Front and Center

Putting maintenance issues first benefits recyclers and equipment makers.

When your day is spent moving, sorting and processing tons of dense material every day, the equipment that does much of the work will take a beating. A harsh work environment takes its toll on the equipment.

Thus, wisely purchasing a piece of equipment requires more than just kicking the tires and checking the sticker price. Making sure the equipment lasts with as little downtime as possible is becoming a more important issue for scrap recyclers.

As the scrap industry begins to climb out of the deep recession that has waylaid the market, some processors are looking to once again purchase equipment to process even greater amounts of material, and they’ll need reliable equipment to do it.

The upfront cost to purchase a piece of equipment may be significant. However, the equipment has to last. For scrap processors, laying out tens of thousands of dollars for a piece of equipment that will be put to extremes requires that once the sale is completed, there is still the confidence that the machinery will last a long time.

Extended downtime due to equipment repairs can be the difference between a profitable operation and one that struggles to survive. With margins for many materials razor thin, the key to success is making sure that the volume of material being processed grows.

To accomplish this, processors rely on equipment that operates for an extended period of time with minimal breakdowns.

In addition to the upfront cost, there are a host of other issues that are extremely important when a buying decision is made. And, some processors contend, some of those issues will be even more important than the price.

"Service is crucial," says Frank Golding, vice president of Newell Recycling of Atlanta, East Point, Ga. He adds that when his company is seeking out scrap handling equipment they look very closely at the warranty and preventive maintenance recommendations to make sure the equipment will run for an extended period of time.

Tom Skodack, vice president of marketing and sales for Fuchs, a wholly owned subsidiary of Terex Corp., Westport, Conn., says a key is having high-quality dealers who know their businesses. In his opinion, the companies that work "factory-direct do a great disservice to the industry."

Golding says Newell of Atlanta has an advantage in that one of the largest Caterpillar distributors in the country is located close to the Newell yard. "They (Caterpillar) make a great line of scrap handlers," says Golding. He adds that the company also has a broad enough product line that Caterpillar has been able to provide equipment to handle all the work performed by Newell of Atlanta.

Other scrap processors, however, don’t have the luxury of operating in that close of a proximity to an equipment company. For a scrap processor several hundred miles away from the distributor of the equipment it uses, it becomes even costlier, both in time and money, to have someone from the equipment distributor come in and repair the equipment.

Sam Jacobs, with Columbia Iron & Metal, Columbia, Neb., says that an important first step is to stay with name brand quality equipment. Additionally, talking to other scrap processors helps make the decision easier.

A third point, Jacobs adds, is that working with companies focused exclusively on servicing companies in the scrap industry has significant advantages.

"I believe they will listen. We are their primary source of sales," he notes.

For those located far away from a dealer or distributor, it may take time to get a mechanic sent in to repair the equipment. Thus, many scrap companies have a maintenance department on hand that can take care of many of the smaller repairs that are required to keep a piece of machinery operating.

Many scrap companies maintain a maintenance staff that is capable of servicing much of the equipment they own. While this can help avoid downtime, there are some differences of opinion on whether or not it is a wise idea to have a staff capable of handling all of the repairs.

One factor to consider is that while employees being able to troubleshoot equipment may be beneficial, the fixed cost of having a dedicated repair staff can be considerable.

Most equipment distributors agree that it may be worthwhile to tend to some minor service issues. However, the extent of repairs that should be performed by such staff causes some differences of opinion.

Skodack agrees that a detailed preventive maintenance procedure schedule is important. And, he adds, "You must follow them religiously. When you depart from the schedules—that’s when problems arise."

Beyond maintenance duties, one determining factor in how ambitious the on-site repair staff needs to be would involve the distance to the distributor or dealership.

Along with having employees of the scrap company being able to perform some modest repairs, another issue is whether additional parts should be kept on site in case replacements are needed.

Most scrap processors say they carry at least a minimal amount of spare parts on site. However, most processors say that the parts, for the most part, are limited to maintenance requirements, rather than full-fledged repairs.

For companies that purchase more used equipment, there appears to be a greater tendency to keep more spare parts on hand. One scrap dealer says that before he makes any used equipment purchase, he checks around to make sure there are parts available for the particular model being considered, in case of a breakdown.

Probably the most important step that both equipment dealers and scrap processors agree on is the need to maintain regular service for the equipment. Greg Skeege, with Hayden-Murphy, Minneapolis, a distributor of Fuchs equipment, hammers this point home. "You have to do lots of preventive maintenance. You have to do follow ups."

He adds that another important issue is to make sure that the "little things" are taken care of. Often a small problem will snowball into a much larger problem. It is best to take care of the issue when it is much more doable. "Don’t put off preventive maintenance," he stresses.

"You have to have people on staff and knowledge about the systems," Skeege adds. "They have to be observant; they have to know the equipment and know what they are doing."

Frank Golding with Newell of Atlanta echoes this statement. "What we look for is [the degree of] preventive maintenance requirements, and warranty work, when we are looking at equipment."

While new equipment can be expected to withstand the strain of the heavy manufacturing environment, purchasing used equipment is a trickier proposition. In addition to buying equipment with little warranty or service protection, finding parts for some older equipment may also be difficult.

Steve Katz of City Scrap Co., Akron, Ohio, stresses that a key when purchasing used equipment is having someone on staff who is extremely knowledgeable with various aspects of the equipment before it is purchased. "Get a person who knows the equipment," he points out.

In City Scrap’s case, the company has a person on staff skilled with hydraulics. This allows the company to make a more informed decision. Additionally, having a person who is able to spot potential problems also can help prevent a company from overpaying for a piece of used equipment.

There are also other strategies for companies who purchase more used than new equipment. To make sure the used equipment runs with little downtime, the company carries additional parts on hand.

While making sure the equipment runs and the company is easily reachable to answer questions, some equipment manufacturers take the additional step to make sure that their customers have the proper training and education. This will not only ensure the equipment runs properly, but that the scrap company will have a greater tendency to purchase additional equipment from the manufacturer in the future.

Katz points out that after the company purchased a shear from Genesis Equipment & Manufacturing Inc., Superior, Wisc., the manufacturer put together a seminar on maintaining the shear. Several people from Katz’s company attended. A program such as this, Katz notes, goes a long way toward cementing the relationship between a scrap processor and the equipment company.

More importantly, after purchasing the equipment, the best thing to do is make sure the distributor keeps in contact with the buyer, checking up on the product and ensuring that satisfaction is met. By doing this, a company can reduce the chance of a problem festering.

An alternative that Skodack feels is becoming a viable alternative, especially for scrap companies that to do not have the staff or expertise to handle the service aspect, is a complete turnkey service/maintenance program.

Under this type of program, the buyer only needs to provide the fuel for the machinery. The distributor would provide all repairs, maintenance and other services that a scrap handler would need. The program is very similar to an automobile lease, where a dealership provides all the repairs for a vehicle owner.

For Golding, a key factor is the response time for the distributor. Another selling point is the knowledge of the company. Developing a good rapport with the dealership after the sale can alleviate many of the problems and issues that crop up when dealing with equipment used in rugged environments.

By doing this, a company stands a much better chance of getting additional business from the customer.