Landfill Insights: Managing machine component repair

Machines don’t wear out all at once, they fail one component at a time. An engine here, a transmission there, with a final drive or differential tossed in for good measure.

Sure, a machine fire or catastrophic roll-over can be the death of a machine, but typically they reach the end of their life in a progressive and somewhat predictable path.

Knowing this, the best managers are strategic when it comes to tracking machine components. They know things will fail, but they choose to track and manage that process.

This begins with establishing expected component life based on the history of similar machines and your experience. For example, you might estimate that a bulldozer engine will go 10,000 hours before it needs to be replaced or rebuilt.

Further, you can adjust your expectations by closely monitoring its condition. Is it making noise, consuming more oil or emitting more exhaust smoke? Is your oil-sampling program showing specific “wear indicators?” That typical 10,000-hour estimate is never exact, so adjusting your expectations is very important, especially as the machine ages.

Based on annual usage (i.e. hours per year), you could calendarize those expected component failure points to create a specific cash flow projection for every machine.

Think about it: What if you could project the life of individual components, do that for every machine, and then combine that information into a machine component rebuild schedule? You’d have a very accurate, adjustable and real-time budgeting tool for major machine repair costs.

This would be much better than the current process used by most managers that bases next year’s machine repair budget on how much was spent the previous year. That’s a process that makes managers look like a hero for one year, and an idiot the next. No thank you.

So when it comes to managing your machines, managers should think in terms of components. They should, but not all of them do. 

Even worse, some organizations have a policy that assumes if a major component fails, like an engine or transmission, it’s time to buy a new machine. The local equipment dealers may favor this approach, but the organization will leave lots of money on the table. It is standard industry practice to repair components as they fail, while managing overall machine performance and cost to manage the “four R’s.” That is, should I run it, repair it, rebuild it or replace it? Every manager makes those decisions every day. They just use varying levels of knowledge when doing so.

We’ll look at a way of managing the “four R’s” that integrates knowledge and wisdom into the process.

Tracking component life for an individual machine, like a bulldozer, begins by listing those components. They include engine, transmission, final drives, undercarriage, pins and bushings and any other rebuildable components. This list will vary from one machine type to another but, in every case, you’ll be focusing on the major components that make up that machine.

© Neal Bolton

Next, assign an estimated life of each component. In this part of the process, it’s good to use historic data and your experience. Be sure to talk with your mechanic and the field service rep from your local dealer. There is wisdom in many counselors and your goal is to accurately estimate the life of every component.

Inventory is the next step. This is where you create a status report for every component for every machine. Determine when the most recent rebuild or replacement of every component was done. For example, you might estimate that a bulldozer engine will last 10,000 hours. But if the engine on your bulldozer was replaced at 9,660 hours, then that engine would be expected to fail approximately 10,000 hours later, somewhere around the 19,660-hour mark. 

Under this system, the clock for individual components starts over when a component is rebuilt. In some cases, it may make sense to downgrade the life estimate for rebuilt components. Due to various factors, a rebuild component may not last as long as the original component that was part of a new machine. Again, these factors should be based on machine history and your experience.

© Neal Bolton

For many years, I’ve used a simple Excel spreadsheet model that estimates the recurring failure point for every component on a given machine—for instance, a bulldozer. 

It then rolls that information into an annual estimate of that machine’s annual repair costs. Here’s a look at that annual cost estimate (table and chart). This estimate includes major components: engine, transmission, final drives, undercarriage and a subcomponent of undercarriage—pins and bushings.

The average annual component cost for this machine is $84,500 per year but, as you can see, there is wide variation. Some years we skate through without anticipating any component issue, and other years show multiple rebuilds or replacements. It looks random, but in fact it is based on annual hours and estimated component life.

Based on previous articles, you know that when it comes to overall machine life, there is a point at which it’s best to replace an aging machine. The trick, of course, is to replace it before it becomes a financial sink hole. 

Along that line, consider what our bulldozer model shows for the year 2032. Based on our assumptions of annual hours and component life and replacement cost, 2032 is a very expensive year. Consequently, selling that machine in 2031 makes sense.

Of course, as you get closer to that time, you may adjust your decision based on actual conditions. That’s why you should periodically adjust this model as you rebuild certain components, monitor oil sampling results, track annual machine hours and observe other vital signs of that machine.

Finally, you can bring all this together by combining similar information for all machines in your fleet. At that point, you’ll have a robust cost model that can predict major repair costs for all machines. By getting a solid handle on machine component costs, you’ll be a hero every year because instead of guessing, you’ll be managing those costs.

Neal Bolton has nearly 47 years of experience in the heavy construction and solid waste industry. He can be reached at neal@blueridgeservices.com.