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By Deborah Lockridge, Editor
With the economy in a recession and the trucking industry suffering through what Stifel Nicolaus analysts now say is a freight depression, trucking companies are all looking to cut costs to survive. But you can't truly cut costs unless you have a way to track those costs in the first place.
So if you don't have computer software in place to manage, track and analyze your maintenance operations, you should take a close look at it - whether you have 10 trucks or 10,000.
And if you do have such software, this is the time to make sure you're using its capabilities fully.
"Almost no other investment a fleet can make today will have such a dramatic effect on controlling costs, reducing expenses and managing the fleet better,"says Charles Arsenault, president of Arsenault Associates, a 30-year-old company that sells Dossier fleet maintenance management software. "Return on investment is very fast, usually six months or so, sometimes even faster. And that's not just my program, but this kind of software in general."
Ric Bedard, president and founder of Cetaris, another longtime maintenance software provider, goes so far as to say if you're not using maintenance management software today, you're at a competitive disadvantage.
"Your competitors who have it know their cost per mile," Bedard says. "They can analyze cost differences between year, make and models of vehicles. They can see chronic repair problems. They can anticipate failures before they happen."
Saving Money
There are several areas where a good maintenance program can save money, including increasing uptime, improving shop productivity, saving on inventory, warranty recovery, and identifying problem equipment.
1. Increase uptime: Maintenance management software can help you schedule preventive maintenance and repairs efficiently. And by making sure preventive maintenance is done on time, you'll reduce the likelihood of expensive breakdowns on the road.
"One of the comments we hear time and time again is that once they implement the software, breakdowns decline significantly,"says Bedard. Software can allow you to analyze and understand failures, and change your PM process to keep them from happening again.
For instance, maintenance software allows you to discover if a particular part breaks down at a fairly predictable interval, so you can schedule pre-emptive replacement of the problem part.
In addition, telematics now allows trucks' on-board computers to send fault codes back to the home office, alerting fleet managers of the need to schedule a repair before a costly roadside breakdown.
And if you're able to significantly reduce breakdowns, you may be able to run your fleet more efficiently, needing fewer extra "spare"units on hand.
2. Improve shop productivity. TMW Systems, which offers TMT fleet maintenance software, says it's possible to increase the utilization of mechanics' time from less than 80 percent direct labor to 98 percent direct labor, through improved planning tools and information at their fingertips. When a vehicle comes in for service, technicians have all the vehicle information and its repair history in their hands.
Before Pennsylvania-based Venezia Bulk Transport went to TMT's maintenance program, they used a homegrown hybrid paper/computer system, where mechanics gave data entry people repair orders to enter. "The repair orders would be incorrect or the data entry people couldn't read them," says J.P. Venezia, fleet manager, "and parts weren't being charged out of inventory."
Although there initially were concerns that technicians would spend too much time on the computer rather than working on trucks, Venezia, says - "We wanted them turning wrenches, not typing on the computer," in reality, they realized both time savings and accuracy improvements in switching to a computer-based system.
In addition, maintenance software gives managers a window into what their technicians are doing, even in remote locations.
"I can view the wash bays and shops and tell exactly what these guys are doing at any point in time, instead of waiting for five days for the paperwork," Venezia says.
When you're able to document who's doing what, you can learn which of your technicians are effective and which are not - which ones might need more training or even need to be let go. If trucks keep coming in for rework and you can identify which technicians or techniques need improvement, Arsenault says, "you can reduce rework, bring it to its knees, within six to nine months after implementing fleet maintenance management software."
3. Save on inventory. The right software can help make sure you have the parts needed for scheduled repairs to improve productivity. But it can also help cut total inventory carry costs by allowing you to identify and remove non-movers, and adjust inventory levels on slow movers.
"It's not unusual to see 30 percent or more savings in parts inventory values" when inventory management software is implemented, Arsenault says.
