You’re charged with the care and feeding of millions of dollars of yellow iron. You have to know the equipment as well as any technician, crunch numbers like an accountant, lead and motivate those under you, communicate effectively with those above you, negotiate like a bulldog and keep the equipment running in the face of a thousand things that could go wrong.
If it’s not the toughest job in the world, the position of construction company fleet manager certainly has the most moving parts.
For this article we talked to five of the top fleet managers in the country to find out what it takes to succeed in this complex, big-money, high-tech, pedal-to-the-metal environment.
1.TRAINING TECHNICIANS
Not too long ago if a technician could work wonders with a wrench, he didn’t need any other skills. But that’s no longer the case. All the equipment managers we spoke with say providing training that keeps technicians moving up the career ladder is key to keeping them in the company and keeping the equipment management process productive.
Loading up on laptops
At Trumbull Corp., equipment manager Robert Decker jumped into the digital age with both feet this year and got all 10 of his key technicians laptop computers.
“Some of them didn’t want to do it,” Decker says. “Some were afraid of the technology, but once they started using it they thought it was great. We’re using the laptops to diagnose equipment and using the Internet to find parts. They caught on very well. A few of them even surprised themselves.”
Decker also had the local Cat dealer come in for a day of training on computer-based diagnostics and CAT’s ET program (short for electronic technician) that deals with online parts ordering, parts books and CD-based service manuals.
Write your own training ticket
“Graniterock is very committed to the philosophy of continuing education,” says equipment manager Carl Wulf. Service technicians put in 40 to 45 hours of training a year, about half through internal sources, including a company Intranet site, and half outside the company through venders, dealers and OEM-sponsored sessions.
The company also uses what it calls the Individual Personal Development Plan, which allows technicians to develop their own curriculum based on needs they see in the field or shop on a day-to-day basis.
The employees fill out a training wish list that establishes goals and performance expectations and then discuss these with their supervisors. From there the requests are submitted to the company executive committee and “more often than not they give it their blessing,” Wulf says. “There is the opportunity for people to better themselves and move forward, but it’s pretty much left up to the individual. You create a niche through your education in an area where the company may need some help.”
Training turns a profit
A good example of how well this pays off is the company’s extended oil drain program. “Our oil program was started by maintenance planner Scott Holland, and Buz Shaw, our concrete branch technician, who said, ‘we need to do something better,'” Wulf says. “They got their heads together and wrote a proposal for the installation of bypass filters, and the testing of several different brands of oil, to come up with the best combination of efficiency and profitability. This was presented to the maintenance team and branch managers, who gave their immediate approval.”
Holland and Shaw studied extended oil drain intervals, filtration issues, high performance lubes and oil. In benchmark studies, they found other companies were extending drain intervals three, four and five times the norm at Graniterock. As a result, they put together a program that saves the company hundreds of thousands of dollars every year.
From technician to manager
AMECO reinforces the importance of training by giving everyone from the technicians to the managers a training-based career ladder that will take them as far as their talent and ambition allow. Forty hours a year is the minimum, “and we don’t complain if you ask for 70 or 80 hours,” says Pat Monnot, vice president of operations.
The company also identifies high potential candidates with its people development board, and puts them on a path to get the training and mentoring they need. “If the regional boards come up with a gem, then the corporate board may start tracking them so they can be trained to move up to the executive management team in their region,” Monnot says.
One thing that helps AMECO retain its best people is establishing a clear set of expectations and a career path they can follow. “It’s not like the union where you’re hired to stamp out fenders and you spend the next 35 years stamping out fenders,” Monnot says. “You have the opportunity to be anything you want, and we offer you the training to get there, including college-level training if it is related to their field of work.”
Leadership, communication skills
For technical skills, AMECO relies on OEM and factory training. But you don’t go far into the company’s system before management training is required. And for managers, there are dozens of skill sets to master, including negotiating, writing, communications and leadership.
“We try to develop the skills needed to move up to the next level,” Monnot says. “We’re placing a lot of emphasis on the ability to read and understand balance sheets and financial statements so we can drive accountability further down into the organization.
