation, but it is important to recognize its limitations. AI’s strength lies in its capacity to analyze large amounts of data and provide valuable insights.
“It isn’t going to replace the workers on your job site,” said Jeff Sample, Industry Evangelist at Join, “but it may help get materials faster.”
Exploring the advantages
In an industry where precision is paramount, AI can be an asset in cost estimation. ChatGPT can access real-time data on material prices and labor rates and help create accurate cost projections. Construction companies equipped with this AI-driven decision-making and data processing can enhance financial planning, fortify supplier relationships, and establish well-informed budgets. “Subject matter expertise is paramount when analyzing responses,” noted Miskelly. “You must understand what you are getting from [AI], because you are in the driver’s seat.” Selecting construction materials and equipment becomes a data-informed decision with AI’s involvement. By analyzing project requirements, ChatGPT can suggest appropriate materials, cost-effective alternatives, and cutting-edge equipment options — steering construction projects toward efficiency and sustainability. AI can also play a pivotal role in addressing challenges that arise during projects. While it doesn’t replace human expertise, AI can
While AI doesn’t replace human expertise, it can help analyze project issues, consider variables, and propose solutions to keep projects on track. It can also help identify provisions in contracts with high accuracy.
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AI can assist in project management by automating routine tasks, tracking progress, and identifying potential delays, thus increasing overall efficiency.
analyze issues, consider variables, and propose solutions to keep projects on course.
“It is great for text classification, like identifying provisions in contracts with a high degree of accuracy,” said Miskelly. “It can create and summarize information from documents or data.”
The scope of AI extends to architectural design, offering new perspectives and solutions. ChatGPT can inject fresh ideas into the creative process, ranging from sustainable construction practices to optimizing spatial utilization — helping further additional innovation.
Navigating concerns and challenges
As AI’s use gains prominence, it also brings legitimate user concerns. The dynamic data analyzing capabilities of ChatGPT introduce potential challenges worth consideration.
“I think it is incredibly important to be cautious with what you are feeding out there,” said Kris Lengieza, Vice President of Global Partnerships and Alliances at Procore Technologies. “You wouldn’t put a bunch of financial statements into ChatGPT if you didn’t want them to be publicly available somewhere and train somebody else’s model.”
If not used carefully, AI can generate non-factual responses, so ensuring accuracy is essential.
Data privacy has emerged as a critical concern in the AI landscape. Ongoing investigations into OpenAI and ChatGPT show the significance of safeguarding user data.
Continued . . .
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‘I think we should be excited as an industry’ . . . continued
Internationally, Canada’s CBC News published that the country’s federal and provincial governments are opening investigations into OpenAI regarding the disclosure of personal user information, and Italy has become the first country to issue a temporary ban on the software as the country finishes an inquiry into any violations.
Another concern about AI is that ChatGPT has been known to generate non-factual responses. Recently, U.S. Judge P. Kevin Castel fined a law firm and two lawyers $5,000 after they submitted a written argument generated by ChatGPT that contained six legal cases that did not exist, according to a report by AP News. The situation and associated reprimand are the first of its kind. “Technological advances are commonplace and there is nothing inherently improper about using a reliable artificial intelligence tool for assistance,” wrote Castel. “But existing rules impose a gatekeeping role on attorneys to ensure the accuracy of their filings.” Castel added, “[They] abandoned their responsibilities when they submitted non-existent
With access to real-time data on material prices and labor rates, AI can generate accurate cost projections. Construction companies can make data-driven decisions, enhancing financial planning and budgeting.
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judicial opinions with fake quotes and citations created by the artificial intelligence tool ChatGPT, then continued to stand by the fake opinions after judicial orders called their existence into question.”
Responsible usage of AI is paramount to avoid misinformation and inaccuracies. These recent instances of false information generated by AI highlight the need for accurate representation and the importance of stringent oversight to ensure the accuracy of AI-generated content. “I think we should be excited as an industry, but we need to be responsible about how fast we move,” noted Lengieza. “We need to be responsible for how much we trust these programs, and we need to make sure that the trust we give is verified.”
Charting the path ahead
AI doesn’t change the core dynamics of the construction worksite, but it can serve to complement it. As the construction industry navigates the evolving artificial intelligence landscape, it finds itself at the brink of the next step in this ongoing technological-driven evolution. ■
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Guest Opinion
Construction companies should consider cyber insurance that may mitigate risks, use strong cybersecurity practices
C
Cybercrime is an increasingly prominent threat to many industries, and construction is no exception. With the growing use of digital technologies in what was once a primarily “offline” industry, cyberattacks can pose a significant threat at every level of the construction industry.
The construction industry routinely handles sensitive information that is of value to cybercriminals, including project plans, client information, financial records, and employee data. Furthermore, due to the tight project deadlines and complicated project scheduling common in the construction industry, it can be particularly susceptible to ransomware attacks that disrupt critical digital assets to extort “ransom” from their victims. Struck by a ransomware attack at the wrong time, a contractor, construction manager, or design professional may face the unenviable position of choosing between contractual penalties for delay or paying an anonymous hacker large sums of money to free compromised data or digital systems.
