Quality Benchmarking

May 23, 2014

Reprinted with the permission of Equipment Manager magazine, the magazine of the Association of Equipment Management Professionals.

Jeff Jacobsmeyer, product specialist with Case Construction, has viewed quality benchmarking from every point of the Equipment Triangle. He once worked at a Case dealership, owned his own business “and made a living running this stuff.” In late 2011, Jacobsmeyer returned to Case, this time on the manufacturing side. He became a product specialist in 2013.

In the days when he used to buy and operate equipment, one of the first things he noticed about a machine was its curb appeal. A good fit and finish of the product ranked high on his list, he says.

“When you walk up close to it, you can recognize good engineering,” he says. “You can see how all of it comes together to complete the unit. The machine is a reflection of the owner,” he says. “When you roll up on a job you want the machine to look good and you want to look good. To me, that’s a benchmark.”

As an equipment owner, he also paid attention to serviceability and operator ergonomics.

It is important for technicians to be able to access regular maintenance items, he says. “If your operator is going to run the equipment, it has to be ergonomically correct,” he adds. “Throttles and switches should be in an industry standard location. The operator spends a lot of time in the machine. Plenty of creature comforts is very important to a fleet owner.”

Application was yet a third criteria with Jacobsmeyer. The end user needs the machine to fit the job, but the machine still must hold its value. That allows the fleet manager to make a decision on whether to keep spending money on repairs or treat it as a “throw-away item.”

“When the machine comes out of the box—with the exception of a loose bolt here or there—it should be ready to work in the field,” he says. “And after 400 to 500 hours of operation, it should be relatively trouble-free if it’s a quality product. There shouldn’t be any component failures.

“When you buy a large excavator it should run 6,000 to 7,000 hours. But if suddenly you are replacing track motors on more than one type of brand, that’s not good. To measure deficiencies like that, you have to look at downtime failures and total cost of ownership,” he says.

“Believe it or not, a fleet manager doesn’t buy this stuff just for fun. The machine has to support itself. When I owned my business, at the end of the year I would look at the income of each piece and make a decision on what I had to do: sell it or repair and keep it.”

In measuring quality in the field, he says, you rate yourself against the competition. For example, you want to make sure the machine is spec’d properly and performs with or better than the competition and that you are getting the best value for your package.

“For instance, if it’s a 10,000-pound excavator, I want to see impressive break-out forces, good horsepower ratings—everything at or above the industry standards,” he says. “Sometimes a smaller machine can deliver more performance. That’s a big deal. You have to be a leader in your class on spec’ing when you look at equipment.”

Bruce Nelson, general manager of Komatsu America’s Chattanooga manufacturing operations, says the company has many levels of quality benchmarking before the equipment ever reaches the customer.

“As with most manufacturers, in the design phase Komatsu benchmarks itself versus our previous models and our competition,” Nelson says. “Since I am the plant manager in Chattanooga, I am more concerned about quality benchmarking against our customer expectations and against other plants in the Komatsu world that manufacture the same products.We can leverage the talents of many people across many plants to share data and work together to continuously improve our quality.”

To measure quality, Komatsu uses industry standards as well as KOMTRAX, its telematics system that not only identifies potential issues but also suggests ways that Komatsu can help customers maximize machine efficiency operation by minimizing, for instance, idle time.

Measuring quality is important because without doing it, “no one can determine if they are improving or falling behind,” Nelson says.

“Understanding where you are makes it much easier to see where you want to go. We can never sit back and rest on past achievements.”

When internal issues or parts-supplier issues arise, the goal is to keep customer fleets up and running and minimize any impact on the customer’s operation, Nelson says.

“The key to addressing shortcomings is to find the root cause as soon as possible,” he says. “To do that, we use all groups working together to develop a solution that addresses the needs of the customer.”

Andy Benko, quality director for John Deere Construction & Forestry, defined quality benchmarking as “a process of comparing OEM solutions, products, services and processes against competitors and leading organizations.”

