In the feature article Telematics Provide Insight into Construction Fleet Life-cycle Costs, Total Cost of Ownership (TCO) was defined as the initial purchase price plus the cost of operation, maintenance, downtime and production, and minus the remaining value. Productivity is a key element in calculating the TCO of earthmoving equipment. “In its simplest terms, Volvo CE calculates TCO as the cost of owning and operating a machine in dollars per hour divided by what it produces in tons per hour,” says Dave Adams, product sales manager, connected services, Volvo Construction Equipment. Connected technologies allow you to track and manage TCO inputs in real time. Adams says, “There are several ways telematics and software can help with all three parts of this equation: owning costs, operating costs and productivity.”
Site simulation software can become a critical tool in controlling the TCO equation. It can increase efficiency and profits by providing customers with tools to reduce their total cost per ton.
Using real-time data, Volvo Site Simulation analyzes worksite conditions and operational goals to offer advice on proper site setup for optimum productivity and fuel efficiency. This includes haul route planning. Users get detailed projections of owning and operating costs via reports and on-screen animations. Recommendations on alternative configurations, as well as insights on overall costs, give customers tools to develop strong forecasts, budgets and bids.
The site simulation helps drive the most efficient machine selection. “Site simulation can help customers right-size their fleet for the job,” says Adams. “When you know what routes, distances, gradients, fuel usage and hours are involved, you can choose which equipment fits that jobsite best. This will save machines from being used inappropriately and decreasing their value. Volvo’s Site Simulation calculations supplemented with known owning costs such as insurance, interest, taxes and purchase price can be used for a true calculation of TCO for the fleet.”
Benefits of Site Simulation
Volvo ConstructionSite-to-site variations can be taken into account by the simulation software.
“Volvo Site Simulation has the ability to help calculate the optimum fleet configuration for the best production at an individual site, but also factor in other operating and ownership costs to aid in a comprehensive TCO calculation,” says Adams. “Understanding cost per ton and/or cost per gallon for every machine on the job makes a big difference. Site simulation recommendations on alternative configurations, as well as insight into the impact on overall costs, give customers the tools to develop strong forecasts, budgets and bids so they can take more control of their operations,” he says.
Using Site Simulation, customers and dealers can put plans in place before a project begins or refine an existing operation. Use of GPS tracking and real-time data collection means fewer inputs are required to run a simulation. From payload and travel gradients to distance between two points, Volvo considers multiple factors to recommend site configurations that achieve shorter cycle times and maximum production.
Recommendations on alternative configurations, as well as insight into the impact on overall costs, give customers tools to develop strong forecasts, budgets and bids so they can take more control of their operations.
While the production analysis provides some good baseline information for operating costs, a more comprehensive estimation should include everything from depreciation schedules, taxes, insurance, estimated resale value, service plans, tire replacements and maintenance costs — along with monthly financing costs.
Volvo Site Simulation is available at no charge to new and existing Volvo customers, in partnership with their local Volvo CE dealer.