THE MEGA EQUIPMENT COMPLEX
THE REFORMATION OF THE CONSTRUCTION EQUIPMENT INDUSTRY – PART THREE
OVERVIEW
The time has come to improve on classic business models, tools, technology and infrastructure comprising the Construction Equipment Industry and serving end-users/customers at all levels. Consider a future including expansive service centers operating “24/7” with hundreds of bays and techs servicing all make and models, achieving economies of scale and enhancing customer experience through lower costs, improved quality, UPTIME & convenience. Contemporary comparisons for “THE MEGA EQUIPMENT COMPLEX” (MEC) include Tesla Production and Sales, Amazon Distribution and “Buc-ee’s” Service Stations -> MEC’s would inherently require large footprints due to the unique service provided, distance between locations and civil aviation facilities adjacent (ideally) to these sites.
The most recent article in this series – “The UPTIME App” (October 31st) – introduced a conceptual “universal inspection tool” addressing the need for “data-driven profiles” (cradle-to-grave) for equipment assets and informational standardization as foundational for the industry. MEC’s build on “The UPTIME App”, advancing the inevitable industry evolution with contemporary, more appropriate structures (admin, tech, brick & mortar) and methodologies: offering process standardization, breadth of service and cost efficiencies in lieu of the multiple “legacy verticals” models employed by dominant manufacturers, each independently vying for market share with proprietary solutions. Capital investments made by OEM Equipment Dealers, forced to replicate large expenditures, then passing the resulting global costs onto customers is inherently inefficient, considering the competitive forces in-play (domestic and global) and the availability of proven technologies.
Regional OEM Dealers should be the first tenants to lease bays in each MEC facility, leading to the consolidation and reinforcement of a customer-centric posture rewarded with acceptance and loyalty. Considering the true end-users of construction equipment (contractors) typically employ a diverse mix of brands and models, the laboratory for standardization and delivery of optimal solutions should be one which emulates and encompasses this reality.
THE MEGA EQUIPMENT COMPLEX (MEC) includes (not limited to) the following –
- “Last Mile” sites near Interstates and other Major Highways, open 24/7
- 150-250+ Service Bays of varying dimensions and equipment, available on long-term leases
- Full Machine Shop facilities for repairs, rebuilds -> machines/powertrains/hydraulics/refurb
- Parts Warehouse/Facilities for OEM Parts, Reman, Capital Spares, etc
- Component Rebuild Center (CRC) level service -> (cleaning/tooling/benches) per OEM specs
- “Standard Jobs” for major repairs & rebuilds, paint – pricing and scheduling available online
- Dynamometers -> several, including up to 3500-4500 Horsepower power plants
- High-Velocity Oxygen Fuel (HVOF) Service + Traditional Hydraulic Cylinder Repair (Chrome)
- Scheduled Oil Sampling (SOS) – full service, all makes & models (with OEM form trend analysis)
- Complete Paint (including Sandblast, Decals) and Fabrication Shop for custom metal work
- Training Facilities for Service Techs, classes, accreditation -> Apprentice to Master Tech
- Operator Training Facilities – for lease to OEM Dealer and Independent providers
- Proving grounds for testing repaired machines under-load + Operator Training support
- Locker Rooms, Canteen and Rest Areas for personnel associated with leased spaces
- Office space -> Sales/Leasing, Warranty, Telematics/Tracking, Service & limited Rental Staff
- Autonomous Equipment & Control Pod Storage + Support –> design/testing/logistics/safety
- Technology Center -> diagnostics, telematics, autonomous support, auction services, etc
- ERP & Saas Technology Lab -> Implementation HQ, Testing Autonomous & NextGen Projects
- Online Auctioneer Services – administrative and operations support, inventory storage
- Storage Yards for lease returns, sales and limited rental fleet inventory
- Bonded Yard Space – for work on non-compliant (emissions) machines with government waivers
- Logistics office & spaces for providers (contract flat-rate service) within a defined radius
- Loop-Truck service (delivery/pickup) for components/parts daily with stops on a defined route
- Long-Haul Transport Load/Unload space -> ramps and lift equipment for outlying customers
- Containerization Facility, office & yard space for provider (competitive contract & standard rates)
- Spaces for service various providers -> tools, lubricants, uniforms, etc
- Exchange Outlet (wholesale) for PPE, OEM Swag, MEC Gear, sundries, packaged nutrition, etc
INNOVATION & ECONOMIES OF SCALE
Autonomous Equipment, Control, Networks & Tech Support -> the adoption of autonomous earthmoving equipment represents a significant shift in the construction industry, with an established foothold, it’s clear acceptance & adoption are trending toward increased interest & demand. Experience demonstrates that contractors prefer to access the latest solutions without committing to a significant upfront investment – most recently exemplified by the proliferation of medium-term equipment leases (in lieu of outright purchase or rental) over a decade ago, based on “work in pipeline” and acceptable ownership time horizons, typically 2-4 years.
