The maintenance function remains essentially the same whether a fleet performs its own work or whether it purchases that work from a third party. In either case, trained personnel and the proper staffing levels are the key to efficient operation, John Dolce told a workshop session at the 2000 Education Management Conference sponsored by the National Private Truck Council.
Dolce is a fleet/transportation management consultant for Baker Engineering. The NPTC meeting was held April 30 to May 2 in Tampa, Florida.
Properly run maintenance facilities are all alike, Dolce said. They all need to practice good housekeeping. They need a well-stocked parts supply and a comprehensive preventive maintenance program to keep track of scheduled repairs. A good shop has a balanced staff with careful, qualified supervision. Supervision must communicate to the shop staff what is needed for an efficient job. "Getting what the company needs from the staff is quite different from the staff giving what they think the company wants," he said.
Managing Waste and Fuel In addition to maintaining the fleet, a maintenance department must contend with hazardous materials, Dolce said. Some of this is shop supplies such as lubricants, while other material is waste. In addition, shop managers must deal with residual waste for operation and simple municipal waste such as used packaging. All this material must be managed and disposed of in the appropriate manner.
In many operations, the shop also manages fuel. This entails assigning fuel to each piece of equipment. All that has to be tracked, including how much is in the vehicle, how much is in storage, and how much is missing, Dolce said. Missing fuel gives shop managers a number of possible messages. Lost fuel may be stolen, but it also may be an indication of a leaking tank resulting in ground water contamination. In addition, fuel volume changes with temperature. Fuel delivered at 75 to 80 F doesn't take up as much space in a tank that stays at 50_ F in the ground. "On top of all this, EPA requires fuel records, and keeping track of fuel is one of the most accurate ways to schedule some maintenance functions," he said.
In-house or outsourced shops operate the same way in that they both deal with scheduled and unscheduled maintenance. The goal in every instance is to enlarge the role of scheduled work, Dolce said. Scheduled maintenance is built around planned preventive maintenance inspections and the work that is generated by the findings of inspections. Some maintenance operations go a step further into predictive maintenance, which is the planned repair or replacement of vehicle components at a specified time.
Proactive Shop Schedules Scheduled maintenance results from a proactive shop environment, Dolce said. This is the sort of maintenance practiced by airlines. They don't have breakdowns because road calls in the sky cost too much.
Unscheduled repairs, although undesirable, can be used to improve shop management, Dolce said. Use information from unscheduled incidents to improve component selection, inspection procedures, and technician training. Careful analysis of unscheduled work can be used to reduce unplanned shop activity.
Modern designs and manufacturing techniques help reduce maintenance costs. Equipment is designed for a longer life, and manufacturers support those designs with extended warranties, Dolce said. The result of increased warranty coverage is a change in the expertise required for shop technicians at the general fleet level.
Managers Must Sequence Tasks One major problem in all fleet maintenance operations is that work always expands to fill the available time, Dolce said. Management is needed to sequence the tasks in a given job to make the job easier. This results in technicians performing within a standard work time. To reach this standard, the shop needs the right number of people and the correct amount of work space.
These task sequences must be matched to the maintenance plan and to fleet operations. Maintenance intervals are a part of the plan, and following the plan is imperative, Dolce said. If the inspection interval is 20,000 miles, make sure that every vehicle goes in the shop every 20,000 miles.
Maintenance plans change as a fleet ages. When the equipment is young, the maintenance plan is labor intensive because most shop time is spent on inspections. Repairs are rare Fuel delivered-maybe replacing a light bulb from time to time. As the fleet ages, the emphasis switches from inspection labor to repair labor and higher parts costs. In older fleets, the cost of parts often outweighs the cost of labor to install those parts.
Finding a balance between labor and parts cost is the reason managers get paid. Inspections in concert with, but not necessarily in line with, manufacturers' recommendations are a way to define the risk inherent in fleet operations, Dolce said. For instance, a medium-duty engine manufacturer may recommend an oil change every 10,000 miles. A savvy maintenance manager may decide instead to sample oil and send it for analysis before setting a change interval. After careful consideration and consultation with vendors, the change interval may be set at 15,000 miles.