As with the many other business risks faced by the industry, the response of many players in the industry is to obtain insurance. While cyberattacks are usually excluded from standard Commercial General Liability (CGL) policies, many major insurers now offer optional coverage under a Professional Errors and Omissions policy or through standalone cyber insurance. While insurance can afford some degree of protection against attacks, this is an imperfect defense at best. Disruption or damage caused by a cyberattack can be expensive, with data breaches and ransomware attacks often costing even comparatively small victims millions of dollars per attack in direct costs. These amounts can easily exceed policy limits. Downstream costs like loss of intellectual property, reputational damage, and in some cases, legal liability to the owners of compromised information are often nearly or entirely uninsurable.
to companies due to their sophistication and because most cyber insurance policies contain exclusions for “hostile or warlike actions.” Although still a developing area of the law, particularly given the ambiguity about whether a cyberattack that does not cause physical damage but nonetheless carries heavy economic costs is a “warlike” action, the exclusion risks a denied policy claim. Further, because cyberattacks by state actors often involve state secrets or national security concerns, insureds often have difficulty developing the facts around the cyberattack, complicating efforts to recover under their policy.
Despite its limitations, construction industry actors may want to consider obtaining or at least looking into cyber insurance or adding it as coverage to one of its existing forms of insurance. While it should not be relied upon as a sole means of protection, it may help mitigate the risk that modern construction companies face. Practicing proper digital hygiene by implementing strong cybersecurity measures like firewalls, multifactor authentication, encryption, and air gapping sensitive data, could be an essential, and unfortunately often neglected, safeguard in today’s digital economy. ■ Editor’s Note: This piece originally appeared on Robinson+Cole’s Construction Law Zone. View it here: https://www.constructionlawzone.com/2023/02/ cyber-insurance-for-the-construction-industry/.
Joshua L. Coker, Associate, Robinson+Cole
About the Author: Joshua L. Coker is a member of Robinson+Cole’s Litigation Section as well as the Construction Law Group and Construction Industry Team. Prior to joining Robinson+Cole, Coker served as a legal extern with the Office of the New York State Attorney General while attending law school. Coker’s previous work included matters involving civil rights, consumer fraud, wrongful death, and pandemic response.
Due to the rise of technology in the construction industry, it’s important to protect your data with strong cybersecurity practices. You should also consider cyber insurance as a means of protection for you and your business, says Robinson+Cole’s Joshua L. Coker.
Proper digital hygiene
Additionally, companies have seen a rise in cyberattacks led by hostile state actors. Often originating from countries hostile to the United States, such as Russia, China, North Korea, and Iran, these attacks are uniquely dangerous
13
A Decade of Data
The 10th anniversary of IMC confirms that users have saved time, lowered costs with integrated GPS grade control
I Andrew Earing, Director of Tracked Products and Technical Service, Komatsu
Komatsu IMC excavators go beyond simple guidance to semi-automatically limit over-excavation and trace a target surface.
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In 2013, Komatsu changed the landscape of the construction equipment industry with the introduction of the first Intelligent Machine Control (IMC) dozer that provided fully automatic blade control from rough cut to finish grade. The D61i-23 made an immediate impact, and a decade later, there is plenty of evidence that IMC equipment has cut costs significantly for customers and increased operator efficiency. “Providing that semi-autonomous functionality in the dozers from the factory was unheard of in the industry,” said Andrew Earing, Director of Tracked Products and Technical Service for Komatsu. “It was revolutionary. The integrated GPS grade control gave operators the ability to move dirt faster and more accurately with fewer stakes and reduced surveying costs. We found that novice operators saw their skill set grow rather quickly when using Intelligent Machine Control, because the semi-autonomous operation is a learning tool that is teaching them proper operation. Experienced operators found that it helped them work more comfortably throughout the day, and we found those operators willing to stay in the workforce a little bit longer because of the more enjoyable experience that the technology provided them.”
Upgrades
The D61i-23’s success set the stage for additional models, as well as IMC excavators that go beyond simple guidance to semi-automatically limit over-excavation and trace a target surface. Once the target elevation is reached, no matter how hard an operator tries to move the joystick to lower the boom, the excavator doesn’t allow it. This reduces wasted time and the need for expensive fill materials.
Liesfeld Contractor, based in Richmond, Va., was the first company to adopt a D61i-23 dozer in 2013. It has since upgraded its fleet multiple times and currently has 10 IMC dozers and three IMC excavators, including some IMC 2.0 models with advanced features that help further increase productivity. The IMC 2.0 dozers have proactive dozing control, which enables even less-experienced operators to cut/strip automatically from existing terrain, as well as lift layer control, tilt steering control, and quick surface creation. The IMC 2.0 excavators feature bucket angle hold control, which automatically holds the bucket angle to the design surface during arm operation. It’s less fatiguing for operators, so they are more productive, and it produces a better finish-grade surface. Plus, auto tilt bucket control assists operators by aligning the bucket parallel with the slope, so that finish grading can be accomplished without needing to align the machine with the target surface.
