Equipment maintenance: keeping your costs down
By Murray Pollok28 September 2010
With fleets getting older there is even greater need to have a lean and efficient equipment maintenance operation. Murray Pollok reports.
Rental companies have been cutting their costs, but as fleets gets older it can be very dangerous to start cutting back on your workshop and service department.
Rental consultant Will Leftwich of WL Associates, puts the case against such cuts very succinctly; "Finding good experienced workshop staff is very difficult. If you have good, honest, skilled plant and tool workshop staff then look after them. It is a false economy not to proactively service machines at the correct intervals, there are issues of reliability, safety, efficiency, reputation, loss of customer confidence."
That said, there are always ways for rental companies to do what they are doing more efficiently , and that applies as much to maintaining and servicing equipment as it does to the company's other activities.
There are two clear ways of trying to do this. One is to organise your service function in a way that makes the most of your resources, and the other is use exploit technology to increase efficiency.
In the UK, A-Plant has been at the forefront of introducing smartphones, extranets and asset tracking technology in its rental business. But it is now involved in a project that combines the use of new technology with a more traditional re-orgnisation of its service department.
Andy Wortley, director of operational applications at the company, explains that in the past each A-Plant depot had its own workshop and field service engineers. Now, under the new structure, engineers will be operate regionally rather than be depot based, and will be equipped with hand-held PDAs that will allocate to each engineer the jobs he or she has to do.
Mr Wortley says there will still be some depot-based technicians, but that the new organisational structure will allocate engineers more efficiently and eliminate, for example, the waste involved when a depot based technician goes to service equipment that is actually much closer to another A-Plant location.
"We think it's going to make much better use of depot staff", says Mr Wortley, "We don't want to save people [reduce staffing levels], we want to make better use of the people we have." A typical regional service team will have around 20 technicians.
It is likely that A-Plant will choose a rugged, Symbol PDA using a Windows mobile application that is currently being written.
A trial of the regional service structure was held in the London and South East region - although that was without the PDAs - and a full PDA-equipped trial will start in the Midlands this summer.
The new system, as well as using resources more efficiently (A-Plant hopes), will have other benefits. Digitising servicing and repairs in this way will allow customers to log breakdowns and see when the repair is scheduled, in real time.
The PDA will also provide a checklist for the engineer - tied into statutory inspection requirements etc - and it will make it easier for A-Plant to track service and repair costs for individual items of equipment, by avoiding the difficulties of having paper records following the equipment.
Technology is, of course, one of the obvious places to look for efficiencies in fleet management and maintenance. RFID tagging, although yet to achieve significant penetration into the equipment rental sector, is making itself useful in certain niche areas. For example, UK company Magnor Plant, part of the Morgan est contracting group, has seen enormous benefits from using an RFID system to carry out equipment inspections at its parent company's sites (see box story).
Another hi-tech leader is SmartEquip, the US company that offers a web-based parts ordering service that links fleet owners to manufacturers (offering seamless ordering of parts, among other things). SmartEquip, which is still largely operating in North America but has aims to enter Europe, has previously targeted the larger rental companies with its eFleetPro system, but earlier this year started to offer a smaller scale, lower cost option for small and mid-sized rental companies.
Alex Schuessler, chief executive officer of SmartEquip, tells IRN that after having focused on getting large rental companies on board - Sunbelt and Hertz among them - the company is now offering a ‘pay as you go' option that will appeal to smaller, single location rental companies.
Mr Schuessler says the offering is web-based (Software as a Service) and has a pricing structure related to the volume of parts ordered; "It's scaled to give a positive return on investment", he says. "The reason we're doing it is that a year ago we started to get repeated requests for it."
There are differences as the SmartEquip system starts to target smaller companies, since many of these firms will deal with local dealers rather than the manufacturer direct for parts of service back up. "The system will detect and route the parts request", says Mr Schuessler.
At the same time, the company is now pushing a way for smaller manufacturers to use the system. He says that Smartequip "continues to see a great deal of growth (as customers continue to look for more and more ways to find efficiency)...Over the past 90 days we signed up about two dozen suppliers wanting to participate in our ‘quick-start' program which is a low-entry way to join the network."
If rental companies are going to consider this kind of specialist software solution, then they could also perhaps look at business software systems that put a central focus on equipment.
