Purchasing

STREAMLINED PURCHASING

RFP, standardized fleet improve fleet management efficiency

 

A Cat® 324E L Extended Reach Hydraulic Excavator perched alongside a stream diverted from the Mad River in Dayton, Ohio, pulled buckets of gravel from the waterway, and loaded them into a Cat 725 Articulated Truck.

City of Dayton crews rely on the machines to clear debris, silt, and muck from infiltration ditches and recharge lagoons that maintain a high rate of infiltration into the underlying aquifer.

A sand and gravel aquifer beneath Dayton provides water for the city and outlying areas. The city’s artificial recharge system ensures that groundwater levels are high enough for large drawdowns by high-capacity wells.

It’s no coincidence that the city crew utilized Cat equipment to clear the stream and truck the gravel to a storage area.

In an effort to standardize its fleet when possible, the city granted primary vendor status to Caterpillar in late 2011. Fleet standardization benefits include: operation efficiency, greater compatibility of work tool attachments, easier service, fewer parts in stock, and a decreased need for software and diagnostic equipment.

“When we did this, we recognized that it is a best business practice to standardize operations whenever possible,” said Gary Schmaltz, fleet manager. “It’s not only construction equipment. We have a primary supplier for tires, for instance.”

The city put heavy trucks and construction equipment through an RFP process, and Caterpillar was selected as the primary vendor for those machines.

“We solicited every large equipment manufacturer to make sure every company had an opportunity. Caterpillar had some pretty stiff competition,” said Schmaltz.

Interested parties answered 13 questions, and answers were weighted by the city to determine the primary vendor. “Part of it was a price comparison on a long reach excavator and a wheel loader.

The vendors put their proposals together for the machinery, and then we scored them accordingly,” said Schmaltz.

GREAT FORESIGHT
The RFP goes beyond the initial purchase price to consider the overall owning and operating costs for the life of the machine.

“This shows great foresight by city leaders,” said Schmaltz. “They used the total cost of operation for the life of the machine, and recognized that is the most cost-effective approach for taxpayers.”

Other factors such as product support provided by the manufacturer and dealer are also considered when selecting a primary vendor.

Services provided by Ohio Cat and Caterpillar include operator training each time a new machine is purchased, as well as when new operators are hired, easy access to training manuals online, and unequaled parts availability.

 

“Caterpillar scored the highest on parts availability.”

 

The Clayton, Ohio Parts Distribution Center (the second largest in the Caterpillar distribution system) is just miles from Dayton.

“We are confident that just about anything that we might need in—even in an emergency—is in stock at the distribution center or dealership,” said Schmaltz. “Caterpillar scored the highest on parts availability.”

Resale value is also a factor. Cat machines hold their value better than other brands. “We had a low- hour D3 that we sold for $6,000 less than what we had paid for it 20 years earlier,” said Schmaltz.

Machine performance is also important to the city, including fuel economy, durability, and compliance with emission requirements.

The RFP has a five-year life, and will be reviewed at that time to once again determine which manufacturer is best suited to meet the city’s construction equipment needs.

Schmaltz will work to determine RFP savings from the current agreement. “For example, how much more does it cost to stock extra oil filters for a variety of manufacturers compared to a single one? It will take some time to determine the full impact of that,” Schmaltz said.

OTHER BENEFITS
With a standardized fleet, operators can freely move from one machine to another. That means an operator can easily that groundwater levels are high enough for large drawdowns by high-capacity wells. fill-in for an absent employee, with no training to learn new machine controls.

“How do you quantify some of these things? We recognized that if we make it more familiar for the operators, that adds efficiency,” Schmaltz said.

Standardization also means the city can purchase fewer work tool attachments, and has the ability to utilize less-used attachments on numerous machines.

And as technicians become more familiar with the characteristics of Cat machines, service becomes easier and more efficient.

Cat machines’ durability also helps prevent unscheduled repairs, and enables technicians to better adhere to a preventive maintenance schedule. The city schedules routine service to prevent breakdowns. Planned repairs are, of course, much less expensive than breakdowns. “We try to keep things planned. We do what we can to avoid breakdowns,” Schmaltz said.

High quality filters, better engine oil, and quality parts have enabled technicians to lengthen PM intervals. “We use engine oil sampling to pinpoint intervals that we can safely implement,” Schmaltz said. “We use these tools to effectively manage our fleet, and drive our costs down. A longer PM means fewer dollars per hour of operation and maintenance.”

Improved efficiency and fleet management go hand-in-hand in Dayton.

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