“It’s hard to make somebody accountable if he doesn’t get financial statements and he doesn’t understand them. And the only way you can give them a way to be promoted is to give them the ability to be accountable. You’ve got to drive that responsibility down, and the only way to do that is to enhance people’s skill level.”
2. SAFETY
Talk about safety and the sparks fly.
Every one of the five equipment managers we spoke to pursues an aggressive safety program, and none sees safety programs as a burden. Their commitment is communicated loud and clear through all levels of their organizations.
Family involvement
“Safety is number one in all facets and aspects,” says Larry Knight, equipment manager for APAC Corporate. The program is similar to that of most large construction companies, with an in-house safety department, a safety director at the corporate level, a safety manager and safety action teams in each division, plus regular tailgate meetings both on the worksites and in the shop.
But APAC takes it a step further and gets the families of the workers involved.
According to Knight, workers who are worried about spouses or family problems or workers who leave the house with a bad attitude in the morning are not going to be as safe and as focused on the job as they might be otherwise. “Safety is related to family life,” he says.
To get families to buy into the company safety philosophy, the different divisions host a once-a-year safety picnic and use that venue to talk about safety with workers’ spouses and families.
Peer pressure and plenty of it
“Safety is part of the culture at Fluor,” Monnot says. “We drive safety into everything, including making it a measurement in the performance bonuses.” And a lot of the company’s outstanding safety record can be attributed to peer pressure.
“You don’t want to be the guy who breaks a 30-year safety record,” Monnot says. “We had one lost-time accident last year. The guy who caused it got the honor of standing up in front of everybody in a country-wide safety meeting and explaining to executives and everybody else what happened and what you need to do so it doesn’t happen again. Do that and they realize you’re serious.”
Another example Monnot cites is AMECO’s recent move into Jamaica where the company took over a telecommunications firm with a fleet of vehicles and drivers who were having five to six minor accidents a week. The first guy to have an accident under AMECO’s watch was fired immediately.
“Ordinarily we wouldn’t have terminated the guy, but we were coming in brand new and we decided to set an example; make them realize that as management we are dead serious. Once employees realize management is serious about it, they become serious about it.”
Inspecting for safety
A new safety program being developed at Trumbull will extend safety to the iron itself. “We’re implementing safety inspections on each piece of equipment,” Decker says. “We’ll pull a piece out of production and do a complete safety inspection from brakes to tires to glass, fire extinguishers, the seat and seatbelt. That even includes the rental pieces. It’s done in the field every 500 hours or six months.”
3. EQUIPMENT STRATEGIES
Whether it’s calculating lifecycle costs, negotiating with dealers, or deciding whether to buy, rent or sell, equipment managers must make hard decisions fast. They have to know to the penny what things are going to cost and then figure out how best to spend the millions of dollars at their disposal.
Severity based service
When it comes to equipment use, most contractors keep tabs on a machine’s operating hours and maintenance costs. Dale Warner, corporate equipment manager for C.J. Langenfelder & Son, bases lifecycle and maintenance calculations on the amount of fuel consumed, a program termed “severity based maintenance.”
“When a machine burns X amount of fuel, it needs to be either rebuilt or replaced and that’s how we pinpoint when it’s ready,” Warner says. “We only use engine hours for one thing and that’s to check utilization.”
So the oil on a machine that’s burning 18 to 20 gallons of fuel an hour will get changed twice as frequently as a similar machine that’s only using 9 to 10 gallons per hour. All other maintenance is based on a multiple of the fuel consumption rate. But to avoid any unanticipated problems, Warner says his technicians sample all the fluids every time the oil is changed.
The savings with this approach add up quickly. “If you take a machine with a 10-gallon crankcase, change the oil and filters and sample, that costs about $609,” says Warner. “If you do that every 250 hours, that’s 40 oil changes over the 10,000-hour life of a machine. With severity based maintenance we’re averaging about 28 oil changes. That’s a savings of more than $7,000 over the life of the machine. Now multiply that times 900 machines.”
An additional benefit of extending the drain intervals, Warner says, is that it gives his technicians more time to attend to other chores such as greasing and inspections.
Buy, rent, sell or buy used
To determine whether to keep or sell a piece of equipment, most managers calculate the cost per hour. “If you don’t know what it’s costing you, you don’t know how much money you’re going to make,” Knight says.
