Komatsu Southwest Constructs a Bright Future for Itself
If you’re looking for construction equipment in New Mexico or Texas, Komatsu Southwest of Albuquerque is a good place to start. In the three years since it launched, Komatsu Southwest has massively boosted its personnel, revenues and parent company Komatsu’s market share in the region.
The firm is the exclusive distributor for Japanese giant, Komatsu Limited, one of the world’s biggest manufacturers of off-road equipment. Komatsu Southwest also sells equipment made by Sennebogen Maschinenfabrik and the Wirtgen Group of Germany, Fecon, a U.S.-based forestry equipment specialist, and other OEMs.
“We have dozers, excavators, wheel loaders, articulated dump trucks, rigid frame dump trucks, rollers, pavers, crushers, concrete machines, slip form pavers and milling machines… We are just as big in rentals as sales,” states President Grant Adams.
Indeed, Komatsu Southwest’s rental fleet of heavy, earth-moving, utility, construction and mining equipment is one of the largest in all of New Mexico and Texas. Rentals or purchases can either be delivered to a customer’s worksite or the client can pick the gear up themselves. Komatsu Southwest also offers spare parts, used equipment and maintenance.
“We look at our business as four legs of a stool: there’s sales, rentals, parts and service,” states Adams.
In addition to the company headquarters in Albuquerque, Komatsu Southwest has branches in Farmington and Carlsbad, New Mexico and El Paso, Texas. The firm recently spent $3 million on renovations at its Albuquerque headquarters with work finishing up in September, 2017. The firm has also invested heavily in equipment and tooling, hugely expanding its rental fleet and quadrupling its parts inventory.
While the emphasis is on construction equipment, Komatsu Southwest’s customer base is quite broad: “We do a lot of [sales and rentals for] mining. We’re very big in the oil and gas industry – both pipelines and oilfield preparation. We do a lot of governmental work – work on military bases, government contracts. We do a lot of heavy industrial work, big commercial industrial jobs. We do road building, even renewable energy. We touch solar and wind. And we do the scrap metal market – we do a lot with recycling,” states Adams. Most of the company’s clients are located in either Texas or New Mexico.
The company also runs a Komatsu-certified “rebuild” center as one of its service options. “We call it refreshing. We’re refreshing the machine. We’re taking a [machine that has worked] 2 – 3,000 hours and putting it back to like new. Komatsu sometimes sells those to other dealers or other customers throughout the U.S. or we take them and put them into our rental fleet or we sell them to customers as a K-CARE certified [machine],” explains Adams.
Komatsu CARE (or “K-CARE”) is a maintenance support program for Komatsu equipment, available throughout the entire life-cycle of such products. As part of the K-CARE package, Komatsu distributors across North America now offer complimentary scheduled maintenance for new Komatsu tier four interim construction gear (tier four refers to U.S. Environmental Protection Agency emissions standards). This free program involves an inspection, servicing, tune-up, replacement of parts and fluids, and more.
Komatsu customers can also purchase parts online, via an Internet-based service called eParts Central. “They can look at their parts books, see what’s on their shelf and then they can go ahead and order through the website. We can drop-ship the parts to them or have them ready on the counter [at one of our branches],” says Adams.
Komatsu Southwest was created after the branches of an equipment firm called Road Machinery were acquired in October, 2016. At the time, the number of employees and the company’s market share was small.
“I nicknamed [the company] ‘23 and Me’ because it was 23 employees from Road Machinery and myself at the start. Today, we’re at 72 employees.”
Asked what’s behind this impressive momentum, Adams says, “I think there’s a certain portion that’s the market. We’ve been helped a lot by a growing market. But changing a culture to be a more customer-centric culture I think has also been a huge portion of our success.
“The first thing that comes into any cultural change is obviously the safety aspect; safety is number one. We implemented a pretty rigorous safety program. Secondly, it would be how we communicate with our customers. We try to be very empathic to the needs of our customers. We try to provide them with more than a one-size-fits-all solution. We try to tailor our solutions to exactly what our customers’ needs are,” he says.
The safety program implemented at Komatsu is called TRACK (the letters stand for ‘Think through task, Recognize hazards, Assess risks, Control hazards and Keep safety first’).
“Pretty much before every job starts, our guys have a task card. They have to identify what issues could arise in the project, what risks are inherent to the type of work they’re doing. In addition, we start every meeting with a safety share. That’s where an employee brings up something they’ve noticed. They recognize an area where there could be something dangerous – ice on the road, or it’s cold and rainy. Are the tracks slick? Are guys lifting appropriately? Have we created a situation where it’s safe to work and where we all can go home?”
Given its strong rate of expansion, Komatsu Southwest sets certain prerequisites for new hires. “Outside of some of the more basic things, like, ‘Are they equipped to do their job?’ we look for people with high learning agility. We want to see somebody that has a desire to grow with us and somebody that has the ability to swim in the deep end of the pool. We want to find employees that can troubleshoot on their own without having a standard operating procedure in front of them,” shares Adams.
In addition to solid salaries, Komatsu Southwest offers other appealing enticements for potential employees. “We have great health and medical benefits. Our health and medical starts day one. We offer 401(k) matching. We offer probably the best in industry I’ve ever seen for disability benefits, if you’re injured while working for us. I’ve been in this industry for 20 years and our medical benefits are better than anyone I’ve ever worked for,” states Adams.
Such benefits are particularly important, given that Adams says his biggest challenge at present “is finding qualified people… Qualified technicians and people in other roles.”
The difficulty stems in part from a low unemployment rate; when almost everybody already has a job, it can be tough to attract new hires. People who do start work at Komatsu Southwest face two weeks of training, says Adams, to get them up to speed.
Being customer-centric, meanwhile, means providing ancillary services such as K-CARE and “trying to create an easier customer experience. We try to give options,” he adds.
For the moment, Komatsu Southwest isn’t looking to set up dealership arrangements with any other manufacturers. “We try to be very careful. I think one of the things that’s been a key to our growth and success is we’ve tried to be very targeted to customers. Instead of having a shotgun mentality when we started up, in which we just sell or rent to anyone, we tried to handpick who we were going after and then make sure we can raise our level of support to take care of them before we go on to somebody else. We try to control our growth a little bit that way, to keep that level of customer service where it needs to be. So we’re open to taking on other lines as we grow [provided we keep doing] a good job with the manufacturers we have,” states Adams.
Komatsu Southwest’s equipment has been used in numerous noteworthy projects. “We’ve got a lot of projects involving border wall construction right now… We’re doing a lot of rentals and leases for that project – wheel loaders and excavators. We also have several tele-handlers on that job and compaction equipment,” says Adams.
Komatsu Southwest machines have also been used to construct a new Facebook data center outside of Albuquerque and an air force base in the same city. The company also has machines in service at a military base in Los Alamos, New Mexico.
The firm maintains a website and engages in social media for promotional purposes. Komatsu Southwest also takes part in industry organizations such as the Institute of Scrap Recycling Industries (ISRI), the American Petroleum Institute (API) and Asphalt Pavement Association of New Mexico (APNM), among others.
As for the future, Komatsu Southwest is considering new locations but is primarily focused on enhancing its existing facilities, services and equipment.
In five years’ time, “I hope we are number two supplier or number one supplier to many of our customers in this market. I hope we expand,” states Adams.