The Appeal of Attachments

Why this proliferation of attachments? An attachment is developed simply because it proves to be the right tool for specific contractor needs.

"They really are useful devices for contractors," points out Doug Pierce, global training and education coordinator for ESCO Corporation of Portland, OR. "Why, we're just starting to catch up with the Europeans in the use of attachments. In Europe, it seems that every excavator has five or six attachments. They use the excavator as a tool carrier and as an excavator. And now we're starting to see a trend toward that type of usage in North America. And here, too, I believe the use of attachments is increasing and will continue to grow."

"A contractor invests a lot of money in an excavator or a wheel loader," explains Keith Rohrbacher, Kubota's product manager for construction equipment. "And since he's in a tight, competitive industry, he needs to get a high return on that investment. However, he might not have enough work to keep a basic machine busy. By adding attachments, he can expand the applications possible for that machine and increase the amount of time it is productively working."

"Contractors have to be more universal now," agrees Rick Campbell, product manager for attachments at Hensley Industries in Mansfield, TX. "If a contractor runs into a period or situation where there isn't enough work in his primary line, he has to have a sideline to keep his equipment and crews busy and productive at least until his main line of business picks up again. Attachments enable him to do that kind of flexible diversification without a big capital investment."

"If a user has a universal coupler, he can be very flexible," adds Mike Camp of ACS Industries in Kent, OH. "He can acquire a number of attachments from any of a variety of sources and interchange them on any of a variety of original equipment manufacturer (OEM) machines. Why, the state of New York goes out for new loaders every year. The only thing that changes is who wins that year's loader business. With the interchangeability of attachments, the state has complete freedom in its selection of the basic OEM machine each year without worrying about obsoleting their current inventory of attachments."

"We don't really know how many attachments are in use or what the real quantitative market potential for attachments is," concedes consultant Chuck Yengst of Yengst Associates in Wilton, CT. "There are a lot of attachments already out in the field that just get moved from one machine to another as needed. Therefore, just because a contractor buys a new machine doesn't mean he'll buy new attachments for that machine. By the same token, though, attachments in the field wear out eventually. It's just impossible to make an accurate quantitative projection of the market.

"However, we intuitively know that the greater variety of attachments on the market today are making things happen for OEM machine sales. All OEMs have an incentive to offer new attachments for their machines because the more attachments, the more versatile the machines can become. That can make the machine more useful to the potential owner, so even if he doesn't buy those particular attachments at that time, he may well rate the machine higher just because of its greater potential."

Rohrbacher disagrees. "Attachments are not driving the construction equipment business," he contends. "Attachments are certainly being used as marketing tools for machine sales, but our sales of attachments by themselves are doubling every year." Rohrbacher didn't reveal Kubota's sales pattern of its basic machines, but we suspect those sales are not doubling every year.

Yengst knows of no formal return-on-investment studies that quantify the financial impact of adding attachments, and he points out that attachments can be inordinately pricey. "The OEMs rarely discount them the way they do their basic machines. Even so, we definitely have reason to believe that more and more attachments are being sold; it's just that the industry is so fragmented that we can't say exactly how many are being sold."

Fragmented Industry

The attachment industry certainly is fragmented. To support the basic machine products of a fairly small number of OEMs, there are literally hundreds of independent manufacturers of attachments. Each of these independents sees, as its primary market, the dealer networks of at least one and frequently all of the OEMs. Virtually none of them sells directly to the end user except with the approval and for the convenience of the OEM or its dealers. Typically, this would occur in isolated areas where the attachment supplier can more readily supply and service the equipment or in the case of federal government procurements, when the OEM dealer is reluctant to deal with the bureaucracy inherent to such sales.

Some independents, such as ESCO, ACS Industries, Attachments International, and JRB, sell directly to the OEM, but every independent, it would seem, competes for the OEM dealer market. This does not mean that a single independent supplier will provide all the attachments a dealer needs to meet a customer requirement. "There are long-term relationships built up between independents and OEM dealers," says Dan Meyer, sales coordinator for the Mann Company of Granite Falls, WA. "For example, we're the prime supplier of thumbs and rakes to some dealerships, but seldom is any company selected to supply all the attachments required by a dealer to meet his customers' needs. Frequently, there is no dealer that makes all the attachments needed to meet a given customer's bid requirements, and no one company makes each attachment in his line as well as every other supplier in the business."

Since the OEM dealer often has to compete for the total system, which may consist of the basic equipment as well as the attachments, he takes considerable care to bid the best attachment products to meet the customer's requirements at the best price. In such a competitive situation, OEM dealers may well buy from different independents instead of a favored supplier or even from his OEM.