“The benchmarking process [at Deere] provides insights that guide how we define its quality metrics and goals in targeted segments around the world to satisfy customer and business needs as we align to our company strategy.”

Quality benchmarking can be measured on four levels, he says: designed-in quality, delivered quality, quality over time and performance quality over life cycle. This is measured by the number of failures per unit, total returns and allowance costs, policy costs and by using B20, which is a measure of component durability performance time from the initial few hours of operation and quality experience from the customer’s perspective.

Benko says deficiencies are measured, analyzed and reviewed in any one of these categories through the use of statistical tools and, if needed, appropriate action is taken to close whatever gaps surface.           

Measuring deficiencies is imperative, Benko says, “to define critical quality metrics, to set goals, to validate measurement systems and to quantify current and forecasted performance, all of which ensures we are making progress toward our goals and quantifying shortcomings for potential action.”

Thad Pirtle, this year’s AEMP chairman, says his company, Traylor Bros., first established a benchmarking program in 2008. That program and measuring its quality is similar to—and just as important as—an insurance program.

Mickey Hammers, equipment coordinator at Traylor Bros., bears the responsibility for overseeing benchmarking efforts across the company fleet of more than 3,000 units.

Obviously, Hammers says, you must establish a baseline to understand if you are improving or not. That baseline at Traylor is anchored by historical data. The benchmarking system is also used to compare against its dealers, he says.

In general, Traylor inspects the equipment upon arrival and departure from the yards, jobs, dealers and/or other storage areas. The inspections are reviewed and deficiencies recorded.

“We track the number of deficiencies, major and minor, as a percentage compared with the number of equipment transfers for a given year,” Hammers says. “The goal is to have 100 percent of the equipment ready to go to work upon arriving at the job, which correlates to 0 percent deficiencies.”

Major deficiencies are those that are safety-related or cause the equipment to not be work-ready. Typical major issues are missing safety guards, decals, structural damage or if equipment will not start. Minor deficiencies are those that are not going to keep the equipment from working but need attention when available. Typical issues could be, for instance, poor sheet metal, faded paint or a damp hydraulic hose. 

“If a crane arrives at a job site and the inbound inspection finds a damaged boom lattice, the crane is red-tagged to indicate out of service,” Hammers explains in another example. “The job site equipment superintendent is notified, and the major deficiency is researched to find out when and where the damage occurred. Once repairs are complete and inspected, the machine is put back into service. The deficiency is recorded in a deficiency log for review.

Having good communication is key in obtaining accurate information to understand the root of the problem.”

Minor deficiencies are more ambiguous at times but are still considered a deficiency. “That counts against our goal of 0 percent deficiencies,” Hammers says.

When it comes to measuring quality benchmarking, Traylor looks at its percentages compared with past years, its goals and its dealers, he says.

“We knew from the beginning that we had to get better,” Hammers says. “We wanted to set a standard for us as well as help the dealers understand what is acceptable within the industry. If a piece of equipment is sent to a job, it should be ready to go to work.”

He says Traylor is running at less than 1 percent deficiencies, “but we understand that even at this percentage field repairs can be costly.”

The importance of quality benchmarking is proven time and again by an old adage, Hammers says: “Time is money.” If a machine is sent out not ready for work, that costs you time and money.

“We are here to support our jobs, and our goal is to be a leader in the industry on supplying ready-to-work equipment.”

In fact, benchmarking is so important at Traylor that it recently started a new process of conducting field audits.

“A lot of our equipment will go to a job site for three to five years,” Hammers says. “What we have found is that some jobs are better than others on maintaining equipment. By implementing on-site field audits every three or four months, we can establish an acceptable benchmark on the maintenance performed and bring awareness to project management. It’s much easier to address less costly repairs during the job versus very costly repairs at the end of the job.

“By adding the field audits, we establish quality benchmarking with job site maintenance, just as we have done in other areas. All of this ensures that ready-to-work equipment is available,” he says.

When it comes to benchmarking, whether for end users benchmarking themselves or dealers, or for a dealer or manufacturer benchmarking against competitive brands, the key word that should run throughout the process is quality.