In addition to working extremely hard we really are one big family. Our guys in the shop really make this place home. Thanks for another great week guys!
In addition to working extremely hard we really are one big family. Our guys in the shop really make this place home. Thanks for another great week guys!
For fleet managers one of the toughest parts of the job is when to rebuild or “put out to pasture” an aging piece of equipment. More often than not those decision are based upon instinct and not grounded by hard analytics. This article will shed some light on the five options feet managers can make when evaluating older pieces of equipment.
Purchasing a fleet of work trucks or excavators is only half of the battle. More often than not, the heavy equipment needed to do the job, is the biggest capital expense of an industrial service company. Agriculture, Transportation, Construction, Road Maintenance, Mining, Oil and Gas and Marine industries all rely on their fleets to produce sustainable revenue. The life span of each piece of equipment should be factored into not only the initial cost but variable costs of running the equipment. When a fleet manager is evaluating what to do with an aging piece of equipment they need to adequately understand their options, factor in initial and future costs, analyze the resale and depreciation of the equipment and how to improve efficiency when they can. It is not a decision to be made lightly.
The first step a fleet manager needs to take is identify the pieces of equipment in their operation and make an honest assessment of condition. Areas of study for an existing piece of equipment include: initial product cost, fuel efficiency vs. newer models, maintenance frequency and costs, decreasing reliability and downtime, re-sell value and lack of ongoing utilization within the fleet. The decision to replace a piece of equipment usually consists of more than one factor other than age of service. A good fleet manager should keep an ongoing list of suitable candidates for replacement and factor in doing a few units per year given the company’s budget. Along the same line the fleet manager should also factor in multiple vehicles that will unexpectedly be broken beyond repair. Failure to plan for unexpected repairs or having to replace a unit entirely can cost a company untold amounts of money in downtime and expedited replacement.
We have identified five suitable options for fleet managers to replace older equipment: Hold, Scrap/Sell, Continued Use & Repair or Partial Rebuild, Remanufactured Like for Like Swap and Full Replacement.
The first option is to hold onto the piece of equipment. After a complete evaluation the fleet manager decides to hold on to the piece of equipment and continue to on as is. More often a piece of equipment in a holding pattern has finished up a very specific job and is sitting idle awaiting another task. The small repairs are not costly and the equipment still produces tangible revenue for the company. It should be noted that a piece of idle equipment can deteriorate quickly and continues to depreciate in value.
The second option for the company is to sell or scrap the piece of equipment. Older equipment can either be sold for scrap, parted out or sold at auction to recoup some of its value. Pieces of equipment that all into this category are beyond their useful age.
The third option for fleet managers is to continue to run and repair as needed. This option should be considered the fall back option if all other options have been exhausted. The inclination is to push a piece of equipment to its useable max however this mentality can backfire on a company. All it takes is for that asset to fail unexpectedly one day without any fallback option. Run and Repair as needed should only be used if the company has an alternative option in-case the machine fails mid project. Trying to extend the life of a machine should be analyzed and calculated vs. replacing the piece of equipment. Upfront costs, performance and future salvage value should be considered in this decision. Sometimes short gap solutions are perfect to get a company through a season before full replacement can take place.
When all else fails and the machine needs immediate attention the Partial Rebuild and/or remanufactured options are the best possible solution before out all buying a brand new piece of equipment. It should be noted that “rebuilding” and “refurbishing” are not the same as “remanufacturing”. A rebuild of an engine or piece of equipment usually include replacing ancillary wear parts to extend the life of the equipment. In an excavator that might include replacing the bucket, teeth or tracks. In a diesel engine a rebuild might include replacing the bearings, gaskets, turbo and injectors. Rebuilding is the more cost effective option to get additional life out of the equipment but the core mechanical components are still subject to wear and catastrophic failure. Rebuilding is a good option if the piece of equipment is slated to last a few more seasons but is scheduled to be replaced in the near future. For example rebuilding a 25 year old engine multiple times with just an inframe or overhaul kit will not prevent spun crankshaft bearings, dropped valves, cracked cylinder heads or a rod through the engine block.