Take Control In setting up a maintenance program, the most valuable person in the system is the shop supervisor. The manager's job is to measure, watch, and pay attention, Dolce said. Maintenance records provide the tools for measurement. The supervisor is responsible for watching everything that goes on in a shop. And while everything is watched, managers need to pay attention to those things that have the most potential for causing trouble. "The whole purpose of management is control because if we don't take control of the fleet, it will certainly take control of us," he said.
A big part of any maintenance program is deciding whether or not to spend money on repairs. When a piece of equipment needs work, someone has to authorize the expense, Dolce said. A good rule to use is to look at replacement rather than repair if the work is projected to cost more than 30% of the equipment residual value. That value fluctuates from truck to truck, but a workable formula suggests that a vehicle loses 30% of its value in the first year of ownership and 20% a year for every succeeding year.
Factor-In Obsolescence "Managers may find reasons other than simple cost for refusing to repair a vehicle," Dolce said. "While the price of a one-time repair could be the main reason for replacing a truck, other factors apply as well. A fleet may have a perfectly servicable vehicle that no longer fits the job-a 14-ft truck in a delivery environment that needs the capacity of 18-ft bodies."
Maintenance programs and facilities must match the work generated by the fleet. The first step is to determine the basic daily work load which consists of maintenance scheduled per day, work already on the floor from a previous day, repairs required by driver write-ups, and work generated in the field when a part malfunctions simply because it was being used, Dolce said. The second step is to project available labor. A fulltime mechanic actually turns wrenches 30 hours a week. The other 10 hours gets divided into vacation, training, and other administrative tasks. Basically, technicians put in 1,500 hours of repair time a year. To determine optimum shop staffing, simply divide the projected annual work backlog by 1,500.
Five Percent Repetitive Work Studies have shown that only 5% of shop work is so repetitive that technicians actually generate one hour of productivity for every hour of charged labor, Dolce said. The other 95% of work is done so rarely that mechanics never develop a routine for it. They may do a certain task only once or twice a year, so one hour of charged labor never equals one hour of work. In fact, nonrepetitive tasks may take as much as three hours' labor for every hour of productive work, he said.
Designing a shop can be reduced to a formula as well. As part of the planning process, multiply the number of days that the maintenance department is open by the number of available labor hours. Divide this result by the projected number of work hours. The answer will be the number of bays needed in a shop for a single working shift, Dolce said. If the shop runs two shifts, cut that number in half.
Working three shifts doesn't change the number much. If a shop needs 10 bays for a single shift, it would need five for two shifts. However, addding the third shift would drop the building requirement only to four bays, Dolce said.
Actual design compared to projected design depends on the work being done. A mechanic performing only repetitive tasks will need one work bay, Dolce said. For infrequent tasks or unscheduled repairs, a mechanic may actually need 11"2 bays. "For instance, a technician gets a truck taken apart and then finds that the required part is not available," he said. "The truck can't be moved, so that bay is unavailable until the part comes in and the job is finished. To remain productive, the mechanic needs another space to work."
The basic solution to maintenance planning is scheduling. The more work that is done on a scheduled basis, the fewer people the program will require and the less space will be needed to house the maintenance department, Dolce said.
Planning Refrigeration Maintenance Programs Maintaining a refrigeration unit requires as much talent and training as maintaining a highway tractor. "We could argue that fleets should use their best mechanics to maintain refrigeration equipment," Richard Smith told the maintenance practices workshop at the 2000 Education Management Conference sponsored by the National Private Truck Council.
Smith is global director for Thermo King Corporation. The NPTC meeting was held April 30 to May 2 in Tampa, Florida.
