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Mon December 30, 2019 - National Edition
When a series of catastrophic equipment failures hit Schlouch Incorporated in 2005 it prompted a change in the way the Pennsylvania-based heavy civil construction firm managed its fleet. Instead of relying on a traditional siloed approach to fleet management, where operations, fleet management and accounting are often at odds, it chose to take a collaborative approach. It call its method the Internal Equipment Triangle and it's an extension of the idea behind the equipment triangle — that equipment end-users, manufacturers and distributors all deserve respect and that transactions should be a win-win for all parties.
"At most construction firms the fleet manager is responsible for all three areas. What we try to do is bring expertise from different areas to the decision. "We believe the best decision for the organization is one that all parties agree on," said Kevin Reimert, fleet coordinator of Schlouch Incorporated based in eastern Pennsylvania.
Reimert is responsible for fleet operations and his group reports to operations, led by Don Swasing, COO. The third member of the equipment triangle is Rich King, CFO.
The team meets weekly to discuss pending decisions, each bringing their unique perspective and expertise to the process. King examines the financial impact of decisions, coordinates fuel hedging and financing along with analyzing and reporting fleet results. Reimert offers data on performance related to equipment maintenance, changing the P.M. program, comparisons of fuel efficiency and maintenance costs, and analysis related to equipment disposal. Swasing is responsible for the overall vision for the fleet as well as relationships with OEMs and dealers. He brings production data from the field and updates the group on their equipment needs. He also ensures Reimert has the resources he needs.
According to Swasing, the collaborative process to equipment management eliminates decision-making based on gut judgments or good old boy connections rather than quantitative methods. If the three team members don't agree, they won't move forward. It also eliminates some of the finger-pointing between operations and maintenance that happened before the change. Their overall equipment philosophy has changed as well.
"Purchase decisions aren't always based on lowest price," said Swasing. "We will pay more for top-performing equipment."
The success of the approach has been proven over time, as evidenced in improved uptime, gains on the sale of equipment or at trade-in, and scheduled vs. unscheduled repairs. The team from Schlouch was awarded with The Association of Equipment Management Professionals Fleetmasters Award in 2016.
The move toward a more collaborative approach had the full support of top management including CEO Barry Schlouch, which made it possible to get through a challenging transitional period. Top management also pursued Certified Equipment Manager (CEM) accreditation from AEMP.
"Once implemented, the rest of the organization saw the benefits, that the equipment was more reliable, and uptime was there," said King. "When maintenance said they would do something, it happened."
To learn how the Internal Equipment Triangle might benefit your operations, you can attend an educational session on the topic on March 12, 2020, from 1 p.m. - 2:30 p.m. at ConExpo-Con/AGG 2020. During the session, the equipment management team from Schlouch will provide examples of how the process works in the real world.
In addition, they will discuss the key results they have been able to achieve including improved reliability, lower operating costs and improved operator satisfaction. It's a session designed to get you thinking about how you can improve fleet management, whether you are in finance, operations, or maintenance.
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