"The current warranty is three years, 5,000 hours on all major components, including components rebuilt by the dealer, not just refurbished components direct from Volvo" said Penland.
Somewhere between new and used lies what some may consider the best of both worlds: refurbished.
Volvo's Certified Refurbishment Program was designed to overhaul customers' older machines to the point that they can be used for many more hours of production. The program “adds another offering to our customer base -– to get a second life out of machines that in the past had been treated with a kind of a one-life methodology,” according to Patrick Overstreet, director of product supports of Ascendum. The refurbishment program currently is used on two of Ascendum's main product lines: wheel loaders and articulated trucks. It covers products such as the C-series articulated truck and D-series wheel loader, models that came out in the late 1990s and early 2000s.
The process is an in-depth one, but at the end the customer drives away with a like-new machine at approximately 50 percent of the cost of new.
In the Beginning
Volvo's refurbishment program got started initially about five years ago, according to Ascendum's Cory Penland.
“Volvo saw an opportunity to reach out to the dealer network across the country and basically set up the refurbishment program as a third offering in regards to new equipment sales,” Penland said.
Volvo reached out to a select number of dealers, conducting a rigorous application and inspection process to become a certified dealer. Ascendum Asheville was selected as one of the locations.
“[Volvo] sent an inspector out, went through the facility, through the nuts and bolts of the facility down to the small things…are we equipped in regards to tools, special Volvo tooling, is the facility set up to handle the refurb or a machinery build? And even down to the technicians — all the technicians basically have to be master techs at this point to handle this process.
“Currently, we employ two techs that are dedicated 100 percent to the refurbishment program. And, it's the same two that we put on every project. We found that in order to be efficient and get the same quality time and time again, you have to dedicate those two techs to the program. We have been doing it a little over five years. It's been a great program for us to date and a very profitable program,” Penland said.
One Size Does Not Fit All
While not every machine is a good candidate for refurbishment, the program gives customers a comprehensive inspection of their equipment and an in-depth look at their machine's actual condition and what they can expect out of a second life.
“We are able to offer more options to the customer. Of course, we are in business to sell new equipment. I don't think any dealer or any manufacturer will deny that. We want to sell new equipment first and foremost, but not every customer is in the position where he can purchase new equipment. And, it goes beyond that. Beyond the customer aspect, we have kind of transitioned internally as well even with our own fleet-owned equipment…real equipment. We are doing a similar thing with our rental equipment. When it gets to the end of its life, we actually start to rotate it through this branch as well, not part of the certified refurbishment program, but we are doing something similar where our equipment is going through the same inspection process and somewhat of a refurb before we try to get it out of our fleet. But, overall it's just a great package for our customers,” Penland said.
“The important thing is the program gives customers the option of a second life with their current equipment versus buying a new replacement,” Overstreet said. “By refurbishing their older machine, they can save up to 45 percent versus the cost of new equipment. So it gives the customer another opportunity to look at his older piece and say 'I can get a second life for this machine and take it from 12,000 hours out to 21,000 hours, or I can sell it, send it to auction or park it and buy a new piece of equipment.'”
Spartanburg County, S.C., recently looked at options concerning two Volvo 825B's.
“Once salesman Keith Gilliland saw that buying new was not an option at that point … buying used was not an option at that point … that's when I was contacted to travel to Spartanburg and do a presentation just to show what we can offer with the refurbishment program,” Penland said.
“In weighing the benefits of refurbishing the two 825Bs that [the county] currently had, both trucks were a little over 10,000 hours so they were both great candidates, but when weighing the potential life of those two machines once they were refurbished versus purchasing new, it was just a better option for the county and better option for the tax payers in Spartanburg County.
“Both machines have been great for Spartanburg County. They have had little to no down time throughout the life of the machines. Really they had no major component failures. Both machines were just worn out at that point. So, refurbishment just made sense.
“We want to stay within 50 percent of new cost. These trucks we went a little beyond that. I think we ended somewhere in the neighborhood of 55 percent of new. There were some add-ons that we decided to do throughout the project that came up. But, as a good rule of thumb we want to stay within 50 percent of new for it to make sense,” Penland said.
