{"id":14033,"date":"2022-07-17T10:14:17","date_gmt":"2022-07-17T08:14:17","guid":{"rendered":"https:\/\/advancedfleetmanagementconsulting.com\/eng\/?p=14033"},"modified":"2022-07-17T10:14:17","modified_gmt":"2022-07-17T08:14:17","slug":"maintenance-55","status":"publish","type":"post","link":"https:\/\/advancedfleetmanagementconsulting.com\/eng\/2022\/07\/17\/maintenance-55\/","title":{"rendered":"Why some fleets opt to outsource maintenance"},"content":{"rendered":"

Fleet needs, service provider capabilities, and data are driving maintenance decisions. Here\u2019s how some fleets are finding the right balance.<\/p>\n

Fleet executives have a lot of big maintenance decisions to make, and perhaps the most impactful is who will do it. Keep it all in-house, outsource all of it, or some of both? Pair those decisions with the increasing complexity of today\u2019s trucks, and new concerns have been raised that fleets need to address.<\/p>\n

A hybrid approach to maintenance\u2014operating an in-house facility that is supplemented by external vendors\u2014can help strike an ideal balance for many fleets.\u00a0For example,\u00a0that approach was evident in the National Private Truck Council\u2019s (NPTC) 2021 Benchmarking Survey Report<\/a> on In-House vs. Outsourced Maintenance. In particular, the vast majority of all respondents to the NPTC survey indicated that they outsource at least a portion of their maintenance spend. In addition, while 20% of the fleets reported that they conduct all or nearly all maintenance themselves, 34% pursue a combination of maintenance strategies.<\/p>\n

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Source: NPTC 2021 Benchmarking Survey Report<\/div>\n<\/div>\n
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At Hub Group<\/a>, for example, a large amount of maintenance needs are met by dealers and independent tire and service providers. Headquartered in Oak Brook, Illinois, the company provides regional, dedicated, and intermodal services with a fleet of 3,000 power units, 6,000 pieces of trailing equipment, and 45,000 intermodal containers.<\/p>\n

While the company operates from 60 locations, it has only six shops in California, Texas, Tennessee, and Georgia, including some with mobile service trucks.<\/p>\n

\u201cWe\u2019re outsourcing maintenance where we don\u2019t have the equipment density or where it doesn\u2019t make sense to have our own shop,\u201d Gerry Mead, EVP of maintenance and equipment at Hub Group, explained. \u201cAnother way to look at it is where operating a shop can be cost-effective because that decision affects total cost of ownership.\u201d<\/p>\n

Keeping maintenance work in-house is a cost-reduction strategy and a means of improving vehicle utilization, Mead noted. However, there are considerations that have to be balanced against shop capabilities and investment needs. For example, he related, does the maintenance organization have the expertise and tools? Does it make sense to tie up people and bays for certain types of repairs when the goal is to keep vehicles moving through the shop? There’s also the question of technician availability<\/a> and the growing need for training and certification.<\/p>\n

American Trucking Associations’ Technology & Maintenance Council<\/a> offers guidelines on how to calculate the number of bays and technicians fleets would need based on equipment density. But the real test of success, according to Mead, comes from determining the quality of maintenance programs.<\/p>\n

“Measurements of things like the number of repairs between PMs and repeat failures present a true scorecard you can use to make the right choices,\u201d Mead added.<\/p>\n

Finding balance amid complexities<\/h3>\n

More vehicle components and systems today interact with each other, increasing the likelihood that problems in one area will affect operation in another, explained Jake Schell, associate product manager for Mitchell 1\u2019s<\/a> Commercial Vehicle Group.<\/p>\n

\u201cNot knowing how various systems interact can lead to excessive diagnostic times as well as misdiagnosis,” Schell said. “Consequently, fleet managers may be more inclined to outsource tasks they believe are not cost-effective to take on or simply beyond the capabilities of the shop.\u201d<\/p>\n

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Dave Walters, senior solutions engineer at Trimble Transportation<\/a>, pointed out that as assets become smarter, additional investments in training and tooling are required.<\/p>\n

\u201cWe see fleet shops struggling to stay current with new technology,\u201d Walters said. \u201cThe general state of the technician shortage also impacts a fleet\u2019s decision to outsource maintenance. The technician shortage has fleets rethinking standard internal repairs; in some cases, that work is outsourced so technician capacity can be redirected to the inspection process and associated repairs.\u201d<\/p>\n

For some fleets and in certain regions of the country, simply finding qualified technicians to staff an in-house facility can be a significant challenge, but the capability of technicians is another key consideration.<\/p>\n

