—JOURNAL OF—
dealing with
DISTRACTION to Help Get Work Done EXCLUSIVE INTERVIEW WITH:
MasonFord, CEM
FINANCE
KEYS TO RETREADING RIGHT TIRES
INFORMATION
KNOWING TELEMATICS’ FIVE SKILLS
POLICIES
MEASURE SAFETY PRESENCE
CONTROLS
MANAGING TIGHTER HOS RESTRICTIONS
CUSTOMERS
BUILDING BENEFICIAL RELATIONSHIPS
THE EQUIPMENT MANAGEMENT SPECIALIST (EMS) CERTIFICATE AEMP’s education is focused on building excellence in equipment management and is designed for professionals in the equipment management and equipment supply industries. Our Equipment Management Specialist (EMS) online educational program leads to earning the AEMP Equipment Management Specialist (EMS) Certificate. The Equipment Management Specialist Certificate is an assessmentbased certificate recognizing the competency of an individual involved with equipment in a private, municipal, or government fleet within the first five years of career development. This certificate serves individuals who want to obtain the skills, knowledge, and competencies necessary in equipment and asset management, to better understand the depth and breadth of the equipment industry, and to gain the ability to interact on a higher level with fleet-related professionals.
Pursue the Equipment Management Specialist (EMS) if you:
• Are interested in taking the first step toward certification.
• Have fewer than five years’ experience in equipment management.
• Are an end user or supplier in the industry
• Desire to know, define, identify and recall information presented in the Career Equipment Fleet Manager Manual.
Visit www.AEMP.org/EMS
Course Details: This course is online self-study and is self-paced. This means that candidates will guide themselves through the material and activities under no set schedule. However, all course materials are available for the duration of one year from the candidate’s enrollment date. It is estimated that the time required to complete the course is between 35-40 hours.
Supported by:
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CONTENTS AEMP Chairman’s Corner
20
06 A Year of Transitions
AEMP Board Members
08 2018-2019 and 2019-2020 AEMP 2019 Chairman: Mason Ford
12 Dealing with Distraction Building Excellence
16 in Equipment Management FINANCE Keys to Successfully Recapping Off-Road Tires
20 Knowing which off-road tires to retread to prevent failure.
44
Narrowing Telematics Priorities Drives Cost Reductions
28 Focussing on what matters most to your fleet.
Reshuffled Construction Equipment Buying Priorities
34 Spreading the risk of machine ownership. INFORMATION
Telematics for Managing Machine Life and Projects
44 Five skills a telematics point person needs.
0 11
Initiatives to Put Management on Your Side
54 How to gain your boss’ confidence. POLICIES
Safety Cultures that Beat Compliance Rituals
62 Measue the presence of safety, not the absence of accidents. Equipment Triangle Must Tackle Technician Shortage Together
72 Aging workforce reuires urgent solution.
What’s Next in Off-Road Diesel Exhaust Regulations?
84 Improved efficiency and capability key to customer adoption. CONTROLS Should Contractors Signal SOS on Truck HOS?
90 Managers struggle to abide by tighter Hours of Service restrictions. Track Chain Tension is Your Key to Cutting Undercarriage Costs
96 Tips to help you beat the odds of maintaining track sag.
How to Start Equipment Reliably as Voltage Draws Grow
102 Getting consistent starts with improved battery technology.
CONNECT
WITH US
CUSTOMER SERVICE Splitting Equipment Triangle Value
110 Building mutually beneficial relationships helps everybody prosper.
2019 | A E M P .O R G
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Journal of Equipment Management
—JOURNAL OF—
62
90
DEALING WITH
DISTRACTION
to Help Get Work Done Mason Ford, CEM 2019-2020 AEMP Chairman
AEMP’S NEW CHAIRMAN READY TO ADAPT TO FREQUENT CHANGE.
page12 Journal of Equipment Management
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A E M P .O R G | 20 19
AEMP
Chairman’s
A Year of TRANSITIONS
CORNER
“The time spent together in planning, discussion and execution gave me great hope for the future of AEMP because the leaders that will follow me have a great depth of insight, wisdom and desire for only the best for the association.” — GREG PEET, CEM
WHILE I CLOSE MY YEAR OF SERVICE TO AEMP AS THE CHAIRMAN OF THE BOARD, and as the title of this article would suggest, the word transition is in the forefront of my mind. Before I explore that further however, let me first say what a privilege it has been to serve in this office for the association. Because of the nature of the tasks before us this past year, the Executive Committee worked especially closely together in that capacity and also functioned as the Transition Team. The time spent together in planning, discussion and execution gave me great hope for the future of AEMP because the leaders that will follow me have a great depth of insight, wisdom and desire for only the best for the association. Mason Ford, CEM followed by Dave Bolderoff, CEM will continue to propel AEMP and the equipment management vocation forward and it will be exciting to watch and participate in. As we began the year I asked the Board of Directors to embrace the idea of becoming a
2019 | A E M P .O R G
more strategic rather than operationally focused board. To a person they embraced that concept and for that and for all of their time, effort, hard work and accomplishments over the past year I thank them. When we first began to conduct our meetings in this manner we started by crawling, then came walking and now we’re ready to run! Once again, thank you to all. BACK TO TRANSITION. Two other members of our Executive Committee/Transition Team are Don Gengelbach, CEM, immediate past chair who championed many of the governance improvements that have so positively impacted our processes, and Stan Orr, FASAE, CAE our CEO. The need for these transition efforts was brought about by Stan’s announced retirement and that of his business partner Cindy Challis Orr who also served AEMP as our Executive Vice President. We knew that finding Stan’s successor would be a huge challenge and opportunity this year but it was made so much
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to focus on the construction industry as a whole. Toward that end they are currently working with the Association of Equipment Manufacturers and the Associated Equipment Distributors and hope to partner with an ever broadening coalition of groups in an effort to attract more young people into the rewarding careers that could await them in the trades. I could go on and on about all that is happening within association and the great work of so many volunteers and committees, but it is my hope that you don’t just want to read about it but that you will get involved and see it (and help shape it) for yourself. The equipment management profession is alive and well today in large part because of the dedication of so many great individuals that have gone on before us. At our Hall of Fame luncheon last year, during his speech, past chairman Dale Warner, CEM presented me with a piece of rope and talked about the need to create a vision and pull the association and its members along with you rather than try to push them, and I look at that little piece of rope daily. Our incoming chairman, Mason Ford, CEM and new CEO, Donté Shannon, CAE will be embarking on a new strategic planning process very soon. I invite you to grab hold of the rope and let’s do it together. In closing I would like to thank Stan and Cindy Orr one more time for their many years of hard work and dedication to improving AEMP and getting us to where we are today. The association and the equipment management profession are both better off for their selfless involvement!
easier by his leadership and tireless planning and execution. I won’t rehash all that transpired as it has been well documented, but suffice it to say that Stan’s efforts resulted in huge wins for the association including the move to a terrific association management company, AMPED, led by Lynda Patterson, FASAE, CAE who is also to be recognized and thanked for all her work to make our transitions seamless and painless. The next part of the process involved actually locating and hiring the individual who would serve in Stan’s place as our next CEO. Once again through much hard work, especially by Stan and Lynda, that new CEO was identified and we are so excited that we now have Donté Shannon, CAE on our team! I don’t want you to think that these processes consumed our entire year however and that no progress was made elsewhere. Through the work of many dedicated volunteers and staff, AEMP continued to grow its conference education and certification programs. We are very excited to welcome 35 new CEMs and CESPs (Certified Equipment Managers and Certified Equipment Support Professionals) into our ranks and I’m very pleased to say that of these 35 individuals, seven of the new CEMs are women! This year we changed the charters of many of our committees by adding emphasis on safety and diversity to each of them. We also created a Membership Steering Committee which has laid the necessary groundwork and will now hand off its work to a standing Membership Committee. They will work on growing our reach into the industry including the verticals we serve and positions within those verticals that we touch and ultimately could provide continuing education for. Another area of growth and transition was in our Workforce Development Committee. We have created a dual emphasis for that group as they continue to focus on our greatest areas of need as equipment managers (the technician shortage) but have now expanded their mission
I invite you to grab hold of the rope and let’s do it together.
Greg Peet, CEM — 2018-2019 Chairman of the Board
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A E M P .O R G | 20 19
The Journal of Equipment Management (JEM) is the principal publication of the Association of Equipment Management Professionals. The JEM provides a serious source of thought-leadership that advances the equipment management profession. Statements of fact and opinion are the responsibility of the authors alone and do not imply an opinion on the part of the officers or members of AEMP.
2018-2019 AEMP
BOARD OF DIRECTORS EXECUTIVE COMMITTEE
Journal of Equipment Management is published annually as a service to all AEMP members. Nonmembers can purchase the publication by going to www.aemp.org. Submitted articles are reviewed by members of the Editorial Committee. Submit article proposals and completed manuscripts to chris@aemp.org. For further information on equipment management topics, or to provide opinion of contributors, contact: Publisher, AEMP, 22 N. Carroll St., Suite 300, Madison, WI 53703, or call 970-384-0510. Š2019 AEMP. Published by the Association of Equipment Management Professionals. Produced by AC Business Media.
Chairman of the Board Greg Peet, CEM, Helm Group Chairman Elect Mason Ford, CEM, Skanska USA Civil Secretary/Treasurer David Bolderoff, CEM, Los Angeles County Sanitation Districts Immediate Past Chair Don Genglebach, CEM, Mulzer Crushed Stone President & Chief Staff Officer Stan Orr, FASAE, CAE, Ex-Officio
All rights reserved. Materials may not be reproduced or translated without written permission from the publisher. Contact AEMP for reprint permission.
BOARD OF DIRECTORS
Editorial Offices: Chris Turek, 970-384-0510, chris@aemp.org
Directors at Large
AEMP AEMP and the AEMP Foundation work together to bring the most comprehensive collection of services and resources to equipment management professionals. AEMP is an individual membership organization. Its members manage private and public fleets in 18 countries.
Randy Bosman CEM, Granite Construction
Our Cause (why we exist) AEMP helps fleet professionals build fleet efficiencies through world-class education and collaboration. Our Value (what we do) AEMP connects great ideas and great people to inspire innovation within the heavy equipment industry.
Casey Dowling, CEM, Bechtel Equipment Operations, Inc. Dan Hubbard, CEM, Oldcastle Materials Doug King Jr, CEM, Sherwood Companies Adam Ralph, Traylor Bros. Inc
Our Promise (how we serve our stakeholders) AEMP delivers a collaborative community within the Equipment Triangle, with exceptional tools to make equipment managers successful.
Vice Chair Tim Morgan, CEM, Branch Civil Inc. Vice Chair Dan Pitt, CEM, Mulzer Crushed Stone Director of Advisory Council Tony den Hoed, Volvo Construction Equipment Director of Associates Lisa Evans, Donaldson Company
Our Guarantee If any AEMP program, product or service does not fulfill our promise, we will make the situation right or refund your money. Our Mission Building Excellence in Equipment Management
2019 | A E M P .O R G
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Journal of Equipment Management
2019-2020 AEMP
BOARD OF DIRECTORS EXECUTIVE COMMITTEE
Chairman Elect Dave Bolderoff, CEM, Los Angeles County Sanitation Districts
Jackie Fowler Awards and Administration
Secretary Treasurer Dan Hubbard, CEM, CRH Americas Materials Immediate Past Chair Greg Peet, CEM, Helm Group
Kim Siebecker Membership and Administration
BOARD OF DIRECTORS
Dan Pitt, CEM, Mulzer Crushed Stone Tim Morgan, CEM, Branch Civil Inc. Adam Ralph, Traylor Bros. Inc.
Jenny Frey Meetings Emily Petersen Awards
Chief Executive Officer Donté Shannon, CAE, AEMP, Ex-Officio
Randy Bosman, CEM, Granite Construction
Donté Shannon, CAE Chief Executive Officer Rachel Connor Education
Chairman of the Board Mason Ford, CEM, Skanska USA Civil
Directors at Large
AEMP STAFF...
Director of Strategic Partners Ryan Blades, John Deere Construction & Forestry Director of Associates Jon Fazenbaker, CESP, WearCheck USA
Kim Striebel Finance Chris Turek Marketing and Communications Tony Veroeven Membership and Business Development Sharon Anderson Young, MBA Operations and Certification
Keith Barrett, CEM, PC Construction Company Ben Caldwell, CEM, Nabholz Construction Services Casey Dowling, CEM, Bechtel Equipment Operations, Inc.
info@aemp.org
Tim Giggee, CEM, Covia Corporation
Journal of Equipment Management
PAGE
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A E M P .O R G | 20 19
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AEMP 2019 CHAIRMAN
MASON FORD, CEM
DEALING WITH
DISTRACTION
TO HELP GET WORK DONE BY G.C. SKIPPER
M
ason Ford, CEM, director of equipment and 19-year veteran of Skanska USA, will become AEMP’s 20192020 Chairman of the Board when AEMP
force that has changed dramatically. Today’s talent pool is filled with a generation already adept in the use of technology that remains unfamiliar to some industry veterans. The work and each distraction must be dealt with differently and separately. Ford says overcoming distractions is a very long, slow process, but at some point it becomes part of the work itself. “It’s almost like we’re running two very different companies at the same time,” he comments. The basic solution to the situation is to determine what is important and how best to handle the distractions; to maintain some balance between working “in” the business and working “on” the business. “The answer to how that’s done is to
convenes in March. He’s more than ready to take on the job. Ford recognizes that not all association members, “put things in the ground,” and each point of the Equipment Triangle functions in individual and distinct ways. Fleet managers themselves have totally different game plans for meeting the demands of their specific operations. But the most pressing challenges in the industry, regardless of what the fleet is used for, Ford says, are: THE NOISE RIGHT NOW FOR AEMP IS ❯❯ Getting the work done, the TECHNOLOGY, AND MEMBER DEMANDS equipment maintained FOR US TO ACT AS A GO-BETWEEN FOR and on the job site, and ALL INTERESTED PARTIES. ❯❯ “Dealing with all the turn the distraction part of the job over to distractions that wrap themselves the staff and let them focus on that,” Ford around doing the job.” says. “As they develop, the distractions By distractions, he means implementing themselves become useable or valuetechnology, recognizing and making added processes. adjustments to recruit and retain a work
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“What AEMP has been tackling so far is a perfect example of what I’m saying. The noise right now for AEMP is technology, and member demands for us to act as a gobetween for all interested parties.” The association is staffing right now to go down this road. Everything in the world is changing: the technology, the business model, the new labor generation and the way we do business. “With these changes, it is so important for us to focus on putting work in the ground, rather than taking the easy way out by adding layer upon layer of stuff when, you might say, there isn’t a cake. Once you have the cake, then you can add the icing, sprinkles and whip cream.” Managerial styles vary broadly. Some managers focus on finance and get wrapped up in cash flow. Others get wrapped up in technology and the application of technology. “But at the end of the day,” Ford says, “it’s about each of us providing reliable, safe equipment to execute the work. Period. “Technology or no technology, the basics remain. Someone still needs to inspect the machine before an operator climbs into the cab and puts the machine in motion.” How fleet managers can avoid being sidetracked by distractions in the first place is still a gigantic question mark simply because there are as many different applications as there are managers. “I don’t know how to answer that question,
Journal of Equipment Management
other than to say this: when I look at the people in our organization who work with or for me, I know there is a core of disciplined (I’ll call them old school) equipment managers who really keep their eye on the ball. They make sure the work gets done. Certainly, you need the basic ingredients, which comes down to this. I don’t care what technology you are using, the foundation of equipment operations and management rests on training operators and doing daily
But at the end of the day, it’s about each of us providing reliable, safe equipment to execute the work. Period.
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A E M P .O R G | 20 19
AEMP 2019 CHAIRMAN and routine inspections of equipment. Those two items are the basis of everything we do. And when you feed that back into design and engineering and manufacturing of equipment, you wind up with a good product that’s actually doing the work.” Ford says there is still nothing in the world that can substitute for hands-on experience. “Perhaps the message we should get out there for a discussion is how important these experienced people are when it comes to successfully making the transitions necessary to cope with all these changes.” Experienced workers sometimes must take their eye off the ball to help deal with today’s technology. That is necessary to being able to adjust and adapt to the increasing frequency of changes constantly peppering the industry. Ford has no doubt about what he wants to accomplish in his new role at AEMP. “I want us to keep doing exactly what we’re doing now,” he says. “We need to complete the alignment of our mission, our vision, our
strategy and our product. All of them should be completely aligned.” Another major change is the retirement of Stan and Cindy Orr. “They have done a great job and have always been there as a resource to provide AEMP with important, sometimes critical, but always necessary, information. “Their guidance, recommendations and support of our strategy, the help they’ve provided in driving our finances and the intangibles, and using a little intuition and feel when it’s called for – that goes along with the job. They have successfully processed the data and input into resultoriented initiatives, which have greatly benefitted the association’s ability to change with the times, making sure we have what we need when those changes come. AEMP already has started that.” As one of Ford’s colleague’s remarks, “He has the knowledge and the passion” to handle the responsibilities that come with the position.” “Now it’s time to hand off the ball to a new quarterback,” Ford says.
EXPERIENCED WORKERS SOMETIMES MUST TAKE THEIR EYE OFF THE BALL TO HELP DEAL WITH TODAY’S TECHNOLOGY. THAT IS NECESSARY TO BEING ABLE TO ADJUST AND ADAPT TO THE INCREASING FREQUENCY OF CHANGES CONSTANTLY PEPPERING THE INDUSTRY.
