Fleet Management In The 90s Requires More Than Maintenance

Bob Deierlein

Today's fleet managers do more than replace flat tires. In or-der to be profitable, managers must take strategic measures to op-erate a safe and cost-effective fleet.

Traditional management resources include manually tracking accounting and shop records. But like the rest of the world, fleet managers also are following the path to computerization. When shopping for maintenance software, make sure that it's compatible with today's technologically improved equipment and soph-isticated shop tools. In addition, it should keep fleet managers informed on government regulations.

Reports from the record systems can be used to spec the proper vehicles, develop and police maintenance programs and determine when training is necessary. But remember: Good records are useless unless you know how to use them.

The Art Of Benchmarking It's difficult for fleet managers to assess their own performance level. For example, fleet managers can't be certain that they're getting as much warranty reimbursement for their fleet of 1993 Fords as other companies with similar makes and models. Also, is their parts and tires inventory at the lowest cost-efficient level? How do their tire costs compare? Is their parts-to-labor ratio correct? Is the percentage of scheduled to non-scheduled repairs cost-effective?

It's useless to keep costs at current levels or to lower them further unless a company knows how its level of costs compares with the av-erages or the best-of-the-best.

Benchmarking, which determines what portions of an equipment/ maintenance program are effective, allows managers to compare their service and productivity to similar operations at other companies.

A manager can use the benchmarking method to secure his or her job. For example, isn't it better for a fleet manager to evaluate the operation's effectiveness before upper management does?

In the following case study, only the names have been changed.

One day, the president of ABC Hauling Inc. handed Fleet Manager Joe Smith a comparison of several companies' labor, parts, outside re-pairs and depreciation figures (see chart). The president asked Smith for his comments.

Smith, whose company's figures are listed under "Fleet B," looked at line 1 for the overall totals. At closer examination, Smith suspected that his company's high costs could be attributed to the varying ages among tractors. He referred to the depreciation figures on line 2 and realized that he had never researched how his company's depreciation schedules compared with others. Smith of-fered other possibilities, such as un-ion vs. non-union labor costs and outside vendors' costs. However, as Smith looked at line 3, he found the individual breakdown of these costs and uncovered the difference - la-bor costs.

With the benchmarking study, Smith discovered how his company compared to others and better yet, where his company could improve.

When preparing to benchmark, don't say, "my operation is different." Similar fleets exist which can be used for benchmarking. However, benchmarking is relatively time consuming and also can require a financial commitment. For instance, one fleet manager may seek more than 60 pieces of information.

"Three common cost indicators are mileage, hours and fuel used," said Cameron Spicer of Solag Industries, San Juan Capistrano, Calif.

"In the residential and commercial sectors of our vocation, the cost-per-stop is the best indicator of performance within a company," Spicer said. "Cost-per-fuel-used also is an appropriate indicator."

Spicer continued to explain the duty cycle in curbside collection.

The haul from a facility to the collection routes and from the routes to the disposal site is fairly typical to most vocations. Curbside collection involves constant start-ups, often at full throttle from a dead stop, only to come to a complete stop again. The truck repeats this cycle more than 1,000 times a day. With each stop, the truck must slowly and carefully turn from and return to the curb to move around parked cars. Each stop requires the brake to be set, the transmission to be placed in neutral, a pto to be engaged and the engine to be throttled to operate the robotic arm and packing mechanism.

Each transmission has two ptos: one has high volume/low pressure to operate the packing mechanism while the other uses high pressure/ low volume to operate the robotic arm. The high volume pto stays en-gaged throughout the duty cycle so the packer can continue to operate.

"The duty cycle accelerates brake wear, scuffs tires and limits tire life. Also, the steering gear wears out faster and the bushings on walking beams need to be replaced every 18 to 24 months. Repairs to the hy-draulic/mechanical system for the body are constant. Hydraulic cylinder failures and welding repairs to the body's robotic arm and packer are common," Spicer said.

Because the effects of the duty cy-cle are more related to the amount of fuel used than mileage or hours of operation, Spicer concluded that fuel use data is the most appropriate form of comparison for his company.

In 1993, Solag replaced its entire 35-unit residential collection fleet. Now that his company's fleet features the "same spec," Spicer said it is easier to research problem areas.

Spicer set up the initial analysis for his company's fleet of 35 trucks with average miles of 13,469 as follows: 0 Cost Per Mile: .0367

* Miles Per Gallon: 3.18.

Since each vehicle varies, conduct research to find suggestions for corrective actions. With identical specs, drivers or maintenance practices are likely to cause the variances.

