Where Do Your Shop Labor Hours Go?
Technicians should be accounting for all hours on their time cards if you really want to manage how your labor dollars are spent.
Jim Winsor
Executive Editor
Whether your fleet operates its own vehicle maintenance shops or contracts out maintenance work, it's vitally important to know where your labor dollars are really going. In doing research for this month's column, I was surprised by the answers I received concerning shop technicians' time and how it is – or isn't – recorded.
Maintenance labor is a huge expense and a manager really should know where his fleet's labor dollars are going. If a technician works an eight-hour day/40-hour week, his time cards should reflect all hours – direct and indirect labor.
One manager told me he had just spent the day analyzing labor utilization at a leasing company that operates about 900 vehicles and seven maintenance facilities. A working shop foreman told him he didn't need to keep detailed time records because he did "too many things."
When the foreman was pressed for examples, he said he "chased parts" as needed and occasionally shuttled vehicles between the company yard and customers' terminals. He figured that was "overhead," (which it was) but management had no idea what percentage of this person's time was productive labor on the shop floor versus "other things."
Example No. 2 comes from a New England-based fleet and it had to do with fueling. A shop foreman had the task of refueling the shop's pickup truck as needed. No big deal, you say?
Listen to this: The fleet rejected on-site fueling due to environmental reasons, instead bidding fuel contracts to local fuel dealers and gas stations. It turns out this foreman was driving 55 miles round trip three times a week to buy an average of 55 gallons of fuel weekly. The fuel contract was a nickel a gallon cheaper than others.
Management "assumed" the pickup was fueled either locally or when it was out on a road call. No one really knew. The fuel dollars were being accounted for, the labor wasn't.
In another "worst case" example, I learned that a large regional fleet that delivers bulk cement, lime and fertilizers had centralized tire purchasing to get better pricing and better control over tire costs. Sounds reasonable, doesn't it?
As the story unfolded, I learned this multi-location fleet did all its tire repairs and tire mounting at its central location. No one had calculated the cost and time of getting tires and wheels to and from the various shops. It turned out one remote facility was 100-plus miles from home base; that the fleet was delivering six tires/wheels two and three times a week, roughly 650 miles total. The expense was buried in the main shop's overhead – the cost of the truck, its fuel and its driver – who was a junior mechanic.
The worst part?
Management never factored these expenses into the costs of its tire program. Turns out the central tire dealer they bought tires from had trucks running in the area and could have serviced this location easily.
In another case, I learned that in analyzing mechanics' time cards and individual repair orders, it was impossible to match the two accurately more than 60% of the time. Example: A technician was assigned to make a brake repair based on a vague driver write-up: "truck pulls to the right." The technician pulled front wheels and brake drums and replaced linings. The truck still pulled. Days later it was determined the right front wheel was not getting full air pressure.
In these examples, no one in shop management, maintenance management or even senior management really knew their true labor costs, direct and indirect. All they knew was "our costs are too high."
Good maintenance management starts with capturing all labor hours. Don't accept time cards that are short hours. Match technicians' times against work done to really learn what's going on.
One of the primary responsibilities of a director of maintenance is to know where his labor dollars are being spent.
He should be held responsible.