One such system is being marketed by Netherlands-based Dysel, which also has offices in the US, New Zealand and Germany and customers all over the world. Its Equipment Life Cycle solution (integrated with Microsoft Dynamics NAV) is a fleet management system that includes functionality for support logists, service, rental and financial processes. Recent customers include Toyota Material Handling in the US.
Hans Odink, sales and marketing manager at Dysel, argues that his company's software offers a better solution that a rental software system that has to interface with other specialist software for financials, CRM etc.
Being targeted at fleet owners and dealers (Bobcat is another user), one of the strengths of the system, according to Mr Odink, is a parts ordering functionality that integrates electronic parts catalogues from major equipment suppliers, allowing users to identify parts and order them online.
For some customers in the Benelux region it has created integrated links via its software to independed parts suppliers such as Belgian parts giant TVH.
That kind of equipment life cycle solution won't suit every rental company, but as investment in IT starts to come back on the agenda, software that puts equipment at its heart must be worth a look.
The issue of whether rental companies can outsource their equipment servicing function has long been a subject of debate in rental circles - in theory it would make perfect sense for an outsourcing specialist like a rental company to outsource some of its own functions.
However, the success of such a move depends on there being an organisation - whether a manufacturer or a specialist service company - to do the work.
Italian Hitachi dealer SCAI has its own rental business and it makes a good case for the outsourcing argument. Alessandro Cesaretti, rental manager at SCAI Servizio Noleggio, says the rental company used to carry out its own servicing and repair work on its 1200 unit fleet, but for the last year has contracted the SCAI dealership to do servicing.
He says there have been enormous benefits; "The machines are well looked after. If you outsource the service they have to do it really well - because we are paying for it. They need to do a really good job. Now we have a plan - we pay a package price, and I negotiated the values, the hours, extended warranties."
Mr Cesaretti says he now knows exactly what it will cost for a check on an excavator's crawlers - because there is an agreed time and value for that job. He estimates that the outsourcing agreement has increased profitability by between 2 and 4%.
RFID helps Magnor
cut inspection costs
UK company Magnor Plant, which is responsible for managing the plant and equipment used by contractor Morgan Est group, says an new RFID asset inspection system has reduced by 70% the time needed to complete equipment inspections.
Magnor Plant has to carry out a thorough examination of every piece of equipment across all of the group's construction sites on a rolling six-monthly basis. Some sites have as many as 6000 pieces of equipment.
"In the old days we'd carry out a manual inspection and, upon return from site, begin the arduous task of re-keying all the information into our mainframe system", says Stuart Faulkner, safety equipment manager at Magnor, "We needed a way to reduce paperwork. Post-inspection administration and time spent re-keying data was getting out of hand."
To manage assets and record inspection results in the field, Magnor implemented Assettagz, an RFID tags and handheld computer system developed by RFID specialist 4hSolutions.
"The results speak for themselves", says Jonathan Hall, Magnor's general manager, "With Assettagz we have streamlined our entire inspection process and have cut post-inspection administration down from three or four days of lots of manual paperwork to one."
Will Leftwich of WL Associates offers some tips on how best to organise equipment maintenance in times of financial stress:
• Reuse and recycle of components where their history is known and their use not safety critical is OK, but assessment of the component must be carried out by a competent technician.
• Make sure you manage the warranty available to you as in many cases urgency takes over to get the machine back on the road, this can mean valid claims get missed.
• Talk to your supply chain about value for money terms on spare parts, make sure that use of non-genuine spares does not negate the warranty claim.
• Compare the market thoroughly (exhibitions, trade magazines, specialist consultants, web) for the best value and the best fit for your business before you buy. The same supplier may well be the best because of the minimisation of disruption, but also consider good current deals from hungry suppliers, if they can support the transition with good supply, training and after sales support.
Bob Bartley, director of technical services at Terex AWP, says; "The most expensive event that can happen is to have a machine break down on a jobsite. There are the direct expenses of repairing the machine, as well as the field service costs and/or transportation costs associated with a replacement unit.
"The solution? Avoid the breakdown altogether, the best way being routine maintenance. Following the manufacturer's recommendations for preventative maintenance is always the best place to start."
He says owners can consider increasing the frequency of filter changes if the working environment is dusty or very dirty; "Losing an engine due to ingesting dirt through a dirty filter is avoidable."