Of course, dealers who configure a solution and make a sale often acquire the needed attachments from "their" OEM, but they are free to buy them from any of the hundreds of independent suppliers. In the case of Komatsu and Deere, the OEMs encourage this independent acquisition, supplying their dealers with attachment-supplier directories and engineering guides. In Kubota's and Case's circumstance, the OEMs qualify independent sources under "allied-approved" or "co-branded" arrangements to supplement the attachments they manufacture themselves.

"In some cases we manufacture an attachment and sometimes not," says Mike Murphy, manager of Komatsu's Working Gear Group in Vernon Hills, IL. "It depends on the attachment and how it fits with what we do. That's why we like to partner with the firms we've identified as the leading attachment suppliers in the marketplace. They do what they do best, and we do what we do best. It creates a better overall value for the user.

"We OEMs supply a quality, cost-effective line of machines; that's what we do best. We've simply concluded that in many cases an OEM can't fulfill niche user needs profitably. There is a real economic need for smaller, more nimble manufacturers to meet local needs. We work well with attachment manufacturers, probably because they have a vested interest in making sure their equipment is compatible with our vehicles. They ask us for the technical interface information they need, and we supply it to ensure compatibility for our customers."

Ryland Eichhorst, manager of custom engineering for John Deere in Dubuque, IA, concurs. "As OEMs, we also have a vested interest in working with the independents because we have elected to manufacture only a few attachments ourselves-those that complement our machines for high-volume usage. To support our dealers, we keep them informed about the attachments on the market and the companies that manufacture them. And although these companies are responsible for the performance of their products, we provide technical information to any of our dealers who ask about a given attachment. In addition, we include 'referral' attachments in our dealer price book to permit our dealers to order these attachments through us. The supplier will bill the dealer in care of John Deere, and we will bill the dealer on the same terms as for John Deere attachments."

JCB goes even further, according to Ray Szwec, JCB's attachments marketing manager (White March, MD). "If a dealer needs an attachment we don't offer, we put him in touch with the appropriate supplier(s). Through this program, we can ensure proper fit and function for all attachment products that will be used on JCB equipment. Our engineering group analyzes the product to determine that it will work properly on our machines, that it will be supported after the sale, and that it does not void the machine warranty. We issue a 'fit-for-use' sign-off on every attachment we get involved with. I believe that independent attachment suppliers can be an important asset to any OEM to provide the right products to fit customer application needs."

Apparently one major OEM does not share that belief. As a corporate policy, Caterpillar refuses to buy or help its dealers buy from independent attachment suppliers. Instead, the company attempts to manufacture all attachments, as well as their basic vehicles, at factories in the United States and overseas. Most recently, it acquired a Dutch company, Veratech Holdings BV, owner of a leading work-tool specialist, A.P. Verachtert BV, for just this purpose. The Verachtert product line consists of a wide range of buckets and work tools for use on hydraulic excavators and wheel loaders.

Dixie Sanders, Caterpillar's marketing consultant for hydromechanical work tools, explains why Caterpillar has adopted this unique approach. "We want to be absolutely sure that what we invest in fits perfectly with our line of carriers. To this end, we 'Caterpillarize' every design to make it completely a Caterpillar product. We put every proposed work-tool product through a complete new-product introduction process just as we do with new models of carriers and other machines. We also put the attachment on Caterpillar machines and operate it in a real work application to make sure that there is a good matchup between the work tool and the machine's hydraulic system, the brackets, and all the other interfaces. When the process is complete, we know that we have a new product that can operate on any of the intended Caterpillar machines and be totally supported just as our basic carriers are."

Executing this policy is no mean feat, considering the breadth of the Caterpillar line. Its 970-page performance handbook covers 18 different classes of machine, each with multiple models and attachment options. To get a sense of the huge number of attachment options available, consider just one relatively small class of machine, Caterpillar's integrated tool carrier. A fairly specialized machine, the integrated tool carrier is similar to a conventional loader but has increased lift height and reach. However, there are five models of the tool carrier and 35 work tools listed in the handbook.

With Caterpillar's enormous inventory comes the ability to precisely meet customer specifications within the company's existing proprietary product line. And if a new requirement somehow dictates a work tool not covered in the handbook, Caterpillar has a plant in Kansas that stands ready to quote price and lead time to supply the new tool, which then presumably gets incorporated into the Caterpillar line.

