The Heavy Hiters of Heavy Equipment: How do these Dealers Keep Enough Stock on Hand to Satisfy Construction Customers, Without Breaking the Budget During the Slower Winter Months?

• Author: Jones, Patricia

Large earth-moving machines working all over Alaska tend to blend into the state's landscape, dust-covered tools of development.

The job of maintaining an adequate supply of those expensive machines, along with all attachments, accessories, parts and skilled labor for repairs, falls to a small group of adventurous business owners--Alaska's heavy-equipment dealers.

Mixing traits from both the retail and construction sectors, this particular industry has some incredible challenges to overcome--expensive items to stock in a location far removed from manufacturers, an up and down demand that mirrors Alaska's extreme climatic changes and a competitive sales environment to a limited audience.

Add to that one of the most obvious hurdles for heavy-equipment dealers and rental suppliers--keeping those big rigs operating safely during use in Alaska's frigid winter conditions.

INVENTORY MANAGEMENT

From his office in Craig Taylor Equipment Co.'s location in the Fairbanks railroad industrial area, Adam Kofoid can keep a close eye on the fleet of heavy equipment he offers for rent or for sale.

On a sunny day recently, the fenced equipment yard sits empty, save for a small excavator. "And that, I just rented an hour ago," said Kofoid, Fairbanks manager for Craig Taylor. "People here don't have the luxury of waiting until next month to do something--the season is short enough as it is."

Alaska Business Monthly

And it's not like he or other Alaska heavy--equipment dealers can easily have big machines flown up on a minute's notice. Delivery of large-scale, earth-moving machines takes days and sometimes weeks--utilizing trucks, trains and barges to move equipment from Lower 48 manufacturers to the Last Frontier.

Such is one of the biggest business gambles for heavy-equipment dealers in Alaska--keeping on hand enough "big iron" to satisfy the bustling summer construction season, but not so much that they will break the budget when parked during the much slower winter months.

"Having too much heavy equipment can kill you," Kofoid said. "It's a double-edged sword. For seven months of the year, (equipment) may be sitting there under the snowbank."

In addition to Fairbanks, Craig Taylor Equipment also operates offices in Anchorage, Soldotna and Wasilla, maintaining a $15 million to $20 million fleet available for sale or for rent throughout Alaska. Therefore, if a customer in Fairbanks wants to purchase or rent a piece of equipment not at Kofoid's location, he has three other fleet yards to draw upon.

Knowing how to build up, maintain and anticipate future demands for an adequate inventory of heavy equipment in the state takes time and experience, according to Jeff Scott...