Weighing in on Equipment Total Cost of Ownership

The first step in cutting a machine’s total cost of ownership, according to Loadrite, is to proactively reduce the
machine’s running costs. There are a number of steps that can achieve this, such as improving efficiency to reduce
fuel usage, optimizing the loading process and improving maintenance scheduling.
Actronic Technology, the New Zealand-based developer of the Loadrite range of products for weighing wheel loader/ exca-vator buckets, conveyors and other appli-cations, recently released a report on opti-mizing total cost of ownership on payload-carrying earthmoving equipment.

According to the company, while most equipment owners understand that total cost of ownership is more important than just the purchase price, many don’t real-ize that they could actively reduce their total cost of ownership across earthmoving equipment and trucks by using Loadrite’s monitoring and alert features to set benchmarks and measure productivity.

Total cost of ownership includes everything from the original purchase price to the daily running and mainte-nance costs, depreciation, finance and even ‘hidden’ costs like insurance and employee wages.

A machine that appears to be compet-itively priced may end up costing many thousands more than a higher priced machine because it may deliver lower pro-ductivity, increased fuel and maintenance costs and a lower resale value.

Total cost of ownership can be meas-ured based on the number of hours a machine works, or based on actual pro-ductivity in terms of the amount of material moved. By basing total cost of ownership calculations on the amount of material moved, operators can get a clear-er picture of the machine’s actual cost of ownership, since a machine that moves more material in less time is likely to gen-erate more income as well as using less fuel per ton of material moved.

While it makes sense to choose a fuel efficient, highly productive machine, it is also possible for smart operators to proactively reduce the machine’s total cost of ownership by reducing the run-ning costs, according to Loadrite Product Manager Elliot Chisholm.

There are a number of steps that can achieve this, such as improving efficien-cy to reduce fuel usage, optimizing the loading process and improving the main-tenance scheduling so that all machines and vehicles are up and running when you need them to be.

Measuring Productivity
“The first step is to understand how pro-ductive your machines are, including how much fuel they use and how much mate-rial they move,” Chisholm said. “The next step is using that information to make changes where necessary to improve efficiency and reduce costs.”

By tracking the amount of material moved per hour to measure productivity and set benchmarks, operators can see underperformance and make appropriate adjustments to ensure all equipment is working to its optimum efficiency.

An onboard weighing system like those offered by Loadrite can be used to calculate the weight of material in an excavator’s or loader’s bucket, relay this information to the operator and record the weight for later use.

“Being able to track the amount of material moved per hour can then be used internally as part of an overall busi-ness analysis to measure productivity and set benchmarks,” Chisholm said.

“Once you know your benchmark pro-ductivity rates, it’s also easy to identify equipment that is underperforming, which sets off a trigger for an investiga-tion into the underlying causes. These causes can vary widely, from operator error to equipment failure.”

Once productivity benchmarks are set, fleet managers can customize the Loadrite system to capture a wide range of other data such as cycle times, which can then be used to identify process bot-tlenecks and inefficiencies. By resolving these issues, managers can improve pro-ductivity and reduce operating costs.

Reducing Costs
By tracking and monitoring various productivity indicators, managers can see variations and make changes that will result in a more efficient use of resources.

“Being able to track and monitor fuel use, for example, is a major considera-tion in assessing the cost of ownership, particularly given the high price of fuel. By understanding the amount of fuel used to move each ton of material, you can see how productive each machine is and possibly find ways to reduce fuel usage,” Chisholm said.

The Loadrite system can also measure the cycle times between each loading event, which can show how efficiently the material is being moved. Shorter cycle times generally point to a more efficient and therefore more profitable operation.”

The system actively helps reduce fuel use. By using an accurate on board weighing system, operators can ensure trucks are filled correctly the first time, with no productivity lost due to under loading or overloading.

“By loading trucks correctly from the outset, unnecessary truck movement is reduced as there’s no need to turn around for either a refill or a removal of material once the trucks get to the weigh-bridge,” Chisholm said.

Setting Maintenance Parameters
Being able to measure the time between replacing consumable parts, operators can establish the most efficient and convenient maintenance and replacement schedule. This can be done by measuring the amount of work done in terms of material moved, rather than simply by working hours.

“The system can record how much material has been moved since the last time the bucket edge was replaced, for example. This data would allow different brands to be benchmarked on how long they last, anoth-er critical factor in calculating the total cost of ownership,” Chisholm said.

“Tire damage on trucks can also be reduced. Providing accurate and consis-tent weight measurement from the outset allows operators to set the correct target weight for the loader bucket to accurately load the truck. Because the truck’s tires are inflated correctly to carry a certain weight, they can be damaged when carry-ing too much weight. So once the loader is set for optimal efficiency, you can potentially prolong the life of the tires.” Chisholm said Loadrite’s onboard weighing system can be configured to pro-vide the data needed for any operation. “Our distributors work with project man-agers to identify the configuration that will give them the information they need. We work with fleet managers individually to ensure the system meets the needs of their business. Our aim is to ensure the data collected provides real value to increase productivity and profitability over the lifecycle of the machine.

As featured in Womp 2013 Vol 02 - www.womp-int.com