FCM and Pandrol Jackson are offering a program to improve utilization of the Model 6700

Get more use from MOW units

By building service into the original lease or purchase, railroads can keep equipment working and make use of the manufacturer's expertise in maintaining MOW machinery.

by Dennis J. Gilstad

Dennis J. Gilstad is president of the Financial Corporation of Michigan and a frequent contributor to Progressive Railroading.

Railroads today are demanding better equipment that requires less maintenance to keep it operating - and they should. The state-of-the-art equipment available is expensive and the purchase of equipment can consume a large part of the annual MOW budget.

An estimated $350 million is spent annually on new and used work equipment. Even more dramatic is the estimated $500 million spent annually on maintenance, labor and parts to keep it running.

I think that it is time that creativity and innovation are brought to bear by both the manufacturers and the users to minimize this upkeep expense. Most railroads own equipment and perform most of the maintenance on the equipment. These repairs are usually done as needed and typically during work sessions many miles from shop facilities. CSX Transportation and Denver & Rio Grande recently built large and expensive shops to rebuild and maintain their work equipment and have the capacity to perform spot repairs as well as larger programs where a whole or part of a segment of their equipment - e.g., reconditioning ballast regulators - is addressed en mass. There are also railways where facilities and expertise are not readily available and most repairs are done in a less than desired way that will impact both utilization and value of the equipment.

I think railways need to address how they acquire work equipment with special emphasis on analyzing the cost of each type of equipment. This analysis should be carried out in the same way the cost of a customer's shipment is analyzed so that when all the factors are defined, a new understanding of the cost of work equipment can be determined. The cost per tie, per foot or per mile should be defined, thereby making the method of acquisition (buy, lease or rent) for work equipment one of economics.

Manufacturers and suppliers need to address in the terms described above how the railways are using their equipment and need to create new methods that will provide better utilization and lower overall costs over the potential life of the equipment. If manufacturer user groups were established, they could create a forum for problems and ideas for better, longer - range usage. A wealth of knowledge could be shared and a direct impact on design, construction and materials could result.

An Example of Innovation

Recently an idea to increase tamper productivity was put on the drawing board. Working to create a method of uninterrupted use of the Pandrol Jackson 6700 Tamper with several of our Class I clients, we and Pandrol Jackson devised a method to ensure maximum productive utilization. The manufacturer, the lessor (if applicable) and the user will prepare a maintenance schedule under which annual maintenance will be performed by the manufacturer at its own facility. Each year the equipment will be returned to the manufacturer so that it can be refurbished to "like new status and will, in fact, have a new machine warranty when it is returned to the user/owner. With proper scheduling, a replacement machine can possibly be available for the railway's use during the refurbishment period.

Some railways have seasonal down time that would provide a natural window for the refurbishment. Pandrol Jackson, based on its knowledge of how the 6700 tamper wears, can replace or repair any defects but, more importantly, can perform preventive maintenance that will go a long way toward preventing major problems from ever occurring.

The cost of this maintenance can be part of the cost of the equipment at the time of purchase by the user or lessor in a manner similar to the extended warranty policy currently used in the automobile industry. Or it can be purchased separately on equipment currently in use after an initial refurbishment or certification by the manufacturer. Thus the expense is budgeted at the t me of the purchase or lease. We will offer this program to our lease clients. If accepted, the extended warranty is subsumed in the monthly lease rate.

The goal of this program is initially to offer a longer - term utilization of the Pandrol Jackson 6700 tamper to the rail industry. Having a "like new" tamper available at the beginning of each work season will offer the railway's MOW personnel more reliable and productive equipment that is currently available to them.

This concept of budgeted enhancement of useful life can be expanded into other types of work equipment. While railroads are certainly teaching us all that their profitability is the result of increasing revenues, reducing expenses and making do with fewer resources, they should re-double their efforts to apply those techniques to work equipment utilization and long-term costs.

Reprinted from May 1994 Progressive Railroading Magazine

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