Getting A Fix On Variable Expense

Spend any time with the McCarty family at their dairy operation and you're likely to hear the words family, relationship, trust and integrity, along with analysis and innovation. All of this played a part in a recent deal from Foley Equipment for 17 new Cat^® machines to handle feed and manure for McCarty Family Farms.

The McCarty family transplanted their entire operation to Kansas from Pennsylvania, where rising costs made it difficult to acquire acreage needed to grow the business. With this expansion came the need for more machines to run the operation. The McCartys turned to their equipment partner, Foley Equipment, and Caterpillar for an analysis of their purchase and operating options.

As with most businesses, the dairy business is considerably more competitive today than in the past, so watching costs is critical. "In any given month, we might find a $30,000 or $40,000 'surprise expense' for machine or equipment repairs," said Ken McCarty, who operates the Rexford dairy with his brother Clay.

"Our goal is to minimize the up-and-down fluctuations in operating costs. We're really tuned in to finding partners and ways of doing business where the unknowns become known," said Clay. "Foley made it so we know how much machine operating expenses will be for the long term," Ken continued. "This brings incredible stability to our operating cost, which ultimately flows to the bottom line."

Long-time Foley sales representative Dustin Daniels and Scott Bailey of Caterpillar's Job Site Solutions team conducted an exhaustive, top-to-bottom analysis of the entire operation, including capital and cash flow; machine requirements and their fit to operational tasks; work flows and productivity; and safety and maintenance.

The outcome of the analysis is a solution that optimizes machine utilization, component life, operator performance, fuel consumption and total fleet availability at a fixed cost. The end result is a fleet fully integrated with dairy operations to significantly improve the bottom line.

Monitoring and managing each machine wouldn't be possible without technology. Each machine is outfitted with Cat^® Product Link^™ and monitored by Foley through VisionLink^™ desktop and mobile monitoring applications. Machines are set up with limits on certain operating parameters, based on the site and the work required and monitored on a number of productivity measures, as well.

Issues such as engine overspeeds, improper shift points or excessive idling that could create a safety issue, an unplanned repair or higher operating costs are now visible. In doing so, Foley will be able to identify issues and develop remedies before they turn into costly downtime.

Productivity of the machines will also be tracked in an effort to optimize efficiency. Load volumes and cycle times will provide insight into inefficiencies or bottlenecks in the day-to-day operations, with the goal of eliminating them.

Delton Taylor, equipment solutions manager for Foley Equipment, will be the primary point of contact for much of this information called Condition Monitoring. "What's neat about this is that it's going to be transparent to the customer. In most instances we're going to know a problem exists before the customer has a chance to pick up the phone. In fact, we'll likely be reporting the problem to them," explained Taylor.

"The more we looked at this, the more it appeared to be a no-brainer on so many levels," said Mike McCarty. "Think about it this way; we've taken a variable expense and made it fixed. That's huge. We've taken the machine maintenance and off-loaded it to the people who really know the machines. As the technology advances it's tougher to train workers and keep them up-to-date. Plus, with an operation this large, we're increasingly looking for a better quality of life, and that doesn't include spending our free time wrenching on a machine," McCarty concluded.