Leverage: Adding Value by Reducing Costs Part 4 (6 Part Series)
Forwarding Freight, In Job Logistics, Logistics, Transportation Jobs, Warehousing Jobs, distribution jobs
This is Part 4 (6 Part Series)
Maintenance options
Maintenance expenditures are a significant portion of operating cost. To control them, it is important to use the option best suited to your fleet, and realize what leverage exists dealing with maintenance providers.
In-house
Companies considering performing their own maintenance should consider their fleet’s size. This option may not make sense for a fleet of less than 25 vehicles. Mechanics cannot be productive 100% of the time; typically, 40% of their time will be spent doing things like paperwork, sweeping shop floors, handling parts, removing snow and fueling and washing vehicles.
Companies performing their own maintenance should be familiar with the following:
Recent technological advances in engines and components have significantly increased life spans and lengthened maintenance service intervals as well. Yet many companies still perform various levels of preventive maintenance classified by type, i.e., “A,” “B,” and “C.” These schedules are frequently based on arbitrary and relatively short time or mileage intervals resulting in equipment being over maintained adding unnecessary costs.
Take advantage of cost tracking systems.
Proper control of maintenance expenditures requires knowing not just how much is spent in total, but where and how costs are incurred. Executives successfully managing maintenance expenses look at costs by vehicle and by total fleet. Costs in various categories are tracked by period to date, year to date and life to date. Computerized maintenance tracking provides the information to “manage by exception,” i.e., focus on defective equipment or mechanics whose performance is substandard.
Scrutinizing computerized fleet maintenance records provides ancillary data such as repetitive repairs, driver negligence and warehouse/yard damage frequency. Warranty recovery management is simplified as well.
Knowing individual tractor costs per mile gives managers the ability to assign tractors that cost the least on the longest runs, highest costing tractors on the shortest runs.
Click here for part 3 of this 6 part series.
Click here for part 2 of this 6 part series.
Click here for part 1 of this 6 part series.
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admin @ March 10, 2009
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