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.

That 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.

Founder Wm. Keith Miles and his 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 that Kreator acted on and that dramatically improved the company's operation.

The suggestion was to enable each of the company's trucks to provide two welding arcs by pairing Miller's Trailblazer 275 DC engine drive welder/generator 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 now sends only two service vehicles.

Kreator now offers 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 C$103.36 (all dollar figures used in this article are Canadian) per day for a job involving 150 km (93 miles) of travel. The company's fuel costs added up to $516.80 per week or $26,873 a year.

By combining a Trailblazer and CST 280 or Maxstar 200, Middlebrook's suggestion cut these numbers in half. Two welders, two helpers, a welder/welder generator pair now only cost $258.40 in fuel a week, or $13,436 a year.

Creating Kreator

“Fail to plan, plan to fail. 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,” Miles said.

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

“My background has been in these fields for over fifteen years,” Miles said.

“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,’ “ he added.

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,” Miles said.

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 tons to 1,500 tons an hour, a unique requirement.

The final piece of equipment for that project was 67 ft. long and 14 ft. 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 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.

Middlebrook suggested that the Miller Trailblazer 275 DC welder generator could solve the shop's problem. In addition to 275 amps of multi-process welding output, he said the Trailblazer offers the industry's only “two-in-one generator” system. One generator provides power to provide a smooth, stable, multi-process arc, while the other generates 11,000 watts of Accu-rated peak power. The equipment is rated at 9,500 watts of continuous power.

Miller Electric said “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. The windings function independently, a design that is intended to prevent a sudden generator load from affecting 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,” Miles said. He said his shop bought two of the machines. Because aggregate sites usually are remote and during shutdown provide little access to 110 V let alone 220 V power, the Miles said the equipment became his welders' main power source.”

Kreator installed one Trailblazer per vehicle. As Kreator rapidly grew, Miles said there were months in which the shop bought two vehicles at the beginning of the month and two at the end of the month to keep up with its growth, and he equipped them the same way.

“As fast as we'd set them up, we would send them out for service,” Miles said.

Fuel Costs

With the spike in fuel costs in 2007 and 2008, sending out vehicles increased Kreator's operating costs immensely.

Miles calculated 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, running the DC engine drive welder/generator 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.

Because most jobs required several welding arcs and, therefore, several trucks, fuel costs would be a multiple of that 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 a better alternative than using the DC engine drive welder/generators alone. He decided to use the Trailblazer's generator power to run the CST 280, a 41-lb. Stick/TIG inverter that handles stick electrodes to 3/16 in.-diameter.

At its rated output of 200 amps at 50 percent duty cycle, that inverter only requires 6,600 watts of single-phase 240 V primary power. With that amount of generator output, the DC engine drive welder/generator still provides more than 150 amps of welding power — more than enough to run 1/8-in. stick electrode.

Where Kreator previously required two trucks and two Trailblazer DC engine drive welder/generators to get two welding arcs, now the shop needed one truck, one welder/generator and one inverter. Because each welder/generator 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 inverter 280 didn't affect the welder/generator'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,” Miles said, adding that the combination also allowed him to send out one truck instead of two. Two days after trying the combination, Miles said he ordered another inverter and, within two weeks of that the shop saved enough to buy another,

The next six welders Kreator bought, however, were Maxstar 200 Stick/DC TIG welders. Those machines weigh 37 lbs., and are designed to plug into any type of primary power from 115 V to 460 V, single- or three phase, 50 Hz or 60 Hz. Further, those welders require only 4,000 watts of generator power to produce their 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 said. His calculations are in the following table, and are based on actual jobs and fuel cost at $.80/liter (about US$3.00 per gallon).

Miller Electric said that, at the rates Miles calculated, this rate, it would take about 11 days to pay for one of its new Stick/DC TIG welders. The company's Maxstar 200 has a list price $ 2,500.

In calculating the savings for each of the shops vehicles that are equipped with a the combined welder/generator and inverters, and assuming an average round trip travel distance of 200 km, the potential savings would be as shown in the following table.

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.

In addition, these potential savings do not include capital costs. Each GMC 2500 van costs approximately $30,000, the welder/generators have a list cost of $4,627, and the inverters have a list price of $2,500.

Previously, Miles said his shop 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.

“Those savings allow me to be more competitive. 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,” Miles said.

But, he added, the issue isn't just about savings. It's also about providing service to customers, and he said the combination of welder/generator and inverter helps his shop do that better than it could a year ago.

“We have 50 percent more availability for vehicles to be used on another site. 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 verses the outlay is mind boggling,” Miles said.

Table 1

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

Table 2

Daily distance	200 km (124 mile) round trip
Daily fuel travel costs per van	$26.60
Daily costs of welder/generator and inverter	$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