Autonomous Equipment Packages are a cost-effective option for short-term civil works and land development projects, and MEC’s will broadly support providers regardless of brand. Rental agreements would include planning, site/plot programming, maintenance and repair services, reducing the burden of bids & selection for contractors, increasing their competitiveness in winning contracts.
Equipment Operators -> Supervised Autonomy defines the initial phase of this technology, as experienced team members shift their expertise gained “in the operator’s compartment” to programming and overwatch roles within on-site, climate-controlled control pods (offices), monitoring and managing 24/7 operation of machines not subject to fatigue. Jobsite Safety is a primary benefit and for the contractor, a cost reduction in labor and insurance outlays.
Service Techs -> will be engaged in all aspects of the industry, replacing marketing & sale staff outright as ambassadors to end-users, simply codifying what has been the case for decades – once a “new machine” is sold, the subsequent direct engagement (including initial Warranty) is primarily between Service Staff and End-Users. In the Autonomous Package scenario, Service Techs would ideally be present in the site/plot programming phase for assigned projects/customers.
Techs will also enjoy a new breadth of income opportunity via inspections of all machines (vintage to new) via “The UPTIME App” – perpetually rated within the platform, requested and rewarded for their expertise and historical accuracy assessing used equipment, earn based on merit. Techs will realize and solidify their undisputed role as the “backbone of the industry.”
Bulk Purchasing -> large service centers can leverage buying power to negotiate significant discounts on parts, supplies, and tools due to the sheer volume it purchases. A single-make dealer, with a smaller and more predictable demand, lacks this leverage, translating into lower costs for parts used in repairs, which can be passed on to the customer.
Specialized Labor -> with up to 200+ bays, the MEC can afford to employ highly specialized technicians for specific component systems (e.g. powertrain, hydraulics, electrical systems, fabrication, EV charging). Specialization leads to faster, more efficient repairs, reducing labor costs per job. A smaller OEM dealer might have less experienced technicians, who may take longer on complex, less common repairs.
Inventory Management -> The MEC can stock a wider range of fast-moving parts for various makes and models. This reduces downtime for customers waiting for parts and can be more efficient than each individual OEM dealer stocking parts for just their brand. A larger inventory also allows the center to predict demand and optimize stock levels, minimizing holding costs.
Facility Utilization -> 200+ Service Bays allow for maximum utilization of resources and internal mobilization to specialized service areas. The MEC can handle a higher volume of repairs, spreading overhead costs (rent, utilities, administration) across a larger revenue base. A single-make dealer inherently has underutilized bays during lulls in demand.
Training and Tooling -> The cost of specialized training and diagnostic tools can be spread across a larger number of technicians and jobs. MEC Management can invest in the latest technology and training for its staff & service provider tenants, ensuring high-quality deliverables across all makes and models. Smaller, less-funded OEM Dealers have budget constraints.
ENHANCED CUSTOMER SERVICE
One-Stop Shop -> Customers with mixed fleets (most) benefit from the convenience of having all their equipment serviced in one location, regardless of make or model. This simplifies maintenance management and reduces the hassle of dealing with multiple OEM Dealership branches with varying support infrastructure. The economies of scale achieved by the MEC will translate to more competitive labor rates and parts pricing compared to smaller OEM Dealer facilities.
Expertise Across Brands -> technicians gain experience working on a wide variety of equipment, developing a broader understanding of different technologies and repair techniques. This can be valuable in diagnosing and resolving complex issues an shared within the MEC’s tech training and accreditation activities.
Improved Turnaround Times -> specialized technicians, readily available parts, and efficient workflows contribute to faster turnaround times for repairs, minimizing equipment downtime for customers.
Flexible Scheduling & Logistics -> With an enormous number of bays and technicians, the MEC can offer flexible scheduling options (online) to meet the diverse needs of its customers. Reliable Flat-Rate transport contractors can relieve customers of using their own trucks & trailers when is makes most sense.