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ELENABS/ISTOCK/GETTY IMAGES PLUS
Journal of Equipment Management
AEMP 2019 C H I E F E X EC U T I V E O F F I C E R
BUILDING EXCELLENCE IN EQUIPMENT MANAGEMENT Understanding challenges helps inform the future of AEMP. By Donté Shannon, CAE
WARCHI/ISTOCK/GETTY IMAGES PLUS
2019 | A E M P .O R G
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T
he turn of the new year has brought about change within AEMP. One of the most significant changes is the start of my tenure as CEO. As I approach the end of my first month, I’m aware of how privileged I am to follow the leadership of my predecessor, Stan Orr, CAE, FASAE. Stan has been a visionary for this organization and a key component to its sizable achievements over the past 20 years. The growth and success of AEMP is a testament to Stan’s leadership, Executive Vice President Cindy Challis Orr’s hard work, as well as the overwhelming commitment of staff. I will keep Stan and Cindy’s legacy top of mind as I embark on my own journey with AEMP. AEMP’s successes are also possible because of you, its members and volunteer leaders. I’ve had the opportunity to hear some of your stories about the impact AEMP has on your careers in equipment management. These stories inspire me to work diligently to promote the industry and provide resources to facilitate your continued professional growth. In the coming months, I look forward to exploring how we can continue to raise the profile of the equipment management industry together. Celebrating the accomplishments of the organization are important because they were not achieved without challenges. Understanding these challenges helps inform the future of AEMP as we navigate the ever-evolving economic and political climates ahead. As we move forward, the staff and I will do our best to be aware of external factors that may cause us to take a look at the industry and possibly forge a new direction. I view these potential factors as opportunities for AEMP to be collaborative, innovative and adaptable; bringing about a relentless will to succeed and reinforcing our
shared mission of, “Building excellence in equipment management”. Over the next three months, the staff and I plan to focus on three things: Member relationships, program execution and increasing my industry knowledge. So, what does this mean in practice? First order of business will be to deliver a great annual meeting experience for you. Beyond the 2019 AEMP CONNECT Conference and Annual Meeting, the staff and I will continue nurturing new and existing relationships with our members and partners. We understand that they play a key role in making AEMP a strong organization. Lastly, I will dedicate time to better understand the industry and use my knowledge to empathize with the challenges and opportunities you face. I look forward to engaging you on how we can better service your needs and deliver value in the future. My goal is to be your partner in trust and leadership as we move the organization forward, while engaging members and volunteer leaders to make informed decisions that are best for our membership, the business and overall longevity of the association. I couldn’t be more excited to join AEMP. With an engaged constituency of great people and real industry expertise, I am confident that we are going to achieve great things together. I am always available to engage in dialogue regarding AEMP and will communicate transparently with the membership and volunteers. I appreciate your support.
Donté Shannon, CAE — Chief Executive Officer
Journal of Equipment Management
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FINANCE
KEYS TO SUCCESSFULLY RECAPPING OFF-ROAD TIRES BY GREGG WARTGOW
Construction equipment managers talk about how to know which off-road tires to retread, and when, to prevent failures and reduce costs
T
he carcass of a construction equipment tire is built tough to withstand immense loads and harsh off-road use, so they can still have value after the tread has worn out. It’s a situation that should encourage lots of retreading if the carcass isn’t damaged before the tread wears to a retreadable level. But retreading the wrong tires, or in the wrong application, can turn out to be more expensive than replacing with new rubber. A recapped tire that fails before its expected tread life also falls short of its expected return on investment. Unbudgeted time and money is spent mounting and dismounting failed tires and, the unforseen course equipment downtime can seem like a strong deterrent to recapping.
2019 | A E M P .O R G
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But equipment fleets can definitely save money and beat tire shortages recapping off-the-road (OTR) tires. Equipment managers
just need a strategy to make sure their recaps perform as intended. “The devil is in the details,” says Joe O’Leary, CEM, senior director of equipment, safety and environmental compliance at Copart. “Unless an equipment manager has taken the time to vet his recapping program – and his recapping vendors – he could end up spending more money on recapping than if he had purchased brand new tires.” O’Leary has learned a lot about the pros and cons of tire recapping over the past five to ten years. When he joined Copart and assumed control of its 850-loader fleet, not much of a tire program was in place. O’Leary challenged one of his area equipment managers to prove that tire recapping was cost-effective. After accounting for all of the mounts/dismounts, casing repairs and shipping costs, he learned that recapping was actually costing at least 2.5% more than buying new tires. Furthermore, the recapped tire failure rate was roughly 10%.
This is the type of thing that can happen to a construction company if it doesn’t have a handle on the numbers. “If you don’t have a tire program and know what your true costs are, I don’t know how you can look at retreading,” says Mike Berra Jr., the third-generation co-owner of Community Tire Retreading based in Maryland Heights, MO. “Keep in mind that a tire program can be relatively simple. It could be that you run your tires until there is 6/32 of tread left, or maybe that there is zero tread left. Regardless, you can work with your tire vendor on that. But if you don’t have that defined, there will never be any consistency.”
…recapping was actually costing at least 2.5% MORE than buying new tires. Furthermore… failure rate was roughly 10%.
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ESTABLISHING SYSTEMS AND STANDARDS Since O’Leary’s team has developed a formal tire program, Copart’s recap failure rate has plummeted from 10% to around 1%. O’Leary says the impressive turnaround is the result of putting systems and standards in place – and
A E M P .O R G | 20 19
FINANCE
putting the onus on tire vendors to help meet their expectations. One policy O’Leary’s team has implemented is that a given tire will never be recapped more than twice, despite the fact that some recappers say you can recap the same tire three or four times. You have to take equipment, application and environment into consideration, so there is no one-size-fits-all policy. The point is that equipment managers must be cognizant of the potential recapping of bad tires. “The recapper must know that you expect the recap to go a full tread life without issue, just like a new tire would,” O’Leary says. “With retreads, there are a lot of ways a tire fails before it wears out the rubber. For instance, there isn’t the right adhesion between the retread rubber and the base carcass. And the biggest issue is wrapping rubber around a bad casing.” There are two manufacturing methods: cut cap and mold cap. Berra says both will work if done correctly, but believes the mold-capping method his company uses produces a better tire. “The consistency of the product is much more controllable, the diameter is fixed and you don’t abuse the casing by sticking the whole thing in a heat chamber. I also think you get a more consistentrunning tire because the cure rate matches what the new tire manufacturers are doing,” Berra explains. Doug King, CEM, corporate equipment manager for Sherwood Companies based
ABOVE: Since putting in place standards for which tires to retread and establishing life expectations with its tire partners, Copart’s recap tire failure rate has plummeted from 10% to 1%.
in Wichita, KS, also likes the mold cap method. He sees much longer casing life, and his operators feel better about the tires. “Perception is reality,” King says. “With the bead-to-bead process Community Tire uses, you can hardly tell that it isn’t a brand-new tire.” Roughly 25% of King’s fleet’s tire replacements are recaps. “I’m only using my best casings,” he points out. Everything in the fleet is fair game, aside from articulated dump trucks, scrapers and the front tires on haul trucks. “Load and speed are our two biggest factors,” King explains. “With our scrapers, we’ve even had blowouts with virgin tires. So with retreads, I’m just erroring on the side of caution. With our
One policy O’Leary’s team has implemented is that a given tire will never be recapped more than twice, despite the fact that some recappers say you can recap the same tire three or four times.
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Journal of Equipment Management
articulated dump trucks, we load them to maximum capacity and run them near 35 mph. If you have a tire that’s a little low, you’re going to build a lot of heat. Any tire can have an issue in that scenario, but I just don’t want to take that chance with a recap.” For the other equipment in the fleet, King says he often goes with a recap if a unit typically has issues with tire wear – especially if a new tire would not wear significantly longer. “If you are going to burn something up, go cheaper,” King says. “Some machines are also better for recapping. One example is our prime loaders in the quarry where the savings are huge and the wear not much different.” Equipment managers do have to be wary of tire damage. “If you’re in a rock quarry and run your tires down until there is no tread left, and there are a million cuts you can stick an icepick in and hit steel, the chances of retreading that tire are pretty slim,” Berra relates. “Water and dirt start to get in there and erode the steel. By the time the retreader tries to texturize it and take it down to a certain diameter, there is just nothing left. So one ABOVE: Tires (2400R35) pulled from a quarry operation with little or no tread thing a fleet has to think remaining have a lot of cuts that need to be skived but the casings aren’t overly about is whether or not compromised. But tires run this far can risk larger separations from dirt and moisture compromising the bond between the steel belts and the casing. they are running their
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A E M P .O R G | 20 19
FINANCE
about capping everything I can,” O’Leary points out. “My mindset is about These 20.5R25 throwing away tires have been run fairly smooth, the casings but still have that can’t be a hard pack recapped. Only surface and very few cuts, which 35% to 40% of Community Tire our tires are Retreading says recapped with makes them good candidates a 1% failure for retreading. rate over the past five to six years. That’s about five tires out of 500 every year. It doesn’t make sense to recap 50% to 60% if 10% are going to fail out of service.”
tires down to near destruction.” Hours of service can be a key indicator in deciding whether or not it makes financial sense to retread a tire. But even if you’ve identified some rules of thumb in that regard, other factors also need to be taken into consideration. Berra explains, “You have to think about the surface the machine is operating on. For example, a construction company running a 70-ton haul truck in Georgia might get 4,000 to 6,000 hours on a new tread. That same application in Texas is much different because the surface is not as abrasive. A company might get 10,000 to 12,000 hours. For that company in Texas, it might not make as much sense to look at retreading because after that many hours of use, the tires might be pretty trashed.” You also have to factor in how the equipment is operating. For example, a haul truck making 5-mile loaded runs all day long tends to develop a lot of heat. That same truck making 3/4-mile hauls, half of them empty, isn’t running as hard. That second truck is likely a better candidate for retreading because there’s a good chance the carcass and casing are still in decent shape. It is important to understand that not every single tire has to be recapped in order to benefit from recapping. “My mindset isn’t
2019 | A E M P .O R G
BAD TIRES ARE BAD FOR EVERYONE A successful tire recapping program often depends on the vitally important equipment triangle. The tire user, dealer and recapper must all work together toward a mutually beneficial relationship. King says his tire dealers help him decide which tires to send for recapping. “From there I have confidence in our retread company’s inspection procedure because we have had very few recap failures,” King says. “Their process exposes all of the casing and all of the flaws.” King is talking about Community Tire Retreading, which also happens to be Copart’s most prominent recapper. Community Tire is the recapper for GCR Tires, one of the largest tire distributors in the country. Nearly half of Copart’s locations do business with GCR Tires. Developing a relationship with Community Tire has been instrumental to Copart’s successful tire recapping program. PAGE
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Journal of Equipment Management
provided there is significant tread left on a given tire, a fleet could return that tire to service for a little while longer, or perhaps designate it as a spare to achieve some additional ROI. Equipment managers should be on the lookout for dealer upcharges for things like shipping and casing repairs. “I don’t want to get dinged for a shipping cost because the dealer shipped a bad casing to a recapper halfway across the country,” O’Leary says. As for repair costs, O’Leary says a direct channel of communication with the recapper itself is essential. Early on in Copart’s recap program, some dealers were throwing in repair charges. But O’Leary had a fixed price for a recap which included basic repairs. “The average construction company might just go ahead and pay these extra charges, perhaps not even noticing them,” O’Leary says. “Because of our relationship with the recapper, we are able to ask for all repair records with tire serial numbers. This way we can see what repairs are actually being done. Now the recapper bills us directly for any additional repair work.” Getting a tire recapping program started requires good planning, followed up by some close supervision for a year or two to help it mature. “Once a tire program is mature, the fleet manager can start to back off a bit because the program starts running itself,” O’Leary relates. Having great tire partners makes it a whole lot easier.
“We made it clear that we could be a pretty big customer,” O’Leary says. “We also made it clear that we could get along just fine without ever recapping a tire again. In other words, our business was theirs to lose.” Granted, Copart is a massive customer with a little more leverage in the triangle than many end-users might have. But O’Leary says every fleet can set the same level of expectation, and every good tire recapper—and dealer for that matter—will work toward the same desired outcome. “A tire dealer is going to get our business either way, so setting a strong expectation for recaps isn’t really an issue there,” O’Leary points out. “As for the tire recapper, a fleet can either be the golden goose that lays a lot of golden eggs for a long time, or the recapper can kill us, pluck us, fry us and eat us once. A good recapper will understand that.” Community Tire understands. It uses a unique inspection process that goes beyond the typical visual inspection for tire defects. The company has invested in something called a shearography machine. A tire is placed inside of a chamber. The machine then takes two sets of laser images: one while the tire is in a relaxed state, and a second set while a vacuum is drawn in the chamber. The two sets of photos are overlayed, allowing retread technicians to look beneath the surface of the tread and sidewalls in search of separations and other defects. This inspection process helps Community Tire avoid retreading tires that likely won’t provide adequate service life. Furthermore,
As for the tire recapper, a fleet can either be the golden goose that lays a lot of golden eggs for a long time, or the recapper can kill us, pluck us, fry us and eat us once. A good recapper will understand that.
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A E M P .O R G | 20 19
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NARROWING TELEMATICS PRIORITIES
T
elematics can provide tremendously valuable information to a fleet manager. The data can also be tremendously overwhelming. A wise approach is to focus on what matters most to your specific fleet, and what will provide the most meaningful ROI. AJ Johns, a construction company in Jacksonville, FL, has 125 trucks and 199 pieces of heavy iron. The company began leveraging telematics roughly five years ago when Larry LeClair, CEM, fleet manager, joined the company. “In that first year, about 20% of our fleet had telematics. Now we’re up to 90%,” he says. Initially, LeClair focused on data points such as machine location and hours. That led him to explore other insights telematics can provide — insights that could influence both machine and operator productivity, and ultimately jobsite efficiency and profitability. “We started looking at fuel consumption and idling data about once a month,” LeClair says. “Then we started looking at brake usage on articulated trucks, engine overspeed, transmission temperatures and hydraulic temperatures. We looked at those things daily, discussing the information with
Drives Jobsite Cost Reductions Maximize value from telematics by focusing on what matters most to your fleet. BY GREGG WARTGOW
2019 | A E M P .O R G
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IF OUR TELEMATICS DATA IS TELLING US WE HAVE AN ISSUE, THEY ALL WORK TOGETHER TO FIGURE OUT WHY.
Regardless why those alerts were being triggered, finding a solution came down to communication. LeClair says his equipment foreman is in the field every day acting as a liaison between superintendents, jobsite foremen and operators. “They talk on a daily basis,” LeClair points out. “If our telematics data is telling us we have an issue, they all work together to figure out why.” For that communication to be constructive, the data being discussed has to be reliable. “I caution all department managers — you have to be careful because there is a lot of data there,” says Joe O’Leary, CEM, senior director of equipment, safety and environmental compliance at Copart. “You need to pick the data that is the most reliable and reflective of operator behavior. If you pick data that is not always reliable, your people will end up resenting it.”
superintendents and foremen so they could apply it to their jobsites.” Safety was also top of mind. With offroad trucks, telematics sensors were set up to provide alerts when hard turning or jerky steering took place. “We’d see those alerts and then contact the foreman to ask how his haul roads were looking,” LeClair says. “Maybe we were getting those alerts because the driver was really having to fight to get down the haul road. Maybe the foreman would want to run a dozer on that road to get it cleaned up and safer for the trucks hauling materials.” BELOW: Copart wheel loaders are heavy lifters, turning and straight-away driving, operators need training on how their techniques influence active fuel burn.
IDLE TIME AND FUEL BURN Copart is an online vehicle auction provider selling about 2.5 million cars
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equipment in 2012. He activated the telematics and ran some loaders as a test for about 13 months. The telematics data, which O’Leary had previously confirmed to be highly accurate, showed roughly 21% idle time. The previous loaders showed nearly 40%. Now O’Leary and his team had something real to work with. They started with 16 loaders, setting a goal of 17% idle time over a twomonth benchmarking period. They actually got it down to roughly 11%, effectively slicing idle time in half. They also looked at working fuel burn. The average during the 13-month testing period was 2.9 gal. per hour. They set a goal of 2.50 and got it down to 2.55 — a narrow miss but still an impressive 12% reduction. “Once we had this two-month benchmarking data, we knew we could apply the same operator best practices across the fleet and begin seeing some significant cost savings,” O’Leary says.
per year and operating from more than 200 locations in 12 countries. Its North American fleet of roughly 700 wheel loaders is tasked with moving inventory (vehicles) on and off of trailers, and in and out of storage. Each 3-cu.-yd. loader has a set of 15.5-ft. forks. Each does a lot of heavy lifting, often operates at slow speeds, and logs a lot of time waiting. O’Leary decided he had an opportunity to look at reducing fuel consumption across the fleet. 2-MONTH LOADER BENCHMARKING DATA Idle Time Data showed idle time at roughly 21%. Goal set to bring it down to 17% idle time, they actually got it down to roughly 11%, effectively slicing idle time in half.
Fuel Burn
Data showed fuel burn was at 2.9 gal. per hour. They set a goal of 2.50 and got it down to 2.55 — a narrow miss but still an impressive 12% reduction.