\u201cDo they have the expertise and necessary training to work on the entire range of vehicles in your fleet?\u201d asked Eric Woltz, garage management system liaison at Holman<\/a>, parent of vehicle fleet management company ARI. \u201cThis is a particular challenge for many vocational fleet operators as vehicles become increasingly complex. For most organizations, investing in and keeping pace with the training necessary to service the latest models and technology simply isn\u2019t feasible.\u201d<\/p>\n

For Woltz, infrastructure is another consideration. \u201cFrom the facility itself and the necessary equipment to the tools, parts, and software needed to run an efficient in-house operation, you\u2019re looking at a significant capital investment,\u201d he said.<\/p>\n

\u201cBeyond that, running an in-house maintenance facility often requires a great deal of administration,\u201d Woltz added. \u201cWhen you outsource your maintenance to an external facility, you\u2019re able to eliminate virtually all of those variables, allowing you to focus on your core business rather than worrying about turning wrenches.\u201d<\/p>\n

According to Mike Dickinson, VP of sales for Cox Automotive Mobility Fleet Services<\/a>, the different approaches to outsourcing and in-house maintenance operations is a reason some of the company\u2019s clients have both types of programs.<\/p>\n

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Photo: Cox Automotive Mobility Fleet Services<\/div>\n<\/div>\n
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\"Cox<\/div>\n<\/div>\n<\/div>
Cox Automotive acquired Dickinson Fleet Services to expand the reach of its mobile maintenance business.<\/figcaption><\/figure>\n<\/div>\n<\/div>\n<\/div>\n

Cox Automotive Mobility Fleet Services, a recently introduced entity, not only unifies brands but also signals what the company sees as the evolution of scheduled and unscheduled maintenance solutions for fleets. The combined workforce of the fleet services group includes more than 1,100 technicians, nearly 800 mobile service trucks, and over 25 shops. Collectively, they offer on-site, emergency mobile, and shop services for light-, medium- and heavy-duty trucks and trailers.<\/p>\n

\u201cMore fleets are transitioning to this service model once they educate themselves about the challenges that come with in-house maintenance,\u201d Dickinson said. \u201cFor starters, the industry\u2019s significant technician shortage is likely to continue for the foreseeable future. Outsourcing takes the burden of recruiting, training, and retaining technicians off their plate. And from a training standpoint, vehicles are more complex, and more diagnostic equipment is needed. With outsourcing, that\u2019s on the provider.\u201d<\/p>\n

Using metrics to meet needs<\/h3>\n

When it comes to metrics, fleets should use those relevant to their operation to decide about outsourcing and to ensure providers are meeting their needs. Understanding technician training costs and time requirements, the investment required in shop tools and technologies, and vehicle uptime rates all help fleets make more effective decisions, Dickinson advised.<\/p>\n

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Photo: Cox Automotive Mobility Fleet Services<\/div>\n<\/div>\n
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\"The<\/div>\n<\/div>\n<\/div>
The combined workforce of the Cox Automotive Mobility Fleet Services group includes more than 1,100 technicians, 800 mobile service trucks, and over 25 shops.<\/figcaption><\/figure>\n<\/div>\n<\/div>\n<\/div>\n

“They can also be used to challenge the provider to do better by providing for accountability,” he emphasized.<\/p>\n

\u201cIn some ways, the decision to outsource maintenance is about opportunity costs,\u201d Dickinson added. \u201cFleets need to focus on what they do best, whether it\u2019s hauling freight, delivering packages, or providing services. The question is whether managing in-house shops distracts you from what you can do to drive profitability.\u201d<\/p>\n

Patrick McKittrick, CEO at heavy-duty repair shop software provider Fullbay<\/a>, said that one of the bigger trends in maintenance outsourcing is fleets starting to demand more data from service providers. \u201cWhile this industry is very relationship-oriented, fleets are increasingly using technology to run more profitably,\u201d he stated. \u201cThat requires repair shops to modernize their businesses.\u201d<\/p>\n

Trimble\u2019s Walters pointed out that an information system that maintains the service schedule of assets and uses fault code information, driver-vehicle inspection reports, and chronic repair alerts helps trucking companies better monitor the health of their equipment. \u201cFleets should also be monitoring asset downtime, which could be impacted positively or negatively due to outsourcing maintenance activities,\u201d he explained.<\/p>\n

When assessing the effectiveness of their maintenance programs, Walters advised that fleets follow metrics that include preventive maintenance compliance, chronic repairs, downtime, frequency as a measure of repairs performed on an asset between PMs, and over-the-road breakdowns. \u201cAn increase in frequency quickly identifies a problem program or may be linked to certain repair work being outsourced,\u201d he noted.<\/p>\n

