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Police Fleet Expo: Rucker on Fleet Management
Fleet Management 101
By John Bellah
Les Rucker, national director, Fleet Management Consulting, Maximus Inc., led two back-to-basics sessions on fleet management. Effective fleet management entails far more than just vehicle maintenance. The fleet management’s authority and mission statement should emphasize service quality and cost control. Other components include organization and staffing; an effective information system; financial management; vehicle procurement; replacement planning; and the eventual disposal of vehicles that have reached the end of their lifecycle.
Fleet management also includes facility programming; fleet size, composition, rotation scheduling, utilization and assignment of vehicles; vehicle maintenance and repair; outsourcing operations that are not done in house; materials and logistics inventory management; registration and registration renewals of vehicles with various government entities; fuel management; operator / driver qualifications and training; and, of course, risk management.
Rucker broke down the historical police fleet dollar into three categories, 1) vehicle ownership was 44%, 2) fuel was 20% and 3) maintenance and repairs were 35%. One of the biggest changes in fleet management over the past five years is the rising cost of fuel, which has caused major concerns with today’s economy, along with the issue of shrinking budgets. In fact, the sharply rising fuel costs now divide the police fleet dollar very differently, 1) fuel is 37%, 2) vehicle ownership is 35% and 3) maintenance and repairs are 28%. This budget shift has caught many fleet managers off guard.
Many administrators, looking to reduce operating costs, are considering measures such as reduction in fleet size. Some are having certain employees, such as administrators, school resource officers, and detectives, use their personal vehicles and are reimbursing them for mileage. Other economy moves include deferred maintenance, repairs, and replacement vehicle purchases. Rucker cautions that some of these measures, instead of saving money, may actually end up costing more in the long run.
The key categories of the fleet manager’s time include asset management, asset utilization, financial process, legal issues, risk management, technology, fuel and fueling, information management; and policies and procedures. Asset management covers the actual vehicle maintenance and the entire vehicle costs from initial purchase to disposal.
A preventative maintenance program should be implemented and pre-determined which “quick fix” operations can be handled during the PM. Major repair issues should also be included, as well as warranty management and recall issues.
An efficient replacement parts inventory management system is also important to support the maintenance and repair operation. Idle technicians and vehicles tying up shop space awaiting replacements parts do not make for an efficient operation. On the other hand, clogging shelf space with slow-moving and obsolete parts tie up space and necessary capitol, which can be used for other things.
Customer satisfaction is the ultimate goal, and that comes with properly writing the repair order. Only the technician can properly diagnose and repair the problem. This would result in lower rates of “comebacks,” faster turn-around time, and a higher percentage of vehicles being available for service. Training is important for both technicians and managers. Properly trained people can work faster and more efficiently. Rucker strongly suggests that both managers and technicians get training from the manufacturers of the vehicles they are servicing.
So how long should the vehicle be kept in service? This is a commonly asked question, where there is no clear-cut answer. While vehicles are certainly more complex these days, today’s better materials and lubrication products allow today’s vehicles to have a longer lifecycle than the vehicles that were produced 30 years ago. Numerous variables exist in determining the lifecycle of a vehicle, time, mileage, or a combination of the two, and Rucker can graph it out so the lowest lifecycle cost of owning the vehicle can be plotted out.
Other variables exist, such as the service the vehicle gets. Is it a “hot-seated” 24/7 vehicle used by several drivers, or is assigned to one or two drivers? What type of terrain and environment is it operating in? It is an administrative or detective car, or is it driven by an officer who operated in a “foot-to-the-floor” manner all the time? Other concerns would be the history of reported problems, accidents, or if major repairs are due. It makes little sense to install a $3,500 replacement engine in a vehicle that has a wholesale retail value of $2,000.
Fleet Management 102
By John Bellah
Les Rucker continued his back-to-basics sessions on fleet management by going deeper into asset management and utilization, as well as the financial process, legal issues and risk management. Rucker admitted there is often a lack of communication between administrators and fleet managers. Many administrators are not fleet managers, nor do many administrators have a clue as what it takes to keep a fleet operating efficiently.
Many administrators only look at the short term and only think of the terms of cost, rather than as an investment. Few administrators measure performance or hold people accountable. Therefore, it is imperative that the fleet manager do his homework. Know how efficiently your fleet is operating.
What percentage of your technicians’ time is being billed against repair orders? What percentage of your vehicles is available, and what percentage is down? What are your comeback rates? What kind of work is outsourced? How is warranty work handled? Is it within the facility, or is the vehicle taken out of service for an even longer period of time sitting at the dealership? Why are we paying more for fuel? Why are we paying so much money for rental vehicles?
Knowledge is power, and the fleet manager who has answers to these types of questions can intelligently explain that deferring preventative maintenance, not purchasing new vehicles for the next five years, or reducing the fleet size by 50% and paying employees for mileage to use their own personal vehicles may end up costing lots more money in the long run. Rucker explains that there are three different types of vehicle lifespans.
The economic lifespan ends when it is no longer cost effective to operate the vehicle. This would be when maintenance and repair costs would exceed the value of the vehicle. A 10-year-old Crown Victoria with a lot of accumulated miles on it would not be a good candidate for a replacement engine, as the cost to replace the engine would exceed the value of the car. The service of a vehicle is when it has reached its projected service time or mileage.
The technological life of a vehicle ends when it is obsolete or is so old that replacement parts are no longer easily obtained. Service life is when a piece of equipment is purchased, however, that equipment is used sparingly and usually sits unused at the rear of the compound. If that piece of underutilized equipment is used less than 500 hours per year, it may be far more cost-effective to rent, lease, or lease/purchase that piece of equipment.
Careful thought should be made to planning for replacement vehicles. This includes specifications. What is the vehicle being used for? Does the detective need a Dodge HEMI® Charger to drive across town to court, when a more economical mode of transportation would suffice? On the other hand, an Escape Hybrid may not be the best vehicle for the traffic enforcement officer.
Vehicle disposal is another issue. Some agencies may “run-the-wheels” off a vehicle, while others may replace their fleets every year or so. Both extremes can be false economy. Retaining a vehicle beyond its technical life may cause that vehicle to become a liability, especially if it is so old that it does not have airbags or ABS. What happens if that vehicle were to become involved in a collision—with the customary litigation generated because of the accident. Most attorneys would make a huge to-do over the absence of current safety equipment.
With the cost of upfitting and later removing the specialized law enforcement options before resale, operating a police vehicle for only a couple of years would not be enough service to recoup the cost of the installation and later removal of the equipment.
How efficiently is your shop operating? A technician who works a 40-hour workweek, should, in theory, produce 2,080 hours of work a year. In reality, because of work breaks, holidays, vacations, jury duty, military leave, sick leave, training, and other non-productive operations, a technician should produce about 80% of that figure, or about 1,680 hours. A technician with more seniority may actually produce less work due to longer vacation periods and more serious illnesses.
The question for fleet managers is how much of those 1,680 hours is being actually billed? If your technicians are not that busy, consider having other agencies that are overloaded, sublet their work to your operation.
Published in Police Fleet Manager, Sep/Oct 2008
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