A manager's top priority is time management. This concept leads a manager to do the most important things first and those tasks are kept on the list until they are done.

Before making strategic plans, a manager should have first-hand knowledge of facilities, shop tools and equipment. This includes knowing the shop's entire layout and the location and accessibility of supervision, parts, various specialty areas (washing, painting, tires, etc.) instruments, heating and ventilating. It also includes knowing which shop tools and equipment will meet vehicle maintenance requirements.

Finally, an inefficient facility can damage an entire operation. A manager's medium-range plans and capital expenditure budgets should in-clude a properly equipped, new or remodeled facility.

Although managing a shop on a daily basis can be rewarding, it also can be very difficult. Personal contact with employees, perhaps the toughest part of any job, should be a high priority. After all, it is the highest single maintenance cost.

Assigning shift levels and scheduling work by shifts must be properly set and reviewed. Truck operations continually change and the numbers of vehicles in and out of a terminal must be monitored so that each service load shift can be adjusted.

It is important to consider vehicles (relays), destination loads, starting and quitting times for the P&D operation and the degree of the shop's responsibility for trailers and tire maintenance. Changes in a terminal's operations or a shift's service load may require changes in the number of people assigned to a shift.

On-going employee training is critical. With changing personnel as well as the integration of new equipment, training sessions are valuable. In fact, most suppliers offer training programs or try matching new me-chanics with experienced ones.

Parts inventory levels must reach and be maintained at the proper re-lationship of parts, units and dollars. The frequency of use, the cost of carrying an inventory, including capital tied up and the cost of storage space, and availability of parts from other shops or outside vendors must be considered when deciding how much inventory to carry.

Equipment managers also must establish proper relationships. For example, determine if the maintenance department cooperates with the operations, safety, sales and ac-counting departments. In addition, to maintain shop efficiency, set a strong relationship between the maintenance department's technical and administrative employees.

Lastly, make certain that all plans and programs are detailed in writing.

Preventive Maintenance As preventive maintenance (PM) costs rise, component repair costs fall. Supervisors and mechanics generally know the procedures and individual tasks within a PM inspection. Standard check-off forms often list the inspection tasks in the exact or-der that they should be performed.

The key is quality inspections. Al-though PM inspections usually look good on paper, the only way to en-sure compliance is for a manager to observe the actual PM work or to check those already completed.

The manager should check to see if the PM inspection interval is still correct and determine what percent of inspection was completed on schedule. Also, the manager should determine if the percentage of completed PMs increased or decreased.

The following programs also will require a manager's attention:

* Training. Besides training for technological components, mechanics must be trained to keep vehicles in compliance with federal, state and local EPA and OSHA regulations.

* Vehicle Specifications File. Notations should be made all year on the original spec sheets. Verify decisions for certain component options and record reasons why some component specs should be reviewed before the next vehicle purchase.

* Theft Reduction. To prevent "losses," take measures to protect parts, tools, supplies and fuel.

* Vehicle Trade Procedures. The price quoted for next year's trade-in vehicles depends on the condition of the vehicles turned in this year. For example, if the deal calls for tires to have at least half the tread life, don't put on rags. If it calls for no cracked glass, turn them in that way.

* Failure Analysis. Outline a program that requires supervision by all managers. For example, the shift foreman supervises the mechanic and the manager supervises the foreman. Also, findings from a failure analysis of a component should be put in the vehicle spec file.

* Safety. Many shop safety practices are not only required but also are economic necessities. Be sure that shop employees observe safety procedures and that fire protection and first aid programs are current.

* Oil analysis. This program also requires a manager's direct supervision. If oil analysis is being used, make sure that it is being done properly and that it still has favorable economic paybacks.

* Replacement Parts Purchase. Learn the difference between used, rebuilt, remanufactured and re-paired. Also, check the price of kits versus buying individual parts.

Know your supplier and watch out for counterfeit parts. In addition, be cautious of poor-quality rebuilds -sometimes they cost only 50 to 55 percent as much as a new product but produce only 40 to 45 percent as much service in time or miles.

* Government Regulations. Many continual federal and state equipment condition regulations, especially local equipment inspection re-quirements, depend on the main- tenance department.

* Tires. Overall, tires represent approximately 20 percent of repair costs. A simple way to achieve low tire costs is to specify them for the right job. This is becoming more im-portant than ever with the variety of specific-use tires available. Keep the tires matched and maintain the correct air pressure.

* Energy control. Equipment specifications and all maintenance practices must always reflect a determination to lower fuel consumption.

The role of a fleet manager is di-verse. Carefully plotting your needs and using appropriate data will put your fleet on the road to success.