Maintenance and Repair Shop Management: Part 1. Indianapolis, IN March 2, 2016
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1 Maintenance and Repair Shop Management: Part 1 Indianapolis, IN March 2, 2016
2 Presentation Outline Part 1 - Now through 9:15 am 1. Introduction 2. Overview of Fleet Maintenance and Repair (M&R) Processes 3. Fleet Management Policies and Procedures 4. PM Program Design and Execution 5. Maintenance Activity Coding and Cost Center Analysis Part 2-9:30 to 10:45 am 1. Determining Fleet M&R Costs and Cost Competitiveness 1. Activity-Based Cost Analysis with Example 2. Measuring Fleet Performance 1. Fleet Data Sources and Processing Tools 2. Measurement and Benchmarking 3. Maintenance and Repair Shop Staffing Levels (time permitting) 1
3 Scott Conlon About the Instructor More than 15 years experience as a ASE master-certified fleet maintenance technician, parts coordinator, maintenance crew chief, shop superintendent, maintenance section chief, asset management section chief, and consultant Successfully transitioned from wrench turner to supervisory and managerial roles in charge of two 24/7/365 transit bus maintenance facilities with 73 FTEs Managed fleet replacement and analysis for 3,000+ vehicles with in-house repair facilities Certified Public Manager (CPM) and Certified Federal Fleet Manager (CFFM) 2
4 About Mercury Associates, Inc. Employee-owned firm incorporated and headquartered in Washington, DC area; employees located in 13 states and in Canada Largest dedicated fleet management consulting company in North America More than 600 clients served, with fleets of <100 to >200,000 vehicles and pieces of equipment Company s mission is to help organizations improve fleet management practices, improve fleet performance, and reduce fleet costs 3
5 Key Mercury Associates Services Fleet Management Best Practices Studies Fleet Management Program Consolidation and Organizational Restructuring Studies Fleet Cost Analysis, Reduction, and Containment Studies Fleet Utilization, Optimization, and Rightsizing Studies Fleet Management Information System Requirements Definition, Acquisition, Implementation, Hosting Outsourcing Feasibility Studies 4
6 Key Mercury Associates Services Development of Requirements, Specifications, and Tenders Vehicles, Services, Information Systems Supplier Selection, Contract Negotiation, and Performance Reviews Determination of Optimal Vehicle Replacement Cycles Evaluation of Lease versus Buy and other Capital Financing Strategies Financial Audits of Fleet Leasing Companies and other Supplier Invoices Management Training 5
7 Corporate 3M Air Products Aramark BP Bell Canada BNSF Railway Danella GlaxoSmithKline Honeywell Intel Johnson Controls Pacific Gas & Electric Pfizer Quanta Services Rockwell-Collins Schindler Elevator Toyota Representative Clients Commercial Alyeska Pipeline Service Company British Columbia Hydro Carolinas HealthCare System Coinmach Services Flint Hills Resources Georgia Power Company Goodwill Industries Gulf Stream Marine Hoosier Energy Horizon Utilities Hunt Brothers Pizza Laidlaw Lancaster Foods Lighting Maintenance, Inc. Terra Renewal Whiting Oil & Gas Government/NGO US Army, Navy, Air Force, Marine Corps US Departments of Agriculture, Defense, Energy, Homeland Security, Interior, Labor, State, Veterans Affairs US Postal Service Smithsonian Institution, NASA Canada Post United Nations LDS Church RAND Corporation Transportation Research Board 33 of 50 largest cities in the US, including 10 largest 3 of 5 largest cities in Canada 35+ state and provincial governments 40+ colleges and universities 6
8 Fleet Maintenance and Repair Business Processes
9 Master List of Fleet M&R Processes In-House Maintenance and Repair (M&R) Services Management 1. Pre-/post-trip inspection and defect reporting 2. Preventive maintenance program design and execution 3. Work planning and scheduling 4. Service writing and job assignment 5. Technician supervision and work quality assurance 6. Mobile service 7. Roadside assistance and asset recovery 8. Warranty management In-House Parts Management 9. Supplier selection and contract establishment 10.Inventory and ad hoc parts procurement 11.Parts disbursement 12.Inventory management and control 8
