Cut Heavy Equipment Operating Costs: Means of Reducing Waste
Business owners — particularly those of a heavy equipment operation — determine success by calculating two sums: gross profit and net profit. Gross profit is the amount of money a company makes. Net profit is how much money the company’s owner(s) makes. While gross profit is of greater importance — because it is the figure indicating total income generated, — the smaller the difference between the gross margin and the net, the greater percentage of the total profit an owner(s) takes home.
Gross profit is important to a company. Net profit is the margin company owners appreciate.
The only ways to reduce the gulf between gross and net profit are to increase gross profit while keeping costs constant or to cut costs. Typically increasing gross profit requires an increase in costs as well. Cutting costs, on the other hand, means keeping gross profit constant while reducing expenditures. While both increasing gross profit and cutting costs can increase net profit, only cutting costs is certain to. Cutting costs mean more money for the owner of a company. Increasing gross profit may or may not as it can often also increase expenses.
With respect to heavy equipment, cutting costs can be the difference between pouring everything back into the company every month and having something to take home.
Obviously, the fact that cutting costs increases net income is no secret. On the other hand, understanding how to cut costs — how to minimize the gap between gross and net profit — is the biggest business mystery of all.
Unfortunately, with respect to heavy equipment operation, there are select few ways to cut costs.
Only Ways to Cut Costs
The biggest expense in heavy equipment operation is labor. But, cutting wages and/or salary mean losing valuable laborers and operators to the competition. The local or regional job market sets salary and wages rates. Reducing the wage/salary of employees — or dismissing employees in the hope of finding less expensive help — is almost a guaranteed means of reducing product quality and quantity. The market value of labor and wages is not something an equipment operation’s owner can determine, at least not to a large degree.
Parts and maintenance costs are not something a heavy equipment company’s owner can manipulate either. The market determines the price of tires, oil, filters, hydraulic hoses, fan belts, etc. as well. While it is possible to find deals, even the best deals do not make a considerable difference over the course of a year.
The second most expensive operating costs — a cost that widens the difference between gross and net profit even more so than parts and labor — is the price of fuel. Every day, week, month and year, wages/salary and fuel costs constitute the vast majority of the difference between gross and net profit. But again, cutting the costs of salary/wage is counterproductive.
The question is, then, how does a heavy equipment operation reduce fuel costs?
Buying Cheap Fuel
Buying inexpensive — cheap — fuel is a dangerous proposition. When considering less expensive fuel, it is necessary to ask why a distributor is selling its fuel at a lower rate per unit of volume. The cost of fuel is typically associated with quality. Diesel with high-sulfur content is almost always less expensive than high-quality, low-sulfur fuel. While less expensive, using high-sulfur fuel comes at a price, engine wear. Sulfur corrodes the internal components of an engine and — once converted to sulfur dioxide — oxidizes the metals in the manifold and exhaust system.
The only means of cutting fuel costs, then, is to use less fuel. There are two means by which to cut the fuel consumption of a heavy equipment operation: improved management and operating techniques and technology.
Management and Operating Techniques for Reducing Fuel Consumption
Depending on how inefficiently a heavy equipment operation is, heavy equipment operation management and operating techniques can reduce fuel consumption a moderate amount or a significant amount. Every dollar saved in fuel goes to net profit, is money for the company’s owner(s).
The most important factors in the fuel consumption reduction formula are the company’s equipment operators.
The best fuel saving technologies on the market — including the Rentar Fuel Catalyst which has produced extraordinary results in both field and lab tests — cannot overcome the inefficiencies of a poor operator. There are a variety of reasons inexperienced and unskilled operators are such a detriment to fuel savings, but every reason comes down to one word, waste.
“Much attention is given to cost control when “waste control” is what owner-operators should be watching,” explains overdrive .com. In even the simplest scenarios, an inexperienced operator who wastes fuels can cause fuel costs to skyrocket.
Idle time is one of the biggest threats to fuel savings. If an operator sits on a machine with the engine running without conducting work, the fuel is lost to non-production, waste. Operator continually makes mistakes and must redo work over and over, waste fuel. If an operator fails to use the most direct route when moving fuel, the extra distance traveled equates to wasted fuel.
How Operators Cost an Operation
There are countless ways a poor operator can increase fuel costs and an equally large number an experienced, skilled operator can save fuel. The formula for determining the quality of the operators is simple. The quality of an operator isn’t how much production they generate in a given amount of time. The test of the quality of the operator is how productive — how much work and operator can do — with a given amount of fuel.
Company owners should not measure how much material an operator moves or how much pipe a crew lays per hour or day. Instead, company owners should measure production against fuel use.
Again, fuel is the second greatest cost of any and all heavy equipment operations so hiring equipment operators that remain conscious of this fact can increase the profits of a company owner dramatically. It is not always possible to hire an expert operator. Most heavy equipment company owners must deal with average and below average operators, at least to fill some of their operator needs.
As such, in order to optimize the performance of less skilled operators, it is important to give mediocre operators a clear understanding of the ideal job site flow.
Jobsite flow, adhering to job site flow best practices, is the biggest factor related to fuel consumption. The less flow, the more fuel wasted. Irrespective of whether an operator is an expert or a neophyte, following job site workflow best practices is an assured means of cutting fuel consumption. The problem is, most inexperienced and poor operators have no idea what job site flow is.
