On equipment specifications

My career in equipment support has always been vocational; I have always dealt with mobilizing a trades-based workforce. Most recently this was managing fleet for a natural gas utility. Observations from years within this field make me draw the conclusion that, pound for pound, there are likely no industries slower to adapt new technologies than those who deal with pipe, whatever the commodity those pipes carry.  Really this should come as no surprise, as much the tooling and technique associated with working on this infrastructure hasn’t materially changed in the past 60-70 years. In a nutshell, what worked 10+ years ago still works today. Also, functioning in a regulated marketplace doesn’t really force a business to consider different solutions to remain competitive.

About 16 years ago, a determination was made by my employer to specify air conditioning in all vehicles going forward. The reason flew in the face of industry wisdom, it was simply “the right thing to do” for the employees. We joked occasionally that we had decided to jump into the 20^th century with both feet. The next century was 2 years away.

Years later this same equipment came up for replacement. My department both bought and sold the equipment, so I got to see first-hand the cost/resale ratio associated with this altruistic purchase decision. While market variables are always tweaking resale values, it was none-the-less apparent that the up-front cost of the option was more than recovered once the vehicle was sold, as I had similar equipment with and without air-conditioning selling side by side.

And really – should this be a surprise for anyone? Which of us, if we are in the market for a used car or truck, wouldn’t pass on a vehicle without air-conditioning? While there are still businesses where automotive creature comforts are not required, the lack of them on your equipment certainly narrows your potential remarketing field.

Specifications for that employer continued to evolve, eventually incorporating cruise-control and tilt-wheel. As before, it appeared that the cost was easily recovered during resale.

And there is the crux of this discussion.  As a commodity, the up-front expense associated with these bells and whistles seemed needless as the truck “worked” just fine without them. However, the resale differential had proven that sale recovery could, and should, be figured into total vehicle costing. It is on this total cost of ownership paradigm that purchase decisions should be made.