However, maintaining refrigeration equipment with good technicians may not be enough, Smith said. Specialized training is required as well. Maintaining a refrigeration unit is not as simple as changing the oil and keeping the refrigerant properly charged. The job is not the same as inspecting a tractor engine and keeping the air-conditioning charged. In fact, a poorly or improperly trained technician can cause more harm than good. On the other hand, using the very best diesel mechanic in the shop would probably cost too much, he said.
Refrigeration Training Required Top level diesel mechanics are generally engine specialists. Their training may lack the details of the refrigeration circuit, fully half of maintaining a refrigeration unit. That training is important, because a failure in the refrigeration can be extremely expensive, Smith said. No one likes failures, but if a tractor fails in transit, a substitute is not all that hard to find. It can be pulled from a nearby terminal or rented from a leasing company. A substitute tractor may not be perfect, but it will usually do the job.
Refrigerated trailers are much different, Smith said. They are more difficult to find than a daily rental tractor. This is especially true when the substitute needs multi-temperature capability. Even when a substitute can be found, the load still faces problems. Perishable or frozen loads need constant temperature control. Unless a refrigerated building is close by, the load is subject to heat shock while it is transferred to the substitute trailer. Making sure that none of this happens is the responsibility of the maintenance department.
Training is the key to productivity in refrigerated fleets, Smith said. Everyone involved with a load can affect the outcome, so everyone needs training. Loaders need to place cargo in the trailer properly to allow the refrigeration unit to do its job, which is maintaining box temperature and product integrity. Drivers need training to ensure that they operate the refrigeration unit properly. At the same time, dispatchers need to know all the pertinent data about the load, what it is, what temperature should be maintained for proper protection, as well as the schedule for pick-up and delivery. If these personnel are properly trained and do their jobs as required, the refrigeration unit can maintain product temperature safely. If any of these personnel fail, the refrigeration unit will not be able to perform efficiently and cargo claims as well as maintenance problems can result.
Training Ensures Performance Obviously, maintenance personnel training is the most important. "Technicians should receive proper training so that they can give a unit appropriate care. A refrigeration system should be operating and maintaining temperature just as well on the day it is sold as it was on the day it was put in service," Smith said. "That's not to say that technology won't change in the 7- to 10-year life of a unit. That's not to say that systems that offer better cargo protection won't be developed. But with proper care, a given unit should continue to perform just as it was designed to perform."
A good maintenance program contains both preventive and predictive measures, Smith said. Preventive programs concentrate on comprehensive inspections to find problems before they reach the point of failure. Predictive measures involve making repairs at some predetermined interval to ensure that failures cannot happen.
The goal in all fleet operations is to lower the total cost of ownership. Refrigeration unit manufacturers have tried to help in that regard by applying some of the newest technology available to their products, Smith said. Of course, this technology is expensive. The choice is to spend more for the unit at purchase and lower the cost of maintaining the unit throughout its service life.
Rely On Self-Diagnostics This is done by allowing the unit to do some of the maintenance work. The most modern refrigeration units are equipped with microprocessor controllers that run extensive self-diagnostic routines. The automated pretrip inspections take less than 20 minutes to run. For comparison, the same inspection performed by a technician takes almost four hours. As a result, manual inspections this thorough are performed infrequently. With the automated systems, an inspection can be performed prior to every use. With automated preventive maintenance inspections, fleets can dispatch trailers with the full confidence that units are in top condition. The microprocessor systems will check everything about the unit but the belts and hoses, he said.
These control systems also help reduce shop time during regularly scheduled inspection and service. The diagnostic program records unit operation during normal operation. If it detects a serious problem, it will usually shut the unit down. If a potential problem is less severe, the unit will continue to run, and a fault code associated with the problem will be recorded. In either case, these alarms are recorded and can be played back by a service technician. The result is faster troubleshooting, more accurate repairs, and lower total maintenance costs as a result of a more productive labor force, Smith said.
Scheduled maintenance must always be done, Smith said. The maintenance program should not tolerate skipping a maintenance interval or skipping part of an inspection or service procedure. The only way to make sure every item in an inspection is checked is to use a printed checklist. The list used in Thermo King's contract maintenance program has 64 items for a conventional refrigeration unit plus seven additional items if the unit has multi-temp capability, he said.