PUT DATA TO WORK THROUGH OPERATOR BEST PRACTICES
It made sense for O’Leary’s team to start with idle time and working fuel burn because those are very tangible, measurable pieces of data. That makes it an easier sell to senior management, which often must approve an investment in telematics. “It’s too nebulous to talk about things like heading off repairs because you might see a fault code,” O’Leary says. “On the other hand, if you can talk about saving thousands of dollars on fuel over the course of a year, that gets somebody’s attention.” The first step for O’Leary was to ensure that the telematics data was accurate. He was misled once before. The loaders in his fleet had a hard time accurately capturing true idle time. Anything up to 3 mph was captured as idling. That distorted the data because his loaders often operate at very slow speeds with no hydraulic engagement. O’Leary did his research and started the process of switching over to Caterpillar
2019 | A E M P .O R G
With respect to idle time, retraining operators was straightforward. “Idle time comes down to a simple one-liner: shut it off,” O’Leary says. “We told our operators to not even worry about the turbocharger; the heat sensor won’t allow it to shut off if it’s too hot anyway. We trained operators to just shut the machine off if they thought they wouldn’t resume work for 15 seconds or longer. “It was a little tough at first because we have some operators with old habits,” he acknowledges. “Our equipment manager and the location managers just handled things on a case by case basis with communication. We call it data-driven, constant gentle pressure.” Along with idling, O’Leary’s team implemented best practices to help reduce working fuel burn. They retrained operators on how to manage the throttle, braking and the lifting of vehicles. Fast starting was the biggest issue. “We had to remind operators that they PAGE
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TRACK. CAPTURE. DELIVER.
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MOST OF OUR OPERATORS ARE MOTIVATED BY THE FACT THAT THEY ARE MAKING SUCH A TANGIBLE CONTRIBUTION. WE ALSO COMPENSATE THEM FOR THEIR CONTRIBUTIONS. …THAT FACTORS INTO THEIR ANNUAL MERIT RAISE.
didn’t have to worry about losing productivity if they brought their speed up more slowly,” O’Leary says. “We have some big yards so operators often have to drive down long rows,” O’Leary continues. “They can do this one of two ways. They can go full speed, hit the corner, brake and turn. They could also take it a bit easier, coast into the corner and turn. We trained our operators to go with that second option because it burns less fuel.” Standard procedure for the lifting of cars was also put in place. “Many of our loader operators have forklift experience so they are used to having to rev the engine to lift a load,” O’Leary says. “But today’s wheel loaders are load sensing. Revving the engine just wastes fuel. This took a bit of retraining, too.” A third technique that required standardization had to do with carrying vehicles from point A to point B. Operators had to be retrained to do the following: pick up the vehicle, drive straightaway a short distance and then begin making their turn. “That technique uses less fuel than if an operator began making their turn before stepping on the gas,” O’Leary explains.
RIGHT: Telematics data is helping AJ Johns reduce fleet acquisition demand by accurately identifying machine utilization.
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Journal of Equipment Management
RIGHT-SIZE WITH THE RIGHT MACHINES
along with the setups and capabilities of each machine, you likely could move a couple of those dozers to other jobs. It took LeClair three to five months to get the hard data needed to start making decisions like that. “We now look at all machines with under 20 hours a week,” he relates. “Then we talk with the foreman and supervisor to see if they could use another machine for those tasks. Sometimes it works, sometimes it doesn’t. But at least we have the data so we can look at our options.” In many instances, it works out very well for LeClair. He has been able to reduce the size of his fleet by 15%. Rental dependency has also been reduced.
AJ Johns has also been taking steps to reduce idle time and fuel burn, and its efforts have paid off. “We had set a goal of reducing idle time to 30%,” LeClair says. “We’ve already gotten it down to 27%. It took a couple of years to get there, but now we’re making improvements and seeing results faster. I’m anxious to see where our idle time rates go now that our fleet has been right-sized with newer, telematics-equipped machines.” Right-sizing the fleet is where LeClair has seen the most impressive gains. In his first years as the company’s fleet manager, just 20% of the fleet had telematics. Still, LeClair was able to monitor utilization on those machines and make some meaningful adjustments. Today, with 90% of the fleet equipped with telematics, the ability to check and adjust has been a boon to jobsite profitability. For instance, LeClair says you might think you need three or four classes of dozers on a jobsite. After looking at the utilization data,
Journal of Equipment Management
OPERATORS BENEFIT TOO For both LeClair and O’Leary, equipment operators are sharing in the success. Getting buy-in from the jobsite is essential to making all of this work. Telematics data helps you find out what you need to know. Best management practices, training and execution translate knowledge into cost and efficiency savings. “Everyone in our company has bought into the fact that this is a cost saver that will also extend the life of our fleet and improve our company’s bottom line,” O’Leary says. “Most of our operators are motivated by the fact that they are making such a tangible contribution. We also compensate them for their contributions. We know who is and isn’t meeting our goals on idle time and fuel burn. That factors into their annual merit raise.” Like O’Leary, LeClair likes to tie rewards to consistent, long-term behavior. “The incentive is to do a better job for our customers and our company,” he says. “That means we need to find ways to produce quality work as economically as we can. “My job is to give our employees the data, tools and coaching to do a better job,” he adds. “Their reward comes naturally then, because we’re more successful as a company over the long run.” PAGE
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HOW THE RECESSION
RESHUFFLED CONSTRUCTION EQUIPMENT BUYING PRIORITIES
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Surge in AEMP members’ use of rental, leasing and service contracts enlists dealers and manufacturers to share risk of machine ownership BY LARRY STEWART, EDITOR, FORCONSTRUCTIONPROS.COM
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rapidly advancing technology in light of the recession’s stark reminder that construction demand is uncertain. Survey respondents are dominated by firms with more than $25 million in annual revenue that participate in the Association of Equipment Management Professionals (AEMP) – in other words, companies with resources and track records of investing in improving equipment efficiency. But firms with less than $500,000 in annual revenue are represented in the results.
unique survey of construction equipment users measured their dramatic shift toward renting and leas ing machines their companies once bought and using dealer service contracts to support machines they once maintained themselves. The change since 2008 suggests more contractors seek to share more of the risk of owning expensive machines with
2019 | A E M P .O R G
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Journal of Equipment Management
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Management
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What percentage of new-machine purchases include a dealer service contract? None
32.1%
1 – 5%
15.5% 22.8%
6% - 25% 26% to 50% 51% to 85% 86% to 100%
9.3% 9.8% 10.4% 10%
20%
30%
processes: 45% of equipment Across all firm sizes, 44% Nearly 68% of equipment users have increased the of equipment users have users negotiate contracts percentage of machines increased the percentage for some service support. One in they acquire by means other of new-machine purchases five firms includes service contracts with more than half of than purchasing new: renting, that include dealer service machines added to their fleets. leasing or buying used. Twocontracts in the past ten thirds of firms do at least some years. One in five firms leasing. One in five equipment includes service contracts users fill more than 25% of their equipment with more than half of the new machines needs by leasing, and 14% are as likely to rent. added to their fleets. One in ten firms use To be clear, the most used acquisition service contracts on almost all – 86% to 100% method for construction equipment continues – new machines. to be purchasing new machines; 63% of firms Increased use of service contracts surveyed fill more than half of their equipment accompanies another departure from needs this way. But rapid growth in use of conventional buy-and-maintain fleet
Change in the percentage of machine purchases that include a dealer service contract? Stayed the same
51.8%
Increased Decreased
43.5% 4.7% 10%
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50% Journal of Equipment Management
As the economic recovery of the past ten years ground forward, equipment users most engaged in equipment management, like AEMP member firms, have been pursuing ways to shift some risk of low utilization to their vendors with rentals and leases. Even the alternate financing options – lease/purchase and rent-to-own deals – offer easier exits than cash purchases and conventional financing. Use of all the alternatives to purchasing has risen to unprecedented levels. Sharing ownership risk with vendors is becoming increasingly attractive. The current U.S. construction expansion is expected to reach into 2019. But prospects for construction
leasing, rental and lease/purchase or rentto-own agreements represents an important answer to one of the toughest lessons taught by the recession. A machine’s total ownership and operating cost per hour is most sensitive to changes in hours of use. Only acquisition cost (purchase price minus residual value) has nearly the impact on the effective cost of working with construction machines. And the telematics technologies on these expensive new machines are providing equipment professionals with reliable insight into how much these machines actually work. Most find that it’s not as much as field crews have been reporting.
Which portion of your machine purchases do you acquire new? None
2.7%
1 – 5%
7.0%
6% - 25%
10.7% 16.6%
26% to 50%
30.0%
51% to 85%
33.2%
86% to 100%
10%
20%
30%
Portion of firms that use these purchase alternatives Rent to own
75.9% 80.3%
Rent
66.2%
Lease Lease/ purchase
56.7% 40%
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Firms that fill more than 25% of equipment needs with these purchase alternatives 20.1%
Rent to own
13.6%
Rent
20.1%
Lease Lease/ purchase
18.7% 5%
15%
25%
business conditions in 2020 More than a quarter of Most fleet replacements and beyond, riding this nearsurvey respondents agree that are made with new record-length expansion into prioritizing other factors over equipment, but nearly 45% of its 11th year, are murky. quality of dealer service is a firms increased their use of purchase alternatives such as common purchase mistake. When asked which are rental, leasing and buying used This nod to dependence on the three most common machines in the past ten years. dealer service underscores mistakes made in equipment the significance of the vendor purchasing, it’s no surprise relationship in the success of machine that the two most chosen are brought about ownership. As equipment buyers enlist more by unmet expectations for machine usage. dealer support, they’ll inevitably learn important Equipment users clearly see replacing lessons about their own expectations and how machines at the wrong time (keeping them too to evaluate vendors’ capacity to satisfy them. long or replacing too early) as the No. 1 purchase More than one in five equipment users said mistake. Fifty-four percent of survey respondents “renting machines that could be purchased named it among the most common. more cost efficiently” is among the most Forty-one percent of respondents included common acquisition mistakes. Incidence specifying machines that are poorly matched to of renting “mistakes” seem inevitable at the job among top purchasing errors. Whether large firms, where multiple people have the machine was specified poorly from the authority to rent equipment, and at firms start, or the machine’s second job assignment experimenting with increased use of rental. strained its capabilities, this mistake would be No doubt many machines are rented to fill an easier to correct if it was rented or leased. immediate need but remain on rent longer In that context, No. 3 on the list of purchase than anticipated at weekly rates above what mistakes – buying machines that could be the company would pay if they’d bought the rented more cost efficiently – perhaps explains machine. But if the rental decision is made the sustained growth in U.S. equipment rental at least in part to insulate the firm from the since the recession. Renting offers a relatively risk of low utilization, that situation is not easy way to unload a machine that’s not necessarily a mistake. Rentals can offer the meeting its utilization or reliability targets company the experience it needs to determine (necessitating an early or late disposal), or that is how much to expect to use the machine not well-suited to the work its owners are doing.
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Journal of Equipment Management
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requests,” and 45.6% said “Parts availability,” longer-term, and good negotiating can often were key dealer requirements. convert much of the rent paid to a purchase. It’s important to note that only 28.5% of The fact that nearly 50% more firms consider respondents selected the fourth most-prized buying machines that should have been dealer characteristic – “Quality of products.” And rented a mistake suggests significantly more trailing behind understanding customer needs, equipment professionals are challenging their availability of training, and trustworthy service machine-ownership habits. and dealership-management people, “Price” The survey measured the influence of made it to the top of only 11.4% of constructionservice support on the purchase decisions with equipment buyers’ lists. the question: “Which are the most important This biggest numbers in this survey characteristics you want in a construction support machine ownership. But there’s big equipment dealer (please select three)?” The top change in the methods of answer, with more than half acquiring some machines in of respondents in agreement, The two most-common a way that protects the user was “Quality of service.” equipment purchasing from falling utilization and The second- and thirdmistakes suggest why rental increasing service complexity. most-selected responses and leasing are growing. They simplify disposing of a machine reinforce the prominence of Managers who don’t have that’s not meeting utilization or service in purchase decisions: complete equipment statistics reliability targets, or that is 46.1% of respondents named can guide their choices with poorly suited to current work. “Speed of response to service some educated assumptions.
10 Most Common Construction-Equipment Buying Mistakes Bad timing (replacing machines late or too early)
53.9%
Specifying machines poorly matched to the job
40.9%
Buying when renting could be more cost efficient
35.8%
Prioritizing factors over quality of dealer service
28.0%
Renting when buying could be more cost efficient
22.8%
Not negotiating an extended warranty Unknown parts availability Prioritizing other factors over machine reliability
22.3% 16.7% 14.5%
Not negotiating service terms (labor rates, etc.)
12.4%
Buying when a lease would be more cost effective
12.4%
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60%
40%
60%
Journal of Equipment Management
10 Things Buyers Want Most from a Construction Equipment Dealer 57.5%
Quality of service Fast response to service requests
46.1% 45.6%
Parts availability
28.5%
Quality products Understands my specific needs
22.8%
Availability of training for my people
22.3%
Trustworthy service personnel
19.7% 14.0%
Trustworthy dealership managers
11.4%
Price Geographic proximity
10.4%
20%
30%
40%
50%
money up front, preserving Any units working at less than The three most important cash to invest in operations 60% utilization are candidates characteristics that and sustain the kind of for rental, assuming similar equipment buyers want from debt-to-equity ratios an models are available to rent. dealers they do business with focus conspicuously on service support. aggressive contractor needs How do prevailing to borrow working capital rental rates compare to and get bonding. your internal rates? If your internal rates do not account for such costs as Of course, leases and renting puts the maintenance overhead (shops, service trucks, equipment user on the hook for the condition of mechanic labor and training, etc.), depreciation the machine at the end of the deal. Residual value and capital costs, then the rental rate doesn’t affects the overall cost of leases, in particular. have to be lower than your internal rate for That encourages the use of service contracts. renting to be more economical. Dealer service has proven to maintain Once you’ve narrowed the choice down to a strong residual values, recruiting dealers few machines that can be rented for less than and equipment manufacturers to invest in double your internal rates, you might want to inspections and preventive maintenance so do a detailed analysis of those units’ complete that machines they get back at the end of the ownership and operating costs. Also consider lease are profitably remarketable. how much value would your company derive The greatest influence on any company’s from having well-maintained, new rental purchase decisions are likely to be more machines doing these jobs? practical than philosophical. Answers to Another post-recession lesson is the questions like duration of the need and annual reminder of how precious capital can be. You hours of use and strength of the company’s can get into leases and rentals with very little cash reserves will drive most decisions.
Journal of Equipment Management
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A E M P .O R G | 20 19
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INFORMATION
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t’s important to approach equipment telematics thinking strategically, prepared to embrace innovations that employ GPS machine-monitoring data well beyond the shop. Telematics technology has made tremendous progress. Not only can it now inform equipment replacement decisions to improve fleet cost efficiency, but the data has the potential to revolutionize the way construction companies manage production. While the pace of adoption is picking up, it remains slow, according to JP Giometti, director of strategy and R&D at construction software developer HCSS.
Telematics has also gone through some growing pains as to who owned the data, where it lived, and who had access to it. That’s where AEMP stepped in…
Branch Civil is a heavy-civil construction company with three Virginia offices and a fourth in North Carolina. Roughly 60% of the company’s mixed fleet is telematics-equipped. The goal, through normal attrition over the next several years, is 100%. PAGE
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INFORMATION
“This standard is a way to ensure that all equipment manufacturers are formatting their telematics data in the same way, making it easier for fleet managers to use,” adds Morgan, who started delving into telematics ten years ago through his involvement with AEMP. Morgan has served on the Technology, Education and Conference Committees, as well as the Board of Directors. This year he’s serving as Vice Chair of the Board.
Giometti oversees innovation and scouts emerging technologies for HCSS, and has served on the Association of Equipment Management Professionals’ (AEMP) Technology Committee. He points to several factors slowing realization of telematics’ full potential: ❯❯ It’s still a relatively new technology ❯❯ Fleet managers are very busy with a lot of responsibilities ❯❯ Data can be overwhelming – Giometti calls it “data overdose” ❯❯ Some savvy fleet managers simply don’t trust the data “Telematics has also gone through some growing pains as to who owned the data, where it lived, and who had access to it,” says Tim Morgan, equipment operations manager for Branch Civil, a heavy-civil construction
MIXED FLEETS AND THIRDPARTY SOFTWARE The variety of equipment brands represented in most construction-equipment fleets adds a layer of complexity to realizing telematics’ true value. Fleet managers must visit several different web portals, manufacturer by manufacturer, to access data from a mixed fleet. Another option, now made considerably more effective thanks to ISO 15143-3, is to use third-party software that aggregates data from several manufacturers’ systems. “This way the mixed fleet manager can see all of this important data in one place,” Giometti says, adding that HCSS is one such aggregator of telematics data. Other third-party aggregators exist and are growing in number. Many of these thirdparty companies also provide telematics devices (i.e. sensors) to install on equipment as necessary. “We have close to 10 different OEM brands in our fleet,” Morgan relates. “We API (application programming interface) all of our OEM telematics data through a third-party aggregator (Teletrac Navman). This allows us to manage our entire mixed fleet in one portal. Then, when we want to dig deeper into the data, we go to the individual OEM portals.” Morgan says he has purchased thirdparty devices to install on some of his older equipment. Any new equipment purchased must be equipped with telematics. “About 60%
Wholly embracing telematics, using the data throughout operations, can give a construction company a competitive advantage.
company with three Virginia offices and a fourth in North Carolina. “That’s where AEMP stepped in to begin developing a telematics standard, ISO 15143-3.
