Management – Page 8 – Utility Fleet Professional

Modernizing Your Shop: Solution Implementation

Written by John Dolce on June 5, 2013. Posted in Maintenance.

In the last issue of Utility Fleet Professional, we looked at what factors affect productivity in your current shop, how to calculate space and technician needs, and the options available to you once you determine you want to upgrade your existing shop or build a new facility. Now it’s time to explore the design and implementation process. This article will cover everything you need to know, from the different project phases to site selection considerations to the solicitation of bids and beyond.

Project Inception
Considerations at the inception of the project for either an expansion or build alternative should encompass the following:
• The goal is to reduce costs, increase safety and improve productivity.
• The cost to rehabilitate the present facility is only $125 per square foot.
• The equipment cost is 30-35 percent of the facility cost.
• The ratio of vehicles per square foot of facility.
• Circulation with inside versus outside storage.
• A new facility costs roughly $200 per square foot, plus an equipment cost at 33 percent of the square footage estimate, which is approximately $65 per square foot or an estimated $265 per square foot total.
• Twelve feet of mortar equals 18 feet of steel equals 30 feet of outside height or 26-28 feet of inside height.
• Allow for electrical, water, steel, mortar and a 10-foot concrete apron around the facility.
• Follow Wicks Law regarding the on-site supervision of the general contractor. Wicks Law states that federal funding for local projects requires a general contractor to oversee all costs as the project progresses to prohibit unnecessary change orders that needlessly increase costs.

Project Sequence
Most renovation projects typically follow this type of sequence:
• Pre-design, which includes gathering input from the fleet manager, architect and designer.
• Schematic design (six months).
• Design development (12 months).
• Contract documents development (six months).
• Request for bids, receipt of quotes and award of contract (six months).
• Design build, which takes approximately 24 months and is a combination of the preceding three line items.
• Wicks Law for construction management of federally funded projects requires an extra level of project management to supervise the general contractor. This is done to ensure that government policies and procedures are followed.
• Site progress, which includes developing a schedule and retainage.
• Involve prime contractors and subcontractors, and hold coordination meetings.
• Wrap-up, warranty, facility use program and move-in.
• Testing followed by final payment.
• On-site, turnkey and warranty management.
• Liquidated damages for latent defects.

Shop Design Sequence
The pre-design stage is a line sketch of the desired layout including items such as general sizing, stockroom, shop administration offices, lighting, plumbing, electrical, water, air, supplies, work areas, lockers, support areas, washrooms, and welding and cleaning areas. The occupant and construction management firm architect will rough out footprint processes, topography and compatibilities. This process can take up to six months with timing, what-ifs, changes, and the learning