FALL 2011

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>> PAGE 20

TRICKYBUSINESS RATE CALCULATION

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31

www.aemp.org

MANAGEMENT

20 The Tricky Business

Of Rate Calculation Methods abound for how to ensure

a fl eet’s hourly equipment rates are accurate, but certain costs must be included.

STRATEGIC ISSUES

25 How to Select

Fleet Software

With a wide range of solutions, thefi rst step is determining priorities.

BEST PRACTICES

31 Shoot For The Green Austin Bridge & Road is AEMP’s fi rst cer-

tifi ed Green Fleet. Here’s how they did it.

MAINTENANCE MANAGEMENT

34 Playing It

Where It Lies In-fi eld welding repair offers a set of

challenges not found in the shop or yard, requiring a strategy for “playing it in the rough.”

DEPARTMENTS

7 The Chairman’s Corner

9 AEMP News

>> AEMP Offers Leadership Opportunities Through Committees

>> AEMP Thanks Foundation For Continued Support

>> Application Deadline Approaching for 9th Annual Fleet Masters Award

>> Deadline Nearing for Technician of the Year Award Applications

>> AEMP Sets 2012 Management Conference and Annual Meeting

>> Delivering Data

>> 2011-2012 AEMP Board of Directors

Official Publication of the Association of Equipment Management Professionals

AEMP PARTNERS FOR GROWTH

34

contents

5

FALL 2011

25

20

aemp.org 7

THE CHAIRMAN’S CORNER

Tough Economic Times…Even Tougher DecisionsI don’t know about you, but it seems to me that economic recovery is barely inching along. As the economic crisis in our country continues, fleets everywhere are trying to make predictions and hard decisions regarding their operations. As I write this letter, there is still no transportation bill that has passed. The government is pushing increased MPG standards, which will result in more advanced technology and increased equipment cost. And, the demand for work is still not where it was a few years ago.

So, I guess my question is, how are you handling these trying times?

Are you cutting repair and maintenance cost by letting your equipment collect rust and dust? Are you downsizing and taking advantage of the rising values in the used equipment market? If so, are you planning your future with your 1031 LKE money? Are you keeping emissions requirements in your sights? How are telematics helping you? And when the economy finally turns around, what then? Will you outsource or hire back help? Knock the rust and dust off of the equipment and hope it holds up? Will you start looking into renting, leasing or maybe owning through a RPO?

This is a tough economy, and tough decisions have to be made. Who else is going to make them, if not you? As you can see, I have all the questions in the world, but, luckily, I have somewhere to turn for assistance in coming up with answers.

Herein lies the beauty of AEMP. During a time when every penny is being analyzed, education investment certainly is not on my chopping block. I find, in fact, with all these questions, now is the best time to invest in education as a way to discover solutions to these recession concerns. What better time to develop your skillset or pursue one of AEMP’s three designations: the CEM, EMS or CESP? Perhaps look to one of the AEMP committees for help in everything from safety to building an emission-reduction plan through Green Fleet Certification. Even if you only have a few spare minutes, check out the newly developed AEMP Facebook page, chock full of interesting industry and headquarters news.

Last, but certainly not least, it is important to note that AEMP’s conference education is slated by fellow AEMP members that have the same industry questions you and I have. AEMP’s education topics are always up to the minute. The education is high-caliber and designed to increase your value to your company, and your company’s value to the market.

So as I sit here and scratch my head with the many questions I have about the future, I can be certain about one thing: I’m not alone. AEMP and my fellow members are with me, taking steps to increase our personal and collective knowledge. After all, education is the best weapon we have for beating this recession.

Dave Gorski, CEMChairman of the Board and CEO

“The most splendid achievement of all is the constant striving to surpass yourself and to be worthy of your own approval.” — Denis Waitley

Having real-time information is crucial to your operation — like where your equipment is located,

when service is needed, and knowing your fl eet is working at optimum performance. That’s why Volvo

Construction Equipment offers CareTrack, a telematic system that transmits machine data from the

jobsite to a website instantly via cell phone signal or satellite. CareTrack can maximize uptime, minimize

maintenance costs, reduce your fuel consumption, and more. It’s all part of our dedication to ensure your

crew is more productive and profi table every day.

Find out how CareTrack can maximize your profi ts at a Volvo dealer near you. Visit volvoce.com/na today.

the information you need to maximize profits.

Let’s Work.

Volvo Construction Equipment

AEMP NEWS

aemp.org

As a volunteer organization, AEMP relies greatly on lead-ership and volunteerism from its members to implement programs and initiatives on behalf of the organization. All members are welcome and encouraged to get involved by volunteering on one of AEMP’s many committees. If you missed committee meetings at this year’s Fall Asset Management Symposium, you still have the opportunity to take part at the 2012 Management Conference in Scottsdale, Ariz. All AEMP committees will hold meet-ings on the afternoon of March 20, immediately follow-ing educational seminars. Committee meetings are open to everyone looking to get involved.

Becoming a part of AEMP’s committees offers a great opportunity for members to network with peers, stay up-to-date on new industry trends and share ideas that will help to further AEMP’s mission and initiatives. There are several committees open for involvement.

AEMP University – Developed AEMP’s online learn-ing platform, AEMP University, which officially launched in March of 2011. The committee is now responsible for AEMP U’s maintenance, and continued growth and expansion.

Certification Commission – Outlines all policies, testing standards and regulations for all AEMP-offered credentials, including CEM, EMS and CESP.

Editorial – Oversees content of Equipment Manager magazine, AEMP’s quarterly publication, as well as all e-newsletter content.

Education – Produces all educational materials for AEMP, its conferences, webinars, online learning plat-forms and the Professional Development Institute.

Emissions – Focuses on and communicates new and emerging trends in emissions standards at the state and federal levels. The committee also developed the AEMP Green Fleet Certification Initiative.

Membership/Marketing – Promotes the association and growth through the recruitment of new members and retention of existing.

Safety – Develops safety programs and standards.Technology – Aids in the continued progress of the

AEMP-led Telematics Standard, including related educa-tional programs to assist in end-user implementation.

Web 2.0 – The newest AEMP committee, its purpose is to oversee the development and maintenance of the AEMP website.

Committees typically meet on a monthly, quarterly or semi-annual basis; frequency is varied, depending on the

committee. Meetings are held in the form of both confer-ence calls and face-to-face meetings. Those interested in learning more are encouraged to attend a committee meeting at this year’s Fall Asset Management Symposium.

For more information on AEMP’s committees, including descriptions and members, visit aemp.org/people/leadership.

AEMP Thanks Foundation

For Continued Support

Throughout the year, AEMP does a number of great things to enhance the equipment management profession, many of which would not be possible without the commitment of the AEMP Foundation. AEMP wishes to express its deepest gratitude to the Foundation and its donors for everything they do to help fulfill AEMP’s mission.

“On behalf of AEMP, I’d personally like to thank the AEMP Foundation, its dedicated committee members and all of those who have contributed their time, energy and generosity,” said Stan Orr, CAE and President of AEMP. “The Foundation’s vision and dedication have been essential to AEMP’s success.”

Not only does the organization support AEMP’s pro-grams, it builds on them with its own initiatives. For example, one of the Foundation’s primary goals has been to advance the industry with quality educational oppor-tunities. By providing these invaluable resources, the Foundation helps to ensure the next generation of equip-ment professionals will have a solid and bright future.

In addition to entry-level education, the AEMP Foundation supports continued education for those cur-rently working in the industry. The organization is devoted to expanding AEMP’s online university (AEMPU), for those looking to augment their existing knowledge base or prepare for one of the AEMP’s three certification exams: The CEM, EMS, or the newest certification, the CESP. Launched earlier this year, AEMPU continues to grow and expand thanks to assistance from the Foundation.

While dedicated to encouraging career development through scholarships, AEMPU and AEMP certifications, the Foundation also recognizes outstanding veteran tech-nicians each year with the Technician of the Year Award.

9

AEMP Offers Leadership Opportunities Through Committees

AEMP NEWS

SUBMIT YOUR APPLICATION FOR FLEET MASTERS OR TECHNICIAN OF THE YEARInterested in being named 2012 Fleet Master or Technician of the Year? The awards are open to the entire industry; applicants need not be members of AEMP to be eligible – so don’t delay! Applications must be postmarked by Jan. 13, 2012.

