About 20 years ago I was working as a junior salesman for my current employer. I was having a hard time getting orders because our backlog was high and our lead times were out.
I whined to a buddy named Tony about how tough selling machinery was. Tony was (and still is) one of the more successful salespeople in our company. He gave me a puzzled look and said, “Are you kidding me? These are the good times, Paulie!”
Clearly, Tony’s success was one of the reasons our backlogs were stretched out. He was taking advantage of the good economic times. I failed to see them and got pushed to the back of the line.
Reasons for optimism
In many ways, 2017 is shaping up to be another great year for our industry. 2017 kicked off with a new administration in the White House, and the economy is on an upswing.
The discussion on infrastructure spending has been the buzz in our industry for a while now. Pending any real major surprises, some new infrastructure spending is to be expected. There is little doubt that this bipartisan issue will receive some much-needed attention.
Undoubtedly, there is also quite a bit of pent-up demand to upgrade the process machinery used in our industry. Many producers have been holding off on investing in their operations. I have many contacts who kept their hands in their pockets and continued to rebuild and repair crushing and screening equipment well beyond when they might normally upgrade.
Countless others have been supplementing their equipment needs by renting machinery for long periods of time. This has certainly helped some companies minimize their capital spending, but it hasn’t helped to improve their equity position or necessarily put them in a position to have the best equipment to meet their needs.
Fortunately, the timing for contractors and producers to impart their rejuvenated confidence into new machinery couldn’t have come at a better time. Today’s horizon is measurably longer and brighter to many.
Last spring, some 128,000 people attended ConExpo-Con/Agg in Las Vegas, where they were exposed to some incredible new products. Most attendees were upbeat and ready to retool.
This wasn’t just another show where suppliers rolled out the same products hoping to cash in on a revitalized market. As the late Don Brock used to say, “God gives us the lean years to help us get our businesses in order.” Many of ConExpo’s exhibitors did just that.
“Lean” seemed to be a common theme among the vast sea of new product rollouts. Crushers and screens were designed to be more productive and efficient than previous models. The use of reliable, industrial-grade sensors and PLCs seems to have finally exploded, evidenced by countless machines being equipped with control systems that maximize safety, productivity and efficiency.
For the contractor, some new machines were unveiled that could be operated with either diesel engines or electric power, giving producers a whole new level of business flexibility.
What’s next?
The confidence in our industry should allow us to commence with investing in our businesses and in our future. We need to focus on what’s currently in front of us. However, most of us cannot remember a time when our long-term outlook was more optimistic than it is right now.
It is a great time to re-evaluate our current core business and ask if it is time to make investments in our own organizations. For example, is it time to finally decommission the plant that was acquired during the Clinton administration and start to take advantage of today’s new technology? Here are some potential opportunities:
1. Replacing aging equipment with similar class machines could potentially provide up to one-third more production without increasing your labor costs, thereby improving the ton per man-hour.
2. Upgrading older machines with newer ones provides opportunities to automate your system (or a portion thereof), potentially improving safety performance as well as plant efficiency.
3. Taking advantage of newer sensor technology can better help identify opportunities to prevent failures, improve efficiency and reduce costs.
The next cycle of prosperity has arrived. Don’t wait too long to take advantage of the good times, or you might get pushed to the back of the line by a guy named Tony.
Paul Smith is international marketing manager for Astec’s Aggregate and Mining Group. He can be reached at psmith@astecindustries.com.