Consequently, remanufacturing is the best possible option before a true replacement. Remanufacturing is returning a piece of equipment to “like new” status. A true reman process will machine the piece of equipment back to OEM spec. In diesel engines this means grinding, polishing, decking and welding all of the hard parts back to their original factory specifications. The engine is returned to the same quality as the day it left the factory years before. Remanufacturing can also improve the quality and efficiency of the component from the original condition as technology and parts quality improved since the initial build date. Typically remanufacturing outfits will either build you a new remaned machine or they can remanufacture your unit and return it, opting for minimal or non-existent downtime. Remanufacturing can extend the life of a piece of equipment by years and save a company untold amounts of money over purchasing a new piece of equipment. On average a remanufactured machine versus a brand new unit is 68% cheaper than going to the dealer.
A company should only consider a true replacement of a machine if all other options have been analyzed and exhausted. A fleet manager should always be focused on the present job at hand and the future needs of the equipment. If a machine cannot keep up with the volume, job site requirements, and nature of the work then the machine should be replaced. The continuation of work should be considered when analyzing a piece of equipment as well as its full economical life cycle and depreciation. Many times assets which are financed through a bank or capital equipment leasing company will be charged more in interest over the life cycle of the machine. Financing companies are expecting the owners to trade in an older piece of equipment once the interest payments balloon over time. The financing companies make money on the sale as well as “pushing” companies to purchase new equipment which include down payments upfront.
Three decisions should be considered when analyzing whether to replace a machine or do a remanufacturing of the existing unit.
Ideally, there is a lot of grey area when deciding to replace or reman a current piece of machinery. There are a lot of unknowns trying to predict years out. In a like-for-like comparison a replacement will win over a reman unit if the production capacity has increased which off-sets initial costs. Examples of greater productivity include (lower fuel costs, greater load or torque capacity, upgraded size and configuration, faster deliverable times or lower maintenance costs). At the end of the day a fleet manager should try their best to focus on the tasks at and while considering future costs. Ben Franklin stated it best, “An ounce of prevention is worth a pound of cure.”
Pretty awesome week here at Capital Reman. We finished 7 engines this week which is now a pace of 30-35 per month. The crew really works hard here and to blow off a little steam we play darts.
This week we started a new tradition… $100 Fridays. First one to hit a bullseye wins a $100, two tries each. Nobody of our 26 guys hit the mark so next week it doubles to $200.
We’ve been off to a busy start here at Capital Reman in 2018. Here are a few shop pictures of engines going out the door.
We want to wish everyone a giant thank you for your support and business over the course of the year. It has been a blast growing bigger and bigger!
We also had a wonderful turnout for the 11th Year of the Harry Samora’s Foundation which donates Toys to sick patients at Children’s Hospital.
Happy Holidays from us a Capital Reman! We will be off Monday December 25th and Tuesday December 26th.
When researching an engine rebuild it can be confusing wading through industry lingo and technical jargon. This article should help clear up the differences between short blocks, long blocks, complete crate engines and what option is best for your situation.
Short Blocks are a non-running engine. They consist of an engine block, crankshaft and connecting rods. A short block however does not consist of a cylinder head, liners, gaskets, rings a timed gear-train or any kind of ancillary parts including the fuel system.
Advantages: Short blocks are great for customers who have a non-cracked cylinder head but an un-useable crankshaft. Usually when a crankshaft spins a bearing the entire engine seizes up also ruining the head. Customers with a workable head can save a great deal of time and money just opting for a new block/crankshaft combo.
Disadvantages: Usually short-blocks requests are rare because the customer’s cylinder head is also un-useable. When remanufacturing an engine it might be best just to have the cylinder head work done as well. A new ported head machined back to OEM spec can be a great way to add life to an existing engine. Another disadvantage of a short-block could also be the labor costs. A mechanic will ultimately have to reassemble the engine regardless if it is a short block or a long block which includes re-configuring the old cylinder head. The labor costs to reassemble the engine will be more than a long block or complete engine without the added advantage of a new cylinder head.
A long block is a more complete version of a short block. A long block is still a non-running engine but contains more parts than a short block. The biggest difference between a short block and a long block is the inclusion of the cylinder head. A long block will typically include:
• Cylinder Block
• Complete Loaded Cylinder Head
• Connecting Rods
• Intermediate Cover
• Timed Front Gear Group
Depending on the rebuilder, some long-block engines will include injectors often called a 7/8 engine. It is always advised to get a build sheet before purchasing just so you are completely aware of what you are getting.
