Decentralizing Equipment Operations

In terms of equipment operations, The Boldt Co.'s centralized model of the past simply had to change, says a fourth-generation company leader.

"I'm not sure if there was a strategic plan that was in place," recalls Thomas J. Boldt, chief executive officer. "Because we were equipment owners, we wanted to have maintenance staff that would maintain these machines to peak efficiency.

"Construction equipment makes you money if you've got the right types, the right quantities, and the right applications. So, over the years, we had built up a centralized maintenance, painting, stores, inventory — the whole thing really — that would service all of our operations throughout all of our different jobsites, as well as our different operating groups."

A privately held, 118-year-old organization based in and historically focused primarily around Appleton, Wisc., The Boldt Co. has moved beyond its Upper Midwest homestead. Today, there are three divisions, the largest being Oscar J. Boldt Construction, which itself is comprised of five major regional operations, many of those with additional satellite operations.

"In the past, our headquarters operation based in Appleton was where the vast majority of the work was generated from," says Boldt. "If you look at the growth of the different markets we have, these regional operations are all now significant, $150- to $200-million-revenue-per-year types of operations. They are no longer the stepchildren; they're equal partners in the organization.

"So, recognizing their growth and their success, you can't work the same type of model you had before."

The result was a shift that, according to Industry Giants information reported to Construction Equipment, has had the greatest impact on the cost-efficiency of operations in and around The Boldt Co.'s $76-million equipment fleet. Although, says Boldt, that's not cut and dried.

"Where this decentralization took place more was in our upper midwestern operations, in which the sites once could basically be driven to and probably get back home from in a day. We found that was getting to be inefficient, and we were trying to force a business model that really didn't work," he says.

With the contraction of the pulp-and-paper industry, a traditional company stronghold, "we felt that our regional offices would be more efficient, more nimble and responsive, and would have better control of their equipment needs. We also began to rely more on our supplier network. This eliminated the need for certain support staff and reduced our 'running around' from the central location."

The Boldt Co. started the decentralization process with smaller pieces of equipment, and moved up to "a certain point in time where you say, 'you know, this doesn't make a lot of sense,'" says Boldt.

"I don't think we appreciated the handling costs and the support costs like we do today," he explains. "As we focused on our changing business model, we added different metrics that helped us make better decisions on what we bought and serviced locally, what we maintained and redeployed, what we traded in, or what we cycled through. We work our equipment hard, and it needs to make us money, not cost us money."

The role of equipment managers away from Appleton has certainly developed, says Boldt, "because in the past, they were dependent on somebody else for purchasing, maintaining, delivery, inventorying . . . and now they are more responsible for that. I think they always had some of that, because they would have pieces of equipment they would buy for specific jobs in those particular areas, but it's just been ratcheted up."

Back in Appleton, with the historical market contracting, it forced an evaluation of operations that coincided with the overall shuffling of equipment responsibilities.

"We've done a lot of analysis on certain pieces of equipment that were bread-and-butter pieces, but because of some of the change in the market, are not as desirable anymore," says Boldt. "As an example, some of these smaller industrial cranes are nowhere near in the demand that they were 15 years ago. We're having to adjust our fleet accordingly."

Correspondingly, The Boldt Co. had operated two active yards in the Appleton area, the second as part of a corporate acquisition. A decision was made to consolidate into one active yard, with the second reserved only for slow-moving or dormant inventory. "We had a decentralization from a centralization," Boldt says with a laugh.

This is all, he says, simply part of the moving forward of The Boldt Co.

"If you're going to stay in business, you have to change and you have to be open to different kinds of things. I'm sure for the people who were involved in it, it wasn't an easy thing, because this is the way we've done business for the last umpteen years, and why would it change? To me, it just shows the company is willing and able to change as times change.

"I often tell people that if we were doing exactly what my great-grandfather was doing in 1889, none of this would be here."