JP Giometti, director of strategy and R&D at construction software developer HCSS
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within the company is asset manager, which is responsible for capital expenditures. “We work closely together and look at telematics data a lot, especially when we’re talking about right-sizing our fleet,” Morgan says. “We look at availability reports and reliability utilization reports to help make repair-replace decisions, and even determine what types of equipment work best in different situations.”
of our fleet is telematics-equipped,” Morgan says. “Over the next several years through normal attrition, our goal is to get to 100%.”
HAVE A TELEMATICS PLAN
For any company looking to embrace telematics, Giometti says it’s important to have a technology adoption plan with clear goals and expectations. Do you want to start with just a few machines, or perhaps a single jobsite or two? More importantly, what data do MANAGING EQUIPMENT LIFECYCLES you want and what are you going to do with it? As pointed out earlier, telematics has the “My best advice is to go in knowing what potential to revolutionize the way construction you are looking for,” Morgan says. “Will the companies manage entire production system provide the data you want, and in the operations. It does start, however, with the report format you are looking for? Too many equipment itself. Operating expense is what fleet managers go into this thinking the new the fleet manager is interested in managing— software will be a perfect cureand predicting. all. Then when it doesn’t do what “You can learn a lot We work closely they expected, it’s a big problem.” about the health of a piece Giometti says a strategic together and look of equipment by how the fuel approach going into managing burn changes,” Morgan says. at telematics with telematics will create the “Likewise, fault codes tell data a lot, necessary mindset to later you when you start having especially when expand your use of the data. temperature fluctuations.” “Fleet managers are wearing “Telematics enables you we’re talking too many hats,” Giometti says. to automate some of your about right“It’s beneficial to find someone processes,” Giometti says. “You sizing our fleet. else in the company to sort of could set up automatic alerts partner with the fleet manager when relevant fault codes are on telematics. Maybe it’s triggered, and generate service someone from another department such requests and work orders. Now you can be as IT. Maybe it’s a younger intern who loves more proactive with machine maintenance technology. Now you’re building a telematics and actually plan for downtime. At the end cross-functional team which helps you take of the game, telematics—in conjunction with the entire company where it needs to go with big data and machine learning—will help telematics—because telematics is here to construction companies identify when failure stay. Furthermore, telematics could become will happen and what can be done about it. a source of a competitive advantage for This transformation is what keeps me really construction companies.” excited about the great future ahead.” Morgan says that, like a lot of things in the equipment management business, 5 SKILLS A TELEMATICS he’s managing to exceptions. He doesn’t POINT PERSON NEEDS necessarily go in on a daily or even weekly At Branch Civil, Morgan says his job is to basis to mine telematics data. Rather, he’s keep the equipment running. Another role
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HCSS telematics software displays equipment fuel level expressed as a percentage of tank capacity, allowing you to understand real-time fuel needs across your telematics-enabled fleet.
Equipment tracking is typically where a construction company gets started with telematics. HCSS telematics software offers robust map view reporting so you can see your entire mixed fleet at any time, all in one place.
HCSS shop maintenance software has a dashboard to present various alerts such as maintenance reminders and inspection updates.
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that haven’t been updated yet. Telematics data reacting to fault codes and alerts. “We do doesn’t provide everything we need to know, manage those on a daily basis,” he adds. “Then but it plays an increasingly important role.” when we reach a point where we think we’ll need to make a repair-replace decision, we’ll start digging deeper into the data to analyze UNTAPPED TELEMATICS where we think a machine is in its life.” OPPORTUNITY A piece of equipment is put on a multiApplying telematics data to decisions year depreciation cycle. Morgan says he likes through more of the machine lifecycle and in to get 8,000 to 10,000 hours out of something, managing construction operations starts with depending on the type of equipment and sharing information. application. There are a few things he looks Giometti explains, “This data can be for when deciding whether or not to pull a shared with people from your finance machine from the fleet. department. Are repair costs beginning to “We look at how much it idled vs. actually escalate in an unsustainable way? Or maybe worked,” Morgan relates. “We look at the the utilization rate on a piece of equipment fault code history. Did it have any electronic is so low that you can consider pulling it problems? What about hydraulic issues? out of service and selling it. You might have Then we look 10 pieces of equipment, back through the and most of them are only maintenance and at 20% utilization. Maybe We do manage those repair history. What you can downsize to eight [machine telematics have we already machines.” data fault codes and replaced in terms alerts] on a daily basis. of components? HOW TO UNLOCK Then when we think Maybe we can get THE CONSTRUCTION we’ll need to make a more life out of PROFIT IN EQUIPMENT repair-replace decision, something if we TELEMATICS we’ll start digging deeper just update some You can share your into the data to analyze key components telematics data with where we think a distributors to help solve machine is in its life. problems and plan parts purchases, as well as coordinate any rentals. Location, fuel-level and usage data shared with fuel suppliers, for another example, can help coordinate on-time deliveries. Telematics data that indicates safe operator behavior can be shared with insurance providers to reduce your premiums. Tim Morgan, equipment HCSS is focusing on creating workflows operations around telematics data. “For example, through manager for telematics you know the working hours of a Branch Civil piece of equipment,” Giometti explains. That data helps you to stay on top of preventive
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In the first years of telematics, it was really just about GPS and machine tracking. Now it’s about using all of this data to make better management decisions: real-time, data-driven decisions right on the jobsite.
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And what about your employees themselves? Could telematics tracking devices be used to monitor employee activity? Probably so. But then again, it’s probably best to allow your site foremen to do the managing. Regardless, the point is to show that telematics data can be used to improve your control of the entire production operation. “We’ve spent a good amount of time as an industry getting telematics to where we can take better care of our machines,” Morgan adds. “Now we’re moving more into production management. We can make telematics as much a production tool as a fleet management tool. Then telematics adoption will skyrocket and be a great help to the construction industry.”
maintenance procedures. “But you can also use that data to populate an employee time card, as opposed to doing it manually,” Giometti adds. This is where telematics can become very powerful. “In the first years of telematics, it was really just about GPS and machine tracking,” Giometti says. “Now it’s about using all of this data to make better management decisions: real-time, data-driven decisions right on the jobsite.” Giometti’s view is that less than half of construction companies are using telematics to some degree. Then, just 10% are really leveraging telematics in a holistic way to improve safety and productivity, and to drive down costs.
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Project to project. Community to community. Generation to generation. We see a tomorrow where the tools and processes used to build our world are more intelligent, more connected and safer than ever before. Where economic prosperity and environmental responsibility are mutually reinforcing goals. And where gains in the power, efficiency and uptime of our equipment drive our customers’ work to new heights.
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EQUIPMENT INITIATIVES that Put Management on Your Side New research by AEMP and ForConstructionPros.com identifies what many equipment professionals did to gain their bosses’ confidence BY LARRY STEWART, EDITOR, FORCONSTRUCTIONPROS.COM
GOLERO/ DIGITALVISION VECTORS/ GETTY IMAGES
s telematics technology delivers the data necessary to track equipment costs more accurately than ever, the Association of Equipment Management Professionals and ForConstructionPros.com offer the construction industry’s first research on which management initiatives equipment professionals used to gain the confidence of construction executives to whom they report. The answers are more important to a construction firms’ profitability than many recognize. When identifying the three issues that have been most effective in convincing company executives to invest more authority in their equipment managers, it’s no surprise that the top answer was “reducing machine downtime.” It’s a critical priority because success keeps jobs moving. But also, in 37 years “building excellence in equipment management” (AEMP’s stated mission), association members recognize that reducing machine downtime is also an issue heavily dependent on machine knowledge and maintenance scheduling – the skills box that many equipment managers recognize as a limit on their ability to contribute to their company’s successes.
MORE THAN MECHANICS AEMP members’ abilities to optimize digital control and data-gathering technologies have advanced as on-board computers came to control diesel fuel injection, hydraulics, and machine
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Which Initiatives Earned Greater Management Authority Source: AEMP, ForConstructionPros.com
55%
Reducing machine downtime
42%
Guiding purchases by forecasting machine life cost
40%
Improving machine utilization Tailoring replacements to maximize cost efficiency
39%
Maximizing cost efficiency with rent, lease and buy options
39%
Sharing data that maximizes operations efficiency
34%
Maximizing use of telematics data
33%
Reducing repair costs
33%
Reducing safety incident rates
27%
Improving field/shop teamwork
18%
Improving technician skills
18%
Researching effectiveness of in-house vs. vendor repairs
16% 20%
30%
40%
50%
Seven initiatives that Fast-growing Superior automation. On the front line have gained AEMP Construction, Portage, Ind., was of collecting and distributing members C-Suite credibility transitioning from decentralized machine data for their companies, follow “reducing machine downtime” in a tight group. equipment managers’ skills equipment management handled They combine machine in managing machines’ costby field superintendents. New knowledge and business effectiveness have sharpened and corporate equipment manager, skills in a way that contractors increasingly become assets that earn trust Ernie Stephens, CEM, determined value as access to machine from the executive suite. that the company’s lack of data grows. machine-lifecycle management Seven initiatives that have was low-hanging fruit. gained AEMP members C-Suite “We did two things to reduce repair costs,” credibility follow “reducing machine says Stephens. “First was getting rid of the downtime” in a tight group. These couple pieces we were always working on. In any fleet, mechanical knowledge to business skills that there’s probably 10% to 20% that you spend contractors increasingly need as access to 80% of your time working on. Within my first machine data grows.
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Trust Before or After Results? Source: AEMP, ForConstructionPros.com
We presented a plan and they gave us a chance to get results
37%
Leaders challenged us to improve equipment operations
26%
Plan needed an ROI forecast before they let us run with it
23%
Had to measure results to gain decision-making authority
8%
Had to show improvements in a test case to gain their trust
6% 10%
20%
30%
40%
Larger firms that responded to this survey rely heavily on dedicated equipment-management software. It’s interesting that the lowly spread sheet is as useful to equipment professionals as machine telematics.
Last 5 Years: Technology Best for Improving Fleet Effectiveness
Spreadsheets
22%
Source: AEMP, ForConstructionPros.com
Accounting software
6%
Construction enterprise software
4%
Project management software
22%
43%
1%
two years here, we retired most of that older fleet, going through case-by-case, looking at the number of downtime days and how much they were spending on them. With additional capex expenditures, we continued to run at the same fleet size, but reduced the average age of our fleet from 6 years to 3.2 years.” Superior’s owners knew they had issues with keeping machines too long. “But how do you go change without having somebody you trust to manage that process?” Stephens asks, to point out the conundrum many contractor executives face.
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Machine telematics
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Equipment management software GOLERO/ DIGITALVISION VECTORS/ GETTY IMAGES
Journal of Equipment Management
When When space space is is at at a a premium, premium, Link-Belt® Link-Belt® Spin Spin Ace® excavators are packed with Ace® excavators are packed with all all the the power, power, productivity, productivity, and and fuel fuel efficiency efficiency needed needed to to get get the job done. Choose from four MSR models, the job done. Choose from four MSR models, with with tail tail swings swings from from 4’9” 4’9” to to 5’10”. 5’10”. Backed Backed by by some of the strongest warranty programs some of the strongest warranty programs in in the the industry, industry, including including free free RemoteCARE® RemoteCARE® telematics coverage. These telematics coverage. These machines machines also also meet meet Final Tier 4 without needing a DPF! Final Tier 4 without needing a DPF!
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improvement plans to company management for approval, and another 23% say the plans must show “a reasonable ROI forecast before they let us run with it.” But few firms expect to see test-case proof before throwing support behind their equipment managers’ strategies. “We all knew we had a utilization issue,” says Dan Kunce, CEM, equipment manager with Omaha-based Hawkins Construction. Reports on the 1,000-unit heavy-construction fleet specifically showed low utilization of rented machines. “In one year – 2017 to 2018 – we had our Hawkins utilization sitting around 70% or so of what we expect. We put some new processes in place, added some drivers and a truck; now we’re pushing 150% utilization. “What’s that mean? We need more equipment,” says Kunce. “Workload’s gone up and the cost numbers have gone down. So that’s good.” Since last year, judiciously moving equipment to where it is needed most has cut a million dollars from Hawkins’ roughly $6 million annual rental budget. So there’s money to adjust fleet size. “To sell the idea of buying more, I’ve had to provide to our owners eight years of
To stretch equipment replacement dollars, Stephens championed the use of leases with full warranties and service contracts. “The lease pricing I was able to secure looked like a pretty good deal,” Stephens says. “We dropped our capex expenditures by more than 65%. The company is actually growing, winning more projects and larger projects than we’ve ever had before, but we’re spending less. We’ve been going 18 to 24 months on some of these leases now, and we’ve had minimal issues.” Stephens worked hard getting Superior’s management approval for his first initiatives. “But once we did a couple of the really large things at the beginning, it clicked for them right away. Then the doors were pretty wide open to do what we felt was necessary,” he recalls. “Now we show where we’ve been, what we’re doing and our initiatives for the coming year with an annual business plan, put a cost structure behind it and we get approval on it.”
PRIORITY ON PLANNING ORDERLY CHANGE Most equipment professionals at AEMP report that the people they work for expect them to set the direction for equipmentmanagement innovation. Thirty-seven percent of survey respondents said they present fleet-
Where is the Top Equipment Manager in Your Org Chart?
3% Middle corporate management
GOLERO/ DIGITALVISION VECTORS/ GETTY IMAGES
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Executive suite
Part of the operating divisions
Source: AEMP, ForConstructionPros.com
A function of project management
30%
20%
47%
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“THE TECH MAKES ME FASTER.” JEROME HAYCRAFT / ASPLIN INC. / FARGO, ND
iNTELLIGENT MACHINE CONTROL “We have a Komatsu PC210LCi and it’s been better than I even expected. The speed and time you save just having your line work and not having to worry about over excavating— that’s huge. I hated those bigger commercial jobs where you’d have hundreds of stakes marking all your corners, offsets and gridlines. And to not have a need for any of that, especially if it’s an export site or it doesn’t even really have to be, just room for your spoil piles. Keeping track of corners—major time saver! I’d say, with iMC, I’m about a third faster getting the job done.”
That’s why I am Komatsu
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Respondent Company Annual Revenue Source: AEMP, ForConstructionPros.com
69%
More than $100 million
18%
$25,000,001 to $100 million
$5,000,001 million to $25 million
7%
$500,000 to $5 million
6% 20%
40%
60%
80%
interest rates are, what the prime data on our utilization of Hawkins The vast majority of interest rate is and what kind of equipment and rental equipment. respondents to this financing options you have. If you’re We’ve been getting the same survey manage going to negotiate a rental purchase utilization on rental equip and large fleets, but the results present a option on a new machine, and they Hawkins equipment [since cutting roadmap for adding offer you 6% interest, are you just back on rentals], so it’s kind of a value to equipment going to blindly walk into that? no-brainer. We had a budget for decisions of any dollar value or equipment in 2019, and now we’re “We will usually bundle machines frequency. going to add to it.” at the end of the year. We’ll convert Sometimes the best thing an $8 million worth of equipment on equipment professional can do to RPO to a purchase in one package gain the confidence of their employers is the because you get a better rate. Do you want to do most basic: study up on subjects the company it with a 36-month amortization, or 60 months? needs most. And why would you do either, or both? “I don’t have a financial background,” “The biggest help I give myself is always admits Adam Williams, general maintenance asking questions and always trying to learn, manager with Castle Rock, Colo.,’s HEI Civil. He and not being afraid to make decisions on is in line to take over fleet management from stuff,” says Williams. “If I’m wrong, I try and fix one of the company founder/owners. “I came it the next time. Going and getting AEMP’s EMS up like most guys do as a mechanic and and then getting my CEM certification validated worked my way up over the years – think I’ve to myself what I already knew and then some. been in charge of maintenance longer now It shows you’re willing to go above and beyond, than I actually performed maintenance. to put your money where your mouth is, and “Biggest change you can make is to learn that you want to grow and expand and not just how to read a financial statement, to know what stay in one spot.”
C
THE BIGGEST HELP I GIVE MYSELF IS ALWAYS ASKING QUESTIONS AND ALWAYS TRYING TO LEARN, AND NOT BEING AFRAID TO MAKE DECISIONS ON STUFF.
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“THEIR FINANCE PROGRAM ROCKS!” LANCE LANNOM, RACHELLE REIGARD & EDUARDO MORALES / GRADE A CONSTRUCTION / LEBANON, TN
COMPETITIVE AND FLEXIBLE “Komatsu has been a great partner for us. They’ve been with us through the years, even when we started small and not many other places wanted to talk to us. They believed in us and helped us grow. From a custom financing plan to tech like KOMTRAX, to customer service and Komatsu CARE, and of course reliable products—they offer everything to help our bottom line grow.” Rachelle Reigard, President
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POLICIES BY GREGG WARTGOW
How Contractors are
CREATING SAFETY CULTURES that Beat Compliance Rituals
“Safety dovetails between safety [department] and operations,” says Clark Construction’s Kris Manning. “It starts with camaraderie on the jobsite and the genuine, shared concern for each other’s safety.”
