Barriere Construction's Ben Tucker is finding that predetermined machine lives are not only a key to cost-effective fleet management, but they reduce the risk of downtime when cutting costs in hard times.
Some will not be impressed once they discover that three years and 5,000 hours is not uncommon for the planned life of some Barriere machines — milling machines, in fact. Tucker replaces pavers and vibratory rollers at 4,500 hours, about every 3 to 3.5 years. But before you scoff that there is plenty of life left in machines at that stage of their lives, remember that Tucker manages Barriere's fleet of 190 machines with a staff of just seven, and no shop.
Major pieces in the Barriere fleet are purchased with full-service contracts. Tucker negotiates a guaranteed buy-back price at an agreed-upon age.
"Factors affecting the sweet spot (the replacement point) include depreciation and market residual values — on the ownership side," says Tucker. "Then you look at your spikes in maintenance cost. You have to know about when failures tend to happen — when components start to fail."
Detailed knowledge of real reliability — reliability the firm can reasonably expect with minimal investment in staff maintenance expertise — is the heart of what makes the Barriere organization a Fleet Master. The information infrastructure is fairly simple — a digital work-order function that's part of the equipment-management module of Explorer Software's Contract Manager construction-enterprise management system. Disciplined use of work orders since 2000 has developed a base of fleet knowledge from which Tucker and his equipment coordinators can make decisions that shave costs with accuracy.
Tucker says it took the first four years of issuing work orders and coding them by priority (on a scale from 1 to 5, with 1 being an emergency, 2 being something to address within 24 hours, and 3 a priority for sometime in the next three days, etc.) for him to develop effective sweet spots for each of Barriere's 30 major machine categories.
The most important statistics for evaluating the sweet spot: mean time between failures (average time from one failure to the next, by machine class), mean time between corrective repairs, and actual component lives.
Fast-developing technology in some key machine types also influences when Tucker plans to replace asphalt pavers, excavators and other earthmovers.
"With some of the information you can get out of excavators, they're faster than the operator can react now," Tucker says. "And I know my efficiencies and productions are up with automated machine controls on graders and dozers. The machines are working much harder than in the conventional method."
"We see major changes during the life of some of our major pieces of equipment," he adds, "And we don't want to put a B model out on a job when there's a D model available. You don't want to be behind in two series."
As Barriere recorded experience and Tucker analyzed the numbers, the company settled on some machine lives — including three-year, 5,000-hour intervals for some critical machines like pavers and milling machines. Between 2000 and 2004, average fleet age fell from 7.5 to 5 years. Percentage of work orders that required emergency response fell from 60 to 11.
In the rush of new business pre-Hurricane Katrina and the triage months after the disaster, average fleet age dropped to three years. As if to prove that you can't buy reliability, though, emergency work orders climbed to 17 percent of the total.
"After Katrina, we lost a lot of people and equipment," Tucker says. "We replaced people and equipment but we didn't go through our training processes. We weren't doing our auditing processes. Fleet age was lower, but we were having more break-downs."
Being able to audit the work-order system, and backing it up with some oil analysis and failure analysis, quickly identified over-application and other operating problems that were cutting reliability. Operator training and auditing work orders resumed. Average fleet age has extended about a year even as the percentage of emergency work orders has fell to unprecedented lows.
Scrutiny of emergency work orders will redouble in the coming months, as Tucker recently increased expected machine lives in most categories by at least a year. Barriere's owners came to him last fall when the economy headed definitively south, looking for significant savings in the equipment budget.
"Using historical data, I'm learning that I can keep machines a little bit longer without problems," Tucker says. "It has allowed me to start extending life."
He committed to a 25-percent reduction in the 2009 capital budget, even though the recession has yet to slow fleet use. Unless they see drastic increases in the frequency of repairs — measured as mean time between failure with the work-order system — he plans to stay with the modified sweet spots for two to three years.
"But I'll revisit the decisions at least every year, and I may have to re-adjust," Tucker says. "It all depends on maintenance cost. We have to decide if this was worth it or not (whether it actually saved money, or just shifted cost to maintenance and downtime)."
"I'm still working on putting a value to the maintenance end of the savings right now," Tucker says. He renegotiated specific aspects of his maintenance contracts to reduce labor costs, selecting some types of repairs for which vendors should send mechanics on Level B or Level C pay scales.
"I don't want to pay a Level A mechanic to change a lightbulb," he says, "but I'm keeping a Level A guy on preventive maintenance (PM) work.
"PM's the most important kind of work — it overrides everything," Tucker says. "I live and die by that."
|Reasons to Restore TPR|
|Year||PM||Corrective||Emergency||Avg. Fleet Age|
|Source: Barriere Construction FleetMasters entry|
2004 profile tells how Barriere enlisted operators in preventive maintenance
2007 profile explains how Barrierre revived fleet reliability