In addition to the written application, potential candidates are judged on several criteria and the presentation of supporting materials, includ-ing letters of recommendation, charts and graphs, transcripts, case studies and portfolios.

To be considered, candidates or their employers are required to complete the application form and mail five copies, along with all supporting material to:

AEMPAttn.: Fleet Masters Award817 Colorado Avenue, Ste. 103Glenwood Springs, CO 81601

AEMP Foundation Attn: Technician of the Year817 Colorado Ave, Ste. 103Glenwood Springs, CO 81601

Contact Sara Sanderman, vice president of program development, with any questions on submission crite-ria at 970.384.0510 ext. 205 or sara@aemp.org. For additional information on the awards and to see a list of past winners, please visit www.aemp.org/awards.

>> From top: Guy Gordon accepts his Fleet Masters Award from outgoing AEMP National President Daryl Crear, while Rod Sutton, editor of Construction Equipment magazine, looks on. Mike Munson speaks about the Austin Way Initiative after accepting his Fleet Masters Award. Ron Bradly (left) and Tom Hellmers (right), 2011 Technician of the Year award winners.

10 fall 2011

Intended to honor those who exemplify the modern, professional technician, the award is given to two indi-viduals who have demonstrated proficiency in technology and safety, and made significant contributions to the heavy equipment industry. With the Foundation’s sup-port, the Technician of the Year Award has provided motivation for heavy equipment professionals to strive

for excellence over the past 22 years. The Foundation is committed to supporting other

AEMP initiatives; one of its newest is the Green Fleet certification. Designed to further the industry’s commit-ment to emissions reductions, the Green Fleet initiative was created to help educate, incentivize and recognize equipment management professionals for steps they have

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AEMP NEWS

aemp.org

taken toward a greener fleet. With help from the Foundation to launch and promote the initiative, AEMP saw success of the new program earlier this year when it was able to award its first-ever Green Fleet certification to Austin Bridge & Road.

“Without the continued support of the AEMP Foundation, AEMP’s vision would not be possible,” Orr said, further emphasizing his appreciation. “From all of us at AEMP, we again thank the Foundation and its donors for all they do to help make AEMP’s mission and initiatives a reality.”

For more information on the AEMP Foundation, visit AEMP.org/about/foundation.

Application Deadline

Approaching for 9th Annual

Fleet Masters Award

Each year, AEMP recognizes excellence in the equipment industry with the Fleet Masters award. Presented to one winner from both the public and private sector, the award acknowledges equipment professionals who demonstrate excellence in meeting the unique challenges inherent to delivering cost-effective and cutting-edge management of mixed fleets of on-road and off-road equipment.

The 2012 award will be presented at the 30th Annual Management Conference, March 18-20, in Scottsdale, Ariz., at a special dinner reception sponsored by the Strategic Alliance Partners. Applications must be com-pleted and postmarked no later than Jan. 13, 2012.

For nearly a decade, AEMP and its partners have been presenting the Fleet Masters award annually in conjunc-tion with Construction Equipment magazine. In addi-tion to the Fleet Masters trophy, winners are honored with receiving one of the top accolades in the industry. Michael Munson, equipment director for Austin Bridge & Road, and Guy Gordon, CEM, director of asset man-agement for Insituform Technologies, accepted the 2011 Fleet Masters Awards on behalf of their teams.

Visit www.aemp.org for application information.

Deadline Nearing for Technician

of the Year Award Applications

In 2012, the AEMP Foundation will recognize two out-standing heavy-equipment technicians with the 23rd annual Technician of the Year award. The honor is awarded to one winner each from the public and private sector, and is designed to acknowledge professionals who

exhibit technical skills, and innovative trouble-shooting and diagnostic capabilities, as well as those who make sig-nificant contributions to the equipment technician profession.

This year’s award will be presented at the 30th Annual Management Conference March 18-20, 2012, in Scottsdale, Ariz. Applications must be completed and postmarked no later than Jan. 13, 2012. Visit www.aemp.org for application information.

The Technician of the Year award is presented through the AEMP Foundation and sponsored by John Deere. In addition to the pride and prestige of receiving the award, winners receive complimentary conference registration and two nights housing at the AEMP Annual Meeting, as well as an embroidered jacket, $500 AEMP Foundation Scholarship, plaque and a custom-built John Deere tool-box. In 2011, the private sector winner was Tom Hellmers, Murphy Tractors and Equipment, and Ron Bradly, Sarasota County Fleet Services Department, took home the public sector award.

AEMP Sets 2012 Management

Conference and Annual Meeting

AEMP’s Management Conference and annual meeting will take place March 18-20, 2012, at the Doubletree Paradise Valley Resort in Scottsdale, Ariz. This event marks the 30th Anniversary of the annual conference and will feature semi-nars from AEMP members and other industry experts based on the theme of “Fleet Optimization: 30 Years of Making the Wheels Go ’Round.”

Highlighting the conference is opening-day keynote speaker Barry Mahar, who will deliver a high-energy, humor-rich presentation titled “Filling the Glass: Real World Tactics and Motivation for Increasing Productivity and Job Satisfaction.” An acclaimed author, consultant and motivational speaker, Mahar has appeared on such outlets as “The Today Show,” “NBC Nightly News” and CNBC, and is regularly featured in the “Wall Street Journal,” “USA Today,” “Businessweek” and other lead-ing publications. He is revered as an expert on maximiz-ing productivity and job satisfaction.

The Spring Conference is AEMP’s largest event and is designed to be an annual gathering of industry profes-sionals to network, share ideas, attend seminars and visit the extensive exhibit hall to gain practical knowledge on the latest topics in fleet management. Seminars will be offered each day and available for AEMP’s Essential, Executive and Professional Development Institute tracks.

13

AEMP NEWS

fall 2011

The exhibit hall will be open March 18 and 19 with industry exhibits, demonstrations and events.

The Essential seminars will cover a diverse range of topics including maintenance, fueling and idling issues, and highway safety/CSA rules. Additionally, “Preventative Maintenance (PM) and Telematics” will explain how the use of telematics systems encourages a more proactive PM program. Attendees can expect to take away specific strategies for how to implement a telematics tracking system into the overall PM program.

Offered as an Executive-level seminar, “Warranty” will clearly define warranty and performance guarantees, dis-cuss pricing and terms, and examine the various options for warranties, from standard to extended and beyond. Attendees can anticipate to learn what to expect from a warranty or performance guarantee, when is a good time to purchase an extended warranty, and cost vs. return analysis. Other seminars in the Executive track will cover a broad spectrum of topics, from succession planning and out-sourcing to fuel hedging and developing a business plan.

In addition to separate seminars specific to each track, several combined seminars will be offered on topics including green fleet, safety task force and state of the economy. Highlighting the combined seminars, “World Class Preventative Maintenance” will overview the four levels of PM programs: Reactive, Planned/Scheduled, Condition-Based and World Class. It will discuss the cost

per year of each, and attendees will learn how to take a PM program from its current level to operation at the World Class level.

Spring Conference attendees also have the opportu-nity to attend the Professional Development Institute (PDI) to aid in preparation for one of AEMP’s three pro-fessional certifications: Certified Equipment Manager (CEM), Equipment Manager Specialist (EMS), or Certified Equipment Support Professional (CESP). PDI classes are offered March 18-20, with certification exams held on March 21 from 8:00 a.m. to noon.

Beyond seminars and the PDI, the conference features several annual events. Opening day will include Mahar’s keynote address, continue with the annual CEM, EMS and CESP certification recognition ceremony, and close with the evening gala. Day two will feature the Fleet Masters Awards ceremony, with the dinner reception sponsored by AEMP and Construction Equipment mag-azine. Kicking off the third day of events, the new board and president will be sworn in at the inauguration break-fast. The Technician of the Year Awards luncheon, spon-sored by John Deere and the AEMP Foundation, will follow, and the conference will wrap with the closing keynote address.,

Registration for the 2012 Spring Management Conference opens Jan. 1, 2012, and will be available online at aemp.org. EM

>> Registration for the 2012 Spring Management Conference opens Jan. 1, 2012, and will be available online at aemp.org.