Komatsu’s D61i-24 IMC 2.0 dozer is the second generation of the original IMC dozer introduced in 2013. Its features include proactive dozing control, lift layer control, tilt steering control, and quick surface creation.
“We have come to rely on IMC, as it puts a lot of the information about the job right in front of the operator on the monitor,” said Kelby Morgan, Operations Manager at Liesfeld Contractor. “The more we can put on the job site, the better off we are. We can get jobs done with fewer worker hours. We’re less reliant on surveying. Everything combined makes us more efficient. I think it gives us an advantage over those who don’t use it.”
Increased efficiency, lower costs
Wisconsin-based Soper Companies performs earthwork and various other services with a sizable fleet of equipment that includes several Komatsu IMC excavators and dozers. “We’re committed to incorporating technology into our practices — from having our own survey techs who lay out jobs to digital plans to using the latest innovations in grade control — because we see increased efficiency and overall lower costs,” said Vice President Ethan Engel. “Our labor expenses are down because we don’t need grade checkers, and we’re moving material faster and more accurately.” Engel praised the Komatsu PC290LCi-11 IMC 2.0 excavator for its ability to follow complex design plans in foundation and utility digs.
“It’s been spot-on, and once you hit target depth on the model that’s been uploaded to the excavator, it won’t let you dig any deeper,” said Engel. “Operators hit final elevation without over-digging, so we are not replacing dirt with expensive backfill. In turn, that reduces trucking, lowers fuel consumption, and helps profitability. We are seeing similar savings with the dozers. Our operators get to grade faster with less material movement.”
Frank A. Rogers & Company Inc. (FARCO), a general contractor in Arkansas, saw similar results when an operator used a D39PXi-24 IMC dozer to complete a 52,000-square-foot commercial building that included 4 acres of pads. According to President Taylor Meharg, it saved approximately 10% to 20% on costs compared to a similar project the company did with rental equipment. FARCO has also found that the D39PXi-24 cuts down on surveying time. “We can do most of our surveying with one piece of equipment,” said Meharg. “The level of accuracy you get with IMC is an upgrade over traditional equipment, and I think even the best operators in our company would agree with me that it makes their job easier and helps get the project done faster.”
Continued . . .
15
‘We view IMC as a time-saving tool’ . . . continued
Texas-based Baker & Company Construction LLC realized the benefits of IMC when it compared a GPS-integrated dozer to a competitive model with an aftermarket system. “Komatsu was the clear winner,” stated President Brad Baker. “Operation was smooth, and the fact that there are no masts or cables to deal with made it a no-brainer. We now have four IMC dozers that we rely on heavily for stripping to finish grade. Our productivity is higher, and our costs are reduced because those dozers allow us to move material once and more efficiently. Operators know exactly where to place, cut and grade because the plans are in the dozer, and it’s automatically doing what’s needed in relation to reaching finished elevation. They have cut our mass grading time by roughly 50%.”
Specialty situations
Komatsu IMC technology works in specialty situations as well as traditional earthmoving. ABR Construction Inc., which is headquartered in Nicholasville, Ky., equips its PC360LCi-11 excavators with rock grinders.
“Using a grinder with the IMC technology allows you to achieve grade without over-digging or misalignment because misaligning a rock trench can be a very expensive mistake,” explained Project Manager Ben Troxell. ABR Construction also uses IMC dozers to complete everything from stripping to finish grade. The company gets further versatility by outfitting the dozers with rippers. The D71i-24 models are the newest Komatsu IMC 2.0 dozers.
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“We were constantly replacing stakes, and now, the whole site plan is in the dozer itself,” said President Christian Ach. “We have less downtime, so we view IMC as a time-saving tool that makes our operators more functional. Now, they produce eight to 10 hours a day rather than worrying about knocking down stakes.” “I feel as though our overall efficiency has gone up 100% since we aren’t wasting time staking, and that also frees up project managers to do other tasks,” noted Senior Project Manager Darrin Darnell.
Continuing to build
According to Earing, customers across North America — and the world — have seen similar results with IMC equipment.
“The original vision for IMC was to provide a solution that all of our customers can benefit from,” said Earing. “We wanted to make this available, scalable and really intuitive enough that everyone can use it, no matter the size of the contractor. Ten years later, we can pointedly say that we believe we achieved that and much more. We’re continuing to build on it, and with customer input, we are seeing applications for IMC machines that we hadn’t thought of at the beginning.” ■ *The opinions expressed here are from the end users who are quoted. The results described herein are those of these end users under certain conditions. Your results may vary.
