Management

6 minutes reading time (1106 words)

Fix That Money Drip

Fleet managers who develop objective, fact-based, data-driven decision-making processes often are successful because they don’t let emotions, irrational estimations or surface-level perceptions factor into their decisions.

Unfortunately, when it comes to properly staffing a fleet’s maintenance and repair teams, some managers waste valuable budget dollars by making shoot-from-the-hip decisions without taking time to drill down into the data to uncover facts that can help steer them toward more financially efficient, prudent paths.

This mistake can have a serious impact on the bottom line because, on average, maintenance and repair expenses can account for as much as 25 percent of annual fleet costs. This is why it is so important that you make sure you allocate every maintenance- and repair-staffing dollar wisely.

Needs Analysis as a Starting Point
On average, fleet professionals perform approximately 500 different maintenance and repair tasks on their vehicle and equipment fleet. When considering adding staff to your maintenance and repair team, you will have to determine whether or not you want new employees to have the skill sets needed to complete some or all of those tasks.

Look at the costs associated with hiring industry workers with varying degrees of skill sets. Salary amounts can range depending on what skills you want your employee to have, whether or not he or she has a professional certification, experience level and where you are located within the U.S. When you research salaries, you also are likely to discover the size of the talent pool you have to recruit from in your area.

True Productive Time and Its Impact on Value
Another mistake some fleet managers make is believing that hiring a full-time maintenance and repair worker who works eight hours a day, five days a week for 52 weeks a year will provide a value of 2,080 total hours of productive work.

A value investor does not make decisions based on this type of surface data; you must dig deeper to find the true value. First, factor in holidays, sick leave, vacation hours, jury duty, outside training and personal days, all of which is time not spent on maintenance and repair tasks. On average, these days away from the bay add up to about 580 hours per year. So, the actual work time is now down to 1,500 hours.

Next, add in on-the-job, at-work, indirect time. This is a term for the nonproductive time when staff members are engaged in administrative work and other tasks that remove them from their bays, such as ordering parts, completing paperwork and pre- and post-trip reports, taking coffee breaks and attending meetings. It's non-wrench-turning time, and it typically accounts for 500 hours a year, which brings the total down to 1,000 hours a year of wrench-in-hand productivity.

Now dive deeper into those 1,000 hours to establish their true productive work time value. Of the 500 tasks that the maintenance and repair staff performs, only 5 percent are performed on a repetitive, continual basis. This 5 percent makes up an estimated 30 percent of their workload and consists of tasks like replacing batteries, changing oil and so on.

The good news is that these are the tasks from which you're truly going to get one hour of productive work out of a one-hour job. That’s because workers benefit from the repetition – it increases their task efficiency and skills. In other words, the more they perform the tasks, the better they get at them. So, of the 1,000 hours, there will be 300 hours of high-value, productive work.

But this means that the other potential tasks will take up 70 percent – or 700 hours – of their workload. These tasks can slow productivity because they are more challenging and haven’t been retained in employees’ muscle memory. As a result, a one-hour task could take double, triple or even quadruple the time to complete.

On average, this drop in productivity reduces the 700 hours to about 400 hours of high-value, productive work time. Now we see that a full-time employee is going to give us a total of approximately 700 hours of maintenance and repair value – 300 hours performing repetitive tasks and 400 hours engaging in tasks that are less frequently performed.

Let’s do the math. Seven hundred productive hours is about a third of 2,080 full-time hours. That means that in the case of a $20-per-hour employee, you really are paying $60 for each productive hour.

When you add in benefits at an estimated $8 per hour, and also add in facility costs – including amortization of the floor space, heat, electricity, clerical times and everything else in that category – the actual figure gets close to $95 to $100 per hour.

Doing this calculation not only shows the value you are getting from your existing maintenance and repair staff, but also provides more revealing data about what it costs to hire new staff. How do these numbers stack up against the available outsourcing options? And where can you find other sources of value in your in-house staff that will help you lower that $95- to $100-per-hour cost?

You certainly can look at your existing staff and assess some of the intrinsic value in them, such as the efficiency and quality of work that is a result of their experience. You can also look at the cost of replacement for those workers. Finding a new worker to replace a good, reliable employee that you’ve properly trained can become a very time- and dollar-consuming task.

If you keep these concepts in mind when you make investment decisions, you'll be much better equipped to put your organization in the best position possible to minimize its vehicle and equipment maintenance and repair outlays, maximize its vehicle availability, minimize your fleet size and maximize your fleet utilization – which adds up to lowering your fleet’s overall billable costs without reducing productivity.

About the Author: John Dolce is a fleet facility and maintenance specialist employed by Wendel Companies, an architectural and engineering firm. He is an active consultant, instructor and fleet manager with more than 40 years of experience in the public and private sector. Dolce has written three fleet-related textbooks and teaches fleet management courses at the University of Wisconsin’s Milwaukee and Madison campuses. He can be contacted at This email address is being protected from spambots. You need JavaScript enabled to view it..

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Monday, 09 December 2019

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