SUMMARY – assessing the confluence of current trends, artificial intelligence (AI), actors and influencers participating in the construction equipment industry – forming a rational view – the reality of a well-designed construction equipment service center, brand colorblind & leveraging economies of scale becomes clear.
The marketplace is ripe for disruptive solutions offering “best-in-class” value to customers with mixed fleets (most contractors), expanding service options & accessibility on a leveled playing-field driven by technology, enhanced UPTIME and reducing the cost of doing business.
Contact: Bret Creech, Cell/WhatsApp# +1-813-922-9840 / Email: info@mistermaquinaria.com
* My intention is direct engagement – joining a team involved in the application of technology throughout all aspects of the construction equipment industry – collaborating with others driven to provide the best possible customer experience.
THE UPTIME APP
THE REFORMATION OF THE CONSTRUCTION EQUIPMENT INDUSTRY – PART TWO
OVERVIEW
One of the most consequential liabilities present in today’s construction equipment sector is the lack of technology – broadly applied. As with most industries platforms exist to bring efficiency to our business activities, today they mainly focused on rental fleet processes, collections for damages, maintenance and parts & service fulfillment activities. Those commercially available technology solutions are becoming familiar brands and currently serve the low-hanging fruit of the industry by improving inefficient client processes & based on the provider’s revenue stream expectations. While a handful of savvy tech entrepreneurs have isolated “honey holes” – the industry remains behind the curve, fractured and ripe for holistic reformation.
The current landscape -> most scaled organizations employ state-of-the-art Enterprise Resource Planning (ERP, SaaS) solutions for their financials and “back-end” processes & tie-in third-party solutions specific to their needs. The tech newcomers in the equipment industry typically provide solutions based on “inspections and condition reports” with data entry (artificial intelligence assisted) on handheld devices & laptops, feeding their closed-source software: rightly so in “protecting” their time & financial investments. Then there are the “OEM Kingpins” serving their legacy strategy of vertical integration with solutions designed specifically for “in-channel branded assets” (ill-suited for allied gear) rolled-out to their Dealer Network – confining to say the least. As a practical matter, just try making sense of a CTS (undercarriage) report on a trade inspection for a CAT dozer, while viewing on another OEM’s proprietary inspection template – “rinse & repeat”, the examples are endless. Ultimately those who receive less, not more, are equipment owners & end users and those who attempt to arrive at fair and accurate asset valuations. The evolved tech providers are on the right track and should be keen to participate with a broader suite of solutions – meanwhile, the market deserves more, with the logical initial investment addressing the most basic space of “ongoing inspections and condition reports”. The roots of the platform will have an easy ride into the depths of the industry.
Conceptual deliverables & collaboration -> a robust app (iPhone/Android) solution will be developed with the breadth to document the complete and entire existence – original build, operational and commercial activity – of any construction equipment asset regardless of make and model. “THE UPTIME APP” is a cloud-based, neutral platform with an attractive premise: management of capital equipment assets, cradle to grave, regardless of make, model or category.
How the data is utilized will be driven by the market, and potentially limitless depending on the app structure, desire for platform standardization, QA/QC, management & monetization, sharing and/or licensing arrangements. Open-source software (OSS) or a workable variant would foster wide and accelerated acceptance versus a “closed-source proprietary” approach. The beauty of “open source” or “permissive-licensing (BSD-style)” solutions is unleashing the power of competition and innovation in an industry far behind the curve compared to others. While extremely important on many fronts, this area of discussion will be tabled – remain completely open – as participants and stakeholders chime-in with feedback and interest.
The UPTIME agenda delivers a comprehensive data-driven solution aimed at consolidating information typically residing in distinct locations & compiled by a variety of sources, many of which will be averse to sharing this critical data. As the use of UPTIME becomes embedded & required within lease contracts, insurance policies, end-user fleet and resale activities, etc, “the dominoes will fall” throughout the industry and replace (or assimilate) many of the current solutions in the fractured construction equipment space. Innovation requires conceptual thought, design based on experience & observation, acceptance and bringing new ideas to the market. The following commentary should be considered “do-able” as the winners will be our customers and the industry, regardless of certain resistance from sectors of the establishment.
What will UPTIME include and offer?
