Kris Hay didn’t set out to be director of fleet for Brubacher Excavating, Bowmansville, Penn.; when he signed on as a dozer operator, it was with the goal of being a project manager. The operator position was actually a step back for him, as he’d been a manager outside the construction industry.
But Hay had a plan to learn his new industry—by immersion.
Our inaugural class of Under 40 in Construction Equipment winners was announced last year. These young people, all under the age of 40 as of the end of 2013, represent
exciting potential for the industry.
This is another in a series of profiles highlighting some of the winners.
“I did not come from a construction background, so I needed to work my way up and learn as I went,” Hay says. “My background was in agricultural mechanics, so I’ve always had a love for equipment and mechanical things.”
He spent two years as an operator, then moved up to supervisor, and then pursued his goal of project management as an estimator/project manager. Hay took knowledge from each position. When the director of fleet position opened up, he interviewed and won the job. Just eight years in, at age 37.
“Everything I did along the way has been useful,” Hay says. “The background in estimating was valuable in that a lot of what I do is estimating, setting up our rates, and looking at costs and spreadsheets. I set the equipment rates that estimating uses for the next year, so that’s an estimate in itself. Project management helped with working with budgets. I’m responsible for the budgeting for the fleet.”
Brubacher has 150 primary and secondary pieces of equipment, 100 light vehicles, and about 50 F-450 and larger trucks. The fleet department has an estimated replacement value of more than $40 million, and a budget of more than $10 million a year. Brubacher is involved in earthmoving and utilities; construction surveying and stakeout; land clearing and demolition; drilling and blasting; asphalt paving and milling; HDD; vacuum excavation; pipe fusion; and heavy haul services.
Insights from the cab
“I’m involved in training with our operators, so coming from an operator position was very valuable in order to ‘talk the talk’ and know how to try to point out operating techniques,” Hay says.
Having an operating background has also helped him understand the pressure to complete jobs and empathize with those in the seat.
“I know there are times when you need to really max out the capabilities of equipment, and that’s what it takes to get the job done,” Hay says. “There’s a difference between misuse and abuse, and sometimes that gets a little gray. It gives me a good grounding in that if guys are checking fluids, doing walk-arounds, and taking care of the equipment properly, there are still going to be things that happen, and we need to understand that.”
While Hay served as project manager, a new business unit was created. “It’s for the dedication process before a township assumes ownership of the public improvements; certain work has to be completed,” Hay says.
“We started bidding that work and created a database in our bidding software covering paving, replacing sidewalks and curbs, and converting basins, and came up with processes and procedures to efficiently do that the work in the field. It’s also the whole process of managing the inspectors and the townships. Probably the biggest risk in that kind of work is having documentation that you’ve completed the work they requested,” he says.
Hay relates a typical case about the oft-adversarial relationships between the developer, the homeowners’ association, and the municipality. “When there’s 10 feet of curb that needs to be replaced, it’s not hard to tell when you just did the work, but a year later when there’s a piece right down the road that fails, then there’s the documentation issue. We need to show we replaced the piece [the township] wanted replaced. My job was to manage that for the customer and make their job easy,” Hay says. The dedication unit within Brubacher now has 12 to 15 employees.
Equipment fleet finances
Hay’s estimating and numbers background helped him make corrections in the job accounting process that have been instrumental in streamlining equipment rates.
“We were trying to have pickup trucks, which are every fleet’s headache, put on job logs, and it just wasn’t happening,” he says. “Our solution was attaching pickup trucks to labor burden.”
It’s all about accuracy and placing costs where they truly belong.
“It was money Brubacher Excavating was spending one way or another,” Hay explains. “We’re still spending that money, so it’s not found money, it’s just that we’re getting the cost to the project, which really is, in my opinion, the name of the game.
“If we’re going to know the cost to put a foot of pipe in or move a cubic yard of dirt, we have to be able to accurately get those costs from the fleet side of things to the project. We don’t get free stone, we don’t get free blacktop—and we don’t get free pickup trucks.”
The philosophy at Brubacher is that the fleet is a zero profit center, and Hay sets equipment rates based on that. His goal every year is to break even, and he’s made procedural adjustments to keep rates as low as possible. For example, Brubacher is a dual-rate fleet with an ownership charge and an operating charge.