Failures Explode Costs Unscheduled maintenance falls at the other end of the spectrum. It is not planned, not predicted, and not wanted, Smith said. This work is the result of random component malfunction, or worse, an error in scheduled inspection analysis. The worst fact about unscheduled repair is that it almost never happens at home and rarely during daylight business hours. Experience shows that a $100 repair at home during normal working hours can cost $400 or more on the road at night, he said.
If a fleet has a high incidence of road failure, it means something is wrong in the preventive maintenance program. Maybe the intervals are too long. Maybe the inspections are poorly designed. Probably the analysis of inspection data is flawed. Whatever the reasons, road breakdown is a clear symptom of failures elsewhere in the maintenance program, Smith said.
Fleets performing internal maintenance should take a tip from contract maintenance operations and begin budgeting for unscheduled, unpredicted repairs. "I call it a slush fund," Smith said. "This is a fixed amount of 7% to 10% of the budget for scheduled maintenance set aside to pay for a big unscheduled repair. Most equipment will last through its predicted service life without failure. Exceptions to this are generally about 10%. Fleets should not experience any downside from this budgeted contingency fund. If it is needed, repairs get made without busting the budget. If it is not needed, it can be carried forward or used for other purposes."
Choosing a Maintenance Source The final decision in any maintenance program determines the source of the work, Smith said. A fleet can choose to perform the work internally, it can source vehicles and maintenance from a leasing company, or it can go to a third party with special qualifications for refrigeration maintenance, Smith said. Keeping the maintenance program in-house may produce the lowest average cost, but it also requires the fleet operator to assume all the administrative and labor costs plus the risk associated with unplanned failures.
Maintenance from leasing companies or another third party offers several options, Smith said. The first option that comes to mind for most fleets is a full-service maintenance. The contractor handles everything, parts and labor, for a set fee. A modification of this idea is the exception contract, where the vendor provides maintenance for part of the fleet or only handles complex tasks. The most common exception contract places new equipment in the care of a maintenance vendor and places older, more failure-prone units in a different category. Other vendors will perform maintenance on a time-and-materials basis. Some fleets work with purchased maintenance. What they need is a central billing process to help them keep track of expenses. That is available from maintenance vendors as well, he said. In every case, the goal remains the same: lowest total cost of ownership.
Making Workable Purchasing Decisions Many fleets use vehicle specifications to enhance the resale value of equipment as well as attract and retain drivers. These decisions are best made by fleet managers and vendors working in concert, Mark Helms, Keith Harrington, and Jay Nieszel told a workshop at the 2000 Education Management Conference sponsored by the National Private Truck Council.
Helms is a regional maintenance manager for Wal-Mart Stores. Harrington is manager of the product marketing group for Freightliner Trucks, and Nieszel is president of Trailmobile Trailer. The NPTC meeting was held April 30 to May 2 in Tampa, Florida.
Wal-Mart runs a fleet of approximately 4,800 tractors and nearly 28,000 trailers, Helms said. This fleet logs an average of 700 million miles annually. Until recently, the company had been keeping tractors for roughly 41"2 years. Trailers are a different story, because Wal-Mart has never had a formal trade cycle for them. "We literally still have some of the first trailers we ever bought," he said. "Wal-Mart leases some of its trailers and owns others. For the past two years, the company has been turning in some leased trailers for the first time in its history."
In 1998, the entire Wal-Mart fleet was cabover tractors. The company reasoned that a COE tractor made spotting a long trailer behind a store easier. This is important because some distribution centers in Texas use 57-ft trailers. In 1998, the company first began looking at the purchase of conventional tractors for two reasons. The first was the attraction conventional cabs hold for drivers. The second reason was the falling residual value of COE tractors. Today, early in 2000, the fleet is now about half conventionals and half cabovers, Helms said.