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Measue the presence of safety, not the absence of accidents.
C
onstruction vies with agriculture for the mostdangerous businesses in the U.S., so it’s common for construction companies to talk about their desire to create a culture of safety. But enacting a safety culture that actually makes construction work safer demands more than making regulatory compliance a priority. And the transformation does not happen overnight. “Safety culture is about measuring the presence of safety, not the absence of accidents,” says Don Swasing, CEM, while quoting a respected safety mentor. Swasing is chief operating officer for
Journal of Equipment Management
Schlouch Inc., a Pennsylvania-based site preparation company. “A safety culture is the way in which safety is managed in the workplace. It most often reflects the attitudes, beliefs, perceptions and values employees share as they relate to safety.” Compliance is the basic component of company’s safety program, but safety culture must go much deeper. “We are focused on relationshipbased safety,” says Kris Manning, national director of safety and vice president with Clark Construction Group, a commercial building and civil construction services firm with offices and operations across the U.S. “We don’t view safety as a priority; safety is a core value to us. Priorities
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A Schlouch Inc. team meeting. “Leadership must be very open and honest when it comes to safety,” says Don Swasing, CEM. “As we’ve transformed our culture, it has been important to celebrate good results. At the same time, when you have a near miss, you have to immediately let everyone know.”
heavy equipment and tri-axle-truck rollovers, which was leadership’s original intent. An important milestone, but the quest for a healthy safety culture continues. “Leadership must be very open and honest when it comes to safety,” Swasing points out. “As we’ve transformed our culture, it has been important to celebrate results as they’ve happened. When we went 100 days without an accident, it was big news. At 200 days, it was bigger news. You have to celebrate the good. At the same time, when you have a near miss, you have to immediately let everyone know.” Clark Construction Group believes in the concept of celebration as well. “Rewards are instrumental when trying to change behavior,” Manning says. “We often have stand downs where we have breakfast or lunch brought in to celebrate milestones. We’ll issue spot rewards like TVs or tickets to a sporting event. We are excited to reward teams for strong safety performance.” If a leader shrugs off accidents as a cost of doing business, the culture cannot transform. An interesting way in which Swasing is helping celebrate safety is through a private Facebook group. Approximately 100 Schlouch employees are part of that closed group. “We share photos and stories, and celebrate safety successes,” Swasing says. “I also send out
often change. A core value, on the other hand, represents the foundation of who you are and what you do. Everyone shares this belief at Clark.” Compliance is the basic component of company’s safety program, but safety culture must go much deeper. In order to create a living safety culture, company leaders must commit to the transformation. A failure (i.e. accident or near miss) can often be used as a catalyst for change. Driven by the desire to eliminate rollovers, Schlouch embarked on its transformation in 2014. The first thing the company did was assign a couple of key employees to investigate the root cause of the rollover accidents. “The findings were quite interesting,” says Swasing. “It was a combination of operational habits, along with a lack of education and time.” Once the analysis was in, Schlouch leadership told employees of its intention to eliminate rollovers. A specific rollover prevention plan was developed and put into place. “Everyone in the company clearly understood that this was a priority of senior management, and concrete steps were being put in place to address it,” Swasing says. Schlouch has made great progress over the past several years. They have eliminated
We don’t view safety as a priority; safety is a core value to us. Priorities often change.
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POLICIES
Schlouch’s safety culture is built around recruiting all employees to continually refine job-hazard analyses until incidents end.
company-wide emails. These types of things are important if you want to shift away from a compliance-driven culture. The ‘front line’ contributes a tremendous amount of great ideas and examples of what ‘right’ looks like.”
Schlouch Inc.
In order to establish the necessary level of trust, leaders have to be “present” out on the jobsite so they can see the hazards and conditions for themselves. “Safety leaders must be credible, respected and inspirational,” Swasing adds. “If they are trying to inspire change, they need to walk the talk every day. At Schlouch, we actually created leadership standards together as a team, published those standards and gave them to everyone in the company.” Any leaders who do not embrace change threaten the credibility and viability of the safety transformation. It’s possible that they may need to be removed from the team.
LEADERS: ACCEPT COLD HARD TRUTH In order to get to a place that “looks right” with respect to safety, leadership must first acknowledge the current state of safety in their company. If a leader shrugs off accidents as a cost of doing business, the culture cannot transform. Leadership must decide and communicate what is and isn’t acceptable. At Schlouch, superintendents and the fleet coordinator assessed their current state of safety. They reported their findings up to the CEO. “It could have been easy to make excuses for our rollovers, i.e. the operator was inexperienced or the underfoot condition was poor,” Swasing says. “But at the end of the day, a lot of our problems had to do with unsafe acts and putting employees and machines into challenging situations. “You have to be strong because there’s a risk in being honest about your current state,” Swasing continues. “A lot of CEOs do not want to hear that things are messed up. It’s important to give the CEO confidence that you’re going to fix it. Trust is a critical component in cultural change.”
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REFOCUS FROM RITUALS TO ATTITUDES When trying to distinguish between a culture of safety and a culture of compliance, you must scrutinize what Swasing calls “compliance rituals”. Swasing offers the below example to illustrate. “We had a loss control person who went out into the field nine times a year to conduct audits,” Swasing says. “He would look at equipment logs, seatbelt on/off, backup alarms, housekeeping of trailers, etc. Then he submitted his report to me.
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POLICIES
Guess what? Everything looked great. We were focused on the wrong things, which we got right every time, but we missed the employee engagement piece completely. “What didn’t make sense was that even though everything always passed audit, our incident rate kept going up,” Swasing continues. “What I discovered was that this ‘ritual’ of the monthly audit was not tied to anything that helped us move the needle to improve safety and hazard elimination. That’s why we hunt for rituals like this today. You must have standards and processes that actually produce results. We don’t have a loss control person doing audits like that anymore. Now he functions as a mentor and safety coach.” That’s not to say that Schlouch suspended site audits altogether. Rather, senior leaders assumed responsibility for conducting the audits. “We have 13 STSCs (safety trained supervisors in construction) certified by the Board of Certified Safety Professionals,” Swasing points out. “We audit each other’s sites. We’re looking for hazards and corrections, and things in a site foreman’s blind spot. We’re also looking for things employees are doing right—and are recognizing and celebrating them. We then produce a site audit report and distribute it to everyone in the company.” A Schlouch daily huddle is less ritualistic too. “We used to have a sign-up sheet,” Swasing recalls. “Then someone laid out three or four standard jobsite hazards. Now it’s different. When you first arrive on a jobsite, someone greets you and escorts you from place to place. New employees also get tool and jobsite orientation task training. Everyone always has their PPE on, no questions asked. The daily huddles are more energetic and interactive.”
When it comes to safety, there is no rank.
if you violate this policy, any number of things could happen, such as getting written up or perhaps even terminated. Getting to know people on a personal level and fostering an ongoing dialogue around safety are critical to achieving an engaged workforce and strong safety culture. “Another way for leaders to approach it is to get employees to take ownership of safety themselves, which results in both leadership and frontline employees owning accountability,” Swasing says. “When that happens, leadership can spend most of its time providing support coaching and training resources. That’s exactly what we’ve been able to do at Schlouch.” Clark Construction Group has stopped believing that safety solely falls on the shoulders of the safety professional on the job. “Safety dovetails between safety and operations,” Manning points out. “It starts with camaraderie on the jobsite and the genuine, shared concern for each other’s safety. It’s a relentless focus on keeping the jobsite clean. Everyone is always focused on what they can do better to help ensure people go home safely at night.”
TIPS TO HELP GAIN EMPLOYEE BUY-IN Many construction companies are comfortable in an environment where they simply hold people accountable. For example,
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don’t want you to chastise them, of course, but the person must accept the feedback. When it comes to safety, there is no rank.” The concept of reporting near misses is critically important. Manning is especially interested in what he refers to as leading indicators. “We ask employees: If something were to go wrong in your area or with your crew, what do you think it would be? Asking those probing questions leads to a candid conversation about what is really going on out in the field. Some employees are taken aback that a general contractor is asking for their opinion. We are always on site, but we can’t be everywhere on the site at one time. Getting to know people on a personal level and fostering an ongoing dialogue around safety are critical to achieving an engaged workforce and strong safety culture. We strive to ensure that every employee on our jobsite gets the same level of respect as senior leadership – and every employee knows that.” Transforming to a safety culture takes time. Thus, leaders must exhibit patience to allow it to happen. “There can’t be an undercurrent of fear during a cultural shift like this,” Swasing says. “When you look at your current state, it’s likely that things are going to be pretty screwed up. You can’t start scaring people and firing people. A company has to allow this new approach to settle in. If an employee refuses to get on board six months down the road, that’s a different story. But the currentstate assessment is designed to see things for what they are. Identify your low-hanging fruit and biggest risks, take action, and lead the transformation one employee at a time starting from the very top of the company.” No company is ever 100% perfect. “Our goal is to identify the root cause and contributing factors, and have an open dialogue,” Manning says. “At the end of the day, all of this is rooted in a respect for people.”
ABOVE: All Clark new hires, including office personnel, go on a jobsite walk-through with a safety professional. “Whether you’re a company veteran or its your first week on the job, you have the authority and responsibility to stop anyone on the jobsite who is doing something unsafe,” Manning says.
The “safety first” indoctrination starts on an employee’s first day of employment with Clark. A day-long orientation has a heavy safety emphasis. Shortly after that first day, every employee must do a walk-through of a jobsite with a safety professional. This includes office personnel and estimators. “Everyone in the company must understand what we do on a jobsite,” Manning says. “When an estimator understands, he or she can talk with our trade partners about what we’re trying to do with safety.” Manning says he likes to use the term safety climate in addition to culture. “When you walk onto one of our jobsites, you can feel a heightened level of expectation and what we hold ourselves accountable for,” he relates. Clark has a program called Stop, Talk and Accept. Everyone on a Clark jobsite goes through an orientation. “Whether you’re a veteran with the company or someone in their first week, you have the authority and responsibility to stop and address anyone on the jobsite who is doing something unsafe,” Manning says. “We
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EQUIPMENT TRIANGLE MUST TACKLE TECHNICIAN SHORTAGE TOGETHER by Gregg Wartgow
Simple demographics suggest the construction industry should look to assemble a more diverse workforce that also includes women. Western Dakota Tech
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Aging workforce of technicians and managers requires urgent solution.
T
he construction-equipment technician shortage has been a growing problem for the past decade or two. Now, with an aging workforce of technicians and equipment managers setting their sights on retirement, finding a solution is becoming urgent. According to equipment dealer Diane Benck, there are a few things the construction industry needs to recognize. First, the general perception that the machinery repair profession is dark, dirty and dangerous needs to change. Secondly, the equipment triangle must work together to help change that perception. Thirdly, a more diverse workforce is needed to help properly staff both equipment dealerships and construction companies. Benck is the second-generation owner of West Side Tractor Sales Co., a 10-store John Deere dealership serving Indiana, Northern Illinois and Southern Michigan. Benck spoke at AEMP’s SHIFT Conference in October 2018. She pointed to a 2015 study conducted by The College of William & Mary on behalf of the Associated Equipment Distributors (AED), a national association comprising roughly 750 dealers and manufacturers. That study estimated that the technician shortage was costing the U.S. heavy equipment distribution industry roughly $2.4 billion a year in lost revenue. Today, with the economy strengthening and an infrastructure bill possibly on the horizon, those losses could grow even more disheartening. To help reinforce the industry’s workforce of equipment technicians, Benck says companies need to look more to minorities, military veterans and women. Additionally, millennials and even workers in their early 20s could be attracted to a career in equipment repair. For instance, it is generally perceived that Generation Z, born between 1995 and 2010, is strongly motivated by job security and good pay.
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“The structure of the new Perkins law remains largely the same, although there have been a couple of changes,” says Jarrod Nagurka, advocacy and public affairs manager at the Association for Career & Technical Education (ACTE). “One change is that a program must submit a local needs assessment and update it every couple of
Plus, unlike with millennials who are perceived to greatly value teamwork, Generation Z likes to work more independently. These workers also like to multi-task and are very digitalsavvy. As the construction industry accelerates toward high-tech equipment, a career in machinery repair could be quite appealing to this younger generation of worker.
THIS (CARL D. PERKINS CAREER & TECHNICAL EDUCATION ACT) IS A BIG OPPORTUNITY FOR BUSINESSES TO MAKE SURE PROGRAMS ARE AWARE OF LABOR NEEDS AND WHAT THE OPPORTUNITIES FOR STUDENTS ARE.
years. This assessment identifies what the labor needs of a local community are. Many of the spending decisions are driven by this local needs assessment.” Nagurka points out that the official name of Perkins V is “The Strengthening Career and Technical Education for the 21st Century Act” (H.R. 2353), which was signed into law in July 2018. While this new law doesn’t go into effect until July 2019, Nagurka says there is a lot going on right now, including the completion of the local needs assessments. Over the next several months, businesses should be opening up dialogue with local grant recipients. “This is a big opportunity for businesses to make sure programs are aware of labor needs and what the opportunities for students are,” Nagurka says.
In addition to her role at West Side Tractor Sales, Benck is also serving as the first-ever chairwoman of AED. One of AED’s top four priorities is to address the technician shortage. The association is working diligently to accredit more schools to help ensure that more students receive proper basic technician training. Roughly 40 high schools and colleges are already accredited. AED hopes to increase that number by more than 60% in 2019. The recent reauthorization of the Carl D. Perkins Career & Technical Education Act (Perkins V) should help by providing additional funding to schools.
IS GOVERNMENT LISTENING? Kate Fox Wood, director of infrastructure policy for the Association of Equipment Manufacturers (AEM) also spoke at the SHIFT Conference. Wood supported Benck’s strategy of equipment triangle cooperation in recruiting new technicians. While federal workforcedevelopment funding levels have risen, the construction industry recognizes that resources remain scant. Federal initiatives such as the Workforce Innovation & Opportunity Act (WIOA) and Perkins V represent two steps in the right direction. One helpful aspect of Perkins V is that employers now have a more influential say in how funding gets distributed at the local level. That’s why it is important for industry to speak in a single, unified voice.
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VO-TECH’S RELENTLESS UPHILL TREK Nagurka is optimistic that the reauthorized Perkins law will help steer more people toward technical careers. One can never be certain, though, especially when funding is such a big component. While funding for vo-tech programs increased with Perkins V, the totals still lag behind levels from before the 2008-9 recession. One way the new law could help is through career guidance. “Previously, Perkins funds could not be used for students below 7th PAGE
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Ammon thinks back to the 1980s and ‘90s when many high school students, including himself, were steered toward a four-year college, often without contemplating what the students really wanted to do. “My blue-collar parents said I should go to college so I could get a job where I didn’t have to work as hard as they did,” Ammon relates. In time, shop classes started falling by the wayside, and the supply of new technicians began to dwindle. Ammon is cautiously optimistic that things could be turning around. Enrollment in his diesel technology program is up. He credits celebrities such as Mike Rowe for helping call attention to the money-making potential of certain vocational careers. He credits scholarship funds like Build Dakota. Ammon also credits local construction industry companies for getting directly involved in the
grade,” Nagurka points out. “Now funding can be used for students in the ‘middle grades’ which is as low as 5th grade. Additionally, some required uses of funds include career exploration as well as integrating academics with CTE, which can help expose more students to technical careers.” In addition to federal funding initiatives like Perkins V and WIOA, there are also many instances where state and local programs are helping the construction industry attract and train new workers. Dan Ammon, CEM, points to one in South Dakota. T. Denny Sanford, a wealthy businessman and philanthropist, made a $25 million contribution to help launch the Build Dakota scholarship fund. The South Dakota Future Fund kicked in another $25 million. Scholarships are awarded to skilled students entering high-demand workforce programs at South Dakota technical institutes. “Students can have 100% of their two-year college paid for if they stay and work in South Dakota for three years after they graduate,” Ammon explains. “We usually have a couple students every semester who are on a Build Dakota scholarship. They walk away a couple of years later – free and clear – and join the industry and start making good money.” Ammon has been in the industry a long time. He came up the ranks as a diesel technician before eventually becoming a fleet manager. Since January 2018, he has been the diesel technology program co-director at Western Dakota Tech.
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grassroots effort to cultivate new technicians. “There are equipment dealerships that help pay some of a student’s tuition if the student comes to work for them,” Ammon says. “Other dealers pay their student employees a lower hourly wage, but supplement that with some kind of monthly bonus to be used toward their education.” Colleges like Western Dakota Tech work closely with employers to fill positions. The problem is that even though Ammon’s enrollment is up, there aren’t enough graduating technicians to meet demand. Furthermore, Ammon says dealers and construction companies want far more than
an entry-level technician. “Everyone wants a seasoned, diagnosticlevel tech,” Ammon says. “But not every student is there right after graduation. I’ve only been here (Western Dakota Tech) for a year, so it’s a work in progress. We’d like to be able to offer an advanced-level program, but we aren’t quite there yet. With a program like ours, you need some expensive training aids like engines and trucks and equipment.” Ammon has reasons to be encouraged, though. Enrollment is on the uptick, which should catch the attention of school administrators. Both the state of South Dakota and the federal government are placing increased emphasis on technical careers, leading to increasing sources of funding. Finally, the construction industry recognizes that it has a vested interest in helping close the technician skill gap. “We (schools) need help from all three sides of the equipment triangle,” Ammon says. “We are all broke teachers and need expensive toys to be able to teach our hands-on classes. We’re fortunate that we get donations and other assistance from manufacturers, dealers and construction companies.” Ammon says that his ability to put forth a high-quality, hands-on class deserves partial credit for the increase in enrollment. Speaking of enrollment, Ammon is further encouraged by the diversity of his typical classroom. Ages typically range from 16 to 36. Some students are military veterans, others are fresh out of high school, and others are changing careers.