14

HERE’S A QUESTION: IF EVERYBODY HAD AN OFFICE JOB, WHO WOULD BUILD THE OFFICES?

©2010 Caterpillar All rights reserved. CAT, CATERPILLAR, their respective logos, “Caterpillar Yellow,” the “Power Edge” trade dress as well as corporate and product identity used herein, are trademarks of Caterpillar and may not be used without permission.

Hi, I’m Mike Rowe and questions like this keep me up at night. That’s why I teamed up with Caterpillar. They understand the value of people like you - people who build our infrastructure. They also understand the value of hard work and the importance of total support. Does Caterpillar “get it”? No question about it.

If you’re ready to work, visit mikerowe.catdealer.com.

®

Equipment data transmitting and tracking has been a popular subject in recent years,

as fleet managers are always looking for a better, more efficient way to collect, manage and utilize equipment data.

The challenges these professionals and their crews face tracking data through traditional methods are numerous. First, there is a large time investment, as each piece of equipment must be tracked individually. In a fleet with dozens, even hundreds of machines, the process can be incredibly time consuming, not to mention inaccurate. For example, a fleet manager wanting to capture and track operating hours on their machines must read each machine’s hour meter, then manually record the info on a tracking log or spreadsheet. Before this data can be used to generate any type of busi-ness report, it must be given to the office staff, then entered into the company’s unique system. Inefficient, certainly, but perhaps the greatest problem with this prac-tice is it leaves the door open for major errors.

But when looking at the big picture, the largest obsta-cle comes for those who manage mixed fleets of equip-ment Each equipment manufacturer has a separate sys-tem for accessing info on its equipment. Fleets as a general rule operate dozens of different makes of equip-ment, and utilizing a separate set of guidelines and web-site for each is time consuming, to say the least.

The need for a standardized data collection and trans-mission system has been recognized, and companies are attempting to find a solution. Such systems are emerging to help address these challenges faced by fleet managers. One example is AEMP’s recently-launched schema. Created in cooperation with partner equipment manu-facturers, the AEMP-led Telematics Standard offers a way for fleet managers to receive crucial equipment data in a standardized format. Items such as equipment cumula-tive operating hours, total miles traveled, fuel consump-tion and current location can all be accessed using the schema allowing fleet managers the ability to accurately

and efficiently track and analyze data.A standardized system certainly offers a major time-

saving benefit, but the accuracy it provides is perhaps the biggest advantage. For example, lets say a company requires machines to be serviced every 500 hours. By knowing a machine’s exact operating hours, a fleet man-ager can identify the precise time a machine is due for maintenance and schedule in advance. Not only does this increase efficiency, it ensures timely maintenance for optimal equipment performance and longevity.

The ability to accurately track fuel consumption is incredibly valuable from a time and productivity stand-point. Precise fuel tracking allows fleet managers and their crews to properly schedule fuel refills and delivery trucks. Equipment with an empty tank won’t be left idle, waiting for a fuel refill. And on the other end, a produc-tive machine with half a tank won’t need to stop and refuel just because a fuel track is onsite.

In addition, managers are able to analyze multiple data factors for more advanced tracking. Exact fuel usage data and total hours accumulated on a machine can be used to accurately calculate consumption rates. This in turn helps a fleet manager better understand a machine’s utilization, and offers an accurate means to monitor and assess operating costs.

While still in its primary stages of use, the AEMP-led Telematics Standard has been well-received. There’s no doubt these types standardized systems are offering great benefit to fleet managers, and we can expect to see more advancements coming to telematics systems in future years. EM

Delivering DataStandardized telematics systems are a great benefi t to fl eet managers

BY STAN ORR, CAE PRESIDENT & CSO, AEMP

>> A standardized telematics system allows fleet managers to more accurately and efficiently track and analyze data on every piece of equipment in the fleet.

AEMP NEWS

fall 201116

• Hours • Location • Fuel • Consumables • Mileage • Engine Work/Idle • Travel Logs • Data Logs

Can’t Trust Data from the Field?

If you’re fed up, or ready to step up to the next level of technology,

Are You Really ManagingYour Fleet by Paper?

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DATA DELIVERY

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2011-2012 AEMP Board of DirectorsExecutive Committee

Dave Gorski, CEM (Chairman and CEO)K-Five Construction Co.Lemont, IL

Guy Gordon, CEM(Chair Elect)Insituform TechnologiesChesterfield, MO

Daniel Connelly, CEM(Vice Chair)Oldcastle Materials, Inc.Columbus, OH

J. Chris Ryan, CEM(Vice Chair)Boh Bros. Construction Co.New Orleans, LA

Bob Merritt, CEM(Vice Chair)URS, Boise, ID

Patrick T. Crail, CEM(Secretary/Treasurer)John R. Jurgensen Co.Cincinnati, OH

Daryl Crear(Immediate Past Chair)Rumpke Consolidate Companies, Inc. Cincinnati, OH

Elected Directors

Rex Davis, CEM (Director of Construction Fleets)RMCI, Albuquerque, NM

Michael J. Brennan, CEM(Director of Governmental)Manatee County Fleet SvcsBradenton, FL

Carl Porter(Director of Associates)John Deere Construction & Forestry, Granville, OH

Ronald Sharp, CEM (Director of Mining)Armstrong CoalMadisonville, KY

Appointed Directors

Aaron Mayer(Director)Ryan Incorporated CentralJanesville, WI

Tommas Cochran, CEM(Director)Cajun Constructors Inc.Baton Rouge, LA

Barry Gilberg(Director)Komatsu America Corp.Rolling Meadows, IL

Carl Uhinck(Director)Kokosing, Wooster, OH

Ed Gestido, CEM(Director)Gray & Sons, Timonium, MD

Theresa Anderson, CEM(Director)EMS Global, Houston, TX

Peter Graham Causer(Director)Volvo, Asheville, NC

Rod Sutton(Foundation Liasion)Construction EquipmentArlington Heights, IL

Chuck Boen(Director)Caterpillar, Peoria, IL

Steve Turbin(Director)Oldcastle MaterialsSpokane, WA

Warren Schmidt, CEM(Director)Flatiron, Longmont, CO

Don Pleu(Director)Kinder Morgan, Tulsa, OK

Donald Lubinsky, CEM(Director)Amtrak, Smyrna, DE

Scott Walter(Director)IronPlanetDelaware, OH

Melissa Gauger(Director)International, Warrenville, IL

Rob Blackadar(Director)Ritchie Bros., Newnan, GA

Tom Jackson(Director)Equipment WorldTuscaloosa, AL

Stan Orr, CAE(President/CSO)AEMP, Glenwood Springs, CO

AEMP HeadquartersP. O. Box 1368Glenwood Springs, CO 81602Phone: 970-384-0510Fax: 970-384-0512E-Mail: cindy@aemp.orgwww.aemp.org

To apply for membership, go to www.aemp.org. The subscription rate for mem-bers is $80, which is included in the Association’s annual dues. The U.S. subscription rate for non-members is $150 for one year and $275 for two years. Canadian subscribers add $5 per year; all other non-U.S. subscribers add $10 per year. POSTMASTER:Send address changes to:Association of Equipment Management ProfessionalsP. O. Box 1368Glenwood Springs, CO 81602

Published by Construction Equipment magazine

AEMP NEWS

TRICKYBUSINESS RATE CALCULATION

Methods abound for how to ensure a fleet’s hourly equipment rates are accurate, but certain costs must be included.BY G.C. SKIPPER, CONTRIBUTING EDITOR

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21aemp.org

T he only ingredients you need to concoct a dead-on formula for figuring out hourly equipment rates are a dash of science, a touch of equations, a bit of

physics, and a generous splash of illumination from a crys-tal ball. In the absence of such a witch’s brew, however, fleet managers are left to their own devices when it comes to the complex business of hourly rate calculation.

The devices are numerous. Entire books have been written on how to do it, and such publications will take you as deep as you want to go in both theory and practice. At the end of the day, however, two things must be fac-tored in: fixed costs and operating costs.

Fixed costs, such as insurance, depreciation and interest rates, are costs you will have whether you use the machine or not. According to Roberto Bogdanoff, technical training manager at Volvo Construction Equipment, such costs are beyond the equipment manager’s control as they are driven by the market.

