The Car and Truck Fleet and Leasing Management Magazine

Maintenance Management Is More Important Than Ever!

September 2005, by Bob White

(This counterpoint article is a response to the previous opinion piece “Is Maintenance Management Obsolete?”) Since the premise of the “obsolete maintenance management” opinion - that such programs “remain essentially the same as they were was 30 years ago” - is unequivocally wrong, the argument’s follow-on conclusions are faulty, too. In our experience, as well as the experience of representatives from all the major fleet management companies with whom I’ve spoken, maintenance management programs are actually more important than ever. And, based on daily qualitative feedback from our clients’ fleet managers and drivers, as well as quantitative performance analyses, from large and small companies, government agencies, utilities, and other organizations with fleets of different sizes, different profiles, centralized or not, local or global - all of them can realize savings in fleet maintenance costs up to 25 percent compared to the national average by utilizing maintenance management programs. Fleet Manager’s Role Changed
The role of the fleet manager has changed dramatically over the last 30 years. Today, fleets can run into the thousands of vehicles, and rarely is overseeing the fleet a sole responsibility. What used to be a very sequestered function has evolved into maintaining the fleet operation within the context of a company’s overall goals and objectives. Fleet is now recognized by procurement and sourcing as a huge spend, prime for on-going financial efficiencies - controlling not only the direct costs on the fleet operation, but also the indirect cost to the entire corporate organization. The average fleet manager has more responsibility and fewer staff and resources to use. Therefore, fleet managers today rely on maintenance programs not only for the administration of the maintenance process, but also for identifying cost improvement opportunities so as to become the catalyst for improvement and change within their companies. In our experience, average cost-per-mile for maintenance has remained the same or slightly increased over the past decade. Our 24/7 call center actually handles more calls per unit today than it did 10 years ago, a sign that the actual number of occurrences per unit is increasing. Today’s Vehicles More Complex
While it is true that today’s vehicles are generally more reliable and have many components that require less servicing (i.e. platinum spark plugs, longer-life fluids, etc), the complexity of today’s vehicle is also much greater. With this complexity, the average repair, when it does occur, is far greater in terms of cost. As stated in the original article, unless the fleet manager is well versed in auto technology, there is still a need for certified technicians routinely trained and educated on new, emerging auto technology and associated costs. While it is true that most repairs performed during the first 12-18 months tend to be preventive maintenance (PM)-related, history shows no change in that percentage. The true value of maintenance management is making sure that even repairs done within this time frame are done by the right vendor at the least cost. It’s not a question of whether a punctured tire needs approval for replacement. However, a fleet manager does need the keen eye and resources of a certified technician to identify when a vendor may be pushing to install tires that cost in excess of $100 or even $150 when tires that cost $60-$70 will provide an equal or greater performance level. The fact is that documented negotiated cost savings by fleet management technicians are at an all-time high. Therefore, every maintenance decision requires a certified technician’s management and approval. We agree that a successful maintenance program must utilize local suppliers as well as national accounts. The number of repairs through fleet management companies performed at independent repair providers is much greater than in the past. Indeed, for many fleets, independents may actually be the majority versus national account repairs. However, this critical issue supports the need for a maintenance management program in order to identify the best, low-cost provider for each occurrence. While one supplier may be the best choice for PM, another may have the best pricing for brake work. A third may deliver the best value for major mechanical or electrical issues. Managing these decisions requires knowledge to pre-diagnose concerns before the vehicle is taken to a repair facility. Warranties Protect Less
Another trend that makes maintenance management more important than ever is that of extending fleet vehicle cycling periods in response to lower residual markets. With shorter powertrain warranties and vehicles kept in service longer today, the vehicles “outside of warranty” account for greater percentage of the fleet. Compounding that, today’s 36/36,000-mile warranties afford less protection than 10-15 years ago when 50,000-, 60,000-, or even 70,000-mile powertrain coverages were standard. As stated in the opposing viewpoint, the debate is not really about whether maintenance management programs are obsolete. The tracking, reporting, warranty, and price negotiating are as necessary today as they were 30 years ago. But with all the recent publicity about the practice of “up-selling” in the automotive repair world, the inherent control of a maintenance management program may be more important than ever. Programs Have Evolved
Finally, let’s invalidate the original assertion that maintenance management programs “remain essentially the same as they were 30 years ago” by looking at the many ways they have evolved with changing technologies. As any businessperson over 30 years old can attest, the Internet and advanced computer systems have completely changed the way all business gets done. In the area of maintenance management, Web-based data and tools are ever-expanding, leading to improved technician access to repair data that ensures informed decision-making; more effective communication with fleet managers, repair facilities, and drivers; strengthened control through more, up-to-the-minute data and sophisticated reporting tools; and more accurately quantified fleet value. Wireless technology continues to alter the fleet management landscape. Telematics solutions allow faster and more proactive vehicle management, and the technology is just in its infancy. Cellular and wireless LAN data exchange will do the same for drivers. Everyone in this industry is looking at how best to utilize these advances to bring true value to all parties. It’s clear that the need for maintenance management programs is more important than ever. If a question remains, it involves pricing. Over the past 10 years, average pricing for these programs has consistently dropped. Average pricing in the industry is down 20-plus percent over this period. The evolution of the programs - as described above - have brought efficiencies that are passed along to fleet management clients. While per-occurrence pricing options are legitimate for fleet managers to consider, they also raise the issue of fee unpredictability. The best solution for fleet managers is to have an open dialogue with their maintenance management providers. Together, they can develop a personalized program and pricing structure to fit each fleet’s needs and goals.
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