Read the full episode transcript
00:00:09 Lou Signorelli
Good day and welcome everyone to Power Bytes. I am your host, Lou Signorelli, and Power Bytes is your destination podcast for power generation conversations. As always, please know how much we appreciate you, our listeners. We hope that you find our topics both helpful and interesting. There are several ways to get in touch with the show. You can send us an e-mail at powerbytes@cat.com. Visit us at Cat Electric Power on Facebook or LinkedIn. Please remember, though, wherever you listen to your favorite podcast, to subscribe, leave comments, and like our show. It really does help. We've done quite a few episodes on genset maintenance, monitoring, and being able to forecast engine failure to the point of repair.
00:00:51 Lou Signorelli
So today we want to talk about what happens when your engine actually reaches its end of life. Now, that could be for a number of reasons. The first of which might be that it’s reached the end of its depreciation cycle and now it's time to invest in a new engine. It could also be that maybe you failed to do the proper maintenance and it has indeed failed altogether. And the last option, probably the best situation to find yourself in, is that that genset has had a great life, it's been properly maintained, but now it's time to contemplate whether you want a complete overhaul or to review other replacement options. So to help us explore these different options and introduce us to a really cool new option, I've asked Hafiz Shiraz to join us. Hafiz has been with Caterpillar for the last 15 years and has a degree in mechanical engineering. He's also been part of Caterpillar Electric Power’s team focused on providing aftermarket solutions for genset owners and is currently based out of our Chennai, India, facility. Hafiz, thanks so much for joining us today.
00:01:50 Hafiz Shiraz
Hello! Thanks for inviting me. I'm really excited to be here today to speak with the listeners!
00:01:56 Lou Signorelli
Hafiz, I listed three reasons a site owner might want to replace an engine. The first being financial and the latter two being more wear driven. Let's focus on those latter two. The engine is just worn out and the overhaul question comes to front – when you think about the decision tree on the surface, both scenarios seem to be the same. What are your thoughts?
00:02:17 Hafiz Shiraz
Sure. While both reasons might sound similar, these could have very different results impacting the equipment downtime, cost to repair, and time to repair. Let me explain this briefly here. Engine maintenance is an important aspect of equipment ownership, and it's definitely a worthwhile investment in time and money as it helps you get more from your equipment and increases your engines longevity, thereby avoiding costly, unplanned downtime. Even many of the original parts can be reused as the engine [continues] being in running condition. The engine service life can be extended without the risk of a major catastrophe due to engine failure. Finally, the financial impact of longer life is always important. The longer the life of an engine or mission, the lower the average running cost becomes. So a genset owner can attain the best cost-value relationship per hour due to this extended life.
00:03:16 Lou Signorelli
Those are very different scenarios after all. Thank you for that. Many often overlook the cost of downtime. If we're talking about a machine downtime situation, it could be significant loss of productivity or even a loss of power at a facility in the case of a genset. What's interesting is the solution to these very different scenarios can be very similar when you consider cost-effective replacement. Take me through the key cost drivers of replacing an unplanned failure.
00:03:44 Hafiz Shiraz
Yes. Delaying a required engine repair could mean more costly work later – or worse! Generator sets are meant to provide required power for commercial, industrial, and many other applications. So ensuring high levels of availability or uptime is one of the key operational priorities. I'll explain some of the important cost drivers here attributed to unplanned downtime. The first one is lost production. This means that your generator stops producing power, which is the very thing that you are depending on your generator to provide! For instance, let us consider this scenario in a manufacturing company and perhaps, most obviously, there is a reduction in the output. But if there is a disruption to the whole production line, you could be faced with a full shutdown, which means a significant loss of production. To overcome this immediate situation, the site owners may have to depend on rental generators, which may incur higher operational costs – which may directly impact production cost per unit. On the other hand, genset owners must lean toward an emergency repair service. This could also potentially result in higher cost. Once the engine fails, it may impact other components in the engine as well, so the cost to repair or replace those components may be substantially higher, and it takes more time (meaning production is stopped) or you end up paying those higher operational costs, due to rental generators, until the repairs are completed.
00:05:20 Hafiz Shiraz
Another potential impact of downtime is on the quality of the product you are making. Stopping and restarting your production process may cause periods where output quality isn't of the required standard. This risk will either increase waste or upset your customers. This last point can't be overstated, as downtime can translate directly into dissatisfied customers. If they can't get your product or service due to an outage, the results could be long-lasting and costly.
00:05:49 Lou Signorelli
Indeed, and those costs really add up fast! Now let's look at the second scenario, where the engine has a foreseen end of life. What does that path look like?
00:05:57 Hafiz Shiraz
This scenario is the ideal one for our equipment owners and allows for much better planning over the previous example of unplanned failures. While our products are meant to last a long time and work under harsh conditions, we understand there comes a time when they will need to be rebuilt or replaced. Let me outlay the benefits of planned overhaul or engine replacement here. The first point, obviously, is parts availability, which is a key one. As we all know, there have been global logistical and part shortage challenges over the past couple of years.