Part of this equation is the use of rental equipment. But the decision to rent or not to rent and to rent short or long term varies from company to company and sometimes from year to year or job to job.
At Trumbull, Decker says rental, in addition to saving on taxes and cash flow, enables him and his operators to evaluate machines they haven’t tried yet. “We did a big productivity study last year to compare brands of articulated trucks we rented. We ran them across scales to get payloads, put them through a time study from load up to dumping and had our operators do different tests of steering and dumping to find the best of the best.”
In the five years he’s been with Trumbull, Decker says he’s run such tests on everything from dozers to forklifts. “If you make a decision and it’s wrong, you have to live with it for at least five years to get your depreciation out of it. So it’s best to do all the studies beforehand,” he says.
Dealer relationships
All five of the managers we talked to relied on dealers for parts and warranty and major component rebuilds. But beyond the technical support, these managers say a good relationship is critical to keeping their business.
“When you are running 24/7, you have to have the dealer support and parts 24/7,” Warner says. Arrogance and a “holier than thou” attitude, he stresses, are the surest ways to lose his business. That, and not stocking wear items. “If you have to backorder a wear item – and I’m talking fan belts, hoses and cutting edges – then I don’t need to deal with you.”
At AMECO most equipment purchases are handled at the national accounts level, but the company still relies on dealer delivery and warranty services. “What we want from a dealer is value added – training, component rebuilds, or something extra,” Monnot says. “Then I don’t mind them injecting a dealer into the process. But if all a guy is going to do is get 5 percent and go sit on his thumbs, I don’t want to talk about it.”
One of the toughest problems multi-state or multi-national companies like AMECO face is warranty service. “When you’re moving pieces of equipment around, there’s all kinds of fist fights about who pays for the warranty,” Monnot says. “Some dealers meet you at the gate and want to help you. Some just want to collect their percentage. The ones that want to do the right thing are the ones that impress me.”
4. THE BIGGEST CHALLENGES
Few people in any business have to answer to and communicate with as many people as the equipment manager does in a construction company. He’s got to work with operators, technicians, accountants, engineers, executives and owners.
Communicate, educate
Communicating up and down the chain of command is crucial, Wulf says. “You need to be involved in your company. Equipment and asset management involve so many different aspects of the company; it’s not just fixing a dozer. There is the accounting side, the fixed asset side, parts and inventory. More and more of that falls on the equipment manager.”
Monnot agrees and adds that communication with the customer is also a challenge.
“Quality is what the customer perceives it to be. Get clear expectations from both sides, then you can do away with those problems,” he says. “We have customer/client reviews and we bring in outside people – not the people on the project – to talk to them and find out where the holes are. You have to learn to listen to what the other guy wants.”
Uptime is everything
“My number one challenge is uptime, to keep every piece available when it’s needed,” Knight says. “If we have a loader break down sitting at an asphalt plant then that asphalt plant is down. You have four or five crews of six or eight people per crew plus four or five pieces of equipment per crew sitting waiting on that plant – and you’ve got a problem.”
Knight says he strives for complete acceptance or buy-in at all levels. “If an operator is used to a certain type of equipment and you put something in there he’s not familiar with, doesn’t like or hasn’t been trained on, then that piece probably isn’t going to live,” he says. “That works from the basic operator level all the way up to the top of the corporation. If everyone is not aware of what you’re doing and not happy with what you’re doing then it’s just not going to work.”
Information overload
Monnot, who has been in the business 37 years, thinks the skills an equipment manager uses today are not that different from the skills used 25 years ago. What changed, he says, is the amount of information available and the managers’ response to it.
“It used to be we would make decisions on half the facts and half guess or use a rule of thumb,” he says. “Now you can get so many facts that if you don’t learn to crunch numbers and run a computer, you’re going to get swamped and you can’t make a decision. It gridlocks some people.”
Decisions are best made with somewhere between 50 and 70 percent of the data, Monnot says. “If you have less than 50 percent of the data, you probably made the decision with inaccurate data and you probably made the wrong one,” he says. “And if you have more than 70 percent of the data, you waited too long and the problem is probably out of control.”
