Tag Archives: ROA

An Overview Of The Heavy Machinery Industry

The present day market is a highly competitive one and therefore companies need to devise new and innovative business strategies in order to continue making profits and to substantially increase their market share. For this reason, companies have now begun to shift their business focus from creating tangible products to developing a whole range of comprehensive products along with service designs. This explains the increasing importance of innovative services and this has become apparent over the years. However, little has been done for the management of these services. Heavy equipments are ones that are used mainly in the construction and manufacturing industry. These colossal equipments are difficult to transport, are capital intensive and have a long life cycle of use. This heavy industry machinery is extensively utilised by diverse industries including forestry, transportation, agriculture and construction.

These industries call for substantial investments in heavy equipments and thus getting a proper ROA or return on assets is necessary. Capital velocity is highly important in this respect. It is necessary to make provisions for such innovative services in order to ensure high level of performance and asset availability within a limit budget. Heavy equipments are usually customised and thus are difficult to manage and maintain. These equipments can be divided into different categories such as mining equipment and construction equipment. A working face, shovel, stacker and dumper is used for open pit mines whereas a drill, underground loaders and rigs are used for underground mines. Construction equipments comprise a long list including trenching equipment, piles driving equipment, wagon and trucks, excavating equipments such as clamshells, power shovels, hoes and cranes; draglines, scrapers and tractors.

There are different types of heavy equipment that are used for similar purposes and thus it would be difficult to make a generic classification. There are a number of factors that are taken into consideration while classifying these equipments and these include service facility, operating environment, revenue generation, core competency, life expectancy, service skills, subsystem, cost and weight.

Stakeholders play a crucial role in adding value to the customer through the supply chain. The list includes profiles such as that of manufacturers, service providers, designers, governments, contractors and suppliers.

Companies that use heavy equipment and heavy lifting services will obviously need the help of high investment in order to achieve an equally high ROA. Asset management is important in this respect. It is a proper and systematic approach adopted towards the maintenance and the upgrade of assets. Asset management comprises the activities and processes that are necessary for minimising the investment, maximising the commercial return, manage risks and optimise the strategic value. Asset management also includes every function right from operations to procurement, from engineering to maintenance. The latter is considered to be an integral function of asset management.

The business strategies implemented in the industry are a bit different from the other industries. It is a bit difficult for the heavy equipment industry to garner profits and improve their market position in the long run. Service development can increase the opportunities to a great extent thereby making more room for marketing opportunities.