The second calculation, which can be controlled, is oper-ational costs, says Bogdanoff. This includes such items as tires, fuel consumption and maintenance, and are incurred “the minute you turn on the key,” he says.

Books and information from associations and industry experts offer up numerous ways to approach the question of hourly equipment rates.

In addition to the availability of detailed, in-depth volumes that discuss theory and practical-ity, fleet professionals can also avail themselves of OEM software programs designed to establish parameters for calculating hourly equipment rates. Also, OEMs have owning and operating manuals, which tell you (perhaps more than you care to know) about establishing such rates.

Mike Hayes, director of service marketing and distribution development at Komatsu America says the OEM’s construction equipment owning and operating costs, “can be calculated from 15 data inputs (that range from) annual operating hours to operating conditions to life of one set of tires to fuel consumption shown in gallons per hour.

“(Our system also) has the ability to estimate some values based on internal information,” he says. “Of course, accuracy of the data is very important since the contractor may use owning and operating costs to make machine purchase and replacement decisions, and also for budgeting purposes.”

Another way to learn the job of rate calculation is to part-ner with equipment distributors. They can guide you step-by-step, if you want, or simply point you in the right direc-tion. Komatsu has an owning and operating cost calculator available only on its distributor intranet. End-users can deal

directly with the distributor to help with rate calculations. Luke Kurth, curriculum development manager at John

Deere’s Construction and Forestry Training Center, says, “We don’t want customers to be out there on their own trying to figure out what it takes for a machine to be prof-itable. John Deere can guide you through this type of cal-culation and, as the relationship strengthens between end-user, OEM and distributor, we can help the customer get the most cost-effective machine for their application.

“We provide averages from the low side to the high side,” Kurth says. “This gets the customer in the ballpark to help get them started.”

Take, for example, fuel consumption. A dozer could be working at a site where the operator must take a lot of breaks—waiting for the ground crew to get work done or waiting for a truck to bring in fill. These situations cause a lot of equipment downtime. In such a scenario, says Kurth, the customer may experience fuel consumption of two to three gallons an hour. Now if the same machine is working at a high-production site where it seldom stops and is constantly pushing dirt, fuel consumption may range from four to five gallons per hour.

“So we try to bracket the numbers for end users,” Kurth says. “Then they have to put a peg in the middle, based on their unique situation. depending on what they are doing. In addition to fuel consumption, we provide ranges for service, parts and labor, undercarriage wear, and ground-engaging tools,” he says.

Although Deere (and other OEMs) has tools specifically applicable for its brand, the company offers cross references for managers with mixed fleets, Kurth says. “If you own a

TTT

Accuracy of the data is very important since the

contractor may use owning and operating costs to

make machine purchase and replacement decisions

—MIKE HAYES, DIRECTOR OF SERVICE MARKETING AND DISTRIBUTION DEVELOPMENT, KOMATSU AMERICA

22 fall 2011

competitive machine of a certain size class, we can guide you in identifying what the general numbers will be.”

Of course, the most useful information exists in the his-torical data of your own fleet. Each machine can yield invaluable data tai-lored to fit the unique applications of a specific com-pany, its geography and even the climate in which the equip-ment operates.

There is no mys-tery in calculating accurate equipment hourly rates, Kurth says, but there is an element of the unknown to it: the skill of the operator, for one thing, cre-ates the unavoidable “guestimates,” which can be tricky and, at times, frustrating.

One of the indus-try mavens in this type of number crunching is Andy Agoos, president of Agoos Consulting. Agoos is also a con-sultant for several construction companies and major OEMs. He, along with his partner Mike Vorster, put on the Construction Equipment Management Program.

Agoos says although there are many reasons why equip-ment rates must be accurate. the most important is for bidding purposes.

“If you don’t know the real cost of your equipment, then you don’t know how to put that cost in the bid,” he says. “Anybody who bids work without knowing his costs is in big, big trouble.”

Rate calculation really isn’t magical, Agoos says. “I am a big advocate of setting rates for classes of equipment, not individual pieces. If you own 10 excavators and all of them are in the 30-ton class, I think the rate should be the same for all 10. If they are not the same—and many companies have 10 individual rates—people start to play games. They bid the cheap ones, but the cheap ones may not be avail-able to actually do the work. When that happens, the com-pany has to go rent a machine or use one of its other machines that have a higher rate.

“Now, you’ve got something different,” he says. “It becomes a real mess to track, to bid and effectively manage machines if you don’t have a class rate.”

Managers also have to know the expected life of the equipment. “The fleet manager has to decide if he’s going to have, say, a seven-year cycle for a wheel loader. That’s pretty typical, maybe a total of 10,000 hours for the full

life cycle. If the machine cost $100,000—and, say, you plan to sell it for $30,000 at the end of the cycle—that’s $70,000 you have to amortize.”

You know the life of the class (seven years), know your uti-lization (about 1,500 hours in this exam-ple), and you make an assumption of what you’ll get when you sell the machine ($30,000). You divide that $70,000 by seven and that’s what some of your annual fixed cost is going to be,

Agoos says. If you use straight-line depreciation, that’s $10,000 a year in this example.

The cost of money and interest rates must also be con-sidered in the hourly rate, Agoos says. “That number comes down as an edict from the company president or owner,” Agoos says “and typically is around 6 percent. Other numbers that should go into the mix are insurance (say 1 percent) and property taxes (say 2 percent). You have to add them to the six percent interest rate. You can now calculate your owning cost by taking the amortization ($70,000), add in the other costs (6 percent, 1 percent and 2 percent) and apply that 9 percent against the average investment you have in the machine.”

At this point, suggestss Agoos, add administration costs. “This is a good place to put that in,” he says. “You shouldn’t dump that cost on the repair side because it is an ongoing cost that occurs whether the machine runs or not.”

Next comes the operating cost, “a calculation that is easier because it is based on usage, either hours or tons,” he says. That includes such things as fuel cost. “Multiply that by how many gallons the machine uses per hour—say six gallons—which gives you $18 per hour for fuel.” The cost of putting the fuel into the machine, the installation cost, must also be added. Add to that the cost for wear parts,

If you don’t know the real cost of your equipment, then you don’t know how to put that cost in the bid... Anybody who bids work without knowing his costs is in big, big trouble.—ANDY AGOOS, PRESIDENT OF AGOOS CONSULTING

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such as bucket and tracks, and the associated labor costs for these predictable repairs.

The next step is to put in preventive maintenance costs. In this calculation, Agoos says, decide how many times PM will be performed over the seven year life and cost them out as a per-hour calculations.

Finally, says Agoos, calculate a number to cover unscheduled repairs. “This is the most difficult to know,” Agoos says. “You can figure out what your maintenance cost is going to be, what your fuel costs are going to be, but this is the one you don’t know. There are books you can buy that give you a number, that is if your internal records don’t have it. Otherwise, you have to guess what the repair costs will be; and it is just a guess. If an experi-enced operator who takes care of the unit is assigned the machine, that number will be low. Another guy might be an inexperienced operator, and the number will be high.”

This number is also affected by the application of the machine. “We have a lot of sand in Florida, for instance, which is abrasive. Other areas of the country may have rock. And you never know what’s actually going on at the jobsite. I’ve seen operators, rather than dig a hole for the placement of trench boxes, pound them in with the bucket. There are lots of stuff that goes on that affects this number,” Agoos says.

Two “very, very important things fleet managers must know,” he says, are cost per hour of the machine and the downtime on the machine. “If you want to switch to a more expensive oil or grease, you have to know at the end of the machine’s life that you got back more than you spent. If you don’t track your costs,” he says, “you won’t be able to tell the difference.”

Accurate hourly equipment rates also can help you know when to dispose of a machine, Agoos says. To do this, you can watch your total hourly costs reduce as the machine ages. When the hourly costs reach a minimum and begin to climb, it’s time to consider replacement, semi-retirement or refurbishment.

Greg Kittle, CEM and vice president of corporate pur-chasing at William Charles, says the hourly equipment rate is a means of calculating revenue to off-set the costs of sup-porting field operations. Those rates are used in bids, too.

“Those costs flow through the equipment company and normally the equipment company breaks even,” Kittle says. “Accurate rates and the elements that create a rate are very important (in that they ensure that) your bids are correct and that the costs are recovered in the equipment company.”

