Dedicated Contract Fleet Maintenance Programs James Cain, National Business Development Manager Rob Lovi, Vice President-Sales & Marketing 2 1
Types of Maintenance Programs There are generally four approaches to maintenance management: In-House Hybrid of In- House & Outsourcing Outsourcing & OEM (specialty components) Dedicated Program How are these applied and to what extent are they driven by a company and their own unique needs? 3 Universal Maintenance Struggles Production downtime due to equipment reliability Retiring Technician Workforce Struggle and balance to lower their costs Limited resources for recruiting and keeping technicians Solid Technician Training Program to stay ahead of new technologies Use of multiple vendor systems to capture all OEM equipment costs 4 2
Why do companies move away from in-house to dedicated maintenance programs? Shortage of qualified technicians No or limited technician training program Out-of-control maintenance program and budget Nonexistent PM compliance No idea where their CPH stands today No maintenance system to track and allocate dollars to assets No real-time tracking of maintenance reports Large ongoing breakdowns and equipment reliability issues Lack of understanding new Tier 4 technologies 5 What is a Dedicated Contract Maintenance Program? A solution built through systematic, disciplined, and scheduled preventative maintenance with predictive elements which lowers the overall maintenance costs and increases uptime while reducing companies reliance on many OEM dealer networks. The goal is to stop maintenance dollars from flowing outside the gates and to provide an onsite solution that reduces reliance on vendors and expensive OEM dealers. 6 3
Typical In-House Maintenance Program Volvo Grove Crane Godwin Pump John Deere Mack Hyster Caterpillar Client Komatsu Colony Tire GM Exxon/ Mobil Euclid RoadTec Ford Truck Concerns Typically dealing with 8-15 outside vendors for all maintenance tasks Low or inconsistent productivity and availability of equipment Poor communication and constant battling with internal departments Huge impact on resources to deal with many vendors No one maintenance system to capture all maintenance costs Limited or no performance metric accountability for the complete fleet Virtually nonexistent life cycle history and fleet data for capital purchases 7 Dedicated Program Features Overall Maintenance Costs Reduces cost drivers such as offsite and expensive OEM dealer services Better forecasting & scheduling of repairs Better control of equipment downtime Reliability Adoption of a Predictive Technologies & Analytics philosophy to every piece of equipment Improved safety and MSHA compliance with a reduction of penalties/fines Reduction on rework to reduce the downtime of equipment. Shop Performance Proactive mindset with greater sense of urgency and understanding to safety Accountability through fleet maintenance metrics Plan your Work, Work your Plan with manager and shop-planner platform Maintenance Leadership Incorporates Reliability Centered Maintenance Philosophy New fresh direction that incorporates training, technology and accountability Eliminate waste and drive tighter control with current and future SOPs Reporting Single source maintenance system to track every unit KPIs to track the historical maintenance costs of each unit true fleet metrics Real time data to make proactive decisions on fleet needs 8 4
Dedicated Program: Technician Impact A dedicated program prides itself on the fact that their factory-trained service Technicians are the lifeline of their company. Rigorous Training Shop Performance Personal Life Ongoing commitment to invest 1% - 3% of their hours towards training Trained in latest repair techniques including Tier 4 machines Building competencies to drill down to root cause analysis and build maintenance case Cross training opportunities Proactive mindset with greater sense of urgency and understanding to safety Accountability through fleet maintenance metrics Plan your Work, Work your Plan with manager and shop-planner platform All service repairs are scheduled on weekly calendar Bona fide career path with opportunities for advancement Improved work environment that improves attitudes and personal development Greater job satisfaction and teamwork Typically higher wages 9 Advantages of Dedicated Contract Programs Feature Dedicated Fleet Program Impact Area Safety first approach to every asset and shop activity Yes Risk Mitigation KPIs for fleet uptime, tech productivity, efficiency, and PM