Even though enrollment in Western Dakota Tech’s diesel technology program is on the upswing, there still aren’t enough graduating technicians to fill all of the open positions. Western Dakota Tech
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As dealer Diane Benck pointed out earlier, it’s going to take all kinds to close the technician gap. Closing the gap is one thing – keeping it closed is another. When catering to a more diverse, somewhat different workforce, construction industry companies need to
“I’m seeing everything from farmers and ranch kids to students who love computers,” Ammon relates. “They’re all great people and great students. Some love engines and machines, and others just like taking things apart and learning something new.”
MILITARY VETERANS CAN EASE CONSTRUCTION -EQUIPMENT TECHNICIAN SHORTAGE
Companies that are looking for loyal, disciplined, hardworking individuals need to look no further than the thousands of active-duty military members returning to civilian life every year. Organizations such as MilitaryHire, RecruitMilitary and Hire Heroes USA can help.
Plamp offers some advice on how companies can increase awareness and better entice veterans to look at opportunities within the construction industry.
In two years, about 16,000 veterans have acquired jobs through working with Hire Heroes
RECRUITING VETERANS
USA.
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“Over the last two years, roughly 16,000 veterans have gotten jobs through working with us,” says Christopher Plamp, a retired Air Force colonel and CEO of Hire Heroes USA. “Many went into the construction trade itself. We also put a lot of veterans into installation, maintenance and repair careers – almost 800, in fact. The interesting thing is that they are not going into installation, maintenance and repair in the construction industry. They are going into industries such as manufacturing, aerospace, utilities and government. Even the retail trade is getting more veterans. That tells me it’s really about awareness.”
Veterans respond favorably to companies that publicly
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technicians’ training, too,” Ammon says. “You need to keep new employees energized. Send them to a service school every once in a while, or maybe bring in some training resources to teach them some new things. Internal training can be very powerful, too.”
think about how they’ll foster employee loyalty. Ammon says the younger generation especially wants to feel appreciated. Continuing education and training go a long way. “Many dealerships have this figured out, but construction companies need to invest in their
say they want to hire veterans. Certain companies (such as Home Depot) and industries (railroad, aviation) have been very good at this. Some construction companies are also doing a great job. Take Branch Civil, for example, a Roanoke, Virginia-based company that provides a dynamic range of services including heavy civil construction, design-build and site development. Branch Civil is part of Branch Group. As of August 2018, Branch Group is a Virginia Values Veterans V3-Certified company. That means the company will be focusing its hiring and retention efforts specifically on military veterans. Plamp says it’s also important for construction companies to not make their help wanted ads so restrictive. Asking for too much industry experience, for example, could turn a lot of promising candidates away. Asking for “equivalent experience,” for instance, could help get them into the pipeline for consideration.
Journal of Equipment Management
RETAINING VETERANS
solid managers will be in increasingly high demand. That prospect of upward mobility can be very enticing to a military veteran looking to build a long-term career.
Some companies pair new hires with existing employees who are also veterans. This helps with the assimilation process. Some companies assemble all of their veterans into groups that meet on a regular basis. “Sometimes it is just company supervisors who simply acknowledge the veterans for the skills they bring to the job,” Plamp says.
“By and large, if a veteran was doing vehicle maintenance while in the military, a vast majority are not looking to do vehicle maintenance outside of the military,” Plamp points out. “There is an exception if they see a path toward leadership and management. Because they were in the military, they’ve acquired a lot of those important soft skills like leading, training and safety. Because of that background, veterans would like to see some potential for rapid progression.”
Once a veteran is hired, it’s important for companies to acknowledge their military service in some manner. This helps with retention.
Career advancement is an important area companies must consider. This is another perfect match for the construction industry, which must think beyond its equipment technician shortage. There will be some turnover of fleet managers over the next several years as many enter into retirement. Solid technicians who possess the characteristics of
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Additionally, military veterans are selfsufficient, comfortable with responsibility and great decision-makers. This is why they often make for great entrepreneurs and franchisees. This is why they could also make for great fleet managers.
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LOCAL, GRASSROOTS EFFORTS ARE KEY
while connecting with vital resources. Chris Caldwell, CEM, Branch Civil’s equipment superintendent, is working with Raising awareness of the opportunities in HopeTree Academy to support their fundraisers. construction equipment repair largely needs “Students have visited our facility to take a to happen at the grassroots level, one school tour and see what we do,” Caldwell says. and industry employer at a time. Branch Civil has also donated a pickup truck Branch Civil, which offers a dynamic range and Snap-on diagnostic tool to the auto of services including heavy civil construction, mechanics department. design-build and site development, is a good Among its other fundraising efforts, Branch example of a company that is active with grassroots outreach. Branch Civil serves clients Civil participated in the construction of a new Little League baseball field and a soccer in Virginia, West Virginia and the Carolinas. field. The company also participated in a unique community event called TouchA-Truck where local companies and organizations bring in a variety of trucks (i.e. fire trucks, utility boom Sachse Construction Academy exposes 500 Detroit-area high school trucks) for students to various skilled job opportunities while also allowing for children to explore and learn hands-on training with skilled professionals. Sachse Construction about. Branch Civil brought in one of its fully equipped mobile maintenance vehicles. “That truck had As part of a workforce development everything including a crane, welder and lights, initiative, Branch Civil is partnering with along with all the tools a technician would HopeTree Academy to develop a job shadowing need in the field,” Caldwell tells. program. The partnership aims to spark a In Michigan, Sachse Construction has student’s interest in certain careers. HopeTree partnered with Junior Achievement of Academy is a private day school in Salem, Southeastern Michigan to host a one-day Virginia, that provides a safe and secure construction academy for 500 Detroit-area educational environment for students with high school students. Sachse Construction unique educational needs. These often at-risk Academy provides exposure to various skilled and in-crisis students grow emotionally and job opportunities while also allowing for socially, and develop academic and job skills
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Building Futures. WBF helps prepare women for economically prosperous careers in industries where women have historically been under-represented, such as construction. In many instances, the women are single mothers and/or looking for a new career. After undergoing a rigorous screening process and running through some coursework, each woman does a paid work term with the various sponsoring companies. The women get to see if any of the sponsoring companies would be a good fit for them to seek ongoing employment, and vice versa. The sponsoring companies also get some of their initial investment back in the form of a government education grant. “Just in the past couple of years, WBF started a program for heavy industrial technicians,” Burke points out. “There were something like eight candidates, which was great for the first year. With the complexity of equipment nowadays, fixing it is more about brains than brawn. Technicians need a very methodical approach. Generally speaking, women have a great aptitude for this and can make for great technicians both today and tomorrow.” Like others have stated in this article, Burke is convinced that the construction industry needs a more well-rounded workforce to
hands-on training with skilled professionals. Students can also meet with labor unions and vocational schools to talk about different career opportunities. North of the U.S. border, Canadian construction companies have also been facing a technician shortage. Ken Burke, CEM, is a longtime industry professional who has been living in Canada for years. He says the government has woken up to the economy’s desperate need for skilled tradespeople, and a slew of programs are helping to fuel interest in careers like engine repair. “Provinces drive the car where education and funding are concerned,” says Burke, deputy operations manager for Bechtel Equipment Operations. “In some of the provinces, something known as an RAP Program has been effective. RAP, which stands for rapid access, enables companies to bring high school students in to give them some exposure to the trade. From there students often enroll in secondary or post-secondary education.” Another program gaining momentum in the Canadian province of Alberta is Skills Canada. Students compete locally, provincially and nationally in a variety of skills competitions ranging from carpentry to baking to machining. Construction equipment
WITH THE COMPLEXITY OF EQUIPMENT NOWADAYS, FIXING IT IS MORE ABOUT BRAINS THAN BRAWN. TECHNICIANS NEED A VERY METHODICAL APPROACH. GENERALLY SPEAKING, WOMEN HAVE A GREAT APTITUDE FOR THIS AND CAN MAKE FOR GREAT TECHNICIANS BOTH TODAY AND TOMORROW.
continue thriving into the future. Programs like WBF that cater to women – along with efforts that cater to minority groups, military veterans and other “unconventional” demographics – will be required to assemble that diverse workforce. An “all of the above” strategy is what is needed, and what some in the construction industry are already doing. With so much at stake, the industry can’t afford not to.
manufacturers often get involved with the competitions by displaying equipment for students to look at and hopefully become inspired by. Here in the states, SkillsUSA operates similarly. Both SkillsUSA and Skills Canada are members of World Skills International. A Canadian organization Burke is especially passionate about is Women
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WHAT’S NEXT IN OFF-ROAD
DIESEL EXHAUST REGULATIONS? by Nathan Medcalf
T
customers in terms of improving efficiency and capability, as well as reducing total cost of operation.”
he year 2019 mark the first year that heavy equipment original equipment manufacturers (OEMs) can no longer produce off-road construction equipment equipped with Tier 3 engines for the North American market. “OEMs were able to use Tier 3 engines for a seven-year period beyond the implementation of Tier 4 Interim says Steve Nendick, global offhighway marketing communications director at Cummins. “This regulation recognized that manufacturers with multiple equipment lines would not have the resources to be able to switch them all at one point in time.” So, now OEMs are no longer able to sell new machinery with Tier 3 engines installed. The year 2019 also marks the eight-year anniversary of the first Tier 4 engines. “Tier 4 Interim engines were first introduced in 2011, with Tier 4 Final in 2014,” says Nendick. “These solutions were a result of many years of experience in both on- and off-road markets. The challenge has been to implement the emissions technology and add value to
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GOING THEIR SEPARATE WAYS For two decades, EPA regulations have been driving engine technology and cleaner engine adoption. Now, there are no new regulations in North America to influencing manufacturer and consumer behavior. Efforts for cleaner engines in North America have plateaued. The European Union, however, has surpassed the U.S. in its efforts to decrease particulate matter (PM) and Oxides of Nitrogen (NOx) emitted from construction equipment. “In 2014, the European Union (EU) Stage IV and U.S. Tier 4 Final legislated against the same levels of PM and NOx,” says Nendick. “However, E.U. Stage V not only limits PM mass (0.015 grams per Kilowatt-hour—as does Tier 4 Final—but it also introduces a PM number count for engines between 19 and 560 kW (25 to 750 hp). This is only achievable via the use of dieselparticulate-filter (DPF) aftertreatment systems.” PAGE
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The Cummins Performance Series B6.7 engine is designed to serve both the European and North American markets. Most engine manufacturers serve global markets and offer flexible diesel engine solutions for customers in different regions.
A EUROPEAN INVASION? Now, a lot of people in the North American construction industry are wondering if the U.S. will eventually adopt the same or similar legislation as the E.U., and are already referring to it as Tier 5, even though U.S. regulators have announced no plans to move past Tier 4. “I think most global OEMs see the E.U. particle-number standard as inevitable for the U.S. I would not be surprised to see the PN standard be incorporated into the U.S. rules at some point in the future,” says Allen Schaeffer, executive director, Diesel Technology Forum. In fact, numerous manufacturers are already prepared to distribute Stage V/Tier 5 technology in North America. “Unsurprisingly, the technology Cummins has developed to meet the challenge set by Stage V in Europe is being incorporated into engines available in North America. Called the Performance Series engines, they give OEMs and end-users access to engines that deliver more with less. Power and torque are increased on average by 10% and 20% respectively across the range.”
Journal of Equipment Management
“Stage V technology impacts Tier 4 engines in that John Deere is focused on developing flexible aftertreatment solutions that can comply with varying levels of regulation. In fact, most of our Final Tier 4/Stage IV products are already Stage V ready today,” says James Knoll, product manager, John Deere Power Systems. “We’ve been using the technology needed to meet Stage V emissions since our Interim Tier 4/Stage IIIB engines. Also, many Stage V technologies have been implemented in both the on- and off-highway markets for some time.”
A WHISPER IN THE WIND So, if manufacturers are prepared to move to more stringent regulations in North America, why doesn’t the Environmental Protection Agency move on this? The answer is in the air. PAGE
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tiered engines with tiered ones and by moving lower tiers to Tier 4 than there is in moving from Tier 4 Final to EU Stage V, which gains a few decimals of one percentage point at best.
“The EPA uses air quality data from monitors, combined with their own emissions inventory estimates from various sectors of the economy, in part, as a basis for creating exhaust emission standards for sectors such as non-road mobile equipment,” says Ajay Prasher, product marketing manager, Caterpillar. “At Caterpillar, we monitor U.S. EPA and California studies and statements related to potential future emissions regulatory trends.” “Air quality is improving in the U.S., and the EPA has proposed retaining the current ozone standards, so I don’t know that I see the ambient air quality standards changing anytime soon,” says Schaeffer. “Manufacturers have successfully reduced diesel engine emissions substantially since legislation began with Tier 1 in 1996,” says Nendick. “The latest products are near-zero, with the level of emissions being so low, they are becoming increasingly harder to measure. With the plans for further emissions regulations being unclear, the challenge for the on- and off-road markets is to move vehicle and equipment populations to ones powered with the latest engines and obsolete older ones.” Given the population of older diesels currently operating in the U.S., removing older engines from the market can deliver the most air-quality improvement today. A Tier 4 Final engine eliminates PM and NOx by more than 99% (versus a non-tiered engine). A Tier 1 engine eliminates 90% of PM and NOx. There is a bigger payoff in air quality by replacing non-
TECHNOLOGICAL ALTERNATIVES TO REGULATION OEMs serving North America are moving on cleaner and innovative diesel engine technology without further requirements from government. “Our in-house combustion, exhaust aftertreatment, turbocharging, fuel system, electronic controls, filtration and alternative power capability means we can adopt the optimum solution which not only reduces emissions, but also brings customer value in terms of performance, productivity and cost of ownership,” says Cummins’ Nendick. “Caterpillar’s latest Tier 4 Final engines are more sophisticated and high performing than ever,” says Prasher. “In terms of performance, we’ve been able to increase power and torque density by 20% in some cases and reduce fuel consumption by more than 10% in some cases. Furthermore, our latest designs are more compact than ever; we’ve transformed the OEM experience where the engines are simple to install with plug and play options— helping to reduce the total cost of installation.” “In the coming years, there will likely be a continued investment in electronic control systems,” says Knoll. “Engines will become
MANUFACTURERS HAVE SUCCESSFULLY REDUCED DIESEL ENGINE EMISSIONS SUBSTANTIALLY… THE LATEST PRODUCTS ARE NEAR-ZERO, WITH THE LEVEL OF EMISSIONS BEING SO LOW, THEY ARE BECOMING INCREASINGLY HARDER TO MEASURE.
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smarter and more capable—not only in terms of lower emissions or higher power, but more reliable to run in the way people want. Telematics and the remote diagnostics and prognostics capabilities of those systems will continue to expand. Those capabilities will become more readily available, as well as more intelligent.” “The need to reduce exhaust gas emissions coupled with the rise of urban zero and low emission zones in major cities around the world has been a key factor in the discussion around alternative power solutions, rather than further regulations,” says Nendick. “Electrification, either full or hybrid is a viable power option for off-highway.” Cleaner engines taking their place in the market, technological alternatives filtering into key applications, and improving ambient air quality suggest little reason to expect further off-road diesel regulation by the EPA. So anyone “waiting for the other shoe to drop” can breathe a sigh of relief for now.
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The Cat C9.3B delivers 18% more power while reducing system weight by 12%. Greater power densities are features of Tier 4 engines.
A E M P .O R G | 20 19
JOHN DEERE MACHINE MONITORING CENTER
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CONTROLS BY GREGG WARTGOW
Should Contractors Signal
SOS ON TRUCK HOS? Equipment managers struggle to abide by tighter Hours of Service restrictions in the face of relentless demand for mobile service technicians.
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F
leet managers who rely on fuel, lube and mechanics’ trucks to keep construction crews up and running are finding the U.S. DOT Hours of Service (HOS) restrictions on truck drivers increasingly hard to bear. “The rules may differ depending on what state you’re in,” says Carter Dicken, vice president of mobile equipment at New Enterprise Stone & Lime Co., a Pennsylvania construction materials supplier and general contractor. “If you’re strictly following the Federal Motor Carrier Safety Administration (FMCSA) guidelines, any vehicle over 10,000 lbs. engaged in interstate or intrastate commerce is considered a commercial vehicle subject to HOS regulations.” Because an equipment technician’s service vehicle is carrying tools (property), it is considered to be engaged in commerce. The HOS rules currently being enforced limit the driver (technician) of that vehicle to working a 12- or 14-hour shift before having to take 10 hours off. That makes technician scheduling a real challenge for fleet managers and dealers alike. “As an equipment dealer, our first goal is to take care of the customer,” says Jon Berry, president of Berry Tractor, which has four locations in Kansas and Missouri. “That can be difficult when some of our
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on his 14-hour shift. By the time the technician is finished with the repair, he will be 15 minutes over. Plus, he still has to drive back home or to the shop. In this case, the company would likely have to dispatch a different technician to that job. “In a 12- to 14-hour day, our technicians are typically wrenching for eight hours,” Berry says. “It can be very difficult when you’re in the middle of a really large job. Should the technician check into a nearby hotel if he is going to go over his 14 hours? Does he have time to make it back home? Should he sleep in his truck? Should he take a second guy with him who is off the clock until it’s his turn to drive? None of those options are very cost effective.” Dicken says he has experimented with night shifts, which have proven difficult to manage. If a technician is scheduled for a night shift, he or she needs something to do while waiting for a potential breakdown to occur.
services can be an eight- or nine-hour job. Also, there are often quite a few miles in between our jobs that can require some drive time.”
