Waste You Never See
You'd be surprised how much waste a good consultant may find. It can add up to big bucks.
JIM WINSOR
EXECUTIVE EDITOR
I've heard that some fleet executives are reluctant to bring in consultants because it implies there's something wrong. Costs may be out of line or procedures are out of date. Or employees aren't doing their jobs correctly. It may make the boss look bad.
In my opinion, these are exactly the reasons you should consider the use of a consultant. Getting an outside professional's independent analysis of your fleet may very well be the best investment you can make. Over the years, I've had the opportunity to see some great fleet turnarounds and huge amounts of money saved ... hundreds of thousands of dollars in some cases. Millions in two.
In the case history below, I'm intentionally omitting names and places but I assure you the dollar figures and examples are real. The fleet described here is a medium-sized truckload carrier. I say congratulations to the fleet executive who was able to redirect maintenance and purchasing policies, savings which also reduced labor requirements while increasing vehicle utilization.
Preventive maintenance. PMs were hit-and-miss, with little mechanic supervision on the shop floor. The manager was hidden in an office, spending upwards of 50% of his time generating reports. PM work did not address many of the reasons that lead to road calls. Among them: coolant leaks, no-starts from discharged batteries and failed alternators, broken springs, low tire pressure/tire failures.
PM forms and mechanic training now include load testing batteries, pressure testing cooling systems, torquing U-bolts. In addition, there's a more productive mechanic work flow around and under the vehicle. Based on analysis of 400 scrapped tires, about 100 of the casings had further value.
Greater shop efficiencies through mechanic training, motivation and effective first-line supervision eliminated almost all come-back repairs ("fix it right the first time") and also eliminated non-essential repairs. Net result: six fewer personnel needed in the maintenance department.
Trade-in trucks. A review of repair orders showed the fleet was spending an average of $2,900 per vehicle on body work, much of it unnecessary. For instance, the fleet often replaced door hinges on the driver's door prior to trade-in. This required four hours labor plus $107.50 per hinge. Cost per truck traded was reduced by $1,450 or approximately $217,500 based on 150 trades per year.
Glass work. Windshield and side glass replacements had been done in-house. Average windshield replacement ran $309.50. Subletting glass work to a local specialist saved $105.50 per windshield, an estimated savings of $31,650 per year. Subletting this work also freed up a mechanic for other work.
Brake maintenance. The fleet bought replacement shoes/linings based on lowest cost, not on lining life and stopping performance. Records indicated first relines averaged 200,000 miles. Second relines dropped to about 125,000; subsequent relines, 80,000 miles each. Maintenance management was totally unaware of lining life drop-off. Switching to a more cost-effective lining eliminated at least one brake job, sometimes two, before vehicle trade. Estimated cost savings: $60,000 to $120,000 per year, not including vehicle downtime.
Many brake drums were being replaced during the last reline, adding an estimated $8,500 annually to costs.
Air filters. These were being changed on mileage, not restriction. Records for one year showed 1,362 air filters at $58 each. Using restriction readings dropped replacements to 8 per year in the main shop for an annual savings of $78,500, not including labor of 15 minutes per change.
There are a lot more savings too numerous to list here. Did the fleet get its money's worth from the consultant? You better believe it; at least three-times over just in maintenance. And we haven't even discussed savings derived from competitive bidding for replacement parts, much less new vehicle spec'ing and bidding!
