Crunching the numbers

When it comes to acquiring a mobile shear for a specific application, one of the most common errors purchasers make is looking strictly at the invoice cost and not at the overall operational or ownership cost of a unit over time. Thoroughly analyzing not just the initial cost of a shear but also its total ownership cost while shopping can help companies operate more profitably.

The starting point for success when acquiring a mobile shear is analyzing a company’s business operations to determine its operational costs and profitability. In determining operational costs, it is important to differentiate between fixed costs and variable costs. In the case of a mobile shear, the fixed cost is the purchase price of the equipment, while the variable costs are those related to owning and operating that piece of equipment.

Factors to consider

The application of the mobile shear should be considered first when making a buying decision. Mobile hydraulic shears are designed for cutting and processing various ferrous metals, excluding cast. These tools also can process nonferrous metals; but, in most cases, the capabilities will vary by shear.

It is important to answer a number of questions when shopping for the right shear for an application:

• How often will the shear be used?

• What will its processing uptime be?

• What type of material will be processed and why?

• What will happen to the material after it is processed?

For example, mobile shears can be used for sizing large materials coming into a recycling yard or for the first stage of sizing for a demolition project. Operators also will have to determine whether the shear will be the cornerstone of the processing operation or whether it will be one of many tools available.

The operation also should consider whether the shear will work outside of the company’s yard, perhaps on a project site, or if it will be rented to other users when the company is not using it.

Once the processing requirements are defined, the size of the shear and its carrier can be determined.

Find the right size

The size of the mobile shear selected depends on the type and size of the material to be processed, with the former category taking precedent.

One of the best ways a company can find the right size mobile shear for its needs is by asking the suppliers it is considering to show the processing capacity ranges of their attachments and then weigh the available options.

Make the best pairing

Once the right mobile shear size has been determined, the next step is finding a suitable hydraulic excavator or material handler on which to mount it. This a critical step for putting together a successful and profitable processing tool. The mobile shear manufacturer’s representative or the supplier of the tool carrier being considered can help in this regard by showing the options that are available.

If using a machine that the operation currently owns, the attachment’s hydraulic and weight-balancing requirements should be matched with the capabilities of the excavator or material handler. This will ensure the pairing will operate at maximum efficiency.

Items to be reviewed on the base machine include carrier operating weight, hydraulic lift capacity, hydraulic pump flow capacity and operating pressure.

One last point to take into account is whether the shear should be mounted on the boom of the carrier or on the stick.

Matching these considerations with the shear’s operating requirements will allow it to perform at the top end of the tool’s productivity curve.

Maintenance considerations

Costs associated with wear parts and maintenance need to be tracked over time to give operators an accurate return on investment (ROI) for their shears.

Many companies do not track these expenses and, therefore, they cannot determine an accurate rate of return on their projects or, in the case of scrap processors, what the actual net profit is on each ton of material being processed.

Referring to the equipment manufacturer’s efficiency ratings or tracking some basic consumption costs can help operators discover their total actual costs for wear parts and maintenance.

The formulas offered in the sidebar below can be helpful when trying to determine the profit margin per ton of material processed. Using this information, an operator can determine a realistic ROI.

An analysis of the shear’s variable operational costs over time will result in a much more accurate picture of the profitability of an operation or project.

Once equipped with this information, a company can be confident in biding new business and expanding its operation.

Salvatore LaCorte is the scrap and demolition products sales director for Rotar North America, based in Willoughby, Ohio. Email him at s.lacorte@rotar.com. A version of this article originally ran in the January/February 2018 issue of Construction & Demolition Recycling, a publication of the Recycling Today Media Group.