When he calculates rates, Kittle considers the age of the fleet units. In a fleet of new equipment—the “ownership piece” as he calls it—the major components would be both depreciation and interest.

“If the fleet is new,” he says, “it has a smaller product-support element to it. If you have an aged fleet, that is reversed. When you are building a rate, the equipment cost recaptures the depreciation of a machine.”

Many fleet managers use fuel consumption in their rate build as product support elements, Kittle says. “These are calculated out for the use of the life of the machine, and then broken down into an hourly component based on utilization.”

As pointed out previously, sources to obtain the infor-mation and data for rate builds, include OEMs, equipment dealers, performance handbooks and the fleet’s own histori-cal data, “which is the most relevant,” he says. “Another good source are other contractors who you come in contact with, especially through associations such as AEMP.”

Capturing and tracking the data is done with your busi-ness system, Kittle says. “For example, if you buy a part, that part is charged against the asset number code in the particular asset. You collect that through your business sys-tem, generally speaking. Utilization is done in a myriad of ways—collection of data from the field or through telematics, for example.”

Machine life determines your rate. “How I look at that comes down to a combination of facts: what the fleet needs are and where your position is in certain areas, such as your emission requirements,” Kittle says. “If you are an ownership-centric fleet, the important component is what the market is doing in that particular asset class and how you roll it forward.”

By comparison, if the fleet is product-support centric, he says, some managers analyze the costs that are being accumulated, along with analytical data such as oil sample and vibration data and take that into consideration when they determine that a machine’s life is used up and it’s time to trade out, he says.

As Deere’s Kurth suggests, once an accurate hourly equipment rate has been established, it becomes easier to calculate in the future: that is if everything else—machines, applications, terrain—remain constant. In the real world, however, things change, such as regulations or hybrid technology.

“Take, for example, emissions, which has been at the forefront in recent history,” Kurth says. “The industry has moved to Interim Tier 4, and historic fuel consumption costs have changed. In addition customers must now account for aftertreatment costs and work that into their calculation. Five years ago, you didn’t have to do that.”

One thing is certain, says Kurth. Game-changers seem to come every couple of years, and as they do, he says, the fleet professional’s ability to calculate hourly equipment rates has to, out of necessity, take on a sharper edge. EM

HOW to SELECT FLEET SOFTWARE

t oday’s technology-oriented mindset offers clever soft-ware systems for tracking and managing fleet operations

and equipment. The problem is that some systems “do what they have to do, but won’t talk to the other kids or even ask about them,” says John Hennessy, vice president of sales and marketing for Locus Traxx.

Hennessy is referring specifically to stand-alone sys-tems, one of the choices a fleet manager must make in selecting a system agile enough to keep up with the unique twists and turns of his particular business. And, among companies, municipalities and other organizations of roll-ing stock, those needs are all over the lot.

The second choice fleet managers have in systems is so-called enterprise systems that can be integrated with other systems that already exist throughout the organization or are already installed on the fleet’s equipment. “An enter-prise system that is integrated obviously takes more time and money to implement,” Hennessy says.

Ultimately, the type of system is really defined by the organization, its sophistication, its complexities and, “a lit-tle bit about the urgency of its needs,” he says. “If you need an answer to an immediate problem, you don’t want to go enterprise. Enterprise systems are for long-range planning and for strategic initiatives.”

Yet some fleets might well start out with a stand-alone solution and then evolve into a system that’s capa-ble of integrating with other func-tions the company performs, such as reporting. “How fast that transition occurs depends on many things you can’t control,” Hennessy says, “scheduling people, revenue avail-ability, and all the crazy stuff.”

Another consideration in select-ing equipment-management soft-ware is the size of your operation, says Martin Roath, solutions

manager for ZTR Control Systems. “It comes down to volume. How big is your organization and how big are its needs? Are you talking about one or two pieces of equip-ment or about something that could potentially grow into a much larger fleet?”

Bob Andrade, CEM and vice president of equipment management for EMS USA says, “Very few businesses will be identical since most organizations have different and/or varied priorities due to their unique plans and organizational struc-ture.” The first step has to be a business review of the organi-zation, he says. “When an analysis of the company goals and the major targets important to the corporation are analyzed, you then can make a determination on the type and scope of the required software that meets these determinations.”

Such business reviews, perhaps, should be done annu-ally, but the majority of companies find that approach unrealistic, Andrade says.

“It takes a very long time to develop the information. What you see in the future determines if you did the right thing or not,” he says. “That is one of the pitfalls, too. Once you spend so much money on the stuff, you don’t want to just trash it and start over again in another direc-tion. In a lot of situations, that’s really what the company should do. However, you run into resistance because you have so many other departments and people involved in it.”

Andrade offers this example. One company might be a trucking operation related to a batch plant. Maybe there is a concern about what’s going on with brake components and slack adjusters and how they wear, especially since the

organization has to meet certain DOT compliances. In a case like that, says Andrade, you focus your monitoring on the trucking aspect of the business since that is so important to your plant operation. You monitor how fast the brakes are wearing out and even the brand of truck you use, since you may find some OEM braking systems are better than others.

On the other hand, an operation that is primarily involved with demo-lition doesn’t care anything about truck brakes. “Its fleet managers

With a wide range of solutions, the first step is determining prioritiesBY G.C. SKIPPER, CONTRIBUTING EDITOR

>> This battery-powered SmartTag sensor from Locus Traxx is wireless and transmits location data from unpowered equipment, such as trailers.

HOW HOW HOW tototo SELECT SELECT SELECT FLEET SOFTWAREFLEET SOFTWAREFLEET SOFTWARE

ttt

25aemp.org

26 fall 2011

worry about hydraulic hammers or going through a lot of seals, so they track those trends and parts. They might find that in their particular application the aftermarket compo-nents they are using last longer than OEM,” he says.

These differences have always been at the core of the problem in the relationship between software and equip-ment management, Andrade says.

“Because there is no real continuity between organiza-tions, what’s important to one fleet doesn’t mean anything to the next fleet. That makes it difficult and that’s why you have so much trouble finding canned packages that work. Everybody wants something completely different,” he says.

Martin Roath at ZTR Control Systems, responds. “When people think of an enterprise system, many times they think of a multimillion-dollar electronic retrieval and transmission system. We have a concept called machine-to-business that integrates equipment data into various types of systems that may already exist in the customer’s busi-ness. For instance, we can tie telematics data into a man-agement system and, as we say, get it to the right people, at the right place, and at the right time.”

A stand-alone system, Roath says, can be more cumber-some to get data in and get data out, “because you have to spend time to pull the data from the system. Someone goes out on a one-by-one basis, for example, puts a monitoring system on a site, and the customer has to dial in that site with a landline and view each site,” he says.

A primary consideration in selecting any type of system, Roath says, is volume of the data produced by the system, “and whether or not it is going to be convenient for some-body to approach what we call ‘data in a silo.’ Our machine-to-business implementation allows you to expand and grow by integrating that data into your business. In other words you are not operating in a silo anymore. You have the ability to expand as your needs grow.”

The cost of basic equipment management software does not have to be cost-prohibitive, Andrade says.

“There are excellent canned packages readily available to smaller organizations that don’t require sophisticated IT departments to have top-notch equipment management soft-ware available to them,” he says. “Large firms can integrate these work-order maintenance systems into their enterprise software to avoid excessive IT support service, labor and fees.”

He says that many high-level enterprise systems “sell the extreme possibilities and just want to get their foot in the door by customizing your software at major cost. This is not required and is often unnecessary.”

As a member of AEMP for almost 30 years, Andrade has seen “too many companies waste huge sums of money for some very poor information simply because bean coun-ters don’t know how to reap the data visibly captured in front of them,” he says.

Properly trained equipment managers, he says, have the knowledge to better manage these systems and can often use a more basic, simpler data package to manage the data that is really imperative but often missed.

“Many organizations flounder, and even today with all the information readily available, they don’t know what their assets are, where they are and what their factual cost of ownership is—including ROI per asset,” he says.

Drowning in data is one of the risks an organization runs if it simply dives head-long into the information stream.

