How to Forge a Partnership

Sept. 26, 2014

The most difficult of all the questions I get asked relate to the “us and them” problem between equipment and field operations in a construction company.  “Equipment” believes that they are doing all they can to manage the fleet and reduce cost; “the field” believes that machines break down too much and that rates are too high.  “Equipment” needs time for maintenance and repairs; “the field” insists on time for production.  “Equipment” sees the fleet as family, “the field” sees the fleet as a self destructive means to an end.  The list goes on and on and many good people get frustrated and disillusioned.  Good companies address the issues and get them right.  Bad companies let them simmer and hope they will go away – this seldom happens and relationships deteriorate to the stage where company goals disappear under a flood of “us and them” accusations.

There are clearly many differences between equipment and field operations but nothing is achieved by emphasizing these differences and forgetting the fact that the two groups are interdependent and part of a single organization.  Productions achieved with out regard for the cost of equipment and equipment management decisions that do not support operational goals make it impossible for the company to succeed.  Success requires a close and understanding partnership.

Let's look at seven things that can be done to strengthen the partnership and help equipment and field operations work together.

1. Emphasize common interests.

Equipment and field operations certainly have different responsibilities.  Equipment manages the fleet, maintains it, fixes it and moves it around as needed.  It is responsible for availability and reliability and for the hourly owning and operating costs throughout the life of the machine.  Field operations use the equipment to produce completed construction on time and on budget.  Production, unit cost and schedule are paramount and project requirements are seen as more important than equipment life cycle decisions. 

Focusing on the differences in responsibility detracts from the simple fact – equipment and field operations share and contribute equally to the principal company objective – undertaking and completing construction projects by employing the necessary resources in an efficient and effective manner.  Placing the shared common interest of the company first makes it possible for equipment and field operations to value the contribution that each makes and emphasizes the fact that the two groups are mutually interdependent – nothing is achieved if one succeeds at the expense of the other.

2. Balance responsibility and accountability.

In an ideal world, responsibility for action is directly linked to accountability for results.  Equipment management is, however, far from an ideal world and the linkage between responsibility and accountability is confused by the fact that equipment managers are often not directly responsible for decisions that affect over 70% of the equipment budget.  Undercarriage and tire costs are a good example – equipment managers can influence these through good maintenance and well timed replacement but the majority of the costs depend on the work done by the machine and the way the machine is operated – two factors over which equipment managers have little or no control.

Understanding that responsibility and accountability can not be precisely aligned, splitting and managing owning and operating costs separately as set out in the October 2003 article and using dual rates to keep control when utilization changes as described in May 2004 help in developing a shared sense of commitment.  Equipment managers should carry single point responsibility for their budget but field operations must accept their role in causing equipment costs to be what they are.  The field can not hide from the impact that their decisions have on equipment cost behind the equipment manager’s accountability.  

3. Accept that equipment works hard.

Equipment is designed and built to work hard and produce efficiently.  If a car has traveled 100,000 miles at an average speed of 45 miles per hour then it has run for 2,500 hours – hardly a good years work in the life of a loader, dozer or excavator.  You must expect failures and, to a certain extent, equipment is a self destructive means to an end.  The end should, however come as late and as cheaply as possible and nothing is achieved by deferring maintenance, over applying the machine or condoning abuse in the name of increased productivity.

Equipment managers must accept that machines work hard and they need the resources and skills needed to keep them up and running.  Field operations must accept that “designed to work hard” does not mean “indestructible.”  No machine can withstand over application and abuse and it is important to understand that seemingly “little things” like applying out of line loads on a hydraulic hammer or using the side of an excavator’s bucket to move material can dramatically shorten component life. 

4. Recognize and manage abuse.

Everyone has their own opinion about the line between fair wear and tear and abuse.  “They” think fair wear and tear includes everything short of sabotage; “we” think abuse includes just about everything including the structural cracks resulting from a tough rock job.  A heavy focus on abuse will result in constant back-charge battles that achieve very little.  On the other hand, blurring the line between abuse and fair wear and tear and not taking action will spread the costs over the whole fleet and thereby reward the guilty and penalize the innocent.

Abuse must be treated for what it is – unwarranted, unnecessary and unacceptable.  Instances of abuse that cross the line should be recorded, discussed and agreed.  This will achieve two things.  First, it will define the line between abuse and fair wear and tear and, second, it will establish the facts needed to ensure that the responsible parties carry the appropriate costs.  Equipment abuse and job safety go hand in hand.  Neither is negotiable.  Both field managers and equipment managers must establish a clear understanding of what is and what is not acceptable.

5. Focus on prevention and provide the time.

Fair wear and tear, the effect of heavy application and abuse add up.  Failures do not occur right away but, rest assured, they will.  A preventive mechanical maintenance program (see September 2004) relies on two things – first, the ability to predict failure and, second, the time needed to take preventive action.

Focusing on inspection and prevention is of no use unless there is a corresponding commitment to release the machine from production and provide the time needed prior to failure.  If this is not done, the machine will take matters into its own hands and release itself from production for what is certain to be a less convenient, longer and more costly breakdown.

Mechanics and equipment managers bear the brunt of the criticism that arises when machines break down.  It is, however, important to realize that they no more cause failures than doctors cause disease.  They, like all of us, they prefer to work in an orderly way without constantly fighting fires – this requires communication and cooperation so that time is available to take action when needed.  

6. Recognize the reality of cost.

How often have we looked at the repair estimate for a prematurely failed transmission and wondered at the cost involved.  The costs were, in fact, incurred months before when wear and tear, overloads, bad haul roads, untrained operators and many other factors caused the costs we must now meet.  

Repair costs are incurred in the field while the machine is working.  The mechanic can be efficient, can do quality work and can make good decisions; but there is not much that can be done about the fact that the transmission needs to be replaced, that it will cost $30,000 and that it will require the machine to be down for five or six days.  It is a fact of life – and the facts were written one hour at a time over the last 4,000 hours.

Squeezing repair costs to meet budgets and rushing repairs to get back into production are not wise things to do.  Doing the right job once is better than doing too little too often. Everyone needs to realize that the costs are real and the necessary time is unavoidable.

7. Develop a common language.

Many companies develop field managers who know how to run productive and safe operations and equipment managers who know how to run reliable and cost effective fleets.  Successful companies focus on a partnership between the two and make sure that they have a common language and a shared understanding of what is necessary for the company to succeed. Equipment managers must know project requirements and the pressures of completing work on time and on budget.  Field managers must know the owning and operating cost calculation and how their decisions regarding utilization, operation and application affect the actual owning and operating costs experienced by the company.  They must know the importance of maintenance and understand that delaying action reduces reliability and increases cost. 

Both parties must understand that they work for the same business and that, while their responsibilities differ, they share and contribute to the same success.