Evenly Spaced Deliveries In making this change from COEs to conventionals, Wal-Mart bought 2,000 tractors in 1998. With such a large purchase, the company requires its supplier to spread delivery evenly throughout the year to avoid overcrowding facilities that perform in-service inspections.
Wal-Mart has been a partner with International since 1984, not having purchased a single tractor from another vendor in that time, Helms said. "That's one of the strong points of the company," he said. "We develop partnerships and stick with them."
The change to conventional tractors by Wal-Mart and other large fleets has accelerated the pace of conventional purchases in the company as the price of used cabovers has fallen, Helms said. At Wal-Mart, the tractor trade cycle has dropped to only three years as the company strives to get the best residual value possible for its remaining fleet of COEs. This shorter cycle is making good used equipment available to many small fleets, he said.
High Horsepower Engines At the same time Wal-Mart changed tractor configuration, it also changed engine specifications. The company standard now is a large displacement engine with 370/430 multiple horsepower ratings. This change was made to gain driver acceptance and to enhance resale value, Helms said.
"We have made other changes to make tractors more comfortable for drivers," Helms said. "Most of our fleet have sleepers now. Only about 150 tractors are still day cabs."
Air suspension is favored by drivers, so the company has adopted it for tractors, Helms said. However, most merchandise delivered by Wal-Mart is not sensitive to shock, which allows the company to continue using steel spring suspension on trailers. The same logic applies to rear frames and wheels. "We have no reason to specify stainless steel rear frames for trailers," he says. "We are not particularly weight sensitive; we haven't made a transition to aluminum wheels. Wal-Mart is essentially a dry van fleet, but the company is moving into perishables as more super centers enter the market."
Selling Tires Wal-Mart now runs low profile 22.5 tires. Making that switch is flooding the market with used tires. The company has 36,000 tires to sell in 2000, Helms said.
Purchase price remains important for Wal-Mart, Helms said. If there is a significant difference between the price of the vendor's favored component and a component that Wal-Mart is considering, the company will take the vendor component as long as performance is comparable.
The company has 30 maintenance facilities throughout the US where it does all its work in-house. Those shops purchase parts, tires, and fuel on pricing negotiated from headquarters in Bentonville, Arkansas.
Three factors should be at play in developing new tractor specifications, Keith Harrington said. If vehicles are kept for an extended service life, a company should match the equipment to its job as carefully as possible. A long cycle between trades allows for highly customized equipment. However, fleets with a short trade cycle should write specifications based on resale to capture as much residual value as possible. The purchase should be equipment that works in their fleet and is adaptable to many other similar tasks. "For instance, engines rated at 430 hp currently have the highest resale value," he said. "Fleets keeping tractors only three years should consider those engines even if they do not need that much power, because it will enhance the trade value. Engine brakes are another example. A fleet may not need them, but engine brakes are a value-added component for a used truck."
Gaining Driver Acceptance Giving drivers what they want is the third factor, Harrington said. Some drivers are particular about vehicle appearance, while others are more concerned about interior comfort. In any event, tractors that appeal to drivers give a fleet its best chance to reduce turnover.
Fleets have a tendency to repeat specifications from purchase to purchase. In the manufacturing business, this is called a same-as-except-for order, Harrington said. Fleet managers will order a vehicle just like their five-year-old tractors without realizing that vendors have made minor changes in some of the components. To take advantage of the latest technology, purchasers should review specifications completely with each new order, he said.
Purchasers need to work with vendors and have confidence in their ability to engineer durable products, Jay Nieszel said. Customers who bring a long list of highly specialized specifications to the negotiating table are taking a risk. Those highly specialized specifications are much more susceptible to failure than a manufacturer's standard production. "If we say that our standard refrigerated trailer will haul ice cream, we know what we are talking about; and we will stand behind that standard," he said.
"That is not to criticize options," he said. "We have hundreds of standard options available for trailers. Those don't bother us because we've done all the work to ensure smooth integration in the manufacturing process. It is the addition of special requests beyond our options list where mistakes get made."