Advantages: Long-block engines are perfect for customers looking save some money but wanting the most complete internal gear-train. A remanufactured long-block engine can be as much as 50%-70% cheaper than a complete drop in option from a dealer. Other advantages of a long-block engine include less complications during installation. A long block is built to the exact engine serial number of the engine being replaced. The existing flywheel and flywheel housing are already an exact match so bolting up the engine to transmission will work every time. Long blocks are also built to accommodate the exact fuel system. Some blocks are built for inline fuel systems while others are built for rotary style fuel pumps. With a long-block all someone would have to swap over from the old engine is the water pump, oil pump, turbo, fuel system and ancillary parts such as accessory mounts. It is cheaper on the parts and labor side than a complete engine.
• Upfront Pricing
• Save money re-using good working ancillary components
• Built exactly to engine serial number
• Swap over perfect fitting ancillary components
• Perfect fit every time
• Shorter Lead Time
• More simplistic warranty terms
Disadvantages: The disadvantages to long-blocks engines are few and far between. For those looking to get back to work or on the road as quickly as possible, a long-block will require more labor than a drop-in complete engine. Long-blocks engines warranties also only cover the hard-internal parts of the engine and do not include failures to the ancillary parts which means if your injectors fail they are not covered by the builder.
A complete engine is just like it sounds… “fan to flywheel” drop in ready to go. A complete engine includes all of your hard internal parts as well as the fuel system, turbo, pumps, housings and oil pan. A complete engine can be bolted up and attached to the transmission rather quickly and requires no additional labor to assemble the engine.
Advantages: A complete drop-in option built to the exact serial number and arrangement number will be the quickest way to get back on the road. Lead time can be a matter of days vs. 2 weeks or more with a remanufactured long block. Complete engines usually are dyno tested and come with a complete warranty on the entire unit.
Disadvantages: The price of a complete drop-in from the dealer will cost considerably more than a long block option; sometimes double the price. Complete engines (crate engines) not build to a specific serial number sometimes may not be a 100% exact fit. Some customers will look to swap in a different model or higher horsepower unit but not expect the intensive labor costs associated of not doing a like-for-like swap. Many times complete engine swaps will require different motor mounts, have different oil sump locations, incompatibility issues with the block in the application, issues with turbo and crossover tube clearance, upgrades to the suspension/axles as well as configuring the ECM of the truck to work with the ECM of the new engine. Compatibility is important but often times overlooked when doing crate engine swaps.
All three options will get you back to work again however it is wise to research the long-term pros and cons of doing each. Overall, the thing to keep in mind when researching replacement engine options is whether lead time or cost more important.
Capital Reman Exchange is proud to call Colorado our home. Based in the Mile High City, we call the Capitol City of Colorado our home, but ensure it is our client’s capital equipment and trust we strive to earn each and every day. We achieve trust through hands on ownership and an employee base that is second to none in skill and training.
Our modern facilities and equipment include our full machine shop and separate engine building departments. These facilities help keep Capital Reman Exchange a cut above the competition and allows us the flexibility to work with customers who are individual owners, fleet managers or anywhere on the spectrum.
We a certified AERA (Automotive Engine Rebuilders Association) machine shop. Our team of in-house diesel experts are qualified to assist you with:
- Remanufactured Diesel Engines
- Used Diesel Engines
- Camshafts and Followers
- Cylinder Heads
- Connecting Rods
- Rocker Assemblies
- Inframe and Overhaul Kits
We believe our consultative approach to solving diesel engine problems helps to craft the perfect solution to fit your specific application. Call us today, we would love to help you with all of your heavy duty engine needs!
All OEM manufacturer’s brand name, tradename, symbols or descriptions are for internal reference only. Any statement, website content, advertisement, literature or brochure should NOT be interpreted or implied as having any direct relationship with OEM manufacturers or their respective dealer network. Under no circumstance is any engine part or engine advertised by Capital Reman Exchange, LLC affiliated with any OEM manufacturers which includes but not limited to Caterpillar®, Cummins®, Detroit Diesel®, Mack®, John Deere®, Komatsu®, Waukesha®.