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Wheel loaders delivering real savings

B.C. custom cut mill operation S & R Sawmills is finding that investing in new Cat wheel loaders is paying off in reduced fuel costs, and the move is also essentially helping to fund the upgrade of its equipment fleet.

By Paul MacDonald

Instinctively, it seems to make sense to run mobile equipment longer, since it means not having to shell out money for newer equipment. But there is a tipping point, where you are no longer saving money—and equipment breakdowns are costing you money, and production. Often, the trick is in finding that tipping point on when to make the decision to get newer equipment.

B.C.’s S & R Sawmills has found that tipping point, and is now making the move to newer equipment.

And new mobile equipment technology is helping S & R Sawmills cut its fuel costs, and at the same time, fund the upgrading of its equipment fleet.

S & R Sawmills, which is celebrating its 50th anniversary this year, and is still a family run company, is B.C.’s largest custom cutting mill operation, and sits on the banks of the Fraser River in the Vancouver suburb of Surrey. It has been working with three new Cat wheel loaders from Caterpillar equipment dealer Finning that are delivering significant results.

“We’ve got close to 150 pieces of equipment here, from forklifts to wheel loaders to boom boats,” explains Mike Crockford, purchasing supervisor at S & R Sawmills.

They run 10 wheel loaders that do everything from bucket work moving chips to grapple loader work. “We have a dry land sort operation. The log booms are brought up the river, and we separate and sort them, using a grapple-equipped loader,” explains Crockford.

“Because we are a custom cut mill, a customer will come in, look at each individual log, and identify what kind of a yield and product he wants out of that log and we put the log through the mill and cut each one specifically to their directions.”

S & R Sawmills, founded by well-known B.C. sawmiller Chick Stewart, now 84 years-old, is actually four sawmills, which specialize in cutting the different species and sizes of wood coming from B.C.’s coastal forests. S& R’s mills can produce a staggering assortment of lumber: some 240 different sorts of lumber of different lengths, thicknesses and grades. It also has a chip mill that makes wood chips from less valuable logs.

True to Chick Stewart’s resourcefulness, S & R Sawmills is a lean operation, and has been built on working with used mobile equipment. “We’d pick equipment up at auctions and we’d run it forever,” says Crockford.

Often sawmills will hang on to older or used equipment, knowing that it offers savings vs. purchasing new equipment. And that can be the case—until the equipment starts to break down too much, and there is lost production.

“We were spending a lot of time and effort repairing older equipment,” says Crockford. With its older wheel loaders, S & R Sawmills had a spare loader in case one of the main loaders went down. And sometimes they had to fix the spare loader, too.

There were times when equipment was in their shop—and there was no spare loader. S & R had to rent a wheel loader, at considerable cost. “We have a crew of great mechanics, but they had been fixing the equipment with the equivalent of baling twine and duct tape for many years.”

Even Red Green would admit that duct tape goes only so far. It was time for a change.

“I thought there are other ways to do this, so I put together a business model for the company that showed how we could improve efficiencies and bring our costs down dramatically by running new equipment,” says Crockford.

“We figured we could cut our monthly operational costs significantly.” But first that meant tracking the costs of what they were putting into each loader over a six month period of time, so they had a history of how much they were spending on maintenance.

Management at S & R reviewed Crockford’s convincing case, and supporting numbers, and opted to purchase two Cat 980H wheel loaders from Finning about a year ago, each of which came with the Product Link remote monitoring system.

Caterpillar says its Product Link remote monitoring helps equipment owners take the guesswork out of asset management. Using telematics, operations know where their equipment is, what it’s doing and how it’s performing, and they can maximize efficiency, increase productivity and lower operating costs.

“I love the technology side,” says Crockford, who spreads out a computer spreadsheet to illustrate the savings the new wheel loaders are delivering to S & R.

“We have quantifiable numbers, and have been able to prove that by bringing in new equipment, we have cut our repair costs down far greater than what our costs are to acquire the new machines. By acquiring the two new 980H machines, we have been able to take three machines out of the fleet, because we no longer needed the spare machine to cover for downtime.”

The spare machine they got rid of was 35 years old, and had done more than its share of service over the years. “It did not owe us a dime, but it was really costing us dollars, in terms of maintenance,” says Crockford.

They’ve been able to increase the efficiency of their loaders from the 55 to 60 per cent range, to upwards of 89 per cent efficiency on the new machines.

The new approach is working so successfully that this year they added another wheel loader to their fleet from Finning, a Cat 980K, also equipped with Product Link, so that they now have an all-Cat wheel loader fleet.

Some of the savings with the new equipment comes strictly due to the age of the equipment, and its engines. S & R Sawmills, like all businesses in B.C.’s Lower Mainland, is subject to levies from Metro Vancouver for its mobile equipment, based on their diesel engines, and their tier level.

Starting in 2012, Tier Zero engines, those with little or no environmental/pollution controls, were taxed at $4 per horsepower per year by Metro Vancouver. This means an older loader delivering 350 horsepower was taxed $1,400 that year. And the fines go up every year until 2016, when businesses will no longer be allowed to have Tier Zero engines on equipment—they will need to have Tier One engines or above. It essentially forces all operations in the Lower Mainland to upgrade their equipment.