The term job site flow sounds like a convoluted, methodology with an infinite number of variables. In reality, there are only two factors that play into job site flow: distance and time. The shorter the distance a machine travels and the less time a machine sits idle the less fuel it uses. Likewise, the greater the distance a machine moves during each task and the more time it sits without producing work, the more fuel is wasted.
How to Increase Jobsite Flow
Jobsite flow includes things like staging material out of the way; using the right equipment for a job; minimizing idle time; etc. As Case News explains, “Planning to work in a way that achieves the shortest distance traveled, the shortest curve, the most direct route or the fewest obstructions will improve fuel efficiency by completing the work in shorter, more consistent cycles.
The flow should also be situated in a way that minimizes idle time. For instance, two dozers pushing to an excavator that’s loading trucks but can’t keep up with the material being pushed its way can result in the dozer idling to kill time – a waste of fuel that isn’t accomplishing any productive work.”
The more complex the situation at a job site, the more difficult it is to produce job site workflow. However, taking the time to generate a job site workflow plan can pay big dividends with respect to fuel savings. And, on the contrary, failing to create job site workflow can be very expensive.
Heavy Equipment Fuel Saving Technology
In addition to best-operating practices, diesel fuel saving technologies can also increase the gross profit of heavy equipment operation. There are several different devices and some are better suited for certain sectors of the construction, excavation, and development industry, but is applied appropriately, fuel savings can be substantial.
Telematics (GPS) to Increase Heavy Equipment Fuel Savings
Telematics equipment has two purposes relevant to heavy equipment operations. The first is machine tracking. The second is to implement elevation control. Machine tracking is a means by which company owners and superintendents can track the work of a machine over the course of an hour, day, week, or month.
Machine tracking shows the path a machine takes as an operator works, the amount of time a machine sits idle, even the rpm of the engine over the course of a task. By tracking a machine, owners and supervisors can help operators improve their job site flow practices.
Telematics has a second purpose and that implements control. One of the biggest problems new and unskilled operators have is controlling buckets, blade, and other machine implements and attachments. The elevation is an issue. Too shallow a pass and the bucket does not fill. That means two passes are necessary to move material that could have been moved in one. That means twice the fuel is used for one bucketload. If the bucket or blade pass is too deep the elevation of the site falls below grade. That means backfilling and compacting. That is fuel wasted on an error.
Telematics keep a bucket, blade, implement or attachment at the optimal grade. That means the least amount of fuel is necessary for a task. Again, the less fuel required for a job, the greater the net profit for company owners to take home.
Auto-Idle and Auto-Shutdown Features
Another issue mediocre and/or inexperienced operators create for company owners is idle time fuel waste. According to Caterpillar, “some industry experts say that it is common for idle time to represent as much as 40% to 50% of total running time.” That means if a machine runs for 2,000 hours a year, 800 to 1,000 of those hours are spent doing nothing. If one hour of idle time uses one gallon and every gallon cost $4, then the total spent per machine on idle time annually could be as high as $4,000. An operation with 10 machines pays $40,000 annually on idle time.
Auto-idle and auto-shutdown features minimize idle time dramatically and all but eliminate high rpm idle time. An auto-idle feature slows the engine rpm to an idle if a machine sits in one place without the attachments moving for more than a preset amount of time. So, if a roller packer, for example, is sitting while a truck unloads, the auto-idle will slow the rpm until the operator advances the machine. An auto-shutdown feature takes the process one step further. If the machine or its implements do not move within a pre-set amount of time, the feature kills the engine.
Reducing idle time by even 25% equates to extreme savings.
Rentar Diesel Fuel Catalyst
The Rentar Fuel Catalyst increases savings by increasing combustion efficiency.
Diesel fuel is a heavy, high energy density fuel. While diesel is extremely potent in relation to other petroleum products with respect to energy potential, traditional and contemporary technologies alike do not have the capacity to completely burn diesel. That means a portion of the diesel moves through the engine and out the exhaust unburned.
The Rentar Fuel Catalyst increases the amount of fuel burned per tank. The Rentar breaks up the fuel clusters inherent in all hydrocarbon fuels. That produces a more homogenous fuel mixture. So, the Rentar Fuel Catalyst is exposing more fuel molecules to oxygen. Poor oxygenation is the reason that a portion of fuel from every tank escapes out the exhaust unburned. The Rentar Fuel Catalyst reduces the amount of un-oxygenated fuel. Simply it breaks up fuel clusters. And that exposes the surface area of a greater number of fuel molecules.
Performance Statistics of Rentar Fuel Catalyst
The Rentar Fuel Catalyst can increase the energy output of a tank of fuel by between 3% and 5%. And, that is just on over-the-road vehicles. The increase in combustion efficiency on heavy equipment is even greater. By generating more power out of each tank of fuel, the Rentar Fuel Catalyst reduces fuel consumption.
There are many priorities every heavy equipment operation owner has. In the end, however, the bottom line is profit. Owners can increase profit by increasing operator efficiency. They can increase profit with job site flow best practices. And they can do so by getting the most energy out of every tank of fuel. By increasing efficiency, heavy equipment company owners can increase their net income. With respect to heavy equipment, cutting costs can be the difference. It can be between pouring everything back into the company every month and having something to take home.