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Innovative Technology
Construction equipment electrification: a glimpse into the future of the electric job site
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From electric vehicles (EVs) to mining equipment, the shift toward an electric-powered world to reduce carbon emissions — including construction equipment electrification — has already begun.
Andrew Earing, Director of Tracked Products and Service, Komatsu
The Bipartisan Infrastructure Law, which President Joe Biden signed in November of 2021, includes an investment of up to $7.5 billion for EV charging stations to help build out a national network of 500,000 EV chargers. Additionally, the Bipartisan Infrastructure Law created a joint office between the Departments of Energy and Transportation to collaborate with local communities and provide technical assistance to support the creation and development of EV charging infrastructure.
Actions are being taken at the state level as well. The California Air Resources Board announced the Advanced Clean Cars II rule in August of 2022 that codified Governor Gavin Newsom’s climate goals for the state. The rule established that all new cars and light trucks sold in California must be zero-emission vehicles by 2035. “While electrification is at the forefront of everyone’s mind due to automotive, our equipment on the construction site is often creating that infrastructure for electric automobiles,” remarked Andrew Earing, Director of Tracked Products and Service at Komatsu.
“There are challenges, and we have solutions to those challenges that we are exploring, but it’s not going to be a one-size-fits-all solution for the various applications and the various sizes of the products that we provide.”
The electric advantage
Komatsu recently showcased a PC210LCE electric excavator and a fully electric compact wheel loader prototype at Bauma 2022, an international trade fair that was held in Munich, Germany, as well as CONEXPO-CON/AGG 2023 in Las Vegas.
In a press release, Seiichi Fuchita, Chief Technology Officer and President of the Development Division at Komatsu, noted that for Komatsu to reach its target of reducing the CO2 emissions of products in use by 50% by 2030 (from 2010 levels), and “to achieve carbon neutrality by the end of 2050, we are looking for promising technologies from suppliers to accelerate our electric machine development.” “Industries including construction are trending in the direction of carbon neutrality,” added Earing. “We want to be a leader. We are a technology leader when it comes to construction and mining equipment. We feel that electrification is one viable option in the construction space.” With the PC210LCE, Komatsu created an electric excavator from a popular size class.
“We wanted to introduce the 20-ton size class, because it opens us up to a lot of different operating applications and environments,” explained Earing. “They’re going to be used indoors and outdoors. It’s a very diverse size class, and we wanted to get a much better understanding of all those applications and how they work with electrification.” In 2023, the PC210LCE will begin to see real work on the job site.
“In North America, we are going to conduct a pilot program where we will work with many of our customers to jointly test not only this machine, but the solutions for our customers’ applications to better understand the benefits to them, and how we can help meet their needs,” said Earing.
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An operator places a battery in an electric Komatsu machine. “While electrification is at the forefront of everyone’s mind due to automotive, our equipment on the construction site is often creating that infrastructure for electric automobiles,” remarked Andrew Earing, Director of Tracked Products and Service at Komatsu.
Meanwhile, a Komatsu electric wheel loader prototype, created in collaboration with Moog, is currently undergoing further tests to enhance and showcase the advantages of a fully electric
Komatsu’s PC210LCE electric excavator provides immediate advantages over a combustion machine, such as better air quality and reduced noise. “It can operate in areas where it may not have been able to operate before, and for longer durations,” said Andrew Earing, Director of Tracked Products and Service at Komatsu.
machine, such as increasing its operating cycle, adding assist functions, and creating a comfortable environment for the operator. The wheel loader also has sensors to add automation capabilities. Compared to its combustion predecessors, electric machinery provides two immediate advantages: better air quality and noise reduction.
“With a zero-emissions machine, it allows the flexibility for that piece of equipment to operate indoors without harming the air quality around it,” said Earing. “It can now operate in areas where it may not have been able to before and for longer durations. When you have a traditional emissions vehicle operating indoors, air quality has to be monitored, and sometimes the machine must be shut down for extended periods of time to let emissions dissipate.” Metropolitan and urban worksites are often accompanied with restrictions for when a contractor can work — in part to reduce noise pollution for the populace.
“That’s why urban environments are another application for electric machines,” Earing continued. “It’s not only due to exhaust emissions, but also because of sound emissions. Going with an electrified machine, which has near zero sound emissions, allows
for an extended operating window for our contractors and customers.”
Bridging the gap to construction equipment electrification
While combustion engines will remain crucial to the development of electric infrastructure, there is currently hybrid machinery available to help the transition between 100% combustion and 100% construction equipment electrification. Komatsu released its first hybrid excavator in 2008, and its most recent model, the HB365LC-3, entered the market in 2017.
