High demand: Pairing growth with deliverability

By |  October 13, 2014

A Texas producer’s rapid growth puts a dealer’s serviceability to the test.

The dirt in southwest Texas is as soft as baby powder, so a plant operator is bound to get an ear full of dirt when 40-mph winds come sweeping down the plain.

The region’s conditions, which can reach 100 degrees in the summer, take a toll on heavy machinery, as well. Jeremy House, president of Crockett County Mining, knows these conditions well. House’s company has undergone a remarkable change over the last few years, transforming from a company that was once solely a sand-and-gravel producer to one that’s now heavily into construction materials production.

Crockett County Mining, which now produces and sells about 4.5 million tons of aggregates into the construction market each year, made a few acquisitions in 2009 and entered the limestone construction materials business that year. Last year, the company added two sand-and-gravel facilities and three limestone quarries. Crockett County Mining also now has a portable division that does heavy highway and renewable work across the region.

Crockett County Mining’s growth over the last few years called for a slew of new machines to meet new demand, specifically wheel loaders, excavators, skid steers and pit trucks. The company’s equipment fleet used to include machines from a variety of manufacturers, but John Deere machines now make up much of the company’s fleet. John Deere has such a large presence, House says, because of the unique service it gets from its dealer, Yellowhouse Machinery Co., and financier, John Deere Financial.

“They’ve done a really good job to make sure they get equipment out in a timely manner, and in the event of a breakdown they take really good care of us,” House says. “They’ve been a substantial factor in the growth we’ve experienced over the last three years.”

Full speed ahead

One of the first steps Crockett County Mining took to meet the new demand in its region was to formulate a plan with John Deere Financial.
“We sat down with those guys early on and we shared the forecast of our growth,” House says. “We made the decision that all of our growth would be made to John Deere Financial in the way of leasing, and we would structure the leases in a way that we would turn machines every 24 months because we’re putting 3,500 hours a year on each machine.”

According to McCollum, few finance companies immerse themselves within operations like John Deere Financial does.

“Crockett County Mining’s original owner was very open and wanted us to know everything about his business,” says Scott Miller, territory finance manager at John Deere Financial. “He took us out to see what he was doing. All of that comes together as we build finance answers for them.”

Among the John Deere wheel loaders now in Crockett County Mining’s fleet are three 724Ks, two 744Ks, six 824Ks and about 10 844Ks. House says Crockett County Mining is currently transitioning away from the 724Ks and 744Ks for additional 824Ks and 844Ks, respectively. House also plans to invest in John Deere’s 944K when it’s available.

“We run a broad scope of all the wheel loaders,” House says. “We’re in the process right now of adding another three or four machines to get to 25 machines on the leased side. At the same time, we’re always taking out the old and putting in the new machines every three to six months.”
According to McCollum, 744Ks and 844Ks were Crockett County Mining’s first investment upon embarking on its new growth trajectory.

“They had one 844K feeding the crusher and they had a 744K loading belly dumps for customers coming for the material,” McCollum says. “We have since changed that to use an 824K to load. Now they’re up to roughly 21 machines. They’re going to be looking to double that in the next year or two.”

In addition, Crockett County Mining runs a number of 544Ks and 624Ks in its ready-mix business. John Deere’s 450G-model excavators are key machines at the company’s sand-and-gravel facilities. Crockett County Mining runs 370E- and 400D-model pit trucks from John Deere, as well.

“One of the things we’ve noticed about a lot of the newer engines – the Tier 3s were having some issues with sensors, but we’re seeing a drastic improvement in efficiency rates,” House says. “We’re seeing improvement in fuel burn and are probably burning 10 percent less fuel.”

“All of the manufacturers are doing a much better job now than they were three years ago,” he adds. “They all have newly designed equipment and more efficient machines.”

And that’s why service is a difference maker to Crockett County Mining.

“All relationships have bumps in the road, but reaction time is what heals those bumps,” House says. “The dealer, the factory and the financial guys have all done a really good job to make sure that we get the latest and greatest equipment out there.”