“With the new equipment, we now have seven machines running at Tier One, and the rest of the machines are at Tier Three or Four, so it cuts down on the fees we have to pay,” says Crockford.

They are seeing some pretty decent fuel savings, particularly with the new 980K. “The Tier Four machines are so much more efficient than the Tier One. We’ve got smaller engines putting out more horsepower, and using less fuel.” The older equipment uses up to 12 litres per hour at idle and the new Tier 4 engines burn less than five litres per hour. The 980K loader comes equipped with a Cat C13 ACERT Tier 4 engine delivering net power of 369 hp. The 980H machines equipped with the Cat C15 Tier 3ACERT engine have net power of 319 hp.

S & R has also opted for a service contract on the three new wheel loaders. For 10,000 hours, Finning will come and do all the oil changes, filters and any maintenance. “Basically, we won’t have to touch those machines for about four years. Typically, after about 10,000 hours, you’d be looking at rebuilding the major components on a loader. But we think these newer machines will go longer. We’re hoping to get 18,000 hours out of them before we have to spend any significant money on them.”

Crockford notes that the service set-up with Finning helps out their mechanics, who don’t lack for work. A bonus is the Finning dealership is a 10 minute drive from the S & R Sawmills site.

In addition to managing their own chips, S & R Sawmills also have a chip reload operation, and the new Cat loaders work in this high use area. They want the new loaders in the areas where they will get the most hours, so they see the most benefit.

The most exciting feature about the new equipment is Product Link, which comes standard with the new loaders. “It’s web-based, and it sends out a signal for reporting, so we know exactly where the machines are at any point.” That’s a big advantage when the guys from Finning arrive to do the servicing, and the machines could be anywhere on the sprawling 2.5 mile long site along the Fraser.

“It tells you your operating hours immediately, so you can schedule your preventative maintenance times accordingly. If you know you have 15 hours left, you can have the Finning guys there on a Saturday afternoon to do the maintenance, when the machine is not operating.”

It also tells Crockford—and Finning—how the equipment is performing, fuel-wise and sends any diagnostic warnings. “It triggers a message via e-mail if something major happens to the equipment. Both Finning and their head mechanics are made aware instantly if there is a major issue, and they can be on top of it for repairs,” says Crockford.

They’ve focused on putting the new Caterpillar equipment in high use areas, such as handling wood chips from the mills at S & R, and in the chip reload operation S & R operates. “We’ve put the new loaders into the areas where they will get the most hours. We want to have them in an active area where we are going to see the most benefit—it does not make sense to put one of these machines into an area where it is only going to be working five hours a day.” The machines are generally working 15 or 16 hours a day, seven days a week.

With the operators, some of whom have been with S & R Sawmill for 30 years-plus, the new technology takes some getting used to, but the new machines have certainly been welcomed.

“For the operators, some of them have never had a new machine—and a new machine comes with all kinds of great features.” The 980K, for example, does not have a steering wheel—it’s equipped with a joystick. “Most of the operators said that they were comfortable with it within 10 minutes.” No steering wheel allows better visibility for operators.

“The guys have been very accepting of the new technology. And the machines offer great comforts in the cab, making their job a little more comfortable.”

S & R has made a point of bringing the operators on side with the new technology, explaining that is a way they can keep track of what is going on with their machines, and how the machine can be more productive. “The system is meant to see how the machines are doing, not how the operators are doing,” said Crockford.

Everything on how the machines are doing is put on an Excel spreadsheet, which is delivered to Crockford. “You can program it to give you a daily, weekly, or monthly report, and can print it out anytime. When you come in in the morning, yesterday’s numbers could be on your computer, if you needed it that often.” Monthly numbers are sufficient for S & R’s purposes, and the results are shared with the loader operators, to establish best practices.

Product Link comes free for the first three years, after which there is a monthly cost to it. “If you don’t find that you have a need for it after three years, you just don’t renew the subscription,” says Crockford. “But I believe we will renew it.” The cost is relatively minimal: the daily cost works out to less than the cost of a large coffee at Tim Horton’s.

The new 980K loader also came equipped with an automatic five-minute shutdown. The shutdown offers savings on fuel, but it also offers benefits in another way. “The less time that machine is sitting at idle or not running it means it will be that much longer until you have to do your next maintenance, because you are not using the hours up on the machine.” Essentially, any time a machine sits idling uses up operating hours, and eats into the servicing and warranty time.

“It also means that since it is using less operating hours, you will not have to rebuild components as quickly, down the road.”

The system lets the machine idle for five minutes to let the turbocharger cool down and then it shuts off. Despite their best efforts, even the best of operators can get sidetracked at times. “An operator could get off the machine to do something, and leaves the engine going, and gets pulled away to do something else, that takes some time.”

The two more recent purchases, the 980H units, will be equipped with the five minute shutdown this year.

Overall, it’s clear what the combination of new equipment, Product Link and a generally more efficient equipment fleet is delivering to S & R Sawmills.

“With the three new machines we have now, at some point next year the savings they will have delivered will allow us to buy another loader, to replace an older machine.”

It’s kind of like having your cake, and eating it, too—equipment-wise.