“You need to focus on managing the exceptions to nor-mal and seek out the abnormal in the software dash-boards,” says Andrade.

Bruce Nelson knows first-hand what’s involved with select-ing software that is appropriate for an individual operation.

“I’ve gone through two buys,” says Nelson, fleet service program supervisor for the City of Madison, Wis. “The first one was to replace an existing system, so we knew going in

>> Virtual parameters, as shown here, let fleet manager easily identify equipment within any job site, facility or service location.

27aemp.org

what the pitfalls and problems were with the old system. One of the first things you do in deciding what type of sys-tem you need is not to make the same mistake twice.”

In Nelson’s particular situation, he says, his old enter-prise system was basically a truck fleet program, “a canned system,” he says. “That was an issue because we are not a truck fleet. We needed a system provider who had experi-ence working with a mixed, municipal fleet. Once we found a vendor that was comfortable in the municipal ser-vice sector, we contacted their sales staff.”

With the first purchase, says Nelson, a false expectation of what was needed in the way of hardware was given to the city. “Once we started loading and doing some testing, we found out that some of the hardware was not capable of running the system at the speed that we needed,” he says. As a result, the city had to purchase additional hardware, “and spent quite a lot of money on that and also on training technicians.”

The second time Nelson went to market for an equip-ment-management software package he made sure he knew of any needed hardware upgrades in order to budget for any changes. “We had to decide whether we were going to have our own server or use the vendor’s server. You have to make sure whatever system you have can handle the job.”

Another factor to keep in mind, especially if you have a large fleet, has to do with the number of users of the sys-tem and licenses.

“With a large fleet, it usually means you will have several users,” Nelson says. “The majority of the companies—par-ticularly on the support side—charge you on the number of users. Licenses are a big factor that many people don’t think about. I didn’t even know to ask the right questions and, like many people first going in, I asked what the system cost, not realizing that sometimes that number includes the license and sometimes it doesn’t. That can be expensive.”

“You have to find out how many licenses are on the server,” Nelson says. “Are you relying on your IT software, or do you need something else to run the program? Most IT departments can’t support that, so it becomes part of your costs.”

Support cost is also important.“Most places are pretty up front, but nowadays

(that cost) is fairly substantial,” Nelson says. “In my case, it comes out of my operational budget.” The reason for that is that the City of Madison, as with many cities, operates on “X” number of dol-lars and 10-year life cycles on capital projects. “Most financial people don’t want to capitalize software programs. And there aren’t many software programs that will last you 10 years. When you reach year five or seven and want an upgrade, they won’t capitalize it. We had to fund it through our operational budget.”

In making a system selection, other needs also were considered in his operational analysis, Nelson says. He had to determine, for instance, whether the existing data on the old computer system was worth bringing over to the new system. Conversion of data is very expensive, he says.

“You need to ask yourself if you have a bunch of garbage sitting in the old system, or is it important data,” he says. “In our particular case, during the first conversion we opted to bring inventory parts information over. We had to decide whether we were going to keep the old system active for history updates, and we decided we did for legal reasons.”

Meeting your needs as well as the needs of the organiza-tion (and each user is different) is necessary in making a change operationally.

“You have to make some changes to accommodate the system because you are feeding the system data,” Nelson says. “If you have determined you can make those operational changes without too much shop disruption (or if you are willing to make that shop disruption), that’s fine. But some systems are so far removed from what your operation is, it doesn’t make sense to go around changing everything. In our case, I told my staff that just because we had been doing this ‘X’ number of years didn’t make it right, and that we would be making some changes to accommodate the new system.”

Parts and service also played a role in Nelson’s decision-making process. “You don’t want a lot of money tied up in stock and you don’t want a lot of unnecessary parts sitting on the shelf,” he says. “In our case, we want to receive parts just in time. It was important to us to have a system that was able to track parts usage to be able to see our own high and low inventory levels.”

For example, Nelson’s operation is responsible for emergency fire and police vehicles as well as public works equipment. “It is essential to have parts on the shelf or get them in a timely manner. We can’t afford to have

It takes homework, research and sometimes old-fashion detective work to find a software vendor to match the unique needs of your organization. Since no two companies are alike, the task of “marrying up” with a suitable suitor can be complicated.

Although the following list is not meant to be all inclusive, it does identify some of the active players in the industry

• HCSS• Locus Traxx• ZTR Control Systems• CCG Faster• Viewpoint • StreetSmarts• JD Edwards• SAP• CMIC• Dossier• Texada • Manager Plus• Trimble• Topcon

SHOPPING FOR SOFTWARES ESHOPPING FOR SOFTWARESHOPPING FOR SOFTWARESHOPPING FOR SOFTWARES O G O SOS O G O SO

28 fall 2011

emergency equipment down. If, based on historical infor-mation, I have a $1,000 alternator that keeps going out and I can have it in my possession overnight, there is a good chance I won’t have it on my shelf. It’s the same thing with brake parts,” he says. “If there is a local jobber who can get it to us by 10 a.m. tomorrow, for example, or if they will deliver it immediately, that’s the way we go. Why should we tie up our money in that stuff?”

When Nelson decided he had to initiate a system change to get the necessary timely support he needed, he laid out benchmarks of what his operation was looking for and a logical pattern of how to get there. Nelson already had a good relationship with other departments, including finance and the city’s IT department, so he brought them in and told them what he was planning. A committee was formed and the IT representative on that committee started getting system demonstrations set up.

“They are the experts,” Nelson says, “so they knew what it would take for the hardware and the servers. They could ask the right questions.”

Nelson kept his boss advised of everything that was going on in the process and even had him sit in on some of the demonstrations “when it got down to making a decision.”

When Nelson got involved in the first system change in 1997 and when he got involved in the most recent major upgrade a year and a half ago, he ran into a new phrase—paralysis by analysis. “That happens sometimes,” he says. “You kind of sit there and nothing happens, so now and again you have to poke somebody with a pin to make sure they’re alive.”

The switch-over process took about nine months, he says, although some municipalities might do it faster or slower. In Nelson’s situation, he happened to find out that a certain

company was coming out with a Web-based program. “When we signed the contract,” he says, “I didn’t want

to have a big price tag and go through and finance stuff afterwards. I signed the contract with the idea that (the vendor) would have a Web-based system coming out. Hindsight being 20/20, I became a beta customer for this Web-based program. I guess I was a glutton for punish-ment. Not only was I beta, but we went into a fuel-con-sumption control system at the same time, doing every-thing within months of each other. I was either committed, or should have been committed.”

Before jumping into the fray of selecting a company to partner with in such an undertaking, Nelson advised fleet managers to ask system providers who their fleet adviser is.

“If they don’t have anyone on staff that is fleet, it comes out fairly soon,” he says. “On the first system I was involved with, that was obvious right out of the box. By being beta with the new system, I saw an opportunity for the city to be influential in the development of the system which, in turn, would assist us in our operational needs. We tried to make certain that every department involved would get what it needed out of the system.”

That kind of (team) approach, says ZTR’s Roath, is pre-cisely what he recommends to customers. “You bring in peo-ple from different departments and you look for the oppor-tunities and needs that must be filled to serve your return on investment. You have to look for a flexible vendor that can meet everybody’s needs when you go out to select a system.”

Hennessy sums it up: “The whole goal is to focus on getting more from the equipment you have and that comes in two flavors: making the equipment more useful more often and making sure it lasts longer,” he says. “And all that is to make more money for the organization.” EM

>> Left: Shown here is a bird’s-eye view of a work site protected by a ZTR Control Systems geofence, used to track and monitor equipment location. Right: Martin Roath, solutions manager, ZTR Control Systems, explains how enterprise type equipment-management software integrates with a customer’s existing systems to track and monitor everything from equipment health to financial reports and work orders.

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1.800.211.3983

the SHOOT the GREEN

forTENE

N ot only was Mike Munson and his entire team at Austin Bridge & Road named recipients of the2010 FleetMaster’s Award jointly sponsored by

AEMP and Construction Equipment magazine, but hisequipment at Austin Bridge & Road has become the first fleet in the country to be designated as an AEMP GreenFleet. Austin Bridge & Road is predominantly a heavy high-way infrastructure company that also does design-build work

Green Fleet is the Association’s newly created certifica-tion process that sets stringent emissions standards for off-road construction equipment with greater than 75 horse-power units. In fact, to be Green Fleet certified, off-road fleets must have a minimum of 50 percent of vehicles pow-ered by Tier 2 or greater engines.

