Managing Cost of Ownership and Operating Costs for Dozers
We find ourselves talking more and more often about total cost of ownership these days. Operating costs have always been a concern for bottom-line-conscious contractors, but your dealership can take extra steps to help prospects and existing customers make the most TCO-friendly buying and ownership decisions.
When your sales and service teams are able to share detailed O&O information, they demonstrate your dealership is interested in helping customers build their business, not just in making another sale. With that in mind, let’s take a closer look at the cost of ownership and operating costs for dozers.
Dozers are an interesting machine to consider, because as construction equipment goes, they present an unusually wide range of O&O costs. Especially the larger production machines. Because smaller “finish” dozers are used for a different range of applications, they have a different set of key O&O factors.
It’s all about tons per hour.
Every dozer’s job is to move material. Its value comes from the amount it can move in an hour, either yards or tons. So size matters — our customer needs the right dozer for the job and working conditions. The goal is to get maximum performance and output from the dozer without over-taxing it, which causes premature wear and tear. Uptime equals revenue, and ultimately more uptime has more value for your customer than simply reducing costs.
Every undercarriage component you spec and how you maintain the undercarriage directly affect operating costs. Typically, you can expect pins and bushings to wear out first, then the shoes, then rollers and links — each an “opportunity” for additional downtime. Since the undercarriage is custom-designed, considering how various options will affect costs down the road is critical.
As customers spec their cab, remind them that operator comfort isn’t a luxury, it’s a productivity-builder.
Typically fuel and labor make up three-quarters or more of the operating costs for a larger dozer. How operators actually use the machine day in and day out significantly impacts lifespan and long-term costs, including fuel consumption. That means training is critical. Yes, it may be a cost, but it can earn your customer a substantial return on investment. Does – or could – your dealership help with operator training as a value-added service for customers?
An ongoing emphasis on safety also increases uptime and saves money.
Finding the right balance
Machines cost more than they used to. On the other hand, they’re more fuel-efficient, which saves money over time. Encouraging your customers to work hand-in-hand with you and even the OEM on an ongoing basis will ensure they continue to get lowest cost of ownership by keeping to the prescribed service and other maintenance schedules.
Following recommended regular maintenance also ensures more uptime, but remind your customer they’ll boost uptime even more with “condition-based maintenance” – using their telematics to fix impending problems before they affect performance or cause expensive repairs.
Did you know that one additional inch of rain per month can reduce undercarriage life by almost 25%? That can seriously diminish per-hour operating cost expectations. The problem here is that moist soil can get into and around the rollers and other moving parts, grinding them down.
To hold down costs, they should also:
- Reduce undercarriage packing material
- Run the narrowest shoe width possible for the conditions
- Maintain equal ground pressure/machine balance
- Monitor track tension
- Avoid speeding and traveling in reverse
What if they saved just 1% in operating costs?
As you’re looking for the perfect cost-benefit balance, it’s important to note that not every value factor rates equally. Here’s how a 1% change in key areas can affect profitability:
- Productivity: 2.5-4.5%
- Availability: 1.75-3.5%
- Operating costs: 1.5-3.5%
- Utilization: 1.5-2.75%
- Selling price: 0.5-.085%
Keeping these details in mind as you work with dozer customers will help them make smart choices to drive the lowest possible cost of ownership. That’s the kind of service that builds great relationships and loyalty.