compliance management Yes Reliability Synergy, Streamline parts selection, ordering practices, and reduced acquisition price Yes Cash Flow Reduced cost drivers such as offsite and expensive OEM dealer services Yes Third Party Services Lifecycle cost analysis and management with real-time reporting on all types of equipment Yes CAPEX Fixed monthly expenses for labor, FMIS, and operating expenses Yes Cash Flow Work Flow Optimization, shop floor management, and inventory controls through one platform Yes Operations Better forecasting and scheduling with production downtime of assets Yes Production Build competencies to drill down to root cause analysis and build maintenance case Yes Reliability Investment in technician training program on new technologies Yes Operations Tracking of all warranty parts (OEM and Aftermarket) Yes Third Party Services 10 5
Dedicated Contract Maintenance Program Goodwin Pumps John Deere Volvo Hyster Grove Komatsu Mack Client Dedicated Contract Maintenance Program Caterpillar GM Colony Tire Euclid Exxon/ Mobil Ford Truck Thermo King Benefits Dedicated factory certified technician team that is managed onsite in a captive environment Single POC interface to increase communication and account management for all maintenance related issues Higher equipment uptime with availability goals driven by KPIs One real-time maintenance system to track and allocate dollars to assets Higher parts and tires availability which reduces reactive waiting on parts Cost of Process reduction with one consolidated invoice for ALL vendors 11 Single POC Interface for Entire Site Staff HE Shop HE Production Fleet Administrative Light Duty Fleet Mobile Maintenance Capability Optional: Fleet Fuel Management System Crane Fleet Skid steer Fleet Forklift Fleet 12 6
Disadvantages of Dedicated Contract Programs Loss of Control Staff turnover Workplace Considerations Hidden Costs Cost Developments 13 How a Dedicated Maintenance Program Impacts Cost and Availability 14 7
Dedicated Program s Scalability Customer: CEMEX Equipment: 30 units of HE Location: Southeast Vector Onsite Staff: 3 Past Hurdles: High OEM dealer costs, low availability & not meeting customer expectations Customer: Titan America Equipment: 30 units of HE & 100 Support Fleet Location: Florida Vector Onsite Staff: 18 Past Hurdles: Mismanaged In-house Program, No tech training program, Fragmented maintenance system with limited cost tracking Customer: Potash Corp Equipment: 66 units of HE, 125 Light Duty, & 200 Fueling Units Location: North Carolina Vector Onsite Staff: 25 Past Hurdles: High OEM & Local vendor costs, No tracking system, Loss of control Customer: Mosaic Fertilizer Equipment: 454 units of HE, 400 Light Duty & 1000 Support Fleet Location: Southeast Vector Onsite Staff: 72 across 6 sites Past Hurdles: High Maintenance Internal Costs 15 Profile: Heavy Equipment Fleet 33 Support Fleet 131 Results: Customer s Past Average: 71.6% Current Average: 88.7% 100.0% Equipment Availability 95.0% 90.0% 85.0% 80.0% 83.3% 79.9% 80.3% 87.5% 91.2% 90.8% 91.9% 93.8% 94.4% 92% Customer (Jan 2014 - Aug 2014) Vector (Sep 2014 - Apr 2015) 75.0% 70.0% 65.0% 60.0% 76.9% 67.9% 64.3% 71.2% 75.3% 75.6% Goal = 92% Linear (Customer (Jan 2014 - Aug 2014)) Linear (Vector (Sep 2014 - Apr 2015)) 55.0% 58.4% 50.0% 1 2 3 4 5 6 7 8 16 8
Profile: Heavy Equipment Fleet 26 Support Fleet 113 Results: Customer s Average: $691,684 Current Average: $583,546 (-18%) $800,000.00 Maintenance Costs $750,000.00 $700,000.00 $650,000.00 $600,000.00 $550,000.00 $500,000.00 $728,890 $635,877 $685,448 $669,321 $725,988 $732,122 $664,145 $622,387 $610,587 $597,854 $575,963 $595,310 $534,012 $548,710 Customer (Jan 2014 - Aug 2014) Goal = $550,000 Vector (Sep 2014 - Mar 2015) $450,000.00 $400,000.00 Poly. (Customer (Jan 2014 - Aug 2014)) $350,000.00 $300,000.00 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb 17 Dedicated Program Takeaways Comprehensive coverage for your entire fleet to allow you to focus on your core business One real-time maintenance system to track and allocate dollars to assets no matter what the manufacturer Addresses the lack of training program and retiring technician workforce issues Insightful KPIs: detailed cost and equipment performance reports Tighter cost and fleet control mechanisms There is no one maintenance program that works for everyone so make the time investment to ensure you have the right program for your company! 18 9
Q & A James Cain National Business Development Manager Cell: 704-352-6831 Email: jcain@vectorfleet.com 19 10