00:06:32 Hafiz Shiraz
By understanding up front what parts are needed for the repairs, our Cat dealers can help ensure these parts are planned through our forecasting process and make them available when you need them. Next one is less downtime. By planning for the overhaul or replacement, the owners can plan their operations around the genset being down for a period of time. They could even coordinate with their Cat dealer or a rental genset to cover the gap while theirs is being rebuilt. Also, by planning for the event up front, all of the required technicians, parts, and support can be scheduled and prepared ahead of time, which typically leads to a much faster rebuild and having the genset up and running in much less time. Finally, when we have an unplanned failure, we end up replacing more parts than would have originally been needed.
00:07:25 Hafiz Shiraz
Often when unplanned failures happen, there is contingent damage to neighboring components. By planning the rebuild before failure, we avoid these types of issues – and it actually helps reduce the scope of rebuild, which helps with also reducing downtime and cost.
00:07:41 Lou Signorelli
This path certainly seems a lot less stressful. I'd have to assume that it's less costly as well. We all know that emergency services are priced higher than planned services. That's true for many things. What I find keenly interesting, though, is that both paths lead to the same place: replacement options. Let's talk about that.
00:07:59 Hafiz Shiraz
True! Once you have decided to consider your replacement options, the work is nearly the same. In the latter part, it's just less rushed. We have carefully designed our aftermarket offerings, including an engine replacement option, which is faster and easier than rebuilding, keeping downtime low. With these complete runnable replacement engine arrangements, you get same-as-original performance; upgrade of critical design improvements, if any; like-new warranty protection; and it's an installation-ready design, ensuring quick turnaround for maintaining productivity. I would suggest the best way for the genset owners is to lean on the expertise of our Caterpillar dealers who can help choose the right solution depending on your engine condition and your needs. One best practice is even to consider a remanufactured replacement engine option regardless of the application.
00:08:52 Lou Signorelli
Well, that's a new term that we haven't talked about yet, “remanufactured engines.” What are their benefits?
00:08:58 Hafiz Shiraz
Yes, there are a lot of advantages. Our remanufacturing process is built on the concept of using less raw materials and starts only when a component or an engine reaches the end of its serviceable life. The cost to salvage, reuse, and remanufacture is less than manufacturing using all new materials. So remanufacturing means fewer used parts and the best scrap. Remanufactured engine options deliver multiple benefits to our genset owners. The first one is you get more for your replacement dollars. When it's time to replace it, just choose the option that gives you more for your money. Cat Reman engines come fully assembled and ready to be installed in your gensets. The second one is get an engine that's like new. When you buy a Cat Reman engine, you get a product that performs like new. One of the key advantages of a complete Cat Reman engine is that you're getting it from the same people who designed and manufactured the product in the first place. These engines are mainly manufactured to the original performance and quality specifications. And finally, to keep your expenses and downtime to a minimum level, Cat Reman engines are priced lower compared to new (with the return of the used cores). They're also backed by a 12-month Caterpillar Limited Warranty, suitable for your model and application, with the same protections and conditions as if you are buying new.
00:10:12 Hafiz Shiraz
This combination of a core credit, same-as-new warranty, and an authorized Cat dealer being available to provide the information and detail you need will help control your downtime and repair costs. Also Cat Reman processes use less process energy, less new raw material, and less greenhouse gas process than the manufacture of new parts, which in turn helps owners build a more sustainable world. These are not just aspirational or ideological words. They come from data from an external study of our engines, alternators, and turbochargers considering the typical impact in the US of the manufacturing and remanufacturing process for engines and components within our four walls. That doesn't include impacts elsewhere in our value chain, but we are pretty familiar with the sustainability benefits for Cat Reman.
00:11:06 Lou Signorelli
You know, Hafiz, that is very fascinating, and we touched on some of that in our episode on the circular economy. If you haven't heard that one, I highly recommend everyone give that a listen. So Hafiz, supply chains are often strained and in a number of cases, deliveries of new engines are extended. Does taking a remanufactured engine with the full same-as-new warranty reduce lead times?
00:11:28 Hafiz Shiraz
Yes, Cat Reman engines come in fully assembled and ready-to-install condition. Our Cat dealer network stocks a broad range of Cat Reman components, from engine overhaul kits to complete engines. With 21 global Caterpillar parts distribution centers and more than 2,300 authorized Cat dealer locations, most of these components are available and ready to install, reducing your downtime and maintaining productivity.
00:11:54 Lou Signorelli
Okay. So let me make sure I've got this right: same-as-new warranty and like-new Cat performance and quality?
00:12:02 Hafiz Shiraz
Yes, Lou, that's true. At Cat Reman, we use state-of-the-art salvage techniques, strict reuse guidelines, advanced manufacturing systems, and stringent inspections to return used engines and components to the original quality and performance specifications. Finally, the engine is subjected to a rigorous testing procedure to ensure we have a quality product, which is backed with the same-as-new 12-month Caterpillar Limited Warranty.
00:12:29 Lou Signorelli
Well, there you have it, folks! I'd like to thank our guest, Hafiz Shiraz, for sharing his insights with us today. And thank you, our listeners. For more information, please go to cat.com/replacement engines. Also visit your local Cat dealer to learn more about Cat Remanufacturing options that are best for your facility. As always, please share, comment, and subscribe to Power Bytes wherever you listen to your favorite podcast. Until next time! This is Power Bytes. Have a great rest of your day.
