Different capacity types
There are different types of capacity: financial, labour, managerial, etc., but this article will focus on equipment capacity. No matter how large or how small a fleet is, the operator still needs to manage his or her equipment capacity. This is an industry best practice. Below are several equipment capacity scenarios.
Equipment capacity is determined by five variables:
- type of equipment;
- number of units;
- production rate;
- area; and
- cycle time (adjusted for client expectations).
For example, there is a small fleet of pickup trucks with 2.6-m (8.5-ft) wing blades on them (i.e. equipment type). Next, the fleet consists of three trucks (i.e. number of units). Then, one can further assume the production data has been analyzed and a production rate of 6970 m2 (75,000 sf) per hour has been assigned to these trucks for a small snowfall. Finally, there are 12 ha (30 acres) to plow (i.e. area). What is the cycle time, not including drive time between properties?
Twelve hectares equals just over 120,775 m2 (1.3 million sf). Dividing by the production rate of 6970 m2 per hour gives 17.42 hours of capacity demand. Dividing 17.42 by the three trucks equals 5.81 hours of cycle time per truck.
Production rates decrease in heavier snowfalls, and cycle time increases accordingly, but by how much? What does the math look like? For example, if the production rate is cut in half, from 6970 m2 to 3483.9 m2 (37,500 sf) per hour, what happens to the cycle time?
Instead of 17.42 total hours or 5.81 hours per truck of capacity demand, there is 34.85 hours of capacity demand or 11.62 hours per truck of cycle time. Is this going to be acceptable to clients? Probably not. It might be better to take a different approach to this.
Instead of trying to figure out the cycle time for a certain number of acres, one could set the cycle time at a certain number of hours and calculate the amount of area that can be covered. How much area can be covered at 6970 m2 per hour with three trucks and a four-hour cycle time?
Multiplying the three trucks by a production rate of 6970 m2 per hour gives a total of 20,903 m2 (225,000 sf) per hour of production. In four hours of time, 8.4 ha (20.7 acres) can be plowed. It is important to keep in mind if the production rate was cut in half, the number of acres that could be produced in four hours would also be cut in half to just over 4 ha (10 acres).
If 12 ha of work has been sold and the operator is trying to figure out how many trucks he or she needs, there is a third way to think about equipment capacity. In this example, the operators know everything except the number of trucks needed. Twelve hectares equals just over 120,775 m2, and dividing by the production rate of 6970 m2 per hour gives 17.42 hours of capacity demand. Divided by the four hours of cycle time equals 4.36 trucks. In other words, the three trucks will not get the job done. In fact, if the production rate was cut in half due to a heavy storm, almost nine trucks would be needed to maintain a four-hour cycle time.
Building flexibility into capacity
There are many ways to build flexibility into capacity calculations. One proven strategy is to hire subcontractors, as they allow an operator to increase his or her capacity without buying additional equipment. To eliminate assumptions, it is important to clarify what equipment each subcontractor has available to dedicate to him or her, what production rates are to be expected, and in what geographic areas the subcontractor operates.
Some contractors take the position of capacity being unlimited due to a perception subcontractors are readily available. In this author’s experience, selling work beyond capacity without having subcontractors lined up ahead of time is risky business. One needs to understand there is uncertainty inherent in the unlimited-capacity approach. Most snow and ice professionals want to reduce their risks, not increase them.
Reducing risk
One of the ways to reduce risk is to have some extra capacity. How much extra capacity is enough? What is optimal? Some extra capacity is desirable, but not too much.
The Major League Baseball’s (MLB’s) Cleveland Indians provide a good example of too much unused capacity. With only 45.6 per cent of the capacity of Progressive Field used in 2012, the Indians have the lowest attendance in MLB based on capacity use. (There were, however, two teams actually over 100 per cent capacity use for the entire 2012 season: the Philadelphia Phillies at 100.8 per cent and the Boston Red Sox at 101.4 per cent.)
In the snow and ice management business, a rule of thumb is to have 10 to 20 per cent of reserve capacity. What may actually be needed is 50 per cent reserve capacity, depending on how capacity is calculated to begin with and what the expectations of the clients are. One should keep in mind primary equipment is that which is dedicated to specific sites to do work, whereas secondary equipment is allocated in reserve or for less intensive work during a storm—where it could be elevated to primary status if needed.
One piece of equipment may have both primary and secondary roles during a snow event. For example, managers may be assigned an hour or two of plowing as a primary role before moving into a secondary role as a supervisor. As a supervisor in a plow truck, they have reserve capacity.
Preventing problems
The snow business can be very unforgiving. Mistakes may result in slip-and-fall accidents, property damage, or damaged reputations. Getting a handle on capacity, cycle time, and client expectations will go a long way to prevent problems and the associated blame game. At the end of the day, and at the end of the season, everyone wants to be rated as excellent by both the customers and accountants.
Phil Harwood is the president and CEO of Pro-Motion Consulting. Before founding his consulting firm, Harwood was part owner of a landscape and snow management firm, and also spent more than 10 years with a green industry retailer in various management positions. He can be reached via e-mail at phil@mypmcteam.com.