ORIGINAL CONFIGURATION DATA -> as machines make their way through OEM manufacturing facilities asset “build” data is uploaded to a file, consider a birth certificate for a machine asset. That data resides originally with OEM’s, of which the largest and well-known would not likely share outside their OEM Dealer network. Eventually, complete configuration data would become accessible downstream as machine assets are sold and the players involved in the sale & delivery (OEM Dealers, financiers, lessors, end-user/owners) would make the data available for manual input – UPTIME files will be populated with configuration data regardless of initial “pushback” by OEM’s, as each “Machine Asset Profile” (MAP) is created. Configuration specifications (SPECS) allow potential buyers in diverse geographical locations to ascertain the viability of any given machine for their use. All data is pertinent to the machine asset’s life cycle through varying phases of ownership.
LOGISTICS –> original OEM configuration data would include precise machine dimensions & weights (whole or broken-down) with options unique to each asset as defined by the “OEM Build Specs”. This “DIMS” data will allow inland and maritime freight organizations to accurately quote rates in a highly competitive space. “AI” generated transportation quotes will become the norm as the applied technology compiles and consolidates data, vessel availability, space & transit times, service options and rates for the global transportation sector. Much of the technology required for logistics exists or currently under development, simply needs to be pathed & interfaced.
ARTIFICIAL INTELLIGENCE (AI) -> basic machine configuration & DIMS data will be the standard by which future condition reports will be compared. When a machine asset undergoes modification implying changes to valuation, DIMS, etc – early UPTIME (Beta) will have “opinions” which will evolve to provide “reliable answers” – consider a dozer with “sweeps & screens” added, a truck with bias-ply replacement of original radial tires, or a loader/telehandler with “foam-filled” tires…value-added options & general marketability will be resolved via AI, neutral and relatively more efficient. Artificial intelligence will inherently play a vital role in the management & use of massive volumes of available data: from collection to compilation & analysis in a plethora of current and future applications.
MAINTENANCE & REPAIRS –> no data is more valuable for a machine asset than its breadth of available history, from replacing wear items to component exchanges & machine rebuilds. Capturing data varies as OEM’s have vertically integrated proprietary applications for their dealer network – historically experiencing significant falloff in reporting after original and/or extended warranties expire (typically 12 & 36 months respectively, limited by machine hours) and the OEM Dealer’s predominance fades. For example, it is common for sellers to tout “working versus idle hours” when marketing a machine early in the lifecycle, because that is when history is most accurate. Recognizing that OEM warranty periods run parallel to “OEM rules of infringement” (restricting sales outside a given territory) is important, and an understandable milestone for potential buyers expecting good historical data.
As machines become “used iron” and fair game for resale by all market traders, the secondary market (non-OEM Dealer) for technical service & repairs is composed of relatively few providers and applications, aside from the end-user performing routine tasks in-house (or not). Recall in many cases, machines are consigned to auctions by leasing companies, currently the predominant asset-owner class in the USA (see my article “Building Your Own Brand”, July 25th). QA/QC is influenced by provider competence, budgetary decisions & real outcomes in this phase and rife with blinders. As machines move through their lifecycles today, documenting complete and accurate data ongoing is precarious at best, making this functionality the most challenging to develop within “THE UPTIME APP” – while simultaneously providing the greatest commercial value to our industry, reflected in efficiency and cost savings, reduction in management hours and creating new revenue streams for users and service professionals up & downstream. Currently the availability of history for a machine with an expected life of twenty (20) years would inherently have little trusted data for more than half of that period. UPTIME will force drastic change in this area as part of “The Reformation of the Construction Equipment Industry”. A robust cloud-based platform for management of equipment assets, cradle to grave will be the “solution of choice” by addressing the void of historical data, thereby making well-maintained machines more valuable, longer.
DIAGNOSTICS & PARTS -> proprietary technical software and parts are controlled by OEMs and their Authorized Dealers, a subject that has been argued at the highest level, the U.S. Supreme Court. The “Right to Repair” movement – “If you own something, you should be able to repair it yourself or take it to a technician of your choice” – has resulted in legislation in some States but not yet resolved throughout the USA. UPTIME, over time, will drive the solution as grassroots market acceptance will force OEMs to respond to their customers’ desires and mitigate the risk of decreased resale values for their equipment. UPTIME will provide the tools to manage fleets comprised of various machine brands & models, mirroring the reality of end-user equipment fleets. Consider this issue & sharing of TELEMATICS data or access via third-party, subsets of the overall MAINTENANCE & REPAIRS cause and in the best interests of customers.
