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Mechanical Contractor Cuts Fuel and Vehicle Costs in Half by Combining Stick/TIG Inverter with Welder Generator

Executive Summary

Kreator Equipment pairs welder with welder/generator to increase responsiveness and competitive edge.

Keith Miles of Kreator. By combining a Miller Trailerblazer 275 and CST 280 Stick/TIG inverter, Kreator was able to get twice the number of arcs on site with the same number of vehicles while cutting fuel costs in half.

In less than two years, Kreator Equipment & Services Inc. of Orangeville, Ontario, grew from a two-person mechanical contracting business to one that employs more than 50 skilled year-round workers, expanding up to 80 employees during peak work season.

This growth has its origin in a well-thought-out business plan that includes playing to the team’s strengths and a dedication to unparalleled service. Wm. Keith Miles and the Kreator team concentrated their initial efforts in the construction area, focusing on aggregate industry. They took the jobs too small for others to take and built up their reputation. Whenever someone at Kreator answered the phone, they were prepared to offer the client a solution—which typically involved dispatching a fully equipped service vehicle complete with an engine-driven welding generator.

Then, Dave Middlebrook, a district manager for Miller Electric Mfg. Co., offered a suggestion, a suggestion that Kreator acted upon and which dramatically improved Kreator’s operation: enabling each truck to provide two welding arcs by pairing Miller’s Trailblazer 275 DC engine drive with a Stick/TIG inverter, such as a CST 280 or Maxstar 200. This simple and relatively inexpensive suggestion allowed Kreator to double its responsiveness to its customers needs. If one job needed four welding arcs, Kreator only need send two service vehicles.

Kreator was then able to offer twice the service with the same number of vehicles. Miles crunched some numbers and was amazed at the results. Previously, the fuel costs for sending two welders and two helpers in two trucks cost $103.36 (all dollar figures are Canadian) per day for a job involving 150 km (93 miles) of travel. These fuel costs quickly added up to $516.80 per week or $26,873 a year. By combining a Trailblazer and CST 280 or Maxstar 200, Dave’s simple suggestion cut these numbers in half. Two welders, two helpers, a welder/welder generator pair now only costs $258.40 in fuel a week, or $13,436 a year.

Kreating Kreator

“Fail to plan, plan to fail,” says Miles. “It’s that ages-old philosophy that guided us. We developed a strategic plan and were very particular about how we marketed ourselves, what we wanted to take to market and what we wanted to take to market first.”

Kreator started by specializing in the aggregate industry, priding itself on providing exceptional service.

Kreator has since grown to include welding and services in the industrial, plastics, recycling, mining and nuclear sectors, although the company got its start in the aggregate sector, its original core competency.

“My background has been in these fields for over fifteen years,” says Miles. “Other companies may have an applied knowledge of fabrication or millwrighting, but without industry-specific experience, it’s hard to call oneself an expert. That’s our edge. We can do anything from repair a component to design an entire plant. From an operations, maintenance or design standpoint, we are results people, as a mentor of mine, Joe Grieco of P.R. Engineering, said, ‘Where the rubber meets the road’ that’s what Kreator is: where the rubber meets the road.”

But they were more than just results people. They were also solutions people.

“We would be the guys that would go out for the four-hour minimum jobs (four hours being the smallest job possible)…jobs that a lot of other people would look at and go, ‘it’s not worth my time.’ We would go because we knew that some day that customer is going to need a project done, need something else done and they will call us. They will remember us because we remembered them now, and it served us well. So for six months we focused on nothing but the aggregate sector, and the reciprocation of respect came back ten-fold.”

For the first two months, Kreator worked primarily on repair, modification and safety applications. Then one of the world’ leading cement, aggregates, gypsum and concrete companies needed a new primary feed system for an aggregate operation with the flexibility to feed 600 to 1,500 tons an hour, a unique requirement. The final piece of equipment was 67 feet long, 14 feet high, road portable and had one-of-a-kind Kreator-designed features.

Kreator and the customer came up with the design that they felt would fit the application and sketched the result on paper and then transferred it to engineering software. Knowing Miles and trusting his experience, the customer gave Kreator the job.

Miles’ first thought, he says, was, “’I need welding equipment.’ It’s true. We got the order before we had a welding machine.”

Since the distributor didn’t have his first choice in stock, Miles went with some alternatives. “But the service just wasn’t there,” says Miles. “With [brand X] we had to rent equipment to make up for the equipment we just bought.”

Miles also bought a brand X welder generator to run belt-splicing equipment and to power small drive motors for dry testing equipment after servicing it. While its welding capabilities were adequate for the job, a sudden generator load, such as starting a grinder, could affect weld quality. “That was unacceptable for us,” Miles states.

Dave Middlebrook suggested that the Miller Trailblazer 275 DC welder generator could solve Kreator’s problem. In addition to 275 amps of multi-process welding output, the Trailblazer offers the industry’s only “two-in-one generator” system. One generator provides power for the smoothest, most stable, flawless multi-process arc of any gas engine-driven welding generator, while the other generates 11,000 watts of Accu-rated™ peak power (9,500 watts continuous).

Accu-Rated means that the unit provides a minimum of 30 seconds of 11,000 watts and is usable for maximum generator loads, such as starting equipment under loads. Most importantly, the windings function independently: a sudden generator load will not affect the welding arc.

“We couldn’t believe the arc consistency, even when we were using it to run lights for night work, grinders or other equipment,” says Miles. “We were sold instantly and immediately bought two Trailblazers. Since aggregate sites are usually remote and during shutdown provide little access to 110 V let alone 220 V power, the Trailblazers became our main power source.”