Kurt Moncini, Senior Product Manager, Komatsu
“The HB365LC-3 offers increased fuel efficiency without sacrificing power. A topper on the cake is the added benefit of reduced emissions that lowers your carbon footprint and promotes sustainability,” said Kurt Moncini, Senior Product Manager at Komatsu. “Based on the Environmental Protection Agency’s CO2 formula, the hybrid potentially offers up to a 20% reduction in CO2 emissions compared to the standard PC360LC-11.” The force behind the excavator’s fuel savings is its electric swing motor, which offers a glimpse into the capabilities of future electric excavators. The electric swing motor captures and regenerates energy as the upper structure slows down and converts it to electric energy.
Continued . . .
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‘Swing is fully electric’ . . . continued
Moncini explained, “It’s using energy that would normally be wasted and makes it available to do work, contributing to increased efficiency and decreased diesel usage.” The energy captured during each swing braking cycle is stored in the HB365LC-3’s ultracapacitor. Each time the excavator swings, the capacitor discharges electric power to the electric swing motor.
“A traditional battery requires time for the chemical process that releases electricity to occur,” stated Moncini. “The heavy work nature of construction equipment places a much faster demand on power transfer. The ultracapacitor’s ability to store and discharge energy quickly makes it ideal.” He added, “Since swing is fully electric, all available engine power can go to the boom, arm and bucket when bringing a loaded bucket out of the ground and over a truck, spoil pile or hopper. This creates a faster cycle time and a very quick, responsive swing.”
In addition to powering the swing motor, the ultracapacitor sends electric energy to the engine via the motor-generator. This energy is used to accelerate the engine from an ultra-low idle speed of 700 revolutions per minute (rpm) and improve hydraulic response. Hybrid equipment, such as the Komatsu HB365LC-3 excavator, bridges the gap between combustion and electric machinery. “The HB365LC-3 offers increased fuel efficiency without sacrificing power. A topper on the cake is the added benefit of reduced emissions that lowers your carbon footprint and promotes sustainability,” said Kurt Moncini, Senior Product Manager at Komatsu.
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It is this technology that can likely be applied to future electric excavator models to extend battery life and increase power.
“Komatsu has the technology to not only capture but also supply energy into an electric swing motor, which gives the HB365LC-3 up to an additional 70 horsepower that it can use for efficiency needs or even use for additional performance needs depending on the customer’s application,” said Earing.
Steps toward carbon neutrality
Complete construction equipment electrification and hybrids are at the forefront of construction’s push toward carbon neutrality, but electrification is just a part of what the industry sees as a solution to meeting carbon goals. “We’re not just exploring electrification — we’re also exploring other technologies that are out there such as hydrogen fuel cells and clean fuels,” said Earing. “We’re looking at all of these options because we’re making sure that we have the right solution for the right job site and customer application.” Earing concluded, “In the future, I would say that the trends that we see in carbon neutral machines will depend on the machine application, plus size and weight. With different sizes, there are going to be different technologies that suit those machines.” ■
Now there is an easy, affordable way to bridge the technology gap Smart Construction Retrofit equips legacy machines with 3D guidance and payload monitoring — tools to drive accuracy and efficiency at your job site. Learn more about this exciting new solution at komatsu.com/smart-construction-retrofit
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Komatsu selected as a Sourcewell heavy equipment provider
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If you work for a municipality, not-for-profit or government agency, money and time are often tight. When it comes to purchasing new equipment, you need to know you’re getting high quality, backed by good service. One of the easiest ways to do that is to join a cooperative purchasing agency such as Sourcewell. Membership is free, and there are no minimum contract requirements.
Among the largest governmental cooperative agencies in North America, Sourcewell represents more than 60,000 member organizations that have access to hundreds of competitively solicited contracts covering a variety of products, solutions and services. With Sourcewell, the procurement process is simplified.
First named a Sourcewell partner in 2019, after an extensive evaluation process, Komatsu was again awarded a national cooperative contract for construction equipment with related attachments and technology. Sourcewell members can
choose to purchase from more than 50 Komatsu models of construction and compact equipment, across 10 product groups. Komatsu’s distribution network, which includes 29 dealers with collectively more than 200 branches across North America, will provide support to Sourcewell members. “Sourcewell provides its members with a unique advantage in the cooperative purchasing process by leveraging qualified suppliers and ensuring that the process and pricing is streamlined to increase efficiency and generate savings for their members,” said Komatsu’s Robert Richens, Director of National Accounts. “Komatsu is thrilled to continue our relationship with Sourcewell and build upon our previous successes in North America. Sourcewell is a strategic partner in the governmental, education and non-profit sector, and we look forward to continuing to provide their members with our world-class products, services and customer-focused solutions.” ■
Sourcewell, one of the largest governmental cooperative agencies in North America, recently awarded Komatsu another national cooperative contract for heavy equipment and related accessories, attachments and supplies.
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Virtual Learning
Komatsu launches Komatsu Academy, a new online training system for customers and dealers
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Komatsu Academy, a new online training system that is currently available for Komatsu dealers, will soon be available for Komatsu customers via the My Komatsu app.
