Strategic Equipment Management for Mid-to-Large Companies

In heavy construction, the phrase "where the rubber hits the road" could be aptly restated as "where the shovel hits the dirt." The point is, equipment operates at the critical point where work gets done. Best practices for managing and operating equipment, therefore, are essential to successful projects. In this edition of Experts Corner, SMS Equipment Strategic Accounts Manager Ian Whittaker shares insights from his conversations with customers.

What are the top challenges that larger contractors are facing today?

Ian: Probably the biggest one is having qualified people to do the work, and that's something I talk about with my clients on almost a daily basis. The economy is pretty healthy right now, particularly in Western Canada, so there's lots of work but not enough people to do it, especially skilled technical trades. Retention is also challenging because, in a competitive market, companies often attract employees from others by offering a slightly higher wage, recognizing the value of their time and skills.

Building a strong company culture is crucial, as it fosters a sense of loyalty and belonging among employees. When people feel supported and secure, they are more likely to remain with a company that consistently prioritizes their well-being and fosters their professional development.

Another significant challenge contractors face is meeting compliance requirements. To be eligible for some of the larger projects, they must demonstrate a robust safety plan, program, and culture. Additionally, they need to showcase strong green initiatives within their company and address issues such as employee diversity.

This brings everything full circle, as companies must also attract the right employees who align with these values.

How does that impact how they acquire and manage their equipment?

Ian: There are several key factors at play. First, having up-to-date equipment with the latest technology is essential for attracting a new generation of workers. Newer equipment also has enhanced safety features, which reduces harm incidents and shows workers that safety is important to the company. Newer technology also helps companies meet the requirements of green initiatives for many of the large projects they are bidding on.

Companies often rely on their equipment vendors to stay informed about the latest trends and learn how to use their machinery more efficiently. When I visit a customer, my goal isn't just to sell an excavator—it's to be seen as a business consultant. I provide them with market insights, advise on industry trends, and discuss how technology is evolving. In fact, about 95% of my day involves activities other than sales—it's focused on the many other aspects our customers depend on us for. We also regularly offer valuable information and training, including seminars on safety, technology trends, and job management to enhance profitability.

What mistakes do people make when acquiring equipment?

Ian: This is really a choice rather than a mistake, but I think the most important area where people go wrong is considering their machines as commodities rather than strategic assets. In my experience, some companies look at the acquisition cost of a piece of equipment, which leads to short-term decisions that aren't necessarily good overall. Our most successful customers understand that when buying a piece of equipment, you're buying it for years to come. So, you have to look at the ownership cost per hour for, say, a ten-year period.

Of course, being able to do that depends on having a vendor that can help you keep the equipment performing at its optimum level year after year. We have a very strong maintenance team and an equally knowledgeable technology team to ensure we can deliver on that.

What kinds of commitments do companies look for from vendors?

Ian: When working with larger companies, our approach varies depending on whether the company is private or publicly traded. Public companies tend to formalize everything, requiring detailed documentation upfront, including labour rates and parts discounts. For these clients, we develop comprehensive master service agreements that outline our long-term relationship—essentially, these are partnership agreements.

In contrast, private companies, many of which are large and family-owned, strongly emphasize their values. Their family name and reputation are often at stake, so they are particularly interested in how SMS Equipment's values align with theirs. For us, it's crucial to listen and truly understand their value system. One of the achievements I'm most proud of is how we've supported some of these companies in their growth journey.

What one piece of advice would you give a small customer that wanted to grow?

Ian: Don't overcommit to equipment purchases; instead, invest more, if necessary, in hiring top talent and focus on delivering quality work. Find a reliable business partner who can support your needs as you grow. I'm particularly proud of a client who began with a single skid steer and expanded to forty machines over ten years. Despite their initial financial constraints and limited credit history, our finance team and I worked closely with them to develop a realistic plan. They avoided overcommitting to equipment and prioritized hiring skilled people. I also helped them connect with skilled tradespeople through my industry contacts. I take pride in the crucial role we played in their growth.

The bottom line:

Given the long-term impact of equipment on a construction company's productivity, they need a dependable business partner who will go the distance with them. With its strong maintenance and technical teams and a partnership approach to doing business, SMS Equipment is proud to fulfill that role for some of Canada's most innovative construction companies.