With costs always being under the spotlight, how can fleet mangers reduce their maintenance overheads?
These five steps are a great place to start to reduce your fleet maintenance costs
According to a report released by the American Transportation Research Institute (ATRI), in 2017, the average cost of operating a truck was up 6% or ten cents per mile compared to a year earlier. Whilst that increase also includes driver wages and benefits, fuel, lease or purchase payments, permits, licenses, tolls and insurance; maintenance and repair costs can make up 10% of the total cost per mile.
And the costs of maintaining fleets are rising fast. ATRI noted a main reason for this is that newer equipment is proving to be more expensive to repair and maintain. In addition, the ongoing need to recruit and retain maintenance technicians is creating additional pressure on labor costs.
Unlike capital fixed costs for asset acquisition, depreciation and overheads (which are fixed for each budget cycle), fleet maintenance costs are variable. As a constantly moving target, they can be impacted by a number of factors, including the types of assets within your operation, the cost of parts and supplies, warranty coverage and even elements out of your control such as road conditions and the weather.
Understanding the fleet maintenance costs that you can control and adopting practices to reduce expenses in your operation isn’t an insurmountable task.
These five steps will help get you started on the right path.
1. Improve communications amongst ALL stakeholders
Open channels of communication are important in every aspect of any successful business. In fleet maintenance operations, this interaction should incorporate essential departments, drivers, shop supervisors, technicians, parts and outside service providers.
Regular contact with everyone involved in an asset’s service is key to a cost-effective fleet maintenance program. It’s the source of valuable and timely insights into vehicles, providing an opportunity to realize lower costs by being able to monitor asset use and address maintenance issues quickly and efficiently.
2. Determine the most cost effective approach to maintenance
The choice of in-house or outsourced maintenance can be a major factor in a fleet’s costs – driving up expenses or saving thousands of dollars. For some fleets, managing maintenance efficiently requires a mix of both practices.
Control fleet maintenance costs
Control over vehicle scheduling
Full quality control
Responsive in carrying out defect management processes
Quicker vehicle turnaround time
Familiarity of vehicles
Full records of vehicle maintenance
Manage parts inventory
Availability and management of a skilled workforce
Ongoing training costs
Workshop operational costs
Parts inventory and investment
Fully trained technicians
Pre-agreed fleet maintenance costs
Warranty on works carried out
Reduced capital investment in workshop building and tools
Parts and service mark up
Increase in downtime
Limited quality control
3. Create and follow fleet maintenance programs
Higher costs can result from something as simple as not preparing for and adhering to schedules and procedures outlined in routine fleet maintenance programs. Scheduled maintenance has predictable costs because allows you to plan efficiently, to know how long a service interval will take and the parts, technicians, tools and shop space required. Planning a maintenance program – and more importantly executing it – leads to a higher quality work and improved shop productivity, which in turn means lower costs.
With clear and concise instructions in the form of checklists that details and define services that need to be performed, and having the information from on-board telematics systems and driver reports, it becomes easier to lower costs by making repairs during routine service intervals when they are less costly to complete.
Success keeping costs down can be accomplished when operations personnel and asset users understand the importance of routine fleet maintenance, the maintenance department’s needs, and how working together to ensure routine service is completed impacts asset up-time.
4. Managing parts inventory
Cost savings can be realized if effective parts inventory management practices are part of a fleet’s maintenance program. With the right parts are on hand where and when they are needed, technicians can complete service and repair work more efficiently, lowering labor costs. If needed parts are not available for maintenance or repairs, these costs will rise.
A comprehensive means of efficiently managing parts inventory is an important cost-saving element. The right inventory for the fleet’s vehicles helps ensure that they spend less time in the workshop. As an example, ensuring that regularly used parts items are always available reduces scheduled maintenance costs by reducing unnecessary vehicle downtime. Likewise, if rarely used or obsolete parts remain on shelves, inventory costs rise significantly.
5. Using technology to your advantage
Fleet maintenance software is a very valuable and useful tool for helping keep fleet maintenance costs as low as possible – from providing visibility into all aspects through to finding opportunities to lower operating and maintaining costs. Our tip – measure to manage!
To conclude, maintenance schedules should be used to manage parts, labor and all aspects of fleet maintenance operations. They form part of asset management and used correctly, become a central point for creating a fleet maintenance process that promotes efficiency and supports the bottom line.