Komatsu Academy will offer module-based, blended learning content such as videos, animations, documents, competency tests, and microlearning sessions that include safety, maintenance and machine operation.
Intended to easily provide educational content to users at any time, “Komatsu Academy is designed to help our dealers and customers recruit, strengthen their workforce, and retain their technicians and operators,” said Craig Yager, Training Manager for Komatsu. “It’s part of an ecosystem to bolster and improve the skill sets of current technicians and operators, while drawing new people to this industry by providing access to high school and technical school students.”
Yager continued, “It’s important for Komatsu to provide our dealers with in-depth knowledge of our products, so they can support our customers. And, for our customers, Komatsu Academy can provide training to support the creation of a skilled workforce that can operate our equipment more efficiently and effectively, to help reduce machine downtime by identifying problems before they worsen.” Komatsu Academy will offer module-based, blended learning content such as videos, animations, documents, competency tests, and microlearning sessions that include safety, machine maintenance and operating best practices. These modules can be accessed easily through a mobile app and completed at an individual’s own pace. For Komatsu customers, Komatsu Academy will offer some free courses and content, but the full suite of content will be accessible on a subscription or a per-course cost.
Flexible career development
Aside from relevant job training, Komatsu Academy will also provide career paths for users, allowing them to learn additional skills and become certified, which could help them advance within their organization.
“The ability to develop a career path is going to help an employee grow by identifying what training and skills are needed for advancement,” explained Yager. “For example, Komatsu Academy can help an employee who works at the parts counter and wants to be a parts manager by providing a view to their career path and explaining what training and skills they need to achieve their goal.”
When a person logs into Komatsu Academy, they are identified by their job role, and then the system tailors recommended courses for them. “The system recognizes any potential career paths and displays certifications based on the job role information,” said Yager. “Users can find additional certifications and information relevant to their career path and see how the content they have taken to date applies to other potential careers.”
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For certifications, users can supplement hands-on training with educational content
Soon, Komatsu Academy will be accessible for customers via the My Komatsu app and will provide educational content wherever users have internet access.
on Komatsu Academy to minimize time away from their organization.
“Our dealers are often faced with the difficult choice between supporting their customers or sending their technicians to do training to improve their skills,” said Yager. “Komatsu Academy will provide them with an option to do both simultaneously. The technician can learn more about our products and how to troubleshoot them on their own, on the job, all with microlearning content at their fingertips. Instead of attending a traditional 40-hour class, they have access to content that’s online, easily searchable, and consumed in small modules. They could be standing out at the machine on their lunch break and learn something about an excavator.”
Development of VR training
As technology continues to evolve in the construction industry, virtual reality (VR) will likely be a crucial aspect of Komatsu Academy in the not-so-distant future. “Our team at Komatsu is working with Arizona State University to develop virtual
operator training using haptic gloves and VR goggles,” said Yager. “Haptic gloves give you the feel of interacting with the machine. The user feels feedback through the gloves, and the VR gives them a 360-degree view of the machine. They can actually feel and see that they are grabbing a wrench and can feel the bolt tightening.” The technology enables people to have hands-on experiences with a machine, even if there’s not a physical model on-site. VR training can circumvent any machine availability issues and provide hands-on content whenever and wherever.
“Someone training could be in a small classroom a thousand miles from the instructor, but they could virtually see and feel the machine and interact with the instructor,” said Yager. “The potential use cases are endless. VR is going to be important for technical training, and Komatsu Academy will provide the necessary training information to make the workforce stronger and to spark renewed interest in careers within the construction and mining industry.” ■
Watch the video
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Culture in Construction
Why culture in construction matters and how to make it better, so you hire and retain a dedicated workforce
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It’s not exactly breaking news that there is a labor shortage in the construction industry. Headlines declare that “nobody wants to work anymore” — but is this explanation really at the root of what is a long-standing, industrywide issue?
Amid the Great Resignation, as Baby Boomers retire and Gen Z workers reject the long hours of the construction industry, it’s more important than ever to examine the causes of this unprecedented labor shortage and explore potential solutions.
Numerous companies are feeling the pressure, especially in the skilled trades, and many have not yet been able to solve their workforce woes. After increasing pay and flexibility with little to no results, a lot of companies find themselves asking — is our company culture to blame? During an educational session titled “Culture in Construction — Is It Really That Bad?” at CONEXPO-CON/AGG 2023, speaker and construction industry advocate Wally Adamchik walked through the reasons why the answer to that question is both “yes” and “no.” The good news is that industrywide survey results indicate the construction industry’s culture issue may not be so bad, according
According to an industrywide survey, 83% of people say that they would reapply for their current position, and 73% of people say that they are happy at work.
to the 2019 People in Construction Report (PICR) by FireStarter Speaking and Consulting, said Adamchik. In fact, 83% of people say that they would reapply for their current position, and 73% of people say that they are happy at work. However, these results are not good enough to sustain successful growth and project execution, according to Adamchik. In addition, there is a significant divide between project management in the office and field supervision on the job site, according to the PICR. In the office, 81% of employees say that they have a close friend at work — in the field, only 50% of employees share that sentiment. On top of that, 75% of office workers feel that they can maintain a reasonable work-life balance, while again only 50% of field employees feel that they can maintain a reasonable work-life balance.