10 Master List of Fleet M&R Processes Outsourced M&R Services Management 13.Vendor selection and contract establishment 14.Service requisition and authorization and transaction administration 15.Vendor performance management M&R Resources Management 16.Organization structure and staffing 17.Employee classification and compensation 18.Employee professional development 19.Maintenance facility site selection, design, construction, and utilization management 20.Facility housekeeping, maintenance, and regulatory compliance 21.Shop safety management 9
11 Master List of Fleet M&R Processes M&R Information Management 22.Management information system functionality, configuration, deployment, and maintenance 23.Data capture and integrity and security management 24.Management reporting 25.Ad hoc management analysis M&R Cost and Financial Management 26.Budgeting 27.Activity-based cost determination/charge-back rate development 28.Cost allocation/charge-back system management 29.Cost and expenditure analysis and control M&R Customer Service Management 30.Transaction-based communication 31.Operator/customer satisfaction measurement 32.Customer relationship management 10
12 Fleet Management Policies and Procedures
13 Documented policies and procedures are important for Ensuring that all the elements required to perform specific M&R activities effectively and efficiently are identified and understood Uncovering deficiencies in current practices Institutionalizing knowledge and maintaining sound practices despite employee turnover Demonstrating professionalism and commitment to high-quality performance to senior management and customers (fleet users) Establishing a defensible maintenance regime 12
14 13 Preventive Maintenance Program Design and Execution
15 Planning steps: PM Program Elements Program objectives and metrics Task lists, cycles, and timing Procedures and training Execution steps: Scheduling and customer notification Performance, corrective repairs, documentation, and review 14
16 Follow-on steps: PM Program Elements (cont.) Performance measurement Failure analysis Road calls, tows, and unscheduled repairs Task development Task list and procedure revision Retraining 15
17 PM Program Objectives and Metrics Before designing a program, you need to decide how you will measure PM program performance Good PM program measures and indicators are tied to outcomes Mean distance between failures (or hours, cycles, etc.) Road calls for mechanical failures Missed trips for mechanical failures Scheduled versus unscheduled (costs, labor hours) Overall maintenance and repair costs Availability / decrease downtime Comebacks or return repairs (<5%) On-time PM performance (>80%) On-time is within 10% of stated window 6,000 miles 6,600 miles 16
18 PM Task List Content Regulatory requirements - must haves Tasks that address OEM guidance Most OEMs do a good job of forecasting maintenance requirements, but some throw in unneeded and counterproductive tasks If removing items, ensure that the benefits outweigh the costs Warranty considerations, risk of progressive damage, risk of failure Tasks that are identified internally 17
19 Internal PM Task Identification Observe patterns of failures, breakdowns, etc. Identify the consequences of those failures: Safety Mission Regulatory or Environmental Other consequences (including financial) Identify a PM task that might prevent those failures Determine frequency and if benefits outweigh costs Avoid open and break maintenance 18
20 PM Cycles and Timing PM Cycles are established by: Meter - units of measure include miles, hours, kilometers, cycles Calendar - units of measure include days, months, years Relative versus Absolute Hierarchical versus Non-hierarchical PM Structures Oil Life Monitor and Prognostics - dash indicator Timing Scheduling by calendar can minimize the effect of downtime Scheduling by mileage can result in less predictable workload 19
21 PM Performance and Corrective Repairs PM performance hinges on technician skill and engagement Corrective repairs should be categorized Class A defects must be repaired now (safety, regulatory, risk of breakdown) Class B defects can be deferred, but only if absolutely necessary (vehicle is in degraded condition, but operable) Class C defects are optional (minor body damage and corrosion) Oil leak classification - technicians should know the difference between leaks that require immediate repair, and a seep that requires monitoring 20