BALANCING EFFICIENCY AND COMPLIANCE “In the complex world of construction, equipment technicians have been asked to work days and nights, short and long shifts, and to be on call at certain times to help get projects done,” Dicken says. “The HOS rules are making it difficult for dealers and construction companies to staff accordingly.” If a construction crew works through the night, a service technician needs to be available in the event that something breaks down. That means the technician can’t work during the prior daytime hours. “With the technician shortage this industry has, it’s hard to have a staffing plan for every possible scenario that could pop up,” Dicken says. For example, a technician is called out on an emergency repair. It takes 45 minutes to drive to the jobsite. The repair is a two-hour job, but the technician only has 2 1/2 hours left The HOS rules currently limit the driver (technician) to working a 12- or 14-hour shift before having to take 10 hours off. That makes technician scheduling a challenge.
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“The typical nighttime incident is a hose break,” Dicken says. “That takes about two hours to repair. What does the technician do for the other 10 or 12 hours of his shift? We try to plan as much preventive maintenance as possible on that same jobsite. Additionally, we look to see if there is a nearby quarry or aggregate site where the technician could go do some preventive maintenance. Options are limited, though, and it’s not easy to make this work.” Balancing efficiency and HOS compliance is an enormous challenge. “In the past, a field technician could go to a jobsite and do an eight-hour job,” Berry says. “Then on his way home he could stop at a couple of other jobsites to do some diagnostics and get parts ordered. The technician can’t do that under HOS. He has to head straight home because his hours are limited.”
A proposed rule change would allow drivers of single-unit vehicles to claim off-duty drive time as personal conveyance. Berry Tractor
cannot offload its property because its property includes the tools and equipment on the truck. A new guidance has been proposed that would eliminate the “offloading” requirement, allowing for single-unit vehicles such as service trucks to be claimed as personal conveyances. Appropriate use of personal conveyance would include the commute from a jobsite to the driver’s permanent residence or terminal (shop) at the end of the technician’s shift. Another recent update to HOS is the electronic logging device (ELD) mandate that went into effect in December. Many commercial vehicles must now have an ELD that syncs with the engine to track hours. “The ELD mandate has had more of an impact on the construction industry than the overall HOS rules have had,” says Fred Fakkema, vice president of compliance at Zonar. “That’s because ELD provides for fewer exceptions, so more construction companies are impacted.” How likely is it that a service technician would need an ELD in his truck? That depends on how much ground the technician
MAKING HOS RULES BETTER FOR CONSTRUCTION A recent development in industry negotiation with FMCSA could bode well for the construction industry. It has to do with something referred to as personal conveyance, or off-duty personal use. Under current law, a driver must offload his “property” in order to claim personal conveyance. For example, an over-the-road trucker could drop his trailer and use the vehicle to drive back home or to a hotel. That drive time would not count toward the driver’s HOS. A field service vehicle, on the other hand,
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our team watching it.” In fact, Berry Tractor has someone on staff who handles all DOT compliance, including HOS. Berry Tractor also works with a third party who comes in periodically to provide compliance training. “That takes our technicians off of billable hours, which is another cost to the dealership,” Berry points out. HOS has been in effect since 2012, so it’s nothing new. However, some would argue that the equipment management side of the construction industry hasn’t focused on it enough or collectively stood up to challenge it. Regulators seem open to hearing the construction industry’s concerns. Several exemptions and rule changes have already been issued. For example, the FMCSA recently accepted a petition from the National Asphalt Pavement Association (NAPA) to eliminate the mandatory 30-minute break period. The rationale was that asphalt delivery drivers do a lot of waiting around. Thus, a break is not needed. In addition, the asphalt industry was granted the full 14-hour shift as opposed to the typical 12-hour shift for companies claiming the short-haul (air mile radius) exemption (www.ForConstructionPros.com/20990330). The rationale was that perishable items like asphalt need to be delivered at the right time. Comparable exemptions were previously granted to the concrete industry. The bottom line is that fleet managers and equipment dealers should be focused on training technicians and helping construction companies stay on the job.
covers. If a technician stays within a 100-mile radius of the main base of operation, an ELD is not needed. If driving a vehicle that doesn’t require a CDL, the technician can actually claim a 150-mile radius. In either case, the technician can simply keep paper logs on those trips where he/she travels outside of the radius. The caveat is that the cannot travel outside of the radius more than eight times during a 30-day period. Fleet managers and dealers need to stay on top of this. If a driver is approaching his maximum allowable eight days outside of the mile radius, Berry Tractor will send a different technician to that job. “It’s kind of like managing fouls in a basketball game,” Berry says.
CONSTRUCTION INDUSTRY ADAPTS AND RESPONDS For dealers like Berry Tractor, the ELD mandate hasn’t necessarily made compliance more difficult, but HOS in general seems to get more confusing as time goes on. “ELDs have made things easier in some instances, but things have also gotten more confusing with different technicians doing different things,” says Kayley Campfield, Berry Tractor’s training and development manager. “We don’t have many technicians who have to drive outside of their radius more often than allowed. So they are just keeping the necessary paper logs, and we have people on In the past, a field technician could go to a jobsite, do an eight-hour repair job and stop at other sites along the way back. This is no longer possible under HOS.
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CONTROLS
Track Cha CUTTING in Tension is Your
Key to UNDERCA RRIAGE C OSTS
Maintain ing track sag is c onstantl y chang ing, but these tip s can he lp you b eat the o By Larry he most dds. Stew
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controlla art, Edit or, ForC ble facto Correct tr onstruc r in unde ack sag tionPro rc arriage w for many s.com equipme e a c r o is nvention nt manu tr a c k chain ad al crawle facturer simple, b justmen for spec ut it can t. ific recom rs is 2 in., but ch be difficu variation eck with mendati lt to main s in grou y o o u n r s . T h tain, as tr e prescri nd cond “We run ack tens itions. ption sou into a lo io nds n chang es t of unde lube guy with ma rcarriage s just do n y s that eit n’t take c out and her the o are of we track sa perator o ll enoug g adjuste with Flori r the cus h. They d d,” says J da Deere tomer’s on’t keep e s s y dealer B Wolf, pro th a daily b e tracks cle eard Equ duct sup asis, if n aned ipment. port sale ot a cou “You have s manag ple time Cleaning to e s r tr a c a le d c a a k s is simp y.” n out yo the rolle ur tracks le but ce r frame w on rt a it in h a shov ly not fu “We run el, prefera n. Dig ou into a lot t b b ly e tw when the two toge of clay a packed m een the track an ther it be nd sand d comes li in Florida a te rial is sti During o k ,” says W e concre ll wet. peration o te lf . u “A p n in the roll d when y , materia compon ou mix th er frame ls that s ents suc s. It’s very tick to an e h as roll tension. e d abrasive rs, links, p a So tensio c k b . ” e s tw p ro e e n c n ket teeth needs to mating chang es and bus be adjus . hings inc ted any ti “If you ge rease tra me pack ck t a lot of ing in th getting th e track c packing, hain em clea it only tig n h e te d out an Wolf. “Yo ns the tr d adjuste u could ack up a run it [tig d is the k s you g o chain life h ey to und t along, so tracks] fo in half w ercarriag r two or th ith the m e life,” sa ree days aterial w ys and alm e get in A LITTLE ost cut tr Florida.” G O ES A a ck LONG W A little b A it of cha Y nge in tr up chain ack sag to reduc m a ke s a e sag by range re big differe half an in sults in nce. Tigh c h on a c a p p roximate at the tra tening ra wler trac ly 5,600 ck adjus to r in the 8 lb te s . r. o machine The sugg f chain te 0-hp ested 2results in nsion wh in. track en meas approxim c h ured ain sag o ately 800 n the sa lbs. of ch me ain tens ion.
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IF YOU GET A LOT OF PACKING, IT ONLY TIGHTENS THE TRACK UP AS YOU GO ALONG, SO GETTING THEM CLEANED OUT AND ADJUSTED IS THE KEY TO UNDERCARRIAGE LIFE.
S
Materials that stick to and pack between mating components increase track tension. Tension should be adjusted any time packing in the track chain changes.
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To determine track tension, measure to the grouser tip from a straight edge or string stretched from the carrier roller to the idler or sprocket, whichever sags most. Check the manuals for the machine model at hand for the full procedure and specific sag prescription. Case
The greater load on tight track results in more wear on contact areas between the track bushings and sprocket teeth and the track-link-to-idler roller contact areas. Increased wear also occurs at the track-link-to-idler contact point and tracklink-to-roller contact points. Tight track also requires more horsepower and fuel to do the same job. Sprockets packed with mud can force the track bushing to seat high on the sprocket tooth. Following bushings will strike the back side of the teeth, rounding off the tops and reverse side of both the sprocket teeth and the bushings. When tracks consistently operate packed with mud, it’s best to loosen them to reach the manufacturer’s recommended track tension to prevent reverse tip wear on the bushings and sprocket teeth. Track that’s too loose will cause bounce and vibration which can affect your dozer’s performance, especially when grading. To measure track chain tension: ❯❯ Roll the machine forward slowly and allow it to roll to a stop. ❯❯ Center a track pin over the carrier roller. ❯❯ Lay a straightedge or stretch a string over the track grousers. ❯❯Measure sag between the straight edge and grouser tip where the track sags the lowest. Every machine’s operator manual will tell you how much track sag is appropriate. Most will review the process for measuring and adjusting tension.
GET MORE TRACK LIFE THROUGH PROPER LUBRICATION The track adjuster is a grease-filled hydraulic cylinder used to maintain track tension. To change track tension, add grease or remove grease from the track adjuster. Track adjustments are typically actuated using a grease gun. Read the procedures carefully to avoid the dangers of pressurized fluid. For example, if
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the bushing when it’s in reverse, compared to carrying it forward — three pinch points in reverse and two in forward.” Operating the crawler in reverse also triples the number of pins and bushings that are under steel-on-steel contact, load and motion, because drive tension reaches from the sprocket, over the carrier roller, around the front idler to the ground. In contrast, the only links in the chain under drive tension when operating forward are the few between the bottom of the sprocket and the first grousers with a bite into the ground. Track wear is directly proportional to speed and distance. Plan your jobsite work carefully to make travel as productive as possible.
track is too tight, the grease that’s holding the idler out will be under a tremendous amount of pressure and should be handled very carefully. This is why most owners prefer track tension be adjusted by trained maintenance people. Yet, there are still misunderstandings about this particular grease zerk. “We do have a little trouble with some lube guys who mistake it for a daily grease point and just pump it up until it stops, then move on to another machine,” says Wolf. Many contractors rely on maintenance people to take care of tracks, but that’s why it’s rare that dozer owners get full value for their undercarriage investment. Most dozer owners don’t have dedicated maintenance people. At companies that do, maintenance crews don’t see most crawlers often enough to react to daily changes in track condition. “Companies that do it well rely on their lube people to get track tension adjusted,” says Wolf. “And they’re leaning on their operators to let the lube guy or the equipment manager know that ‘Hey my tracks are too tight. You need to get somebody out here to check them out.’”
MINIMIZE ADDED TRACK COST Eliminating pitch extension, or chain stretch, slows sprocket tooth wear and bushing outside diameter wear. Sealed and lubricated chain life is approximately 50% longer than that of sealed, dry track chain. Sealed and lubricated track chain not only reduces wear on bushing outside diameter and sprocket teeth, but it also reduces noise and increases machine fuel efficiency.
TRAVEL AFFECTS TRACK WEAR
During reverse operation, about 75% of pins and bushings are under contact, load and motion from the bottom of the front idler to the first pin, and bushing joint engaged by the sprocket tooth. Forward operation puts about 25% of the pin and bushing joints under contact, load and motion. John Deere
Track pins rotate approximately 180° against the inside diameter of the bushings as the track chain pivots into and out of the sprocket and idlers. On sealed track chain, wear will occur on about 180° of the track pin outside diameter and bushing inside diameter. On sealed and lubricated track chain, this wear is virtually eliminated. “The amount of time that you’re in reverse on a dozer accelerates the wear, as well. It is just as bad as having them too tight,” says Wolf. “Maintenance has greater impact on undercarriage life over a broader cross-section of machines than operating technique because of track tension adjustment. But on dozers, the sprocket rubs in more places on
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Built-up material can become like concrete in the roller frames. Because it’s very abrasive, it can accelerate component wear.
Reduced wear in sealed and lubricated pin joints can challenge conventional thinking about when to turn pins and bushings on a crawler tractor. For example, if you’re measuring wet chain and the link rail is 40% gone and the drive side of the bushing is at 80%, you could end up with a lot of dry joints if you try to reach 50% rail wear and 100% on the bushings. And the risk of failures is probably not worth it, considering the additional savings available if you change a little early but can reuse virtually all of the pin/bushing seals. Another buying tip that affects track cost significantly is selecting the narrowest track shoes that provide the flotation you need. Proper flotation helps reduce wear by keeping track from being submerged in material. But wide track shoes used on a hard surface can overload track pin and bushing joints, and can affect pin and bushing retention in the track links. Because the middle of the track shoe is fastened to the track links, the links act as a pivot point to absorb twisting forces that occur as the machine moves over uneven or rocky terrain. Shoe width can affect seal integrity in lubricated track chain, reducing chain life by as much as 50% in rocky or rough conditions. Wider than necessary shoes also increase stress and load on idlers, rollers and sprockets. The wider the track shoe and the harder the underfoot surface, the faster track shoes, pins, bushings, rollers and idlers will wear. Use rock guards only when working in rocks too big to lodge easily between the sprocket teeth and track bushings or between the track links and idler tread. Rock guards also help guide the idlers and rollers when working on steep hillsides. But avoid rock guards when working in normal conditions. Working on soil or surfaces that pack, full-length rock guards will trap the material between the track rollers and links, reducing the components’ useful life. Equipment manufacturers agree that about 20% of your crawler’s purchase price is for the undercarriage, and track will eat up nearly half of your maintenance costs. Many factors can reduce that percentage, but maintaining track chain tension in changing conditions and buying the right parts will most likely have the greatest impact.
W M c W o W M M cLW W M o co cM o In Lc o Lo o Lo In Lo In o In In
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CONTROLS
HOW TO START
EQUIPMENT
RELIABLY as Voltage Draws Grow Here’s how your battery maintenance program can get consistent starts from continually improving battery technology By Larry Stewart, Editor, ForConstructionPros.com
Flooded Battery- - -
FLOODED BATTERY
---
Terminal Post Terminal Post
Plate
Plate Strap Strap
Positive Plate Positive Plate Like under- or overcharging and chronic deep cycling, vibration is a primary battery killer. Loose mounts or hold-downs allow vibration to destroy separators and ruin the battery with internal shorts and open circuits.
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SeparatorSeparator Negative Negative Plate Plate
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K
You also want as much reserve capacity (RC) you can get. (RC is the time in minutes that a battery will deliver 25 amps at 80 degrees Fahrenheit and maintain at least 1.75 volts per cell.) If the equipment OEM recommends 500 CCA and you have to choose between a 500 CCA battery with 100 minutes RC and a 750 CCA with 90 minutes UC, take the one with 500 CCA. Today’s absorbed-glass-mat (AGM) batteries improve flooded lead-acid battery construction in a way that extends both CCA and RC in many applications. The AGM battery surrounds thinner lead plates with a fiberglass matrix that absorbs all of the electrolyte in the battery. Thinner plates improve power delivery and recovery, and boost reserve capacity. Sandwiching them tighter in the glass matrix helps the battery resist vibration degradation. Interstate Batteries, for example, claims its pure-lead AGM battery for commercial applications can triple service life compared to conventional flooded batteries and double the expected life of alloyed lead AGM batteries. The vendor backs up the claim with a 36-month free-replacement warranty. Terminals on AGM batteries tend not to corrode. Maintenance requirements are largely reduced to ensuring there is still plenty of cranking power, making sure the cables are securely connected to the battery terminals and that the battery hold-downs are tight (use care not to deform the battery case). Check the voltage or CCA of AGM batteries twice a year – about half the frequency required in many applications of flooded batteries.
eeping a battery ready to start a vehicle in all conditions is largely a matter of getting it fully recharged between each start. Innovations such as high-powerdensity alternators and absorbedglass-mat and spiral-cell battery construction have made this easier, but vehicle electrical loads continue to climb. Maintenance is easier today, but no less essential. To extend the life of batteries with the recommended cold cranking amps (CCA) for your vehicles, check the total amperage draw generated by the machine and all of its accessories. With light bars, telematics, multiple ECMs, power tarping systems, controllers for EGR and SCR emissions systems, communications equipment, stereo and air conditioner all on, the load could be more than the alternator can supply. Accessories will draw the additional power necessary from the batteries. Around the turn of the century, when all a battery had to do was turn over a 12- or 14-liter diesel engine, a flooded battery with 750 CCA did the job. Then electronics to control the emissions systems started appearing on diesel engines. Electronics to control transmissions and hydraulic systems followed. Use of telematics became prevalent, adding more electronic load. The average electrical load to operate an on-highway truck has grown to more than 80 amps. It requires a battery that can handle deeper discharge but can also retain cranking ability. As long as the battery has the CCA recommended by the machine maker, go with deeper-cycling capability.