TELEMATICS –> networking communication platforms between OEM Dealers and End-Users of equipment assets. Capacity to remotely monitor machines in the field, detect abnormalities & alert clients, download ECU data (machine operation history) in reporting formats. The most favorable outcome for customers is a standardized transmission solution across all makes & models, avoiding the cumbersome and inefficient task of creating multiple software interfaces for something this simple. UPTIME can drive behavior to a resolution, with broad market acceptance based on leveraging the power of competition and innovation in the marketplace.
TRANSPARENCY – “THE DOMINOES WILL FALL” throughout the construction equipment industry as the OEMs and their Authorized Dealers who actively promote the sharing of information & data into the UPTIME solution will see resale values of their branded equipment assets increase relative to competitors who drag their feet in the face of market-driven evolution. Customers are much more likely to gravitate toward a used machine with easy-to-digest historical data, than one without…regardless of past preferences. “THE UPTIME APP” is a tool, long overdue, and only the next step in “The Reformation of the Construction Equipment Industry”.
How will UPTIME be used & who will invest in development?
MARKET CONSOLIDATION & CHANGE – the argument in favor of a user-friendly cloud-based app to manage equipment assets “cradle to grave” has been contemplated long before now, at least in other industries. The fact that sectors of our industry are being served “a la carte” where entrepreneurs have identified potential revenue streams speaks to that. Some of those entities may form part of UPTIME development, become assimilated or acquired as the UPTIME build-out serves more users and gains momentum. Detail and discussion of a predictable industry evolution – with foundations based on this conversation – will be addressed in the next article “FUTURAMA” (third in this series), outlining the continued migration of investment away from the classic “New Sales Model”, forward to the “Parts & Service Centric” model & inherently driven by original OEM Product Quality. Supported by a landscape of highly-competitive aftermarket service, customers will evaluate, choose & value their equipment suppliers on equipment reliability & innovation, service experience & responsiveness and overall cost of ownership – less on new sales promotion and staff.
MONETIZATION, SALES & MARKETING – the UPTIME platform will bring supply & demand together in an efficient, user-friendly manner. Players in new or reconstituted roles offering “added-value” to processes and operations will share in the revenue streams generated within the construction equipment industry, replacing the stagnant or unsustainable. Organizations and individuals providing efficiency, cost reduction and value will emerge as they liaise with operations and support construction equipment users in all aspects of project management dependent on equipment productivity. Used Equipment & International Experts will be key players as secondary markets increase in importance.
LENDERS & LEASING INSTITUTIONS – with most new machines being delivered into the USA market on leases, these organizations would benefit more than any other single user, in my view. Lease contracts would include required periodic UPTIME inspections in the condition clauses to track compliance and ready machines for resale long before assets are returned. Addressing the pervasive issue of “predictable conflicts” as leases end and reconciliation of “required versus actual condition” is required, often delaying the process and/or redefining final disposition of equipment assets (for in-depth discussion see my article “Building Your Own Brand”, July 25th).
OEM DEALER PARTS & SERVICE – RENTAL FLEETS, GENERAL CONTRACTORS – no elaboration required
SERVICE TECHS, INSPECTORS – monetization and sustainable income will drive participation. Notwithstanding the guidance of artificial intelligence, well-trained mechanics will be the ideal first choice for inspections and documentation of the work they have performed on machines in the shop or field – equipment owners will have the option to hire techs for UPTIME inspections and related services, a rating system will allow both tech and owner to rate each other on a variety of KPI’s.
SOFTWARE DEVELOPERS – with ample opportunities in a barren tech landscape, this group will thrive and enjoy employment for many years.
SUMMARY – when a confluence of readily available technology meets an industry rife with inefficiencies, something must give. For those with vast experience and a penchant for business development – currently defined by technological advance – it is incumbent on us to impart knowledge in positive, productive ways. This discission is only beginning, meant to provoke rational thought and preparedness through dialogue about what we can reasonably expect & embracing impending change.
*Look for the final article in this series “THE MEGA EQUIPMENT COMPLEX” (January 2025) – addressing issues detailed above and further exploring how and where the industry will evolve in the next decade and beyond. Topics of discussion include vast, all-encompassing “Equipment Centers”, autonomous & remote-controlled gear, breakdown of traditional sales and retail behemoths and the ultimate dominance of parts & service providers.
It is my aim to forward the application of technology throughout all aspects of the construction equipment industry, regardless of scenario, partnering with organizations driven by delivering solutions and adding value to the client experience.
Contact: Bret Creech, Cell/WhatsApp# +1-813-922-9840 / Email: info@mistermaquinaria.com
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