Munson’s mixed fleet of 520 units is 88 percent Tier 2 or better,he says. As equipment director for Austin Bridge & Road, Munson haslong been a strong supporter of emissions management, so it was no surprise that he described his climb to Green Fleet status as fairly simple.

“We had already taken a snap-shot of our fleet, so, based on theenvironmental regulations that are out there now, we had a pretty good idea of what our emissionsprofile looked like,” he says.

To take that snapshot, Munson partnered with his major OEM, Caterpillar, in compiling and

verifying the data, and then translated the informationfrom its original format to a similar one required by AEMP for certification.

Brett D. Alkins, southeast territory manager, CaterpillarEmissions Solutions, worked with Munson on the project.

“I was involved because the Caterpillar software designed to calculate the data had just been introduced,” Alkins says.“At the time, we were releasing the tool to our customers, and Austin Bridge & Road was my second or third fleet analysis. Today, of course, our dealers work directly withcustomers to establish a fleet’s emissions profile.”

Caterpillar initially developed the Fleet Emissions Management tool to help California customers evaluate their options for meeting the California Air Resources Board(CARB) standards In-Use Off-Road Diesel Regulations.

“Essentially what we did,” says Alkins, “is collect the fleet information from the customer and input it into the Web-based tool to determine a fleet’s average emissions for NOx and particulate matter. For instance, once we know the emissions factor for a particular engine in grams-per-brake-horsepower and how many hours a machine operates, we

can extrapolate an emission of how many tons per year of NOx and par-ticulate matter are generated. This can be done for a single machine orfor a whole fleet of machines.”

The data provide a baseline of information for the customer so he can determine the overall annualemissions. The emissions benefit of future retrofit and replacement deci-sions can then easily be determined.

Caterpillar analyzed 483 pieces of Austin Bridge & Road equipment.“We provided individual data on the machines with regard to NOx andparticulate matter,” says Alkins, “as well as a summary chart which

Austin Bridge & Road is AEMP’s first certified Green Fleet. Here’s how they did it.BY G.C. SKIPPER, CONTRIBUTING EDITOR

>> Mike Munson, equipment director, Austin Bridge & Road

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enabled Munson to identify the informa-tion most significant to their business. As part of the summary discussion, we ran through different scenarios, reviewing fleet maintenance and job specifications that may impact their fleet, and with this base-line Austin Bridge & Road was able to see more clearly the potential impacts.”

A lot of back and forth activity was required up front, such as checking the accuracy of the numbers, says Alkins. Yet once the information was loaded into the Cat software, the job was completed in about a day.

Munson provided Caterpillar with serial numbers, engine make and models of the selected machines. “They took the data and basically identified where we presently stood versus CARB standards,” Munson says. “That enabled us to con-sider when we had to start replacing the fleet. In our case that wasn’t until 2015. We also could see where we might come into jeopardy of meeting some of the more aggressive environmental mandates.”

“This is relatively new for us,” Munson says. “We now operate in Texas, Arizona, Louisiana and part of North Carolina. Because the region is not on the forefront of states like California, emissions management in previous years, while still important, ranked differently. Now, espe-cially as the economy improves, it has become a critical priority for us. We recognize that with new Environmental Protection Agency mandates going out to municipalities and to nonattainment zones where we do operate, it’s just a matter of time before equipment used on future projects will have to be of a certain Tier level.”

For example, it is highly conceivable that a municipality in Tarrant County, Texas, might mandate that only equip-ment with Tier 2 or better engines be used on a project, Munson says. “That’s not an actual example, but it does illustrate what might happen.”

The U.S. EPA now requires municipalities to develop plans to lower their ozone levels, “and right now we antici-pate that many things we are seeing in California will eventually be implemented in the nonattainment zones,” says Munson. “Although the recent economy has caused CARB to back off somewhat, when we do come out of the recession, I believe many municipalities in other states will follow California’s lead.”

Austin Bridge & Road is “venturing into new markets,”

Munson says, and in doing so has sharpened its focus on environmental management. Green Fleet certification plays a critical role in the pursuit of federal projects.

“As part of our process in qualifying for federal work, we had to ask ourselves what were we doing about emis-sions management, what have we done and what does our fleet look like,” Munson says. “However, we have not been able to articulate that message to our customers. AEMP’s Green Fleet certification allows us to do that.”

Green Fleet certification, he says, validates that the company has invested in “a youthful fleet.” The average age of his equipment is just a little over five years old.

“That investment enables us to lower costs from the standpoint of repair, rebuild and efficiency,” Munson says. Although not every vehicle in the fleet meets Tier 2 stan-dards, “down the road, we will actively replace, or make modifications to, those units,” he says.

Green Fleet certification also benefits Austin Bridge & Road’s overall operation, Munson says. “It shows we are good stewards of protecting the environment. That goes hand in hand with recognizing not only that we do things on the ground at the job site to prevent environmental catastrophe, but we are also protecting the atmosphere.” EM

Birth of Green Fleet Early in 2010, national feedback from AEMP members with mixed fleets made it clear they needed a way to demonstrate their commitment to a cleaner environment and deliver that message to customers and potential customers.

Against a backdrop of constantly changing federal emissions regulations, creation in some states of nonattainment areas, and the increasingly restrictive legislation of the California Air Resources Board (CARB), fleet professionals were scrambling to conform to a shifting landscape of compliance rules. They also needed a way to address widespread public opinion that off-road fleets were leading contributors to greenhouse gas emissions.

To provide mixed fleets with a way to update their respective markets on their environmental improvements and, at the same time, help reposition and correct that public perception, AEMP established the Green Fleet program with three goals in mind: recognize the environmental efforts and progress made by fleets and fleet managers; provide information for companies seeking to reduce their emissions levels; and create a challenging yet attainable objective for equipment managers.

Green Fleet allows AEMP members to achieve those goals, while taking advantage of federal funds that are available to help costs of emission reduction; expand their business bases by bidding on a wider range of projects; and improve employee health, morale and productivity.

32 fall 2011

11:36 pm - Unauthorized Usage

Run Time: 86.7 hoursIdle Time: 21.3 hours

Fuel Used: 370.5 gallons

Red Stop Lamp ONEngine High TemperatureFault Code: 65226-623

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fall 2011

>> Portable units such as Miller’s Wildcat 200 can provide 6,500 watts of peak generator power and 200-amp DC Stick and TIG welding output.

In-field welding repair offers a set of challenges not found in the shop or yard, requiring a strategy for “playing it in the rough.”BY GEORGIA KRAUSE

Pla yWheW

hen a machine breaks down in the field, it’s a

given the repair will require a few more steps to complete than if it had failed while parked in the yard. There are innumerable mechanical and environmental variables to any in-field welding repair, and because each repair is unique, no rigid operational policy will fit all situations. One factor, however, is completely under the equipment manager’s control: the human variable.

First, determine how much of the repair is owned. If the machine is rented or leased, emergency field repair options are described in the contract. It may include doing an equipment swap with the rental house, waiting for the dealer’s ser-vice truck, calling an independent welding repair service, or doing the repair in-house under the guidance of a remote service rep. Much of the same holds true for owned equipment if the downed machine is still under warranty or service agreement.

Regardless, when equipment breaks down on-site, the first response for many fleet managers is

35aemp.org

to do something—anything—to fix it regardless of the ser-vice resources put in place when the machine was acquired.

Managers must resist the temptation to work around the service or lease agreement’s parameters in an attempt to quickly return the machine to service. Rogue repair welds may be a small, even hidden, part of the equipment’s fix, but they can carry costly consequences. Dave Landon, manager of welding engineering at Vermeer, cautions that a welding repair done outside the bounds of your contract can void your warranty or service agreement.

“If the equipment goes down again and the service pro-vider has to fix the ‘fixed’ repair, a failure analysis will tell if the proper procedures were followed initially and if they were the cause of subsequent failures,” he says. Supply field supervisors with detailed instructions that explain how field repairs are to be handled.