Action items
Rather than list off more statistics about the industry’s labor shortage, many leaders want information about creating a more long-lasting and motivated labor force. There are several concrete actions that can be taken to improve company culture and keep workers happy, and companies should act now to avoid losing more of their employees. The labor shortage isn’t exclusive to the construction industry, and these actions can be implemented in any workplace. Even organizations with good company culture can implement some of these changes to elevate employee experience: • Standards and values. Approximately 90% of survey respondents agreed that ignoring the core values of their workplace would get them into trouble. This shows that workplace values still matter, and the most visible way to manifest this is to enforce standards across the board. There should be no double standard when it comes to values. Employees will take standards and values more seriously when they are a part of company culture and see leadership being held accountable to the same standards as employees.
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• Creating lasting change. Three-quarters of senior leadership (those who are supposed to be spearheading change in the workplace) say that their efforts
There are several concrete actions that can be taken to improve company culture and keep workers happy, such as encouraging employee participation and recognition.
fall short. Change requires organizational capacity and requires a significant personal investment from leaders. Creating a path for change with concrete steps to follow along the way will help companies maintain organization and encourage both employees and leadership to follow through.
• Encouraging and participating in employee recognition. There are a multitude of opportunities to tell employees how much they are appreciated. Chances are, on a daily basis there are numerous opportunities to give positive and relationship-building recognition, and companies that regularly participate in positive recognition are more likely to attract and retain loyal employees.
• Amping up one’s referral program. About 84% of employees surveyed say that they would recommend their workplace to a friend (but don’t). Furthermore, 83% of employees say that they would reapply for their current position if given the chance. There are also several ways to increase the effectiveness of a referral program, including using an easy-to-use option, offering a mixture of incentives, announcing or re-announcing the program, and
recognizing current employees for referring candidates.
• Bridging the gap between teams and departments. In construction, there are several discrepancies between survey answers from field and office staff members that could be corrected with a little work. For example, creating teambuilding opportunities for one’s entire staff on a monthly or quarterly basis can go a long way toward building camaraderie.
Discover more
While there are several improvements that would benefit the construction industry’s culture, and company culture in general, the survey results show that the situation may not be as bad as advertised. There are several actions that employers can take to improve company culture, from enforcing values to bringing employees together. Even small actions make a big difference, and there is no better time to start than now! ■
Editor’s Note: This article is courtesy of the Association of Equipment Manufacturers (aem.org). For more information on how to attract and retain employees, visit https://www.komatsu.com/ blog/2022/employee-retention-in-theconstruction-industry/
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The My Komatsu Parts Store makes it easy to get what you need to keep your equipment running at its best. Don’t have a My Komatsu account? No problem! Check out as our guest at mykomatsu.komatsu
New Payment Option
Komatsu Care Plus Cost Per Hour gives you a fixed hourly rate on unlimited services for 60 months
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As your machines age, increase certainty in your owning and operating costs with Komatsu’s new Komatsu Care Plus Cost Per Hour program that delivers unlimited scheduled maintenance services at a fixed rate for 60 months. “Komatsu Care Plus Cost Per Hour is a subscription-style billing plan that gives customers a very cash-flow-friendly alternative and lets them extend coverage beyond the complimentary maintenance period,” said Komatsu National Accounts Manager Felipe Cueva. “There is a nominal, up-front, opt-in charge. Customers then lock in their cost per hour for that 60-month period and are billed based on the machine’s monthly usage. Price protection is built in. The rate doesn’t change, which offers a hedge against inflation and rising costs.” The benefits of Komatsu Care Plus Cost Per Hour include: • Unlimited hours
• Up to 60 months of coverage guaranteed • Price protection
• Total periodic maintenance (oils, filters, labor, travel and oil sampling)
• Monthly payments based only on machine utilization reported in Komtrax • National coverage
How it works
“For example, if the rate on their particular machine is $5 per hour and the customer used the machine for 10 hours, they would be billed $50,” Cueva explained. “If they put 100 hours on the machine, the cost would be $500 for that month.” The usage is tracked with Komatsu’s Komtrax telematics system to ensure accurate billing. “Added peace of mind comes in knowing that, as with other Komatsu Care programs, the services performed with Komatsu Care Plus Cost Per Hour are done by certified technicians,” said Cueva.
He also noted that Komatsu Care Plus Cost Per Hour is restricted to current production models such as Dash-11 excavators. Hourly rates vary depending on machine. Once the initial 60-month period ends, customers may opt in again at the current rate.
