Ryan Inc. Central is the kind of company that defines its core business and outsources as much of everything else as possible — fueling equipment, some preventive maintenance, and most major-component repair. But when Greg Kittle, the "Giant" earthmover's equipment manager, called for better, more current information to support important fleet decisions, the company decided to write its own equipment-management software.
"Information flow and the interpretation of that information provides a quantitative competitive advantage," says Kittle. "We need high-quality information in real time that can be acted upon."
Off-the-shelf equipment software didn't supply what Kittle considered essential information to properly manage a fleet.
"I believe there are several key elements to effective fleet management," says Kittle. "Develop durable partnerships with equipment vendors. Recommend machines that are highly productive. Develop acquisition and disposal strategies that support the company's equity-management goals. And ensure that the customer receives the value that was intended — this is an operating and production cost metric."
"We're always building equity in a machine as we move forward, even with rentals and leases," says Kittle. "And because our equipment needs can change at any time due to weather or job schedules, we want to know our equity position in each of those machines all the time — every day — in case we should have to buy or sell a machine."
Kittle oversaw development of Ryan's fleet-management software, called Iron IQ. The system would eventually digitize most of the equipment-operation's paperwork — things like tracking fuel use and hour-meter readings, work-order processing, and ordering and paying for parts. Equipment-department field data is gathered using Nextel phones with bar-code readers attached.
"Iron IQ tracks all of the costs and credits [revenue and residual value] to each machine every day of its life," says Kittle. "It gives us an accurate idea of actual fleet values so we know where to invest, and when."
The Web-based software accumulates cost inputs such as fuel, oil, maintenance and repair by machine ID number thanks to bar codes on each machine. It correlates productivity based on Kittle's production studies with work hours recorded by hour-meter readings from fuel and lowboy drivers, and from Qualcomm units.
The system regularly imports current market pricing (auction results) for machines like the ones in the Ryan fleet. Iron IQ uses all of this data to calculate an actual return on investment, including residual value, for each Ryan machine. It compares this number to the estimated ROI used to justify acquiring the machine to see how each equipment asset is actually performing in terms of dollars and cents. Kittle believes this comparison is the key to practical decisions — repair or replace, rent or buy, convert a lease or return the machine to the dealer.
"These are decisions equipment managers make every day," says Kittle. "The software just organizes and presents all the information we need to make each one of those decisions quickly and with a very high degree of accuracy."
The software touches all of the day-to-day equipment operations such as preventive maintenance and oil analysis because each expense affects the machine's ROI. In typical Iron IQ fashion, it does so automatically.
When the time comes to pull an oil sample from a machine, Iron IQ sends an electronic alert via Nextel to the maintenance manager in the region where that machine is working. The technician swipes the bar code on the machine before starting to work, draws fluid samples, and swipes the bar code on sample bottles to attach the machine ID to the samples.
Laboratory technicians at Ryan's oil-analysis vendor swipe the bar code on the sample bottles, attaching the machine ID to the analysis information. When the analysis is complete, the laboratory's computer communicates the results to Ryan's computer.
"Wear-element information and particle data goes to our software digitally, gets fed into our algorithms (based on Caterpillar's classic combinations of wear indicators), and is interpreted by the software," says Kittle. "If necessary, the system generates an action. If a sample shows high coolant, for example, the software generates a work order to change the oil and a repair order to find the source of coolant."
Ryan's fuel vendors use Nextel and bar-code readers to tag each gallon of fuel they pump to a machine ID. The data generates their invoices, and the hour-meter reading the fueler punches into his keypad with each fuel stop is correlated with the gallons pumped to compute fuel consumption for every unit. Nextel's GPS chip identifies where the machine is located.
The process complements information gathered by Qualcomm's GlobalTracs asset-tracking systems. Ryan has 500 units with Qualcomm boxes installed. The investment significantly enhanced accuracy in Ryan's cost accounting.
"We saw utilization increase exponentially with the introduction of Qualcomm," says Kittle. "We paid for the Qualcomm boxes in six months just with the increased utilization on small equipment."
Iron IQ's automated data gathering eliminated several thousand hours of data processing at Ryan in 2005. It eliminated 3,000 hours of vendor data processing. One result, Kittle points out, is that Ryan pays significantly less than the street price for fuel service.
"Saving our vendors money is important to Ryan," says Kittle. "That's how you build partnerships. It also allows us to negotiate service charges — we expect to get some of the benefit of saving them money."
The company extends that courtesy to its own customers. Ryan works exclusively for private developers and firms, and most contracts are negotiated rather than awarded based on bids.
"Ryan's company objective is to continue to improve productivity for the benefit of our customers," says Kittle. "Their continued prosperity ensures our own."
