Construction Equipment Used Parts

Construction Equipment Used Parts

Guest writer Alex Weaver writes this blog post tonight on the topic of Construction Equipment Used Parts.

Construction Equipment Used Parts is similar, in some ways, to the automobile or on-highway truck salvage business. A core is purchased for salvage, disassembled, parts are evaluated for inventory, and some parts and components are repaired or rebuilt and sold. The business was created out of a need or demand for additional price points in the construction equipment replacement parts business.  

A successful Used Parts business contributes to overall company goals. Assume, a company has the following high-level goals:  Financial Performance, Market Share, Customer Satisfaction, Employee Satisfaction. Used Parts impacts these goals in the following order. Customer Satisfaction first, Financial Performance second and Market Share third.

Used Parts increases Customer Satisfaction by providing additional price points, and in some cases parts availability. Today, parts availability is not as certain as years past. In fact, some very large consumers of parts have created their own internal used parts operation to support parts availability needs. To insure they have the parts they need when they need them. Customer Satisfaction or loyalty positively impacts market share. Used Parts can impact financial performance by adding a revenue and profit stream for the seller. Used Parts can increase customer loyalty. Used Parts, also, contributes to harvesting a greater share of a customer’s wallet.  

History

The Construction Equipment Used Parts business got its start in the late 1940’s and early 1950’s.  Enterprising entrepreneurs purchased U. S. government surplus war material from World War II   Primarily half–tracks. An armored truck, mated with a rugged bogie and track suspension system in the rear, allowed foot soldiers to quickly move with modern, mechanized attack forces. In civilian life, many found homes in large farms and ranches as a way to deliver feed and hay bales to herds scattered across many acres.  Some 12,499 M3 half-tracks were built by White, Autocar, and Diamond T during World War II.  The track bogie’s required replacement parts and cannibalizing other units became the best, easiest source. The companies that started here, gravitated toward other track type units. And, thus, an industry was born.

As the construction equipment product lines expanded, so did the demand for used parts and components. Product improvements obsoleted older technologies. From Mechanical systems to oil lubrication, hydraulics, electrical, and electronic. Dry clutch to oil clutch, Gasoline Starting Engine to Direct Electric start, Manual transmission to PowerShift, Cable lift system for dozer to hydraulic. Operator Environment – from no operator protection to Air Conditioned, Enclosed Roll Over Protection. Every step of the way, used parts provided opportunity. And, that opportunity continues today.  

Growth & Change – Scope and Scale

The transition from Half-Tracks continues. The number of construction equipment manufacturers has increased. The numbers of product lines and models has increased.

Heavier, bigger machine products as well as compact construction equipment. Many smaller models, and as a result many more customers. The construction equipment market now includes global manufacturers and distribution.  

Some products are now obsolete or out of production. But the original products/machines are still operating. Elevating Tractor – Scrapers, like Caterpillar, 613/615.  The used parts business helps keep these machines running.

It all adds up to used parts opportunity.

Operations

Used Parts can take a lot of real estate. Or not. Some combination of Core (a machine to tear down) storage, warehouse storage and physical space dedicated to core disassembly and parts inspection. Plus, space for counter sales. Some customers want to “kick the tires” or look at what they are purchasing before they purchase. Which means public access to the used parts operations.

In today’s world, there are environmental considerations. How do you wash/clean a core before dis-assembly? How do you capture the waste fluids from a core? 

Environmental Impact

In 1976, Congress passed the Resource Conservation and Recovery Act to increase recycling and conservation efforts as waste became a bigger problem. It is estimated that the slogan “reduce, reuse, recycle” was born at this time. The used parts business is a positive contributor to environmental opportunity. Used Parts maximizes the use of original material.  Reduce/Reuse/Recycle and now Repurpose are all in the used parts “wheelhouse”.

Accounting

Many used parts operations, assign or breakdown the purchase cost of a parts machine, to some larger, higher demand parts or components and value the “by-products “at estimated scrap value. Slower moving inventory is not overvalued. In some cases, the cash accounting model is more suited to the used parts business than the accrual method. Your accountant will have the answer as it applies. Proactive, managed scraping of unneeded material is an ongoing process.

Products

  • Work Tools / Attachments
  • Drive Train Components
  • Hydraulic Components
  • Cabs / Canopies
  • Sheet Metal
  • Structural Parts – main frames / track frames / booms / sticks

Condition

Used Parts products can be in prepared and sold in various conditions

  • “As-Is” – removed during salvage process.  Take off with no condition offered
  • Removed – Cleaned
  • Removed – Cleaned – Inspected – includes condition estimate
  • Removed – Repaired – base product used as core to make some repairs
  • Removed – Rebuilt – base product used as core to rebuild to published standard condition
  • Removed – Remanufactured – base product used as core for complete rebuild

Future

Our industry has grown and prospered by providing customer solutions.  Used Parts, starting with Half – Tracks, has provided, and will continue to provide customer solutions.  The details, models, applications, horsepower, reach, lift, capacity, may change, but the demand and the supply our industry provides will continue.  Used Parts has been a part of every product/market change.  

Did you enjoy this blog? Read more great blog posts here.
For our course lists, please click here.

