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“Place Your Parts Ordering On Automatic”
Establish accurate Min’s and Max’s for your inventory and establish expectations
that your parts personnel use these parameters for re-ordering parts
There are shops that we have visited that do not use the data available in their software system to decide when to order or re-order parts. We have seen shop leaders use a couple different methods for making that determination:
- Knowledge that a part was installed on a piece of equipment
- Observation of parts bins with low stock age levels
- Communication from a technician that a part was consumed
The problem with this approach is that sometimes parts are consumed and none of the above occurs. When this happens, stocking levels for parts can reach low levels and parts could be unavailable when needed for repairs.
Virtually every maintenance software system will have a tool for placing a min and max on all inventoried parts. Sometime the labels are different – safety point, target point, etc. But, at the end of the day, using data on actual parts in inventory, and establishing re-order points for purchases, is the most efficient and cost effective method for managing parts inventories. So, take the guess work out of this area and require your associates to perform automatic re-ordering of parts based on an established min/max system.
The other area for consideration with this process is re-ordering quantities. Ensure that:
- If a discount is available for purchasing a certain quantity of an item that your order meets that quantity requirement
- The number of parts required for the discount can be consumed in a reasonable amount of time
- You use your software system to identify and prompt you for the most cost effective re-order point
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“Bring definition to your shop’s Pull Standards”
We visit with many shops that do not have properly defined pull (replacement) standards. The difference between pulling a tire at 4/32’s versus 3/32’s can equate to over $12,500 in added cost based on just 500 tire replacements a year. From a cost standpoint, establishing and monitoring technician decisions relating to pull standards is one of the most important tasks performed by shop management. However, it can be difficult for some managers to peer over the shoulder of their techs to ensure compliance with the company’s expectation around removal standards. Therefore, we need to arm them with leadership skills that allow them to perform this task without de-grading or insulting the tech.
Additionally, we need to ensure that we have selected pull standards that fit our business model. We need to publish specific measurements or requirements that need to be met before a component is replaced. Pull Standards for things like brake linings, tires, and air filters are important to ensure mechanics don’t replace them early or arbitrarily. It is not uncommon, when we visit fleets and ask mechanics about when certain components are replaced to receive differing answers. And, often times when left on their own to make these decisions, mechanics will chose to remove components earlier than what is required. This is understandable as it’s their name, and to some extent, their reputation that’s tied to the quality of repairs.
Another step that shop management can undertake is to provide technicians with specific tools for them to use to decide on replacement standards. Producing Go-No go gauges can contribute to consistent standards being applied to decisions to replace certain components. More and more, shop employees rely on “wear bars” on components such as brakes. Even though we see that as an acceptable approach with brake linings, we need to ensure mechanics are armed with knowledge and understanding of component life, performance and company-directed replacement standards.
What process do you use to establish replacement standards?
What tools do you provide to your technicians to assist them with replacement decisions?
What different components do you publish pull standards for?
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“Put Your FIST Down”
In this case FIST stands for: Fuel Island Service Technician.
We are frequently asked whether it’s a good idea and a good use of labor, to inspect tractors and trailers either when they arrive into the company facilities or when they leave. There are some industry experts that believe that “you can’t inspect quality into your equipment”. Still others argue that, by inspecting equipment, we are substituting the work that should be completed by drivers during their pre-trip or post-trip inspections.
There were far fewer fleets considering these inspections prior to the advent of the CSA system. But, with a focus on lowering scores and reducing overall defects, more fleets have instituted some form of inspection process.
The question then becomes, “How can I do this most effectively?” We believe one option is to increase the number of equipment defects found during visits to the terminal by implementing an inspection process at your fuel islands. The driver and the equipment are already going to experience some downtime during the fueling process.
Focus these inspections on the most common breakdown and DOT violation defects –Tires, Lights and Brakes. Establish an expectation that requires the drivers to walk around with the FIST during the inspection. You’ll make your drivers more comfortable with performing their pre-trips and post trips and educate them on what to look for.
One added benefit, from a maintenance cost standpoint, will be realized by capturing more work in your company shops. If we are able to identify work that’s required on equipment while it’s at our facility, we can increase the amount of work performed in-house and reduce our costs. For drivers that are in-transit and only have time to fuel, we can complete this inspection without interrupting their delivery schedule, provided no defects are found.
Tell us how your company addresses this need.
Have you found effective ways to increase the number and quality of pre-trip and post-trip inspections are your terminals?
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Fully Burden Your Shop Labor Rate
By Steve Zerphey, General Manager, Master Fleet’s Consulting Division
Ensure all costs associated with maintaining the equipment in-house are included in your calculation
Your shop leaders need to make informed decisions on whether to complete work in the company shops, route work to the company shops or sublet repairs to outside vendors. They can only make informed decisions if the shop labor rate is properly calculated.
Some companies use only the cost of labor – mechanic pay and benefits – and the use of this practice may cause them to make decisions like: Towing tractors from far distances to complete the work in-house. The difference between this labor rate and a fully burdened labor rate can be $20 – 25 per hour. That difference can be a huge factor when trying to decide how to address a repair need on a piece of equipment.
To accurately calculate a fully burdened labor rate, maintenance costs with items such as these need to be included:
- Utility costs
- Shop supplies
- Building costs
- Costs of management overhead
We realize that accounting methods are different, and sometimes costs are “buried” in with other non-maintenance costs or even in non-maintenance departments. But, being able to calculate actual repair costs with reliability is important enough to devote resources to gathering this information and assigning an accurate valuation for the shop labor rates.
Even with a properly burdened labor rate, part of the decision-making must also include considerations for:
- Equipment utilization
- Driver retention
- Delivering on customer expectations and requirements
Some companies will assign a value to an under-utilized piece of equipment. For example, they’ll use a value of $500 a day of missed revenue opportunity for any trailer that is out-of-service. This allows for decisions to be made about how and where to repair a trailer that is away from any company facility.
Have you calculated a fully burdened shop labor rate?
Have you consistently included some of the costs listed above?
Do you assign a “missed revenue” valuation and use that in your decision-making?
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Come see us April 16th at the N.E.W. Truck Show located in the Brown County Arena in Green Bay, WI! Master Fleet will be at booth #4 and is once again sponsoring a truck and trailer with John Veriha Trucking for the Wisconsin State Patrol CVSA Vehicle Inspection session. Master Fleet will also have a booth (Booth #CF 2) in the Career Fair section of the show. Looking forward to seeing you there!
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