Republic Services Inc., a 5,500-truck solid-waste fleet based in Ft. Lauderdale, Fla., discovered it was carrying more than $2 million in parts that were obsolete or hadn't been used in a year when it implemented Arsenault's Dossier system throughout its operations. Some of the parts were traded among company locations; others were returned to vendors for credit. The company's parts inventory was cut from $9 million to $7 million.
Before they started using TMT software at Venezia Transport, their inventories were off 25-30 percent. "Now we hold our shops to less than 1 percent error," Venezia says.
And once you have control of your inventory, you can get better prices on the parts you buy.
When Marshall Babbitt came to Lester Coggins Transportation as director of maintenance in 2004, he decided it was time for the company to implement the Dossier software it had purchased but never used.
"We were paying $68 for a brake drum four years ago," he says. "Today, we pay $54." Babbitt explains that he looks at everything the fleet's shops bought and who they bought it from. "I look at what was bought from each individual vendor, so I know exactly how much business we do with each one." When he sits down with vendors, that makes it easier to negotiate discounts.
In addition, he says, each year they take the top 100 items purchased through the year and put them out to bid, with the lowest bidder becoming the fleet's preferred vendor for that part.
"Of the top 100 items during 2007, 51 of them came back with lowered prices," he says.
4. Maximize warranty. If you install a part with a one-year warranty and go to replace it six months later, maintenance software will let you know it's still under warranty. This way the part is replaced by the vendor instead of being purchased again.
Before they started using TMT software, Venezia says, "we only knew if it was covered under warranty if the guy working on the truck knew." With the software, he says, they're recovering 20 times what they were. The system has paid for itself with the warranty recovery alone.
"There's a huge opportunity today for fleets in warranties," Bedard explains, "If you ask the average fleet today how well they do in service replacement warranty, they'd say on a highly visible part they do pretty well. But if it's multiple locations and one repair's done here and another's done down the road, the likelihood of capturing that is very low. When it's all done electronically, it makes sure you get that. We have customers who have implemented our software and enjoyed year-over-year gains of double digits in warranty capture."
5. Discover and address trouble spots. Charles Arsenault says as a general rule of thumb, the worst 10 percent of your units will eat up a disproportional amount of your time and budget. But in order to accurately identify those problem trucks, you need to be able to track them. Maintenance management software can tell you which units are costing you the most from a maintenance standpoint.
"It allows you to see units that are suboptimal performance," Bedard says. You might bring in your OEM partners and seek their help addressing the issue, he says. Or, "with the variability of costs of commodities like fuel, being able to see which units are costing you not only a lot in fuel but also a lot in repairs, maybe you should be taking them off the road."
Choose the Right Program
In order to achieve all these benefits, you need to find the right program for your operation - and you need to implement and use it effectively.
The first thing to do sit down and figure out what your needs are.
"They need to ask themselves, what do I need to get out of a system and what are my expectations?" says Jim Vanderpoel, manager of Karmak's Director Series Services.
Someone with a large parts inventory, for instance, has different needs from someone who doesn't stock their own parts. Do you need the ability to track cores? Do you want barcode capability for inventory or time entry? Do you just need to track equipment, or do you need control of mechanics, drivers and vendors? Do you want software you install on your own servers, or do you want an Internet-based model? If you offer service to outside customers, you might want something like TMT's new Service Center program or Karmak's Director Series, which offer customer service capabilities.
To do this, Venezia put together a team representing operations, safety and maintenance to determine what everyone needed. "Before we started looking, we had to determine what we wanted to get out of it," Venezia explains.
Consider how the software will integrate with other programs your company uses. For instance, McLeod Software has developed interfaces between its dispatch, operations and accounting software and vehicle maintenance products from Cetaris, Squarerigger and others. TMT interfaces with parent company TMW's enterprise transportation software. Many programs will interface with QuickBooks, commonly used by smaller companies for accounting.
