November-December 2006

The Push to Upgrade the PM Process

Here’s what the leaders are doing to improve efficiency in their preventive maintenance processes.

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When your construction company is running flat out, life is tough for the equipment manager who wants to maintain the machines.

People hate to stop equipment for preventive maintenance (PM), so you’re forced to do it at night and on weekends. Good technicians are difficult to find—and very expensive if you do find one or want to keep one.

Despite all that, the nation’s best equipment managers are giving PM a high priority. And thanks to creative business arrangements and high-tech tools, today’s managers are getting their maintenance done more efficiently than ever. Here are some examples:

• Some contractors “lease” technicians from their local equipment dealers. When the peak time of need is past, the technician returns to a full-time job at the dealer and is not paid by the contractor.
• Small computers and even onboard data reporters (Qualcomm is an example) are automating the flow of PM information from the machines to the central office and back out to the field.
• Some contractors base their PM intervals on fuel usage. It can reduce the number of PM services needed and save thousands of dollars for a fleet over a year.
• You can predict when an engine may give out—and order a rebuild before it does.

Preferred Partners
From a home office in Janesville, WI, earthmoving contractor Ryan Inc. Central runs some 800 pieces of heavy equipment and works in a number of Midwestern and Mid-Atlantic states. In the Chicago area, where Ryan does 30% to 40% of its work, the company outsources about 70% of its field and preventive maintenance tasks to equipment dealers, called preferred partners.

Ryan engages in 10 such partnership agreements; four are in the Midwest, three in the Mid-Atlantic states, and three in various other places. Greg Kittle, Ryan’s equipment operations manager, explains: “Our preferred partners supply highly trained technicians to us, and we commit to a certain number of them. They fill out our time sheets and turn them in to our payroll system. The time sheets are based on our equipment, our job types, so that we can track equipment costs accurately.”

The “time sheet” is actually an electronic form on a computer, and it’s integrated with Ryan’s Equipment Asset Management System. “We can export that equipment cost data to the dealer so that they can integrate it with their work order and invoicing system,” says Kittle. That way Ryan gets an invoice for the “leased” technicians—and the company has already accounted for the equipment costs. Kittle credits Larry O’Neill at Patten Tractor, a Caterpillar dealer, with pioneering the leased labor concept.

The ability to lease technicians from dealers has changed Ryan’s cost structure from being fixed emotionally to being completely variable. If the technicians were Ryan employees, the company would seek to keep them supplied with work, Kittle says. “But we can rent or lease a technician from a dealer, and if we run out of work for him, the dealer will continue to hire him,” he says.

Still, Ryan has a 12-bay equipment shop in Clinton, WI, and employs a total of about 40 field and shop technicians. “We don’t hire many technicians,” says Kittle. “That’s another benefit of outsourcing labor.” Ryan works with Local 150, the Operating Engineers Union, to help identify people with the potential to become skilled technicians. “Local 150 has a marvelous training program,” says Kittle.

Automated Reporting
With Qualcomm Global Tracking systems installed on many of its machines, Ryan can remotely collect daily meter hours and machine locations. The information is directly imported into the company’s Equipment Asset Management System. Software automatically reports the PMs that are due, and the information is sent to the field to a variety of devices—a laptop, a personal data assistant, a handheld computer, or a Nextel phone, Kittle says.

To complete the loop, the technician performs the PM and reports the task completed on his electronic time sheet. “When the time sheet is sent in and uploaded, it refreshes the PM planner at our central office,” says Kittle.

At Trumbull Corp., a large Pittsburgh-based contractor, Corporate Equipment Manager Bob Decker equipped his technicians with laptop computers. Used on Caterpillar equipment, the laptops can diagnose mechanical problems and read such things as engine fan speeds or hydraulic pressures. Using his laptop, a technician can then order a part online and receive it the same day or next day.

“We get inexpensive laptops for about $1,500 each,” says Decker. Plus, technicians all have digital cameras, which they use to take photos of a mechanical problem. Decker recalls the time there was a problem with the push arms of the blade on a Cat D6RXL. The push arms were rubbing against the frame.

“The mechanic took a picture and e-mailed it to me,” says Decker. “I e-mailed it to the dealer, who e-mailed it to Caterpillar in Peoria. We needed a wear plate, and we had the part the next day. That camera probably saved me a week, compared to having the dealer come out to look at the problem.”

McAninch Corp., a large contractor in West Des Moines, IA, equips foremen with small computers that can dial into the company’s server to report payroll information and machine hours. At the server, software flags a machine if it’s within 50 hours of needing any one of four classes of PM work—engine, transmission, final drives, or hydraulics. Reports go to the oilers, who consult a posted board to find out where a machine is located. The company buys all Caterpillar equipment and uses fluid change intervals as recommended by the manufacturer.

Fuel-Based PM
At C.J. Miller LLC, a general contractor based in Hampstead, MD, Equipment Manager Dale Warner uses fuel-based PM intervals for his 640-machine fleet. “Fuel use is the only way I know to judge the severity of an application, to tell how hard the machine is working,” says Warner. His formula is to change engine oil at a fuel usage interval equal to 90 gallons times the quarts of oil in the crankcase. So if an engine holds 40 quarts of oil, multiply that by 90 and you get 3,600 gallons of fuel. When the engine has burned 3,600 gallons of fuel, it’s time to change oil.

PM is becoming an increasingly high priority for equipment managers.

“The hourly intervals will vary widely,” says Warner. “We average about 560 hours per oil change. Some we change in 300 hours; some are 700 or higher. We did one two weeks ago at 800 hours.” Oil analysis is a necessary part of extended oil change intervals, Warner says, warning that you have to stay within the recommended particle count limits.

