Cutting tire costs

Oct. 1, 2007
Manager: Rod Vilhauer Title: Co-owner, president & CEO Fleet: Rodman Excavating, Frisco, TX Operation: Aggregate and construction equipment hauling PROBLEM Rod Vilhauer, co-owner of Rodman Excavating, says there are only two ways for a company to make money: raise the bridge or lower the river. Raising the bridge involves getting more business from new and existing customers a pretty tall order in

Manager: Rod Vilhauer

Title: Co-owner, president & CEO

Fleet: Rodman Excavating, Frisco, TX

Operation: Aggregate and construction equipment hauling

PROBLEM

Rod Vilhauer, co-owner of Rodman Excavating, says there are only two ways for a company to make money: raise the bridge or lower the river. Raising the bridge involves getting more business from new and existing customers — a pretty tall order in the construction market this year. Lowering the river, which refers to cutting costs, is sometimes a more viable option. If you can cuts costs, the money you save goes right to the bottom line.

Saving money in the rough-and-tumble off-road world of aggregate and construction equipment hauling is no easy thing, however, as your trucks are exposed to hazards an over-the-road fleet will never see.

“There's always a devil at every level,” Vilhauer explains. “The trick is not to fear it, but to involve our people so we can make decisions with as much information as possible. As a team, we'll succeed more than we fail.”

Recently, Vilhauer and co-owner Barry Rich have been focusing on how to drive cost out of their operation, a $300-million enterprise serving the Dallas, Austin and San Antonio areas of Texas. “It takes a lot of money to grow; it eats up capital and we don't want to borrow to operate,” Vilhauer says. “Cash is king to us, so we wanted to find ways to save more of it by operating smarter.”

SOLUTION

Vilhauer and Rich hired Shawn Schneider as manager of process improvement to work alongside Cash Rainer, vp-transportation, to find those savings. The fleet has 120 medium-duty Peterbilt 335 trucks and heavy-duty Peterbilt 379 tractors, along with 100 dump and flatbed trailers.

Schneider first focused on tires. With 50% of Rodman's fleet spending its time off-road, hauling loads ranging from 84,000 to 300,000 lb. (with permits) on trips up to 600 miles, the company's tires take a beating.

To improve tire life and reduce costs, Schneider partnered with Goodyear's local Wingfoot Commercial Tire retailer, standardizing Rodman's fleet on one tire model (11R24.5). In addition, they organized monthly “air ups” to keep tires properly inflated, set up quarterly fleet surveys to make sure tread depth and air pressure matched between duals, and established specific tire “pull points” to ensure retreadability.

End result? In just six months, Rodman reduced its tire costs by 33%, which equaled savings of 10 cents per mile.

“The majority of the savings came from specifying the right tire for the right application, which increasednew tire life, and from a variety of processes bundled into one program,” Schneider explains. “Increased retreading delivered significant upfront savings by reducing new tire purchases, and specific tire pull-points increased casing retreadability. And specifying Goodyear 300 casings decreased scrap and RAR percentages, keeping tires running longer in the fleet,” he points out.

With tire maintenance on track, Schneider plans to turn to better fuel purchasing management and extended oil drain intervals to add more savings to Rodman's bottom line. “If you take care of the pennies in this business, the dollars take care of themselves,” Vilhauer says.

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