The huge product line is a significant asset for Caterpillar dealers involved in a competitive procurement. And, according to Sanders, this dealer support extends beyond just product. For every six to seven dealers, Caterpillar has a district office, and this office has machine representatives, work-tool representatives, and administrative support to help a dealer select the best system to meet a customer's needs and prepare the best bid to maximize the probability of winning the business. In addition to support from Caterpillar Finance for focus programs, Caterpillar World Trade can put together a deal to barter the equipment for such commodities as grain or scrap, which it is in a position to move to market.

The Importance of Couplers

Faced with this awesome self-sufficiency, few independent attachment suppliers take on the formidable task of trying to sell their products to Caterpillar dealers. One exception to this rule is Attachments International of Pelican Rapids, MN, which makes special attachments for special jobs for some Caterpillar dealers. Attachments International is "by far the largest manufacturer of severe-service quick-coupling devices for excavators," states Jerry Henry. "We even manufacture and warrant them for use with big hydraulic hammers."

However, most independent attachment suppliers apparently prefer to pursue the dealer networks of the other OEMs, and couplers are the key to successfully selling into this market. Two issues are involved: industry-standard coupling for application to different machines of different OEMs and quick-hitch-coupling to permit fast and easy changes of work tools from the vehicle cab.

ACS Industries claims to have the first universal coupler, and indeed for wheel loaders it offers an industry-standard coupler system that interchanges its attachments among all same-size wheel loaders of all the different manufacturers. "It's an easy installation too," Mike Camp says. "New or existing vehicles can be converted using OEM bracket pins and existing loader hydraulics, and the center-of-gravity extension is less than 2 inches for an average 2.5-yard loader."

A variety of independents (including ACS) make quick-hitch couplers, a development that is quite popular with contractors. Hensley's Campbell explains why: "Taking off a bucket and replacing it in the field has always been a pain. It seems that whenever you go to disengage the bolt, it won't come out, so you have to drive it out with a sledge. The bolt comes out so hard, you would have sworn there wasn't a trace of grease on it, but when you finally get it out, it's greasy all right. And you know the job is only half-done; you still have to put on the replacement attachment. All in all, it's a nasty job that can take at least 20 minutes. Now, with our quick coupler, the entire change takes only about a minute and a half."

The Case Corporation likes the JRB Slide-Loc quick coupler, and through its recent co-branding agreement with JRB, the hydraulic version of the JRB quick coupler has now been designed for use with Case excavators. According to information supplied by Case's Cindy Brugioni, the coupler "permits fast, effortless attachment changes from the cab---most in less than a minute---and is compatible with many Case-approved attachments, including buckets, clamps, crushers, grapples, hammers, and processors." She also notes, "Today's competitive market is demanding increased attachment versatility for hydraulic excavators. Time is money, and all excavator users do not have the time to pound pins from one attachment to another."

Because the convenience and time savings of quick-hitch couplers are making these devices so popular, a large number of independent attachment suppliers offer them now. The Komatsu Attachment Directory has identified 23 companies that supply them for its excavators, plus five more for graders and 13 for loaders. Already widespread in Europe, this trend is now taking place in North America as well. And the advances in coupling design should further spur the usage of attachments.

Emerging Trends: Buy or Rent?

Not only does the usage of existing attachments seem, even with the absence of quantitative market data, to be increasing, it also seems that new types of attachments are being developed to meet newly perceived ways to cut costs and increase productivity. Tim Davis, sales manager for Rockland Manufacturing of Bedford, PA, says his company continues to design and manufacture new attachments even though Rockland's current product line of over 80 different types of attachments is among the broadest in the industry.

"Dealers call us," he says, "when they need a nonspec bucket or other attachment. We don't try to sell them the nearest OEM bucket size; we design and build to solve a specific contractor's problem. If we get several requests for that same design, we know we've got a new product. But we do build a lot of 'one-offs' for our dealer market. The OEM dealer is our customer."

The OEM dealer as the fulcrum to the sale of machines and attachments has worked well. Virtually every independent we talked to was comfortable with the arrangement, even though it greatly increases the number of and distances to sales calls as opposed to selling directly to OEMs. As one independent says, "It beats having to contact every contractor in the country."

But now the increasing presence of the rental houses and the trend among contractors to prefer rentals as opposed to purchase or rent-to-purchase arrangements is threatening this structure. Even if the current distribution pattern is altered significantly, however, it seems clear that the growth in numbers and types of attachments will continue unabated. As Deere's Eichhorst says, "The application of attachments is only limited by the imagination of the people selling them and the people using them."