Kreator installed one Trailblazer per vehicle. As Kreator rapidly grew, “There were months that we would buy two vehicles at the beginning of the month and two at the end of the month just to keep up with the growth,” Miles says. “Every time we bought a vehicle, we needed another Trailblazer. As fast as we’d set them up, we would send them out for service.”

Fuel Costs

With the spike in fuel costs in 2007 to 2008, sending out vehicles increased Kreator’s operating costs immensely. Miles calculates that, as of November 2008, each van cost about $0.13 per km ($0.21 per mile) in fuel costs (with fuel at $.80 per liter or $3.03 per gallon). In addition, a Trailblazer running for nine hours (a typical day for Kreator) at high idle consumes about $31.68 of fuel. Therefore a van traveling to and from the edge of Kreator’s typical service radius (320 km or 199 mile round trip) would cost $73.28 per day ($41.60 in fuel travel costs + $31.68 in Trailblazer fuel costs) or $366.40 per week.

Since most jobs required several welding arcs (and therefore several trucks), fuel costs would be a multiple of this number. At the time, Miles considered it the cost of doing business and providing Kreator’s customers with the level of service they’ve come to expect.

Middlebrook, however, had an even better alternative than using the Trailblazer alone: use the Trailblazer’s generator power to run the CST 280, a 41-lb. Stick/TIG inverter that easily handles Stick electrodes up to 3/16 in.-diameter. At its rated output of 200 amps at 50 percent duty cycle, the CST 280 only requires 6,600 watts of single-phase 240 V primary power. With this amount of generator output, the Trailblazer 275 DC still provides more than 150 amps of welding power—more than enough for running 1/8-in. Stick electrode.

Where Kreator previously required two trucks and two Trailblazers to get two welding arcs, now Kreator only needed one truck, one Trailblazer and one CST 280. Because each Trailblazer was being used as a welder and as a power source for lights and other tools, it was already running at high speed for nine hours. Plugging in the CST 280 didn’t affect the Trailblazer’s fuel consumption.

“Instead of it costing me $63 for nine hours of welding, now it was costing me $63 for 18 hours of welding,” says Miles. “Plus, I was sending out one truck instead of two. After two days, we ordered another CST 280. Within two weeks, they saved enough to buy another one.”

The next six welders Kreator bought, however, were Maxstar 200 Stick/DC TIG welders. Weighing only 37 lbs., the Maxstar 200s can plug into type of primary power from 115 to 460 V, single- or three phase, 50 or 60 Hz. Further, the Maxstar 200 only requires 4,000 watts of generator power to produce its rated output of 175 amps at 60 percent duty cycle.

“I worked out the numbers on some actual jobs, and the savings were astronomical,” Miles says. Here are his calculations, based on actual jobs and fuel cost at $.80/liter (about US$3.00 per gallon).

Job distance

182 km (112 mile) round trip

Fuel costs per van per day

$24.26

Fuel costs to run Trailblazer per day

$31.68

Daily cost per vehicle

$55.94

Four vehicles sent per day at a cost of $55.94

$223.76

Length of job

114 days

Total cost of fuel savings (sending four vehicles instead of eight)

$25,508.64

 

Note that at this rate, it takes about 11 days to pay for a new Maxstar 200, which has a list price of about $ 2,500.

The savings added up quickly. For each of Kreator’s vehicles equipped with a Trailblazer 275 and Maxstar 200, and assuming an average round trip travel distance of 200 km, the potential savings would be:

Daily distance

200 km (124 mile) round trip

Daily fuel travel costs per van

$26.60

Daily costs of Trailblazer and Maxstar 200

$31.68

Daily cost per vehicle

$58.28

Cost over 250-day work year

$14,570

Savings for an 8-vehicle fleet working 250 days a year

$116,560

As Miles points out, in actuality, the savings aren’t always half; generators aren’t always running at high speed, and not all trips require more than two arcs. But even if Kreator saves 25 percent as opposed to 50 percent, the savings per vehicle in the example above still amounts to $29.14 per day, or $7,285 per year per vehicle.

Nor do these savings include the capital costs. Each GMC 2500 van costs approximately $30,000 plus a Trailblazer 275 has a list cost of $4,627 compared to a Maxstar 200 at a list price of approximately $2,500.

Previously, Kreator needed to make a capital investment of more than $70,000 to put two arcs on a job site. Now it costs about $37,000, or a savings of more than $32,000 per year.

"We couldn’t believe the arc consistency of the Trailblazer 275, even when we were using it to run lights, grinders or other equipment,” says, Keith Miles, Kreator Equipment & Services.

“Those savings allow me to be more competitive,” says Miles. “Now I may be the one company that doesn’t have to add a high fuel surcharge or who can absorb some of the rise in steel prices.”

But the issue isn’t just about savings. It’s also about providing top-level service to its customers. This new Trailblazer 275/Maxstar 200 helps them do that exceptionally better than even one year ago.

“We have 50 percent more availability for vehicles to be used on another site,” Miles says. “That is crucial for us. Our busy season is about five months long, from January to May. In that window, we must be available to do as much work as possible. The limiting factor is usually not the amount of work that we can bring in--it’s our availability. Even if we take a conservative number of 30 percent more availability during that time of the year—that represents approximately 60 percent of our annual revenue. It’s been one of the best investments I’ve made; the return on investment versus the outlay is mind boggling,” Miles concludes.

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