Any maintenance budget needs to be as detailed as possible to generate the type of reports that will identify troublesome areas, but some fleets still don’t track individual expenses, says an incredulous Bill Spence, a maintenance consultant based in Carlisle, Ont. “They fly by the seat of their pants.”
Software should be used to record every aspect of a repair using the Technology and Maintenance Council’s VMRS 2000 codes, says the former Ryder maintenance manager. The Vehicle Maintenance Reporting Standard, a type of shorthand for maintenance operations, includes codes for everything from repair types to a vehicle’s condition and application.
If you don’t track it, you can’t measure it, and if you don’t measure it, you can’t control it.
2. Speak a meaningful language
John Lewis, vice-president fleet and safety for SLH Transport, can rattle off a litany of ways he can express maintenance costs – from the all-important cost per kilometre, to the cost per terminal, unit, application and age of equipment. Each serves its own purpose.
Reports that track maintenance costs as a share of revenue may be important to upper management, but they don’t offer an accurate reflection of maintenance practices, Spence says as an example. “If you don’t sell a good deal, your running costs will look bad.”
Even the widely accepted cost per kilometre doesn’t work for every fleet. A shunting operation may need to track maintenance costs against consumed fuel since its odometers won’t offer a true reflection of equipment wear, suggests Vic Wintjes of VW Transportation Services, a former maintenance chief for Canadian Tire’s fleet.
3. Watch for the red flags
Specific benchmarks will vary widely from one fleet to another, but there are some figures or trends that should attract the attention of any maintenance manager.
“Labor is always higher than parts,” Spence says, adding this is a sign of an effective Preventive Maintenance (PM) program. “If you’ve got it reversed, you’ve got a problem.”
If there is an unexpected surge in unscheduled downtime because certain components have failed, it’s important to be able to cross-reference that with any changes in the equipment’s application, Wintjes adds.
If you’re tearing through rear ends at an alarming rate, it may be important to see if trucks spec’d to haul 40,000 lb. loads are suddenly being put into service with heavier weights.
Joe Stianche, the maintenance manager for Mississippi-based Sanderson Farms, told the audience at a recent Technology and Maintenance Council meeting that he lives by a 10% rule. If a line item adds up to 10% of any area of the budget, he wants to know why it’s getting better or worse.
4. Track age-related repairs
“If capital costs are down this year, you certainly have to budget for more maintenance costs next year,” Lewis says. But take the time to determine whether the cost of repairs and associated downtime would still be cheaper than new equipment.
An SLH van trailer will stay in service for 15 years, almost doubling the eight-year lifecycles that are realities in many fleets. (“We have such a huge fleet, we don’t put as many miles on them,” Lewis says of his company’s 4,184 leased and owned trailers.) But maintenance budgets need to reflect that older equipment will need such things as suspension work to ensure the longer life.
Penske Truck Leasing, meanwhile, will add .001 per mile (1.6 km) to the cost of maintaining any tractor that surpasses 50 months of age, says Ken McKibben, the leasing giant’s senior vice-president of field maintenance. That adds up, considering the company has more than 58,000 tractors, 57,000 mid-range trucks and almost 48,000 trailers in 650 locations across the U.S. and Canada.
The US $2,000 per year that’s spent on maintaining trucks traded in at 42 months of age balloons to $2,500 per month for those traded in at 50 months, he says.
Replacement costs should also be included in budgets from the moment that new equipment is purchased, Wintjes adds.
5. Look at location, location, location
Location, location and location are often referred to as the three most important factors in the world of real estate. Maintenance budgets need to reflect costs associated with different regions as well.
The SLH equipment that travels through Western Canada, for example, is more likely to run triples and trains, leading to higher tire costs because of the increased rolling resistance, Lewis says. So, too, is it more likely to experience a damaged windshield. Such maintenance issues will never be spotted unless you break down numbers by geographic regions.
The tracking efforts also help the fleet save hundreds of thousands of dollars a year when deciding how to distribute new equipment, he adds.
A 2002 SLH tractor working out of Toronto may only travel 90,000 to 100,000 km per year, but its maintenance budget reaches four cents per kilometre because of the higher brake wear and additional suspension issues associated with tight turning radiuses and stop-and-go traffic. A 2002 tractor that’s based in Kingston, Ont. may travel 300,000 km per year, but it can be maintained at a cost of 1.5 cents per kilometre because of the less demanding linehaul runs between Quebec City and Windsor, Ont.
6. Plan for the unexpected
Perhaps the most difficult task in setting a maintenance budget involves determining how much money should be set aside to address accidents and unexpected recall campaigns. A recent campaign that involved the seal on a Sealco brake valve affected 350 SLH trailers that each had to be pulled off the road for a half-hour repair, Lewis says as an example. It could never have been foreseen.
The best benchmark here will be to rely on your past experience. It may only be an educated guess, but some money has to be set aside.
7. Track repair costs by types of workers
Employees can have a dramatic impact on maintenance costs. A large pool of new drivers may lead to more dock-related damage. An increase in the number of owner/operators could be accompanied by premature trailer brake problems, as the brokers rely on trailer spikes to reduce wear on their tractor brakes.
“If you put the same driver in the same truck, it’s maintained better than when you slip seat,” Lewis adds. A driver who knows he’ll take the wheel of the same truck day after day may report a minor pull at the steering wheel before an alignment issue manifests itself as premature tire wear. Equally, drivers dedicated to specific trucks are also more likely to do their own small repairs, replacing such things as window cranks or bulbs, he says.
8. Collect the warranty money you deserve
Warranties offer maintenance shops one of their only opportunities to recover expenses, but many shops fail to submit every eligible claim, Spence says. It may be easy enough to track a new piece of equipment that breaks down in its first year of operation, but how will you know if a newly replaced alternator fails within six months?
Software and bar codes need to be used to track individual parts for a full year after they’re installed, he says. Otherwise, you’re relying on your own memory, or will have to pour through individual vehicle files when replacing any part.
9. Control your parts inventories
Any parts that aren’t used within a year should be returned to the supplier, Spence says – and he recommends spec’ing common equipment to ensure common components.
Stianche of Sanderson Farms said that he managed to slash his parts inventory by more than 58%, saving US $1 million, by challenging any component that wasn’t used within six months. Excess stock was returned, and on-hand quantities were reduced to volumes that could be turned within two weeks.
10. Act on the numbers
In the end, a budget is a simple jumble of numbers unless you use it to identify troublesome areas and act on them. In the words of the King, “A little less conversation, a little more action, please.”
“If I look at someone with high costs, I say, ‘Let’s look at your breakdowns. Number one, are you tracking them?'” Spence notes. The first step to reducing related costs is to identify the top 10 breakdowns and investigate ways to reduce them, he says. A high cost associated with tire failures, for example, may simply require a renewed focus on alignments and tire pressures. Hoses also shouldn’t be failing on the road, Spence adds, referring to how PM inspections should catch them before that happens.
He also focuses on seemingly little issues, and refers to one client who’s having a problem with failing LED lamps. The parts themselves have little impact on the maintenance budget since they’re covered under warranty – but the fleet is left to assume the labor costs to replace them. Such costs can add up in a hurry.
Granted, you need to recognize that some budgets may be out of your control.
“There are times you have to live within a certain plan, and sometimes it’s forced down,” Lewis says. Then it’s a matter of finding out where you can make cuts – perhaps delaying cosmetic repairs for six months. Damaged trailer panels might need to be patched instead of being replaced.
“Think smart instead of working hard,” he suggests.