For instance, Prophesy's FleetTrax maintenance and fuel tax reporting software interfaces with Prophesy's dispatching software as well as with QuickBooks. "Our dispatch software will check the fleet maintenance software and see if the vehicle is in the shop or if it's going to be unavailable because it's scheduled for maintenance that week," says Chris Johnson, senior product specialist.
If you're considering using a maintenance module that's part of a larger fleet management software program, make sure it handles your needs, warns Arsenault. "Some of those modules feed accounting or HR or payroll very well, but don't do a lot of the stuff a fleet maintenance manager needs, like automatic PM scheduling, automated repair orders, tracking parts inventory in and out, and the like," he says.
Look at ease of use. Microsoft Windows-based programs may be easier to learn for computer users already familiar with that operating environment, says Karmak's Vanderpoel. "Most of our new customers, while they may not be PC-savvy, it's not that hard to navigate through a Windows environment."
"It boils down to what you need vs. the functions that are offered by the software vs. the cost,"says Prophesy's Johnson. "A lot of people make the cost their biggest factor, but your needs are definitely the biggest factor. It's a rule of thumb to get the best package you can afford based on your budget. If you get a lower-end maintenance package that doesn't do [what you need], you've wasted your money."
Getting the Most Out of Your Software
Buying the right software is just the first step. You need to use it, and use it well.
Getting the most out of your maintenance management software starts with making sure everyone in the organization's on board, from the head office to the IT guys to the technicians.
"Everyone in the company has to buy into the idea that fleet maintenance management is a function everyone is responsible for," Arsenault says. "Yes, most of the work and most of the systems function at the fleet maintenance manager level. But that information is still viable and there are uses at the shop floor level, the mid-management level, and the executive level, having to do with capital investments and business planning."
Cetaris' Bedard says you need support right to the top of the organization - and beyond that, "you need to develop a culture where you're using the software to help you to run your business."
When Venezia Transport decided to implement the TMT maintenance management system, some technicians weren't sure they would be able to use and understand the system.
"It had them freaked out, to be honest," Venezia says. "We started with the younger crowd in the shop who were more apt to [be familiar with] computers and started training them. The seniors would come around and see them moving a lot faster on the computer than on paper, and it got them to buy into it, especially when they realized they could see the unit's history and see what someone else had done with it."
Another vital first step is the installation and initial data entry.
"Implementation of the software is critical, and directly relevant to the return on your investment," says Arsenault. "Today, fleets are identifying that the implementation and training services are an integral part of the investment."
Venezia found that out the hard way.
"We made the mistake of initially hiring temps and other people in the office who had no idea how to input parts" to do the initial data entry in implementing the programs, admits Venezia. "You've got to use people in the maintenance department and the [software] people to back you up, so they understand what they're putting in and so you don't have garbage data in the system."
In fact, when you're deciding on a program, one of the questions to ask is what kind of help you'll get with implementation, training and support.
At Karmak, Vanderpoel says, they require customers to purchase training, because "we've learned from experience that customers that don't take training are unhappy." Take full advantage of initial training, and provide users with regular refresher training, he says, whether it's a once-a-year webinar, or training on a new product update.
"If consulting services are offered, there's hardly a better way to make sure you're maximizing your investment on a business system," Vanderpoel says. "They're going to be able to come in and analyze what you're doing, how you're using the software as well as your processes, and be able to offer some valuable suggestions to better utilize that business system as well as maybe some of your processes."
Many software providers host annual user's conferences that offer training and education, as well as the opportunity to network with and get tips from other users. Take advantage of these. Also see what type of feedback the company solicits from its users for improvements and new product development.
And finally, "It may sound funny, but actually use it," says Prophesy's Johnson. "A lot of people don't get the fullest potential out of it. It's a good idea to learn it and use all of the applicable features." For instance, he says, they find many customers don't use many of the analytical reports, on things such as vehicle fuel mileage, mechanic productivity, tires, etc., that can help you fine-tune your operation to make it as cost-effective and efficient as possible.
From the February 2009 issue of Heavy Duty Trucking.
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