For outsourced maintenance, it is important that fleets know and track out-of-service times and repair costs, Mitchell 1\u2019s Schell explained. Truck repair software can be used to evaluate the expected time and cost of repairs against the actual time and cost of outsourced jobs.<\/p>\n

\u201cA full suite of programs that empowers the fleet to ensure its vehicles are being properly maintained provides a way to track maintenance and repairs on vehicles flowing through fleet and outsourced service provider shops,\u201d Schell said. \u201cAs this data is collected, the fleet can access reports to make informed decisions. For example, knowing the time needed to perform repairs is a powerful way to enable the fleet to better balance workload and reduce downtime.\u201d<\/p>\n

\u201cThe metrics a fleet chooses to collect depends largely on what goals it hopes to attain,\u201d Schell added. \u201cNevertheless, there are basic metrics that will provide insight to the overall effectiveness of the maintenance program whether it\u2019s in-house or outsourced.\u201d<\/p>\n

According to Schell, those metrics include repair time per job, parts costs, when specific problems develop based on time or mileage, and technician performance in completing jobs in the estimated time as well as comebacks. There is also the amount of time a vehicle spends in the shop, not only the time to perform the service but also how long the vehicle was in the shop waiting.<\/p>\n

Ultimately, obtaining and leveraging accurate and timely data from repair providers helps fleets make the right maintenance choice for equipment.<\/p>\n

\u201cIf a fleet knows exactly what work is being performed and that required inspections and maintenance intervals are being met, they\u2019ll be able to avoid issues,\u201d McKittrick said. \u201cTrue cost of ownership, cost per mile, uptime, and safety are the most important maintenance metrics to follow.”<\/p>\n

\u201cRepair shop software creates a closed loop between the shop and the fleet, sending data back and forth,\u201d he continued. \u201cIt facilitates communication about real-time status so the fleet has full transparency. With analytics, that can be used for predictive insights. They\u2019ll be able to maintain safer and more profitable fleets.\u201d<\/p>\n

Effective fleet approaches<\/h3>\n

Running out of Aberdeen, South Dakota, Hell Bent Xpress<\/a> got its start in 2010. At the time, owner Jamie Hagen, a former company driver for a bulk tank hauler of food-grade liquid products, began leasing his services to the carrier and adding tractors to his fleet. Today, Hell Bent hauls tankers and dry vans across the U.S. and Canada with Mack Anthem tractors.<\/p>\n

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Photo: Hell Bent Xpress<\/div>\n<\/div>\n
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Fleet owner Jamie Hagen handles lubrication, tire work, and some light repairs himself. For anything more complicated, he relies on local Mack Trucks and Utility Trailer dealers.<\/figcaption><\/figure>\n<\/div>\n<\/div>\n<\/div>\n

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Over the past year, however, the fleet doubled in size to 10 trucks, so Hagen began doing the math. \u201cAt this growth rate, it\u2019s time to consider if we should be performing maintenance in-house,\u201d he said. \u201cThat\u2019s a discussion that we need to have, but there are a lot of moving pieces, so the equation gets complicated.\u201d<\/p>\n

Focused on making sure that his company\u2019s tractors are well maintained, Hagen handles lubrication, tire work, and some light repairs himself. For anything more complicated, he relies on local Mack Trucks and Utility Trailer dealers.<\/p>\n

\u201cWe believe it will be less expensive and more convenient to perform maintenance in-house, and we have a mechanic in mind if we go in that direction,\u201d Hagen said. \u201cThe question is whether we can justify the expense or if we need to reach 20 or 30 trucks to be able to afford it.\u201d<\/p>\n

Hagen also asks if his own time is better spent growing the business rather than managing maintenance and handling some of the work. \u201cWhat else could I be doing? At what point am I more valuable doing other things?\u201d he asked. \u201cThat\u2019s not something you necessarily think about when you\u2019re scaling up rapidly, but now is the right time to ask so we know the answer when it\u2019s time to take the leap.\u201d<\/p>\n

Likewise, whether providing services to a job site in Connecticut, an A-list concert in California, or world-class road races, United Site Services (USS)<\/a> relies on its fleet to deliver temporary fences, portable toilets, hand-washing stations, and roll-off trash dumpsters to its approximately 115,000 customers nationwide.<\/p>\n

“Having trucks ready and available to go each day is a key component of delivering a consistent customer experience from coast-to-coast,” Kevin Podmore, VP of fleet and strategic sourcing at USS,\u00a0explained.<\/p>\n

