Introduction:
Properly categorizing maintenance costs is a well worth the time. Incorrectly categorized labor and parts will hide the true costs associated with your equipment, and also prevent you from making meaningful and cost-effective changes.
In my years working in the Bus Transportation Industry, I have only seen a few different ways that companies keep track of their maintenance costs. Usually, it is just a sum of all the labor and parts that are put into the maintenance department divided by the total miles traveled for all of the vehicles that year, and just like that we arrive at the cost per mile (CPM). Sometimes those costs are further broken down by vehicle and compared to each other to make future purchasing decisions. On a rare occasion the costs associated with the fleet are broken down by more in depth categories such as the ones below, but this tends to be an exception rather than the rule.
Cost Per Mile Calculation
It may seem pretty obvious by this image that there are bunch of categories for the type of work that is put into your fleet, and each of these categories is important to track in order to understand where the costs are going and what "low hanging fruit" can be picked off to lower the overall CPM for your vehicles. I hope to convince you that incorporating a more in-depth breakdown of where the time and part costs are put can lead to improvements and better future planning for your fleet.
As a side note, I will not spend time on tracking fuel costs and tracking tires in this blog. Fuel is normally tracked in most fleets using various different programs and is fairly easy to compile into a myriad of different metrics to analyze which vehicles consume the most fuel and any changes in consumption that should be addressed. Tracking tires is a whole separate conversation and I intend to cover that on another blog, so the following information only discusses tracking the labor hour costs, and parts associated with those labor hours.
What Exactly Are These Categories:
The first category is the Preventative Maintenance Inspection (PMI). All labor hours and parts that are associated with performing a PMI, should be tagged accordingly in whatever maintenance system you use. The kinds of items in this category are:
- All fluid & filter changes done because of the manufacturer's recommendations or determined by your specific operation.
- Mechanic hours associated with performing the inspection, and these fluid/filter changes.
- Wearable parts that are changed during the inspection (because they were determined to be worn out), such as...
- Belts
- Bearings
- Idlers
- Brushes
- Lamps
- Tires that are replaced because of normal wear and tear.
Some Additional Thoughts on PMI's:
I think it is important before we move onto the next category to just touch a little on PM Inspections. I have had the privilege to work with some amazing technicians over the years, and I think it is important to make a public announcement about technicians that everyone should know. Just because you have a very talented technician in your shop, does not mean that they are capable of performing a good inspection! It is not to take anything away from their abilities, but it is a mistake to just assume that if they are capable of fixing anything they also know how to do a good inspection.
Just as important is the fact that very good inspectors can easily be very bad technicians, and that is ok. It takes a certain mentality to look at a vehicle and know what to look for, if the problem is still ok until the next inspection, or that it needs to be addressed right away. Relying on one technician to be great at both of these very different tasks is usually a mistake. Performing inspections is monotonous, can be very boring, and is usually not the kind of job that someone who likes to fix things wants to put their attention into. All of these things may be true, but the inspection is arguably the most important task that can be done in your fleet. I have seen really good technicians forget to put oil in the engine because they got distracted by a problem that was more fitting of their talents, you can imagine how much that mistake cost.
Let's Continue:
The second category to track because it can become a huge expense for operators, is the Accident category. There are actually two types of accidents that can be considered here, preventable, and non-preventable. The reason these two items are separate is because the non-preventable accident is most likely a "true accident," and could likely not have been prevented with driver training, safety equipment, or better route planning. Damaged tires would also be placed in the preventable category, only if they are replaced because of driver error. The windshield is a special case here and can be categorized as either. As you might expect a stone chip or random crack is not usually preventable, but something like tree damage would be.
The third category is Other Maintenance. This category is important because it should be very low in costs; however, poor PMI inspections and repairs can push many costs here where it can easily balloon out of control. It is also important to note that if you are seeing high costs in this category then your fleet is likely not performing optimally and also not at reliable as it should be. I think this may be the most misunderstood group for costs in the department. The types of work that would be placed here are as follows:
- Breakdowns
- Thermal Incidents
- Incorrect Repairs (come back work)
- Incorrect Diagnosis
- Driver Write-ups
- Passenger Complaint Follow-ups
- Tires - Valve stem damage, Tire Pressure Monitoring System (TPMS) Faults.
The fourth category is Diagnostic Time. Many times, the hours associated with this kind of work is just put into the same bucket as the other maintenance cost, or PMI costs if someone is spending time diagnosing the issue discovered during an Inspection. Diagnostic time has to be one of the largest contributors of maintenance hours on a vehicle and must be captured separately. Even better, it should be grouped by vehicle. This is the only one way to properly gauge the skills and knowledge of your maintenance staff. Given the complexity of the various engines, transmissions, HVAC, and electrical systems being used today, individual time tracking associated with those tasks is the only way to find areas of improvement. Any serious time (more than 30 minutes) spent troubleshooting an issue should be on a separate line from the actual repair. Once the problem is determined, a separate line or job should be opened to actually replace the parts.
It is not uncommon to hear things like; how expensive training is, how much the laptop with software costs each year, or why do I need an external priming pump for a DD13 engine. It becomes much easier to justify the cost when you can show the actual costs of diagnostic time and how that time can be decreased with the addition of the proper tools or training.
My Take on Diagnostic Time:
I have spent a good majority of my time in this industry diagnosing complicated and easy issues, as well as working with technicians to help them diagnose these very concerns. Many problems on a vehicle are not as complicated as they seem if the technician has the correct tools and manuals to work on the issue. All too often I will see technicians and mechanics spend hours trying to figure out why the bus won't start, the A/C compressor won't come on, the lights won't work, etc... Only after changing multiple parts and not getting to a solution do they finally, call the manufacturer for help, pull out a wiring diagram, or read up on the system in the maintenance manual. If you track the hours spent diagnosing issues and see that some technicians a regularly spending hours troubleshooting, you will have found a problem that needs to be addressed. Maybe it is that more training is needed, they lack access to the manuals, don't have the correct tools, or they just lack the ability to troubleshoot (not everyone can do it even if they get enough training).
Poor diagnostic abilities can cost the company thousands of dollars in parts and labor, not to mention putting a bad taste in the owners' mouth about a particular vehicle. Changing parts is usually pretty easy and inexpensive for most repairs, but allowing poor diagnostic practices to continue is just throwing money down the hole. Not everyone will agree with me but most of the time a computer, sensor, or multiples of those items are replaced because of poor diagnostic practices and not because they are actually faulty, especially if the problem is intermittent in nature.
Conclusion:
I hope this article has shed some light on what costs are associated with repairing and maintaining your fleet, and why differentiating those costs are important. There are many different programs out there to record maintenance costs, but they are usually under-utilized or poorly understood. Over the years I have worked with many of these systems and can offer help in better understanding your data and how to interpret what is there. If you have any comments that you would like to share, feel free to sign up to the site and post your remarks or reach out to me via email, james@morrasolutions.com.
If you would like to implement some of these categories in your system or get a more one on one conversation about where things stand in your organization and how they could improve, reach out and setup an introductory appointment to discuss your current situation and needs in more detail.