Getting a grip on use

Crockett County Mining’s growth these last few years was so rapid that determining fixed use patterns for its equipment was a significant challenge early on.

“The challenge on the finance side of the business was trying to figure out the sweet spot of hours per machine,” Miller says. “We did our best estimate in the beginning and that didn’t work. We did our best estimate again and that didn’t seem to be enough [hours], either. But we’ve finally arrived to where we need to be on hours. Between all of us, we have found their typical use patterns.

“There’s been a huge learning curve for us because we’re not used to dealing with customers in this application,” he adds. “Crockett County Mining has an operating window that’s very, very large in west Texas. And these machines are running a lot of hours six days a week.”

According to Miller, Crockett County Mining uses its John Deere equipment at about twice the rate as John Deere Financial’s average customer.
“It’s pretty impressive,” Miller says. “The amount of time they’re working puts a strain on the equipment.”

And because equipment is accumulating hours at a higher-than-normal pace, maintenance is an area that requires a special approach from Yellowhouse Machinery.

“Typically our shop is two to three weeks behind,” McCollum says. “Most shops are three or four months behind. We’ll put Crockett County Mining at the front of the pack.”

In the meantime, Yellowhouse Machinery will loan or rent a John Deere machine at a discounted rate if Crockett County Mining needs a replacement to maintain the desired production level.

“There are times where an issue’s been really simple, and I’ve been out there trying to fix machines on my own,” McCollum says. “We don’t always have an 844 sitting here. But we get them something to get them by so they’re up and running. That maybe happens once a month, as far as a machine going down.”

This approach works well for Crockett County Mining, House adds.

“It’s critical for us that they keep multiple machines in a rental-type fleet that aren’t available for any customer other than ourselves,” he says. “So when we do lose an 844, they bring it out and swap it. If we have a major breakdown, we have a replacement the same day.”

House says Crockett County Mining does not have a lot of significant equipment breakdowns. Most of the mechanical work Yellowhouse Machinery does for Crockett County Mining pertains to routine 2,000-, 3,000- and 4,000-hour services.

Breakdowns do occasionally happen, though.

“A 3,000-hour machine still does break down,” House says. “We’ve had major breakdowns on new machines. The difference is having a good relationship with a dealer. Our equipment typically gets prioritized – we’re not waiting two to three weeks to get it serviced.”

Crockett County Mining also works closely with Yellowhouse Machinery’s parts team because it goes through parts quicker than others.
“We’ve been running this program for 12 months, and we’ve identified in that time parts that are quick turnover parts,” House says. “So what we did is inventory enough of those parts and pieces so we’re not waiting on parts from the factory.”

The close nature of the dealer-producer relationship has been beneficial to Yellowhouse Machinery, McCollum adds, because Crockett County Mining’s customers usually don’t plan too far ahead in terms of their needs.

“Whether it’s one loader or six loaders, they typically give me 10 days before they’re ready to go,” McCollum says. “The hardest part is being ready when they’re ready.”

One thing that that’s helped Yellowhouse Machinery keep up with Crockett County Mining’s demand is John Deere’s JDLink telematics system.

“Being able to track how many hours these guys are running a day, a week, a month has helped us track what’s going on,” McCollum says. “Not only hours, but service. I get emails every morning and throughout the day about what’s going on with the equipment. Any machine issues are reported to me by email.”

By the numbers: Crockett County Mining

  • 70+ John Deere machines currently in Crockett’s fleet
  • 21: John Deere loaders currently in Crockett’s fleet
  • 35: John Deere loaders the company anticipates having in the fleet by the end of 2015
  • 23+: Company’s facilities in which John Deere equipment is used
  • 4.5 million: Estimated tons of material Crockett produces and sells into the construction market each year
  • 13: Crockett County Mining’s stationary ready-mix plants

Take note

Among the John Deere wheel loaders now in Crockett County Mining’s fleet are three 724Ks, two 744Ks, six 824Ks and about 10 844Ks.

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About the Author:

Kevin Yanik is editor-in-chief of Pit & Quarry. He can be reached at 216-706-3724 or kyanik@northcoastmedia.net.

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