“Customers can cancel their subscriptions at any time after 1,000 hours and two completed services without penalties or fees,” said Cueva. “We encourage anyone who wants more certainty in their costs to check this out, as well as other options through My Komatsu. Your local Komatsu distributor can help get you covered.” ■
Felipe Cueva, National Accounts Manager, Komatsu
Komatsu Care Plus Cost Per Hour locks in a fixed hourly rate for 60 months, and customers are billed on their monthly usage, which is tracked with Komatsu’s Komtrax telematics system to ensure accuracy. Services are performed by certified technicians.
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Tax Savings
Bonus depreciation has dropped to 80%; equipment must be purchased, placed into service by midnight Dec. 31
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This year, full (100%) bonus depreciation, which was passed under the Tax Cuts and Jobs Act of 2017 (TCJA), dropped to 80%. Under the law, it will continue to drop by 20% per year until it reaches 0% in 2027.
Bonus depreciation is available for both new and used equipment placed into service by the end of the year. Eligible qualified property includes depreciable assets that typically use the Modified Accelerated Cost Recovery System (MACRS) with a recovery period of 20 years. “The purpose of bonus depreciation is to encourage businesses to invest in new equipment and machinery,” said Sean Farrell in the article “A Guide to the Bonus Depreciation Phase-Out 2023” on SharedEconomyCPA.com. “It provides businesses a tax incentive to do so.” With the percentage of bonus depreciation dropping, now may be a good time to consider making a purchase, according to Dan Furman, Vice President of Strategy at Crest Capital.
In the article “Goodbye, 100% Bonus Depreciation — Phase-Out Begins in 2023” published by Equipment World, Furman writes, “To qualify, the equipment must be bought and placed into service during the calendar year, so making your bonus depreciation purchase
as early as possible has advantages (avoiding supply-chain issues delaying shipment/etc.). Further, if you were considering a major purchase in 2024 or beyond and planned to use bonus depreciation, perhaps bumping that purchase to 2023 makes sense (80% depreciation this year vs. 60% next, and so on). In addition, finance rates are predicted to keep rising, so if you were planning to finance your purchase, there’s another advantage to buying earlier.”
Higher amounts for Section 179
An additional advantage with bonus depreciation is that it has no limit on the amount. It can be used in conjunction with Section 179 expensing, another tax savings vehicle, that does have a cap. Section 179 limits the 100% depreciation amount to $1,160,000 in 2023, an increase of $80,000 compared to 2022. After that amount, the expensing percentage begins to reduce. The total equipment purchase limit for this year is $2,890,000, which is up from $2.7 million. ■
Editor’s Note: This article is for informational purposes only. To learn more about how to take advantage of these tax savings, contact your tax adviser or equipment dealer for more information.
You can take 80% bonus depreciation on eligible new and used equipment purchased and placed into service by midnight on Dec. 31. The percentage drops to 60% in 2024.
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Tech Talk
New replacement monitors, GNSS receivers provide upgrades to your existing Intelligent Machine Control devices
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Komatsu’s Intelligent Machine Control (IMC) equipment has always been on the cutting edge of technology that automates grading and excavating. To ensure that’s the case on all models of IMC equipment, Komatsu has now introduced remanufactured, upgraded machine control monitors and GNSS (global navigation satellite system) receivers.
“Komatsu always looks to upgrade its equipment and components in order to increase our customers’ efficiency and production, and we updated these devices to the latest technology as well,” said Goran Zeravica, Senior Product Manager, Reman. “There have been slight changes to the hardware, but the biggest upgrades came in software that makes them even more effective than the previous models.” The new devices are replacements for the original monitors in IMC dozers and excavators and their GPS/GNSS receivers. All are now Komatsu Genuine Reman with proprietary technology, including the PH700 IMC excavator monitor (replacing the older X31) that shows
operators where cuts and fills are, as well as other job site features. Users can upgrade their GX-60 to a new GX-55 in IMC dozers. As with the PH700, the GX-55 shows cuts and fills and other job site features. Previous MC-i3 GNSS receivers have been replaced with new MC-i4 models, which provide GPS/GNSS positioning for the machine, so it knows where it is on the job site and in relation to final plan elevations.
Available through distributors, My Komatsu
Goran Zeravica, Senior Product Manager, Reman, Komatsu
“As with cell phones, which you upgrade periodically to have the latest technology, we encourage you to do the same with your IMC devices,” said Arash Moghaddamzadeh, Product Manager, Reman Products and Forestry Aftermarket. “These new devices are available through your Komatsu distributor by contacting your product support representative, technology solutions expert, or through the parts department. Additionally, they are available as Reman by using your My Komatsu account.” ■ Komatsu Genuine Reman devices for Intelligent Machine Control (IMC) dozers and excavators feature proprietary technology that helps increase earthmoving efficiency.
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