Each year, fleet and Operations compare the number of average ownership hours logged for each class to the targeted ownership hours logged with the goal of tweaking the target rate up or down.
“I have a self-imposed rule in regard to rates: I don’t change rates significantly without a serious group discussion,” Hay says. “It’s not fair to Operations to have a rate that’s $70 an hour in December and it magically becomes $90 in February.”
Brubacher also capitalizes undercarriages to try to level out major expenses. “I also do, as [Construction Equipment contributing editor] Mike Vorster recommends, the sum of digits for depreciation on the ownership to also try to level out our ownership versus operating costs,” Hay says. “I spend a lot of time trying to level that out, whether it’s average age of the equipment in a class, or how we cost it, to try to avoid peaks and valleys.”
Transparency in fleet management
Consistency and transparency is very important to Hay and his fleet department.
“It was never a big secret at Brubacher so far as what rates were,” Hay says. “I think I’ve become a lot more open explaining how rates were calculated, in order to avoid gamesmanship with logging equipment. By explaining and showing how we come up with our ownership rate, our field managers understand how their accurate records impact many other aspects of the business.
“The responsibility of the fleet department is to manage and educate all stakeholders in the selection, use, and care of equipment to minimize costs. It’s very simple math; you divide your cost last year by the hours it ran and there’s your cost per hour. So I try to be open and educate people with that, and also how taking care of their equipment affects future rates” Hay says.
Hay also simplified the accounting for rental situations, and attachments. “If there’s an attachment such as forks for a backhoe that don’t need to be logged, we’ve made them $0 per hour in the system, so that if someone does accidentally log them, it doesn’t hurt them,” he says. “Everything we have has a number on it, so theoretically you could log your forks, your bucket, your backhoe, but that comes as a package when you get a backhoe at Brubacher. You only need to log the backhoe.”
In addition, when Hay publishes equipment rates every year, he shows what the fuel cost per hour is. This helps drive home the need to minimize idle time.
Hay also has an affinity for the technicians who perform field repairs and services. Once a quarter, he picks out a technician and rides with him on a day’s service calls.
“I help them with what I can,” Hay says, alluding to his background in agricultural mechanics. “And it’s always good to keep in mind what other people are going through. You can forget what it’s like to lay in the mud, or why something takes as long as it does. It’s a good use of my time and also gives me a chance to spend some windshield time with them between jobs. Things can come up that maybe they wouldn’t have the courage to talk about just seeing me in the hallway.”
Hay graduated from Penn State with a degree in ag mechanization. “I utilize things from that background all the time; we build things here and it gave me the confidence to build and design,” Hay says.
“Last year we built an emulsion spray bar for a water truck we have, for dust control on roads. There’s no difference between that and calibrating a sprayer for applying Roundup on your field. The processes were exactly the same with flow rates, timing, and pressure.
“It saved a lot of money over buying one, and it’s not like we needed the accuracy required to spray tack coat on state highways; essentially it allowed us to meet a customer’s need,” Hay says.
“They asked us if we could do it, and we found a way to do it. That’s what Brubacher is all about, trying to meet the needs of our customers, and in the fleet department, meeting the needs of our customers in Operations.”
Hay’s future plans at Brubacher include selecting a new fleet software program to take advantage of equipment telematics offerings. He’s investigating software and going through demos, but it has to tie-in with his back-office system.
“We have telematics on some over-the-road vehicles and obviously the new equipment that comes with it,” Hay says. “We have six John Deere pieces and eight Cat pieces with telematics. At this point, I’m only set up to get alerts. Until telematics is more prevalent in the fleet, my focus is on idle time reduction. Since only 10 percent of the fleet has telematics, I can’t just single out those operators with too much idle time, otherwise I will have a revolt and nobody will want to run that equipment.
“Telematics is the future, but I think the fleet software has yet to catch up,” he says. “I can’t be going to five websites to see if oil needs to be changed. Plus, you have no history. I want to look and see, out of my 13 backhoes, what was my cost per hour last year, and what’s my average cost per hour over their lifetimes? I need to be able to get that information from one place. Then I can make useful decisions about internal rates, brand slection, and the ideal number of units in an asset class,” Hay says.