HOW TO IDENTIFY AND IMPLEMENT PRACTICAL COST IMPROVEMENTS AT YOUR OPERATION.
By Chris Connolly
The future looks bright for the aggregates industry, with reports showing continual increases in production over the last two years. However, finding and retaining qualified workers remains a challenge. On top of that, 2014 production levels turned out to be higher than originally forecasted, suggesting that the already understaffed industry has had to get more done with less.
With production on the rise and the continued struggle to attract skilled labor, operator training has never been more critical to making sure we’re not just working harder, we’re working smarter.
By properly evaluating operator behavior and its affect on both costs and production, a fleet manager can pinpoint areas of improvement, set measurable goals for operator success and develop ongoing training programs that are tailored accordingly. However, gaining buy-in on the value of training is the essential first step.
Gaining Buy-In
Without a quantifiable return on investment, it can be hard to gain buy-in from site owners for what might be viewed as an expensive, time-consuming effort to train operators who already have years of experience. Studies show, however, that among those operators who identify their skill level as “expert,” there can still be a huge difference in how those operators impact the bottom line.
Volvo Construction Equipment recently conducted an in-depth study to quantify variability in operator skills. Seventy-three operators were tested, and each was asked to describe their skill level. Each operated identical wheel loaders through three typical quarry tests, including re-handling of crushed stone, loading and carrying of crushed stone, and loading a truck with blasted rock.
It’s no surprise that the difference in performance was significant between those who identified themselves as beginner operators and expert operators, but what was astounding was the variability between the self-identified experts.
Among “expert” operators, productivity (tph) varies by up to 100 percent, and efficiency (ton-per-gal. of fuel) varies by up to 70 percent.
The bottom line here is that operators can have an enormous impact on production, as well as costs – and even among those who consider themselves experts, there is a big spectrum of performance that can be equated to real dollars. To put this in perspective, imagine choosing between two machines during a purchase evaluation. Both machines cost the same, but one of the machines can get twice as much done with 70 percent less fuel compared to the other. The choice would be obvious. Operator training can have the same effect.
The Expert Operator
What makes an operator a true expert in the aggregates industry is their ability to not just move tonnage quickly, but to do it at a low cost. As demonstrated by the aforementioned Volvo study, skill-level is best measured by two metrics – tph and ton-per-gal. Fuel is the largest cost, however, the operator’s influence on overall costs goes far beyond fuel usage.
The primary factors influencing operational costs of a loader in a quarry (in order of highest cost to lowest) are:
- Fuel.
- Machine Depreciation.
- Tires.
- Labor.
- Interest/Taxes/Insurance.
- Repair And Maintenance.
While the actual labor expense of an operator equates to approximately 15 percent of a machine’s overall operating cost, the operator’s behavior can have a significant impact on all but one of the other factors. Proper training can make the difference between influencing these costs in the right direction or cutting into your profits.
Operators Can Slow Depreciation
The factor that most drastically impacts resale value is total machine hours. Believe it or not, one operator can get the same amount of work done as another while putting significantly less hours on the machine. How? Idle time.
It’s not atypical for wheel loaders on an aggregate site to have a 50 percent idle time. The operators often let the machines run while waiting for work or while eating lunch and taking short breaks. However, if the fleet manager is diligent about monitoring idle times and training operators to shut down at certain times, 25 percent idle time is an attainable goal – and the financial impact is immense.
To demonstrate just how immense, let’s compare two machines over a five year period – one with 50 percent idle time (Machine A), one with 25 percent idle time (Machine B). Machine A is likely to run about 2,000 hours per year, whereas Machine B is closer to 1,500. Over the five-year ownership period, Machine A has 10,000 hours on it versus 7,500 hours on Machine B.
Based on machine hours alone, Machine B would likely fetch $20,000 more than Machine A after five years. Resale value isn’t the only upside to reducing idle times, however.
Operators Reduce Parts, Maintenance Costs
In addition to slowing depreciation, an operator can also reduce maintenance costs by reducing idle time. In the same aforementioned scenario, Machine B would require five less service intervals (assuming 500-hour intervals) than Machine A.
This could equate to roughly $9,000 over the ownership period. It’s also important to note that any existing warranty on the machine would be spread out over a longer portion of the ownership of Machine B versus Machine A, potentially resulting in additional cost savings.
Outside of idle times, however, an operator’s behavior has significant impact on maintenance and parts costs. The most frequently replaced (and most expensive) wear parts on a loader are its tires.
An operator who frequently digs into a pile at too high an RPM will put the tires through unnecessary slip during each cycle. This repetitive action can wear treads faster than a well-trained operator would. Additionally, operators need to be trained on general tire inflation best practices, as well as training on any existing tire monitoring technologies that can help reduce wear. If this training results in even one less set of loader tires over a five-year period, that’s at least a $30,000 expense that has been avoided due to training.
An untrained operator can also have tendencies that are hard on the drivetrain and the brakes. Many operators have a tendency to continuously rest their foot on the brake pedal. In most newer model loaders, the electronic brake systems are very sensitive, and if engaged at all times, it can build up heat, which detracts from the service life of the axles and brake systems.
Additionally, untrained operators often have a tendency to change directions on the fly in short cycles, which is hard on the drivetrain. These should be areas of focus in any training.
Operators Reduce Fuel Use
Fuel is the highest cost of operating equipment, and once again, an operator’s behavior can significantly impact cost. First, let’s refer back to the idle time example. Over the five-year ownership period, Machine B would run 2,500 hours less, which could equate to roughly $6,000 in fuel savings.
In addition to reducing idle time, operators should also be trained for work at lower RPMs. The latest diesel engines are capable of producing maximum torque at lower RPMs, which wasn’t the case a decade ago. Operators who have been in the industry for a long time may have a tendency to want to redline an engine to get more power. But on today’s machines, all they’re doing is wasting fuel with no extra production to show for it.
Another way operators commonly waste fuel is by running excavators at a constant RPM, even when not working. Most of the newer-model excavators are equipped with auto-idle functions, which reduce engine RPM after a set amount of time spent not working. It’s up to the operator to engage this function, however, and if not properly trained in using it, a lot of fuel can be wasted.
Devote Time or Recruit Help
The justification is clear for a comprehensive, data-driven approach to operator training. However, time and resources are seemingly common obstacles for quarries. Fortunately, there are technologies and resources site managers can turn to – namely telematics software and equipment dealers.
Telematics technologies have come a long way in recent years. What once was used primarily for simple service alerts and machine location tracking can now be used for machine utilization reporting and recommending improvements to the aforementioned operator behaviors that drive up costs, such as brake usage, idle times and engine RPMs.
If a fleet manager does not have time to monitor and analyze this type of data, some manufacturers offer dealer-provided telematics reporting and monitoring services as part of service programs such as Volvo SmartCare. These programs take the weight off the fleet manager’s shoulders and ensure even those operators who identify as “experts” have something to gain from ongoing monitoring and training.
Set Measurable Goals And Follow Through
By adequately monitoring operator behavior and pinpointing trouble spots, the fleet manager can set specific, measurable goals for individual operators. No matter how you do it, there’s no doubt that investment in operator training can have a very high ROI. Implemented properly, training results in increased productivity and decreased costs for your quarry.
Chris Connolly is a Certified Operator Training Program manager for Volvo Construction Equipment.