The average electrical load to operate an onhighway truck has grown to more than 80 amps. It requires a battery that can handle deeper discharge but can also retain cranking ability.
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BETTER STARTING THROUGH CHEMISTRY
BATTERY SAFETY MEASURES
The chemical reaction that stores voltage in batteries helps explain why proper recharging is crucial to reliable starts. Plates made from dissimilar metals (lead and lead oxide) react in the acidic electrolyte and a flow of electrons moves from the negative plate to the positive plate, up the positive lug, and out through the positive post. The reaction starts changing active lead and lead oxide on the plates to lead sulfate. Their chemistry becomes more similar, the acid is diluted by water produced in the reaction, and voltage drops. When demand on the battery stops, the process naturally reverses. Helped by the alternator pushing charging voltage back through the battery from positive to negative, the plates revert to their original, more dissimilar compounds as they absorb oxygen from the electrolyte. Electrolyte becomes more acidic and the battery stores more energy. As recharging current flows through battery electrolyte, water is converted into its hydrogen and oxygen elements. These very flammable gasses are why batteries must always be properly vented. Gassing also causes water loss, so flooded batteries need water added to them periodically. Sealed batteries contain these gasses, allowing them to recombine into the electrolyte. If the battery is overcharged, internal gas pressure will open a relief valve in the case to vent the gas, resulting in some water loss. Most sealed batteries are made with extra electrolyte in the case to compensate for some water loss. A hot battery, excessive water consumption and black lead material under the vent caps indicate overcharging. As a battery spends more time in a discharged condition, some of the lead sulfate on its plates can begin to harden. The process is called sulfation. The crystals resist conversion back to active plate material. Crystals
Recharging current that flows through battery electrolyte converts water into its hydrogen and oxygen elements. These very flammable gasses are why batteries must always be properly vented, and why sparks, flame and smoking around batteries is very dangerous. Download the Materials Safety Data Sheet to get information on battery content, safety and handling, and emergency-response measures. ❯❯ B attery electrolyte contains sulfuric acid, which can blind or cause severe burns. ❯❯ Always wear proper eye, face and hand protection when working with batteries ❯❯ Never lean over a battery while boosting, testing or charging ❯❯ E xercise caution when working with metallic tools or conductors to prevent short circuits and arcing ❯❯ Keep terminals protected to prevent accidental shorting ❯❯ R eplace any battery that has signs of damage to the terminals, case or cover ❯❯ Install a battery in a ventilated area for operation and during charging ❯❯ O vercharging can cause a battery’s pressure relief valves to open and battery gasses to escape. These gasses are flammable! You cannot replace water in sealed batteries that have been overcharged. Any battery that becomes very hot or makes a hissing sound while recharging should be disconnected immediately
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battery with deionized, distilled – or at least drinkable – water after the battery has been fully charged. Avoid hard water, and never add acid to a battery. Check the AGM or gel battery manufacturer’s charging instructions before attempting an equalizing charge on those batteries. Their absorbed or gel electrolyte may be damaged by this type of over-charging.
accumulate on both plates, and the battery weakens as the difference in charge between the positive and negative plates diminishes. Sulfation accelerates the longer a battery is left in a discharged condition, or if the electrolyte levels are low. Check the alternator output to be sure the battery is brought back up to full charge after every start. Another result of repeated discharging and recharging is electrolyte stratification. Acid in electrolyte is heavier than water and it eventually falls out of suspension, causing the electrolyte to stratify. Periodically applying an equalizing charge – a controlled increase in charging voltage – intentionally causes gassing that re-mixes electrolyte in a flooded battery. Check batteries with removable vent caps regularly to be sure the electrolyte levels reach a quarter of an inch below the bottom of the vent tubes. Never refill cells when the battery is partially discharged. If the level is low, refill the
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MAINTENANCE IN STORAGE Batteries at a reduced state of charge are more likely to freeze. Don’t attempt to charge a frozen battery. Allow it to warm up to 60 F before applying a charge. If vehicles are stored in an unheated area during sub-freezing weather, remove batteries, charge them, and move them inside. Batteries should be kept fully charged and stored in a room where the temperature stays between 32 degrees Fahrenheit and 60 F.
Spiral-Cell Battery
SPIRAL-CELL BATTERY Pressure PressureRelief Relief Valves Valves
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Terminal Terminal
Cast Cast Straps Straps Spiral-cell batteries use AGM separators that hold electrolyte like a sponge, and tightly compressed cells with cast straps resist vibration. Thinner plates improve power delivery and recovery, and boost reserve capacity.
Positive Positive Plate Plate Absorbent Glass Absorbent Glass Separator Separator Journal of Equipment Management
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CONTROLS
Balanced Charging
12.5 Amps Draws 12.5Draws Amps
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Don’t string banks of batteries to be charged, connecting Battery A to Battery B to Battery C and so on. Unbalanced resistance in this setup will shorten all the batteries’ lives. Follow this parallel wiring diagram, with a consistent number of leads between each battery, and consistent lengths and wire gauges to balance charging.
Connect banks of the same type, age and size of batteries to be charged in parallel. For example, don’t connect a deep cycle battery with a starting battery, or connect two old batteries with two brand new batteries. Don’t connect a group 24 with a group 27 and group 31 sized battery. Do not string the batteries to be charged together, connecting Battery A to Battery B which is connected to Battery C and so on. The unbalanced resistance in a setup like this would shorten all the batteries’ lives; battery A would be worked harder and charged faster than Battery B, and so on through the bank. Following the diagram shown here, use a consistent number of interconnecting leads for each battery, with consistent lengths and wire gauges of the battery leads to perfectly balance charging. Set a constant-voltage charger for charging flooded batteries slightly higher than the intended charge level. The charge rate
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BALANCED CHARGING
should not exceed 10% of a battery’s rated amperage. Deeply discharged batteries should be charged more slowly. If a battery heats up, it’s charging too fast. Reduce the voltage. Once batteries have reached their voltage target, use a trickle charger, which only puts out 2 amps or less, to maintain the charge on batteries in storage. Today’s digital “smart chargers” take information from the battery to provide maximum charge benefit with minimum babysitting. The microprocessor delivers a full charge cycle without need of changing settings, and doesn’t undercharge or overcharge. A smart 24-volt charger’s bulk mode does about 80% of the recharging. Current is held PAGE
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WARNING Messages
SULFURIC ACID CAN CAUSE BLINDNESS OR SEVERE BURNS
DANGER/POISON SHIELD EYES EXPLOSIVE GASES CAN CAUSE BLINDNESS OR INJURY
FLUSH EYES IMMEDIATELY WITH WATER – GET MEDICAL HELP FAST
NO SPARKS, FLAMES, SMOKING
KEEP OUT OF REACH OF CHILDREN
Battery chargers that lump together in one setting AGM, deep-cycle and gel batteries can be problematic. Gel settings on battery chargers – even settings designated as both “AGM” and “gel” – may not deliver enough power to fully recharge AGM batteries. Leaving the battery only partially charged encourages sulfation. To properly recharge AGM batteries, use a smart charger with an exclusive “AGM” setting and with multiple charging phases, or set an older charger to the normal setting used on flooded (not gel) batteries. A battery that dries out while sitting in storage can be refilled with water (not acid) and recharged, but it will not likely come back to rated power. Recharge any deeply discharged battery slowly – at 8 amps or less over a 24-hour period. Don’t use a trickle charger to recharge a dead battery. Battery maintenance is easy to overlook when machines are starting easily in warm weather. When mornings become cold and project deadlines loom, though, the condition of a battery in a critical machine can mean the difference between a profitable day and a money loser.
constant and voltage increases. A properly sized charger will give the battery as much current as it will accept up to charger capacity (25% of battery capacity in amp hours), and not heat a wet battery over 125 degrees F, or an AGM or GEL (valve regulated) battery over 100 F. Target voltage for a 24-volt charger for AGM or some flooded batteries is 2.4 to 2.45 volts per cell, which is 28.8 to 29.4 volts. The AGM/flooded charger’s absorption stage (remaining 20% of the charge) holds the charger between 28.8 VDC and 29.4 volts and decreases current until the battery pack is fully charged. If the battery won’t hold a charge, or the current does not drop after the expected recharge time, it may have some permanent sulfation. When it switches to float stage, the smart charger reduces voltage to a constant 2.25 volts per cell – about 27.0 volts total – while the current is reduced to less than 1% of battery capacity. This mode can maintain a fully charged battery pack indefinitely. Some chargers stop charging and monitor the batteries instead of maintaining float voltage, initiating a charge cycle only as necessary.
Recharge any deeply discharged battery slowly – at 8 amps or less over a 24hour period. Don’t use a trickle charger to recharge a dead battery.
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Superior Construction is a heavy civil contractor with expertise in bridge and road work, normally working 10 to 15 jobs from its Northwest Indiana headquarters, and 30 to 40 jobs in the Southeast.
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I
f you’re in a leadership position, relationships are your No. 1 thing,” says Mike Twedt, East Region Equipment Manager for pipeline company Minnesota Ltd. “That’s how we function as successful business people, building every relationship you can as positively as possible.” “You can’t do it by yourself,” says Ernie Stephens, CEM, Corporate Equipment Manager for Superior Construction. “You’ve got to have partners who want to grow with you.” The Association of Equipment Management Professionals (AEMP) coined the phrase Equipment Triangle in 1995 as the cornerstone of association members’ philosophy of building mutually beneficial relationships between equipment users, distributor/dealers and manufacturers or suppliers. The Triangle philosophy reminds industry professionals that in this multi-tiered relationship “everyone is entitled to receive the respect they deserve, and all transactions are to be win-win for all concerned.” The Triangle underscores that AEMPs Standards of Ethical Conduct should govern the actions of everybody approaching a relationship from the three sides of the equipment triangle. “[A Triangle relationship] is a lot of tag teaming,” says Ernie Stephens. “Might be us and the dealer meeting the OEM or us and the OEM working with the dealer. In both cases,
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CUSTOMER SERVICE
I’m also making a great deal. “It’s a mutual thing, and that just comes from discussion. The relationship is particularly important in these deals because we can talk candidly. I say, ‘Hey can you come down this much?’ and if the answer is ‘Well, no. I’d only be making this much and I have to do better than that,’ well, I’m OK with that.” Acknowledging the long-term value each member offers makes taking “no” for an answer easier to do. “When it comes to equipment purchasing, the No. 1 issue is purchase price,” says Twedt. “You have a budget and X amount of equip you have to have. You have to get the best bang for your buck. “Of almost equal importance, though, is the vendor’s service capability. I buy Caterpillar and John Deere because we’ve got established relationships with good dealers and they’ve got dealers in all of the areas where we work. So I know if I have an issue, there’s a dealer right down the road that is going to be able to take care of us.” Signing service contracts is a measure
we’re able to rely on someone in the party. “Sitting down with contacts on every leg of the triangle really helps. You’ve got to give them a seat at the table [to excel in equipment management]. I don’t think it’s done enough.” Industry willingness to throw resources at problems without getting input that might help prevent recurrence was part of the motivation for codifying the Equipment Triangle. The philosophy reminds equipment professionals that each is working through a partnership to achieve their own ends and help the other partners succeed. “The manufacturer knows who we are, we trust our dealer and our dealer is going to bat for us,” says Twedt. “It builds the relationships and, I think, impacts how we are treated. I think they give us great deals and great service.” Triangle language recognizing that transactions need to be a win for all three sides doesn’t necessarily mean every transaction. “Whether somebody else makes money is not in the front of mind when I’m looking at deals trying to take care of my company,” says Twedt. “I expect them to take care of themselves, and I’m OK with that as long as
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the purchase, warranty, parts, labor costs and more], dealers are going to suffer. You’ve really got to allow them to grow with you. “And you really set up a good priority level for your company at the dealer because you’re already doing so much business with these people. They know that if something bad happens they need to be out there right away, and typically your name’s at the top of the list.” Stephens and Twedt are also both testing boundaries of heavy equipment leases. “There’s other ways of sourcing your equipment, and there’s no better choice than leasing right now, whether it’s short- or medium-term,” says Stephens. “It almost acts like a rental but with a substantially better rate. The jobs are happy and you’re not spending too much capex, so your bonding companies are happy and you’re able to bid more work.” Leases can be contractual proof of how willing a contractor, dealer and manufacturer are to work together for all three parties’ success. Vendors share some of the long-term risk of equipment ownership with an equipment lessor. The leased machine is likely to return to the dealer’s inventory, and a properly negotiated lease gives the dealer and manufacturer incentive to make sure its resale value reaches the estimate used in calculating lease terms. It motivates vendors to make service contracts attractive to the equipment user. The volume of Stephens’ leasing and service agreements allowed him to negotiate most elements. “We have pre-arranged discounts on parts, and when you’re throwing that much labor at them, we negotiate that labor rate. “My idea was for them to get out there and put their hands on it; do the service at a very economical price for both of us, and while they’re out there, do the undercarriage inspections, check the cutting edges, and whatever else might be necessary to keep the machines reliable,” Stephens says. “That’s where they’re going to make their money.
of a contractors’ appreciation of the value of their dealers’ capabilities, and negotiating the terms can prove of how willing a contractor, dealer and manufacturer are to work together to foster all three parties’ success. “We’re growing. I’ve probably added $40 to $50 million in equipment to the Superior fleet [over the past few years],” says Stephens. “I was able to leverage those purchases to add on 70 to 80 maintenance packages from the vendors, and that’s been a huge relief. “It may cost a little more up front, but we need to stick with what we’re good at – we should be doing the inspections and the preventative side. If you need to get a laptop out to troubleshoot, it’s time to get the dealer involved. The dealers are getting training that our guys will probably never get.” Stephens limits his service-contract business to dealers and vendors who understand the Triangle concept. “We’ve been picky about who we’ve tried to do those large packages with. You’re going to get a better deal giving them a bulk package, and I think it’s worked out good for both of us,” he says. “If we’re growing and doing all the taking, and winning every time [on Minnesota Limited is a pipeline contractor headquartered near Minneapolis doing business across 25 different states in the U.S.
It’s through mistakes that you actually can grow. You have to get bad in order to get good.
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When you put everyone’s ideas in the same bucket, you’ll see it’s not just you winning; it’s everyone winning.
because we asked for them in January. “We’re really trying to forecast what we’ve got going on for the entire season. Lead time is everything right now with equipment – it’s so hard to find and prices are going up. If you can give a dealer an advantage there by not hiding anything, you’re really helping both parties.” Forecasting equipment needs and ordering early is a challenging change in equipment buying with benefits for the entire triangle. And customers challenge dealers and manufacturers to test the benefits they might realize from tailoring their sales approach to relationship building. “When we return equipment, our mainstays take the time to ask if the machine worked out alright, and they take action on our feedback,” says Twedt. “In addition, these guys will also – not frequently because they know we’re busy – if they’re in the area, ask if they can swing by to check in on a piece of equipment out on one of our jobs. If it works out, I appreciate that. They’re wanting to make sure they’re taking good care of us. The dealers that we work with all the time do that regularly.” “It’s kind a tricky. I don’t want a thousand people blowing me up every day on the phone, calling me up just to see what they can help me out with. “I understand those times when a salesman is filling a call log, but the guys we’ve got a terrific relationship with, they understand we’re busy and they’re working not just to take me to lunch,” Twedt says. “They’re reaching out to my guys in the field saying, ‘Hey we heard you had an issue. Can we come out and help you take care of that?’ “That’s hugely valuable to me and even our supers and foremen. They don’t like a lot of vendors coming out to the jobs, but when it’s those guys, they don’t mind it. They like it because they know it’s just more help.”
“It’s a long-term commitment. That’s what they want at the end of it. A service contract is a valuable thing to share with the vendor. “When you put everyone’s ideas in the same bucket, you’ll see it’s not just you winning; it’s everyone winning. I’m going to get the best price I can – the lowest price on the best machine – and they’re going to win on the back side, getting the parts and service business and the brand exposure to other equipment buyers.” Superior Construction has reaped enough value from leases and service contracts – alternatives often considered too expensive by many equipment users – that they’re changing the way they determine equipment needs and fill them. Stephens again finds making that process easier for dealers and manufacturers yields plenty of benefit for Superior. “We’re in our second generation of jobsites projecting equipment schedules, especially when we win a job,” he says. “So up here in the Midwest, come December or January, we have a good idea what we will need for the season come March, April, May.” Pushing project managers to forecast equipment needs has great budgeting value for the contractor, and sharing the information with the company’s trusted Equipment Triangle business partners not only returns more value, but spreads it around to the dealers and manufacturers. “Dealers have to order equipment three to five, if not more, months ahead. So better lead time is really advantageous for them.” And advantageous for Superior. “Last year, I needed ten 200-sized excavators, half of them with breakers, and four dozers just for this one job. Come May 1, the dealer had all of them sitting on their lot with our name on them,” Stephens says. “Everybody wanted them, but they had our name on them
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