But in 2014, USS’s fleet faced some challenges. The company worked with multiple vendors, each with its own maintenance standards, and this led to inconsistent protocols that reduced uptime. What’s more, Podmore and his team had little visibility into the information they needed to make strategic decisions.<\/p>\n

USS needed a comprehensive and consistent PM solution that could be rolled out nationwide, so it expanded its partnership with Penske Truck Leasing. Penske, already a full-service leasing vendor for USS, offered to provide on-site maintenance, add its staff and technology to in-house shops, and hire qualified USS technicians. The lessor also worked with USS to reorganize its maintenance facilities, including some of its larger shops, and added service check-in kiosks.<\/p>\n

USS had also struggled to get access to industry standard metrics that could help them plan an effective fleet replacement strategy.\u00a0Penske provided that visibility through Fleet Insight, a proprietary app that delivers fleet data on maintenance and costs in real time.<\/p>\n

According to Podmore, implementing a consistent PM program has helped USS reduce vehicle out-of-service rates and enhance its Compliance, Safety, Accountability scores. It also provides for greater technician engagement and improved driver and customer satisfaction.<\/p>\n

\u201cDeciding to outsource is a fleet utilization play,\u201d Jim Lager, EVP of sales and rental for Penske Truck Leasing<\/a>, said. \u201cIt\u2019s about improving uptime and at the same time\u00a0a\u00a0fleet\u2019s ability to hire and keep drivers. That is absolutely tied to vehicles. Drivers need trucks to be running to make money, so maintenance has an impact on their satisfaction and retention.\u201d<\/p>\n

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Photo: Penske<\/div>\n<\/div>\n
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\"In<\/div>\n<\/div>\n<\/div>
In addition to full-service leasing, Penske offers fleets in-house maintenance technologies.<\/figcaption><\/figure>\n<\/div>\n<\/div>\n<\/div>\n

Not that long ago, operating 50 or 60 power units was enough scale to justify in-house maintenance, Lager noted. Today, fleets of that size, and even larger operations, can see value in outsourcing.<\/p>\n

Furthermore, current industry issues are driving interest toward outsourcing maintenance. \u201cDelays in deliveries of new vehicles means running equipment longer, and parts may also be harder to procure,\u201d Lager said. \u201cIndividual fleets may not have as much leverage with manufacturers and parts suppliers, but when they have a maintenance partner with full-time procurement expertise, they get more support.”<\/p>\n

\u201cThat\u2019s especially true as trucks get older,\u201d he added. \u201cIf you\u2019re extending a full-service lease, you have the security that the truck will be kept running at a predictable cost. In that case, having a partner is better than going it alone.\u201d<\/p>\n

 <\/p>\n

By Seth Skydel<\/a><\/span><\/p>\n

Source https:\/\/www.fleetowner.com\/<\/a><\/p>\n

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Fleet needs, service provider capabilities, and data are driving maintenance decisions. Here\u2019s how some fleets are finding the right balance. Fleet executives have a lot of big maintenance decisions to make, and perhaps the most impactful is who will do it. Keep it all in-house, outsource all of it, or some of both? Pair those…<\/p>\n","protected":false},"author":3,"featured_media":14034,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[18],"tags":[53],"_links":{"self":[{"href":"https:\/\/advancedfleetmanagementconsulting.com\/eng\/wp-json\/wp\/v2\/posts\/14033"}],"collection":[{"href":"https:\/\/advancedfleetmanagementconsulting.com\/eng\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/advancedfleetmanagementconsulting.com\/eng\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/advancedfleetmanagementconsulting.com\/eng\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/advancedfleetmanagementconsulting.com\/eng\/wp-json\/wp\/v2\/comments?post=14033"}],"version-history":[{"count":1,"href":"https:\/\/advancedfleetmanagementconsulting.com\/eng\/wp-json\/wp\/v2\/posts\/14033\/revisions"}],"predecessor-version":[{"id":14035,"href":"https:\/\/advancedfleetmanagementconsulting.com\/eng\/wp-json\/wp\/v2\/posts\/14033\/revisions\/14035"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/advancedfleetmanagementconsulting.com\/eng\/wp-json\/wp\/v2\/media\/14034"}],"wp:attachment":[{"href":"https:\/\/advancedfleetmanagementconsulting.com\/eng\/wp-json\/wp\/v2\/media?parent=14033"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/advancedfleetmanagementconsulting.com\/eng\/wp-json\/wp\/v2\/categories?post=14033"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/advancedfleetmanagementconsulting.com\/eng\/wp-json\/wp\/v2\/tags?post=14033"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}