Another factor in Spantanburg's decision to stay away from new is the emissions requirements.
“They are not purchasing new so there was that fear of going with Tier IV emissions. Currently, there are no restrictions in place where a customer would have to retrofit a current machine with Tier IV emissions. So, that was a plus. They could stick with what they had.
“Basically, they could bring both machines back to new condition with a better warranty than a new machine.”
Ascendum planned the refurbishment for the upcoming year and staggered it out.
“We took the first machine on, I want to say in January of this year 2016, and it's an 8-week turnaround process. So basically eight weeks per truck, we did them back to back,” Penland said.
“The staff at Spartanburg County, we met with them here before the refurbishment process and again after it. So they brought a crew here to view the machine after it was completed and basically they approved it before it was brought back on site.”
Both trucks received all new hydraulic components, which includes new hydraulic pumps, all the hydraulic bows on the machine were rebuilt, wire harnesses and any hot air on the machine … all hydraulic hoses.
During refurbishment, nearly every part on the machine is torn down, inspected and repaired or replaced to bring it back to a new condition. Following the rebuild on every machine that is refurbished the cab interior also is updated.
“That's one of the primary focuses we put on the machine. The cab has to be back in new condition.
“When you get the machine back to the customer, the operator is not so concerned with the exterior of the machine. When he gets back in it and the cab is new, he really feels that he is back in a new machine at that point. Operators are finicky. They like the current machine that they are in. I've never known an operator that was comfortable getting in a new machine. They always refer back to the old machine. So, it's a great benefit for the operators as well,” Penland said.
On articulated hauler, refurbishment includes the engine, transmission, the gear box with the drop box as well as all the components contained within the three axles.
From Start to Finish
The path to refurbishment begins with a free onsite inspection, conducted by one of the technicians who would actually be performing the work. At the same time the technician will pull whole samples on every component while he is on the job site and send that information back to Ascendum.
“That information is going to come directly back to me and nobody else … it is confidential,” Penland said.
“At that point, we will look at the inspection and, based on what that machine needs to come back to the Volvo certified refurbishment standards, I will start working on a quote. I will then go back and meet with the customer, review the inspection, review the quote and we will try to make a decision together on what makes sense for that machine for the customer.”
If the customer agrees to the work, a parts stock order is placed upfront, which is going to include every part that Ascendum anticipates needing before beginning the eight-week process.
Once the machine arrives, the same two techs will basically tear it down to the bare frame at that point and start back with the rebuild component by component.
“Normally, once we get down to the frame they will go back with the axles first, from the ground up on a rebuild. It's no different than restoring a car, a similar process … it's truly a ground up down to the frame restoration on the machine,” Penland said.
Once the work is completed, Ascendum will follow-up with a final inspection and will review the project with the customer.
“We will go over everything that was refurbed on the machine from start to finish and we like for the customer to operate/test the machine here before we deliver it.
Once the customer signs off on it the inspection process is completed and we will schedule delivery. At the point of delivery we will actually send one of our techs to accompany the machine. They will stay with it the entire day it's delivered.”
Once back at the customer's location, the technician will go over the machine with the operator and show him everything that was done with the machine.
“Our tech will take the time and spend all day long just to ensure that nothing comes up on it. Any small leaks, anything that might come up when the machine truly goes through a typical heat cycle at a customer that we can't replicate here,” Penland said.
Ascendum will follow up with the customer once again within six months with another warranty inspection, conducting the same inspection process and pulling all samples once again.
“The current warranty is three years, 5,000 hours on all major components, including components rebuilt by the dealer, not just refurbished components direct from Volvo,” said Penland.
To emphasize the point, Overstreet pointed out that the component warranty on the Certified Refurbishment Program is actually longer than that offered with a standard, 6-month, 1,500-hour warranty that comes with a new machine. Volvo's refurbishment warranty covers the engine, transmission, drop-box (if applicable), differentials and final drives.
“It's truly a great option to the customer. To date, every customer that we have performed a refurb on has been very happy with the results and there have been very little failures to date on the rebuilds. It's kind of a testament to the guys we've got performing the rebuilds.”—CEG
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