22 PM Documentation and Review A lot of otherwise-good maintenance programs fail to properly document inspections and safeguard records Documentation should be reviewed promptly by the shop superintendent to ensure completion Documentation is an investment that pays dividends: PM records are discoverable in cases of civil litigation - don t leave your employer or business unduly exposed to liability Employees might claim mechanical failure to avoid responsibility for an at-fault accident - don t let them shift the blame towards your shop Vendors might claim lack of maintenance during warranty claims - be prepared to prove them wrong 21
23 PM Follow-on Tasks PM performance measurement Failure analysis Task development Task list and procedure revision Retraining Remember: your PM task lists should be living documents - they need to evolve over time to keep up with new failure patterns as vehicles age 22
24 Questions 23
25 24 Maintenance Activity Coding and Cost Center Analysis
26 Maintenance Activity Coding Purpose: to provide an abbreviated method of describing the various activities that occur in the maintenance environment Sources of coding conventions: Vehicle maintenance reporting standards from Technology And Maintenance Council of the American Trucking Association Coding conventions provided by software providers as a default code set In-house developed code sets Coding provides categorization to all maintenance costs that enables analysis from various perspectives 25
27 Reason for repair Coding Examples Maintenance - breakdown, PM, road call, rework Management decision - capital improvement or modification Outside influence - accident, vandalism, natural disaster System or group codes 04x - engines air intake system cooling system exhaust system fuel system, etc. 26
28 More Examples Component and repair codes 043 Exhaust Engine A06 Turbocharger Asm 001 Diagnosis 043 Exhaust Engine A06 Turbocharger Asm 100 Replace 043 Exhaust Engine A06 Turbocharger Asm 150 ReplaceFastener 043 Exhaust Engine A06 Turbocharger Asm 165 Repair 043 Exhaust Engine A06 Turbocharger Asm 170 Rebuild 043 Exhaust Engine A06 Turbocharger Asm 190 Wiring Repair 043 Exhaust Engine A06 Turbocharger Asm 191 Wiring Replace 043 Exhaust Engine CB0 Clamp 001 Diagnosis 043 Exhaust Engine CB0 Clamp 100 Replace 043 Exhaust Engine CB0 Clamp 165 Repair Billable versus non-billable Scheduled versus unscheduled Wild card searches - % and * 27
29 Typical FMIS Coding Generator 28
30 Cost Center Ranking Fleet management information systems should allow you to run reports by maintenance activity codes and by vehicle classes Instead of trying to make sense of your fleet all at once, you need to run cost reports for each class or segment of your fleet that are grouped by cost centers Areas of high cost should be evaluated first, as they represent your core business, and marginal improvements can create significant savings 29
31 Prioritize Your Staff Development Effort Focus on developing in-house capabilities for primary cost centers Investments in process improvements, across-the-board training, and equipment probably pay off Develop key staff for secondary cost centers Powertrain, hydraulic, electrical, and other specialized training are probably good investments for higher-end technicians Consider outsourcing for tertiary cost centers Low frequency of repairs, technical complexity, specialized equipment, and risk to personnel probably preclude investment (e.g., hybrid system component replacement) 30
32 Prioritize Your Individual Effort Focus your effort where it counts! This is very similar to PM task identification - ask yourself if there is something that you can do differently to lower costs Can you decrease the frequency of repairs? Can you increase the accuracy of repairs? Can you increase the efficiency of repairs? 31
33 The Value of Coding and Cost Center Analysis In order to find unrealized efficiencies, you should: Institute a coding system to categorize maintenance Rank your cost centers to focus your attention Take steps to minimize frequency, maximize accuracy, and maximize efficiency of repairs Move to the next cost center and repeat 32
34 Questions 33
35 For Further Information: Scott Conlon Mercury Associates, Inc. Rockville, MD
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