Do You Have the Right Heavy Equipment for the Bid?
The bidding process in the construction industry has become so competitive in recent years that a lot of the small and mid-size contractors out there may feel like they’re working just to break even. Bids separated by a mere dollar per yard, unheard of years ago, have become much more common — and things like machines on lease and maintaining employee salaries make cash flow an absolute requirement.
When bids are this competitive, profit margins can be razor thin. If you’ve won a bid and you’re being paid $2 per cubic yard, for example, you need equipment that can get it done for much less than that to keep your business moving forward and earn a decent profit. It can be hard to find those nickels and dimes that add up over time and make the jobs worth it.
But we can help you find them. Here are several things you should consider to help you win more bids and boost your profitability for the contracts you get.
DON’T SIMPLY MIX AND MATCH YOUR EQUIPMENT TO WIN NEW JOBS.
Know the production targets of your potential bid, then right-size your fleet to meet them. If your loading excavator or haul trucks aren’t properly sized, you may decide to rent off-size equipment to get certain jobs done — but that’s not always efficient. If you plan to use heavy equipment to move large amounts of dirt long term, it could be more cost-effective to right-size the equipment you currently operate versus renting. You can right-size by pass matching your equipment to reduce the number of cycles, or by using fleet sizing software to eliminate unnecessary idle times. The efficiencies you’ll gain in production over time, versus incurring multiple years’ worth of rental fees, are usually worth the investment.
DON’T LET AGING EQUIPMENT COST YOU MONEY.
If you’re running older equipment, those machines likely burn more fuel and don’t have the faster cycle times that new equipment has. Saving even two gallons per hour can equate to thousands of dollars over the course of a year. And faster cycle times can help you load significantly more tons per hour. The efficiencies in newer machines help you move more material, which helps ensure you’re properly outfitted for more bids — and for the ones you win, you’ll have the best shot at getting the jobs done for less.
MAKE YOUR LOADING TOOL YOUR TOP PRIORITY.
The machine you load with — whether it’s a wheel loader or an excavator — should be sized correctly. If it’s not, it’ll require more passes to fill each truck, and as a result, you won’t be able to keep up with trucks waiting to be filled. This creates unnecessary idle time that eats into your profitability more than you might think. You also won’t be able to keep up with the face, which can lead to additional work for your excavator, increasing truck idle times even more. Simply selecting a larger excavator bucket isn’t an option to speed up your productivity either because then the machine becomes unstable. Consider your loading tool a primary factor in meeting daily production numbers. Make sure it’s sized correctly and built for uptime. If your loading tool goes down, your entire operation can come to an abrupt stop.
UNDERSTAND THAT BIGGER ISN’T ALWAYS BETTER.
If you’re going after a big project, you may initially think you need a big hauler or excavator for the job, but be aware that bigger machines also come with higher operating costs — more fuel, more expensive parts, and so on. Hauling large excavators around also costs more. Consider how often you’re moving site to site and the transportation costs associated with getting these machines where they need to be. And remember, investing in a large haul truck like our Volvo A60H doesn’t necessarily mean you’ll automatically move more material — you won’t if your loading excavator isn’t matched to efficiently keep your A60H moving. Large machines like these are typically specced into massive earthmoving jobsites and quarries, so operating costs have already been determined and don’t outweigh the increased productivity they’ll realize. But one-off purchases of massive machines can come with risks if these kinds of factors aren’t taken into consideration.
VALIDATE PRODUCTION NUMBERS WITH IN-CAB OPERATOR TOOLS.
A lot of haul truck operators track their daily production numbers on a notepad in the cab, but if you’re on a site with cell phone coverage, find out if your OEM offers in-cab programs that automatically weigh and log production. At Volvo, we offer both Load Assist and Haul Assist in-cab programs that utilize on-board weighing so operators know for certain how many tons or yards they’ve moved. It can be tracked by individual machine or by fleet, and it can also be monitored remotely to determine if one truck is producing more or less than others. Our in-cab programs can help you spot an unknown issue with site set up or an opportunity for operator training. It’s a great way to verify that site optimization programs like Volvo Site Simulation are truly impacting your productivity they way you expected it to.
HOW TO SIZE HEAVY EQUIPMENT FLEETS
Most contractors can do the math to determine how much material they need to move. For example, if it’s a six-month site and you have to move a certain amount of material, simple math says you take the number of days divided by the amount of material to determine how much must be moved each day. That’s a great first start — but you can also put new technologies and software tools to your advantage to get a leg up.
Volvo Site Simulation is a great example. It’s available at no charge to new and existing Volvo customers through their local Volvo CE dealer. Contractors can maximize productivity by utilizing the most profitable fleet of equipment for project results based on metrics the customer is looking to improve. This could be cost per ton or tons per gallon, or even a complete total cost of ownership analysis. It’s always worth investigating free tools like these that can help you get more done while cutting costs.
GETTING MORE OUT OF YOUR HEAVY EQUIPMENT
A lot of jobs include bonuses for early completion. That’s where programs like Site Simulation come into play. They help you easily right-size your equipment when bidding on jobs to give you a better shot at earning your bonuses. Just enter the amount of material you have to move in a certain amount of time, and the software gives you the exact number of workdays and shifts it takes to move that material with the fleet you suggest.
As an example, we had a customer in South Carolina use the software a few years back on a massive contract his company had won. They uncovered a need to split the jobsite into different sectors due to a loading capacity issue. By moving to two separate faces and two separate fleets, they were able to meet daily production targets without having to upsize excavators or add more trucks.
Site optimization programs also take into account non-machine factors like sharp bends in haul roads or steep inclines to show contractors how they impact the speed of production and the efficiency of machines. Customers who tie their estimation software into programs like these often have the advantage to win more bids. For these contractors, it’s not just a shot in the dark anymore.
The best programs aren’t simply about justifying the sale of new equipment either — they’re truly designed to partner with customers to improve site efficiency by ensuring their fleet and site setup are optimized to maximize productivity and profits, without sacrificing safety.
If you’re looking to grow your business by going after more unconventional bids, we encourage you to talk to a Volvo dealer about these technologies and solutions that can help you not only win new bids but maximize your profit potential in the process.
By Eric Yeomans and Rob Palermo.