If it is necessary to perform the weld in-house, contact the manufacturer for up-to-date repair procedures for the machine’s make and series model, Landon says, suggesting a conversation will augment any printed or online repair manuals as service references.

“The OEM’s service desk will be able to give informa-tion about your model series that has not made it to the online service manual and advise you on procedures and materials that will give you the best weld repair results,” he says. The weld itself may be a small part of the fix, but it could directly affect a machine’s future productivity. Ask for directions.

Whether welding is performed in-house or outsourced, insist on taking adequate time to identify the failure and plan the repair. “If you don’t know what you’re looking for, you don’t know what you’re looking at,” Landon says.

“The telltale mark of a welder who thinks he’s good enough to work without a plan is the one who has sheet metal ripped off, parts and pieces scattered around the site, and is running back and forth to the truck,” says Dean

Black, a welding instructor at the Apprenticeship and Skill Improvement Program of the International Union of Operating Engineers Local 150 training center in Wilmington, Ill. “The welder who is at the truck quietly reading the manufacturer’s specs and assessing the equip-ment’s mechanical, electrical and hydraulic fundamentals is building his work plan.”

Before the repair begins, the welder should know how the machine is to be used when the repair is finished.

“A skilled certified welder can do a repair in different ways according to what the owner wants,” says Mark Otto, another ASIP welding instructor. “Let him know if you are looking for a quick weld repair to keep the machine on the job just one more day, on that project for several more weeks, or want a temporary solution until you can get the equipment into a shop.” Understanding the expected end result is the starting point in his repair plan.

Field welding repair usually uses the shielded metal arc welding (SMAW or stick welding) process and flux-cored arc welding (FCAW or flux-cored) process. John Liesener, product manager with Miller Electric, says stick welding is still the most common process worldwide in construction because it is portable and requires less equipment. Setup is simple because stick doesn’t require hoses, wire feeds and regulators, so the service truck carries less weight.

“Stick welding has the field advantage for steel repairs because stick doesn’t require gas tanks, which can be a con-sideration on some construction sites,” Liesener says.

Stick electrodes are more portable than wire rolls and come in a variety of filler metals, such as sticks with nickel for cast iron welding, he says. A service truck stocked with a selection of electrodes gives the welder flexibility to work on more of the machine’s parts.

This article was reprinted with permission of Construction Equipment magazine.

a ying It here It Lies

36 fall 2011

Hardfacing, or hardsurfacing, is wear insurance for your heavy equipment. Chris Monroe at Hobart

Brothers says hardfacing old equipment can restore worn components to almost-new condition for up to 75 percent less than what it could cost to purchase a replacement part. Hardfacing stress areas on new equipment before it is put in service can extend the life of those surfaced parts up to 300 percent, he says.

There are two hardfacing methods: build up and over lay. Build up welds layers of filler material to a worn sur-face to restore the area to its original dimensions. Overlays weld protective “buffers” on wear points to guard surfaces from abrasion and impact. Used separately or in combina-tion, both bond a metal alloy to the equipment’s base metal using either stick or flux-cored welding processes.

The type of wear equipment displays will determine which filler to use. The causes and cures for the three most common types of equipment wear and tear are: • Abrasion: Surface wear such as scratches, grooves and gouges caused by repeated contact

with hard materials, usually found on blades, buckets, and attachments. Carbide or chrome car-bide filler metal protects against low-stress abrasion. The best filler metals for high-stress grinding abra-sion contain austenitic manganese, martensitic irons or titanium carbides.

• Adhesive (metal on metal) wear: Found on steel track components and exposed gears that experi-ence nonlubricated friction as they roll or slide against each other. Hard surfacing alloys such as austenitic manganese or cobalt-based filler metal will reduce wear for these applications.

• Impact: Caused by a compressive load such as repeated pounding, or by random contact with rocks or other hard objects, which places high mechanical

Hardfacing May Triple Service Life

>> Left: Lincoln Electric says when properly applied, a hard-facing or build-up deposit will last longer than the equipment’s original material.

>> Below: Welding instructors George Ludolph, Dean Black and Mark Otto bring more than 70 years of on-site welding experience to the Local 150 Operating Engineers training center in Wilmington, Ill. They are currently training welders to work on wind turbines.

stress on equipment. Often found on attachments such as hydraulic hammers and buckets. Austenitic manganese steel filler metal offers the best protection for impact wear.

Most welding wires contain chromium to improve wear resistance, but when chromium is heated it produces hexava-lent chromium fumes, which OSHA says causes lung cancer. New chromium-free hardfacing wires eliminate fumes and provide a layer of wear resistance and hardness said to be

equal to or better than conventional chromium carbide.Also new to the hardfacing industry are gas-shielded,

all-position flux-cored wires for general hardfacing applica-tions. The deposit is a specially formulated, wear-resistant alloy that produces a uniform distribution of small pri-mary carbides in a martensitic matrix. The small carbides provide greatly improved wear resistance over martensitic steel, many tool steels and some conventional chromium carbide alloys. EM

On March 21, 2011, an explosion at the Carbide Indus-

tries, LLC calcium carbide manufacturing plant in Louis-

ville, Ky., took offline the largest calcium carbide furnace

in the Americas. Carbide Industries produced 75 percent

of the material used to generate acetylene gas, the pri-

mary fuel for precision cutting in welding applications.

Calcium carbide is being imported from other countries,

but the acetylene shortage is expected to last well into

next year, accompanied by rising prices and delivery

delays up to nine months.

The workaround is switching to alternative fuels such

as propane, propylene and HGX propane. Alternative

fuels have some limitations, but the difference in cost

compared to current acetylene prices may justify the

adjustments the operator will need to make to achieve

satisfactory results, depending on application.

Propane, for example, does not burn hot enough for

welding tasks but can (with the right torch and tip) pro-

duce clean cuts comparable to acetylene. Propylene’s

flame temperature is 600 degrees higher than that of pro-

pane and offers good cutting properties, but its flow rate

is too strong for welding. HGX propane is standard pro-

pane combined with a cutting additive, HGX-3, at a ratio

of one part per thousand and increases the flame tem-

perature of propane by 15 percent, according to Energy

Additives in Michigan, making it suitable for aluminum

and cast iron welding.

Switching to an alternative fuel requires these equip-

ment modifications:

• Replace all R-grade fuel hoses with T-grade hoses.

Propane and other alternative fuels will disintegrate

R-grade hoses and become a safety hazard.

• Replace the acetylene regulator with one designed

for alternative fuels. The new fuel regulator shows

readings in levels specific to the fuel type and can

deliver alternative fuel at a higher psi than the

15-psi max draw limit for acetylene.

• Propane and propane-based gases are half again

heavier than acetylene and work best with a low-

pressure injector-style torch for proper flow.

• Replace acetylene-cutting tips with tips designed

for alternative fuels.

Operators using alternative fuel will also need to

adjust their torch lighting techniques. Here are three to

start with:

• Technique 1. Turn the fuel valve a quarter turn and

light. Then turn the oxygen preheat valve a quarter

to a half turn and “walk up” the flame.

• Technique 2. Turn the fuel valve a quarter to a half

turn and light. Place the tip on the workpiece at

about a 45-degree angle, open the oxygen preheat

valve a quarter to a half turn until the flame snaps

into place, then walk up the flame as normal. Use

this technique on a windy day, if the shop fan is

blowing on the work area or if the flame goes out

when using Technique 1.

• Technique 3. Turn both the fuel and oxygen valves

a quarter to a half turn, light the flame as soon as

possible and walk up the flame.

Alternate fuels require a different technique to

achieve a neutral flame. The flame needs to be “walked

up” or forced to prevent starving or extinguishing the

flame. Here’s how:

After lighting the torch and adding the initial preheat

oxygen, alternately add more fuel and more preheat

oxygen by turning the respective valves a quarter to a

half turn at a time until the fuel gas valve is completely

(or almost completely) open. Then add oxygen until the

flame creates a loud whistling sound and the primary

cones reach their shortest point. Depress the cutting

oxygen lever and readjust the preheat oxygen if neces-

sary. Note that with propylene, adding a small additional

amount of preheat oxygen will produce a more concen-

trated flame with a heat pattern similar to acetylene.

ALTERNATIVE FUELS DURING THE ACETYLENE SHORTAGE

38 fall 2011

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