If you want to use fuel-based intervals, Warner recommends starting at 70 gallons times the quarts of crankcase oil. Watch the oil samples, then inch it up to 80 gallons, and 90 next. “A major manufacturer said 70, but I’ve been successful at using 90 gallons as the multiplier,” he says.

His results are impressive. Last year, Miller did a total of 1,445 oil changes. This year, using fuel-based intervals, that number is expected to drop by 20%. The savings in dollars: nearly $250,000, figuring $760 per oil change.

Warner also practices predictive maintenance. His formula for engine life is to multiply 100 gallons of fuel by the cubic inches of displacement in the engine. “That is conservative,” he says. “Somebody gave me that number and I’ve been using it for a very long time.”

A Caterpillar 3406 engine, for example, will last for 120,000 gallons of fuel, according to the manufacturer. The engine has 638 cubic inches of displacement, so that would indicate 63,800 gallons of fuel as the life of the engine—about half of what Caterpillar says it will last.

Some contractors choose to perform all preventive maintenance and repairs in-house.

“You may find that on larger engines, the 100 gallons is low,” says Warner. “A larger engine can probably last longer than the 100 gallons times the cubic inches.” The Cat 3406 engine at 120,000 gallons, for example, would produce a multiplier of 188 gallons per cubic inch.

Warner plans to install a completely automated Fuelmaster fuel reporting system. Miller’s fuel truck will have an electronic chip in the dispensing nozzle. When fueling takes place, the nozzle will receive equipment information—unit number and equipment hours—through a transmitter in a ring installed at the fuel tank neck. When the fuel truck gets within 900 feet of a central data receiver, all fuel/equipment information will automatically transmit and upload into Miller’s equipment management system.

 Miller uses software called ShopFax from World Information System. Just as Ryan’s system does, the software flags when PMs are due. It prints out work orders with the list of filters and oils needed according to the intervals that are set up on ShopFax.

Do It Yourself?
Some contractors prefer to do nearly all PM and equipment repairs in-house. McAninch maintains a 40-bay maintenance facility and employs 55 persons to maintain more than 400 pieces of Caterpillar equipment. “The only things we don’t do are undercarriage work, rebuilding hydraulic cylinders, and warranty work,” says Equipment Manager Jason Paulson. “We build engines and transmissions, and we do all our own component work. We can rebuild a hydraulic pump, and we can fabricate just about any part on a piece of earthmoving equipment.” McAninch even has a machining center and a full-time machinist to build parts.

Why not send more maintenance to the dealers? “It’s extremely expensive to have work done through the dealer,” says Paulson. “This way we can prioritize work for our own equipment, and we don’t have to wait for the dealer to service other contractors’ equipment. Our downtime is less. If we can get a machine up and running in two or three days versus 10 days at the dealer, that’s a huge cost saving for us.”

Paulson says the McAninch shop is extremely busy. If the company maintains 90% availability, that means 40 machines (10% of 400) are in the shop at a given time. “The low 90s of availability is pretty realistic,” says Paulson.

At Zachry Corp. in San Antonio, TX, Mike Monnot is the director of equipment and heads up maintenance operations for a fleet of 3,200 pieces of equipment. Monnot believes in striking a balance between outsourced and in-house maintenance. While the company does a great deal of its own maintenance work with 25 shops in the San Antonio area, Zachry closed down a component rebuilding shop a few years ago. “We found we couldn’t do that work cost-effectively as compared to having the dealer do it or buying a remanufactured component,” says Monnot.

“A lot of contractors compare their cost of labor to a dealer’s cost, and their internal cost may be $50 an hour compared to $85 or $100 for a dealer,” says Monnot. “But we looked at the tooling cost for the component shop, the training cost for technicians, and the cost of the downtime—compared to the cost of buying reman components from the dealer—and it was fairly apparent that the rebuild shop was not cost-effective,” says Monnot. “So we gave up the component rebuild shop, and we use those people where their core competencies are better applied.”

Ryan’s Kittle prefers to outsource a substantial portion of his maintenance work for strategic reasons. “We’re an earthmoving company. That is our core competency and our focus. We are not in the equipment repair business,” says Kittle.

“It seems ludicrous to me to judge a dealer or a manufacturer based on product support ability and then not use it,” Kittle stresses. “We need a dealer that is strong financially. Dealers make more money on product support than on new machine sales, and we don’t begrudge them that. We need partners who support us, and we can’t have that if we don’t support them financially.”

Integrated Software
Zachry is about to implement a new software system that integrates equipment asset management with other related business units in the company—time keeping, accounts receivable, accounts payable, parts invoicing, and more. “We started out with a homegrown PM system,” says Monnot. “Now, we have looked for three years for this new system. We looked at the functionality, at how well it integrates with our work processes, and at the training that would be necessary. It’s best to look down the road a long way.

“Some companies buy an equipment asset management system that doesn’t integrate with other departments in the company,” Monnot says. That means they must manually transfer information from one system to another—a time-consuming process that is error prone at best.

Zachry’s new system will enable managers to extract total equipment costs per hour and break those costs into separate components—parts, labor, and fuel, for example. Managers will be able to look at machine types and tell which components have the highest breakdown frequency. “You have to measure something first in order to manage it,” says Monnot.

Beyond a question, equipment maintenance is becoming a more efficient process. Electronic tools can do almost everything except pour the oil. But to achieve maintenance correctly, management must be committed to the process. It takes time, resources, and dedication. To be sure, the payoff is there—in machines that are up and running.

Author's Bio: Daniel C. Brown writes on safety and technology in the construction industry.