AgilitiONE

AgilitiONE

Alex Weaver’s career in the industry spans several decades. His initial job in the industry was with an independent used equipment – used parts company, White Tractor Parts in Blue Springs, MO. After several years of ground floor, learning the business, including how to chain a tractor to a trailer, he went to work as Assistant Used Equipment Manager for The Whayne Supply Company, Caterpillar dealer for Kentucky, in Louisville, KY.  Later, promoted to Eastern Region Sales Manager. In 1979 he went to work for Crane and Tractor of Dallas, another independent used equipment, used parts dealer. 

In 1988 He relocated to Charlotte, NC to work for the Caterpillar Dealer, Carolina Tractor.  Initially holding the position of Product Support Sales Manager, later serving as General Parts Manager and VP of Heavy Equipment Sales. In 2002 Alex began work with Caterpillar, Inc, and relocated to Peoria, IL. Here he served as Sales Manager for the Eastern Region of Caterpillar’s Redistribution Company, CRSI, Inc, moving to the Reman Group, and later to the Caterpillar Used Equipment Sales, Inc before retiring in 2014. 

With over 40 years of experience in the industry. As a retirement project, Alex and a partner created the concept for agilitiONE, including manually researching every company listed in our search engine/database. The great influencer working with all these companies, in various positions and segments, were the customers. The customers shared what they did, how they did it and how as a supplier you could help them do it. A great education in market wants and needs.

Imagine all Your Information Needs at Your Fingertips

Have you ever wondered why?  Why there is no single source that lists all suppliers to the construction equipment industry?  There will be soon.  A fast, easy to use industry- specific search engine, or directory.  Search for providers of new / used / and rental equipment.  Search for providers of parts and attachments.  Plus, service – providers, such as insurance, heavy hauling, software, business services, marketing, and consulting.  Filter searches by brand, New, Used, condition, distribution source by brand, and zip code location.  Search all industry parts providers in North America. Would you believe there are over 13,000 such suppliers / providers in our database?

agilitiONE was created by a team of construction equipment businessmen.  Their background in the industry includes senior level management / leadership roles at both manufacturer and dealer organizations.  Through extensive work in the field with construction equipment customers, they’ve gained a strong appreciation for the contractors’ challenges and needs.  It is with this background that agilitiONE addresses those needs.

The agilitiONE website is the first true, industry-wide, product – wide, online platform / marketplace built solely for contractors to easily locate and purchase all job-related requirements.  At attractive prices.  All using a single IOS or Android app.   Machines, rentals, parts, and services.  Users of agilitiONE will find many new sources and viable options for all of their many needs.

agilitiONE is an online platform / marketplace where contractors and equipment owners will find multiple, new sources for the products, parts, and services they routinely buy, rent, and utilize.  At the same time, industry suppliers can expand their sales reach by attracting an ever-growing larger clientele.  And, manufacturers can further promote their brands, support their distribution, and collectively increase sales.  agilitiONE is unique; there’s nothing like it in the industry!

Why is an industry specific search engine important?  What is the benefit?  Easy.  You get your specific result faster and easier.  Have you noticed that with the existing search engines, your answer may be down in a search results page or pages down?  For instance, search for a turbocharger for a Volvo MTC85C skid steer loader.  If you search by zip code, or within 100 miles of your zip code, you may get results for turbochargers for Volvo automobiles or Volvo Trucks.  The search is interesting because Volvo is out of the skid steer business.  The MTC85C was built for Volvo by JCB.  The engine is Perkins, now owned by Caterpillar.  But all you want is an exchange, rebuilt turbo.  In agilitiONE a search for “turbocharger” returned 23 providers.  Only 23 results, not thousands of non-search related results, that don’t apply to your search.  A search on Google, also using “turbocharger”, turned up 64,000,000 results.  Because our search engine is industry specific, our database only contains providers for construction equipment or related rebuilders.

How do you find all of the providers of Safety Equipment, that focus on the Construction Industry?  A search of agilitiONE returned 109 providers that can be filtered by zip code.

Again, Google returned millions of providers.  Our goal is “fast and easy” access to information.

In today’s work world, small contractors are accepting work further from their home base.  Home base is comfortable.  Providers are known.  But contractors are also bidding more work further from home base.  If there is a minor breakdown, how do you find the nearest hydraulic repair shop?  Or if a contractor needs to rent a small excavator to finish a job.  What provider is close to the work?

We know and understand the challenges of daily operations.  agilitiONE will provide quick and easy information search related solutions for all contractors.

About Industry Services:  Categories – Aerial Information/Data – Asset Appraisal – Asset Inspection – Associations/Trade/Industry – Auction – Builders/Commercial – Business Services – Certification Agencies – Construction – Consultancies’ – Contractor – Engineering – Financial Services – Financing – Freight/Trucking/Delivery – Governmental Agency – Individual Consultants – Insurance – Land Survey – Logistics – Manufacturers’ Representative Firm – Marketing – Oil Analysis – Opinion Survey – Project Management – Publishers/Publications – Safety – Software – Training/Education – Warranty – Drone Services – 3-D Printing

Our search engine is currently under construction. But it is coming soon.  A lot of information in one portal. We hope you are curious. Will keep you posted on Start Up date.  Questions?  Email traction@agiliiti1.com.

Alex Weaver

Co-Founder / AgilitiONE

Alex Weaver’s career in the industry spans several decades.  Experience with Used Equipment / Used Parts Dealers, 2 – Caterpillar Dealers and Caterpillar.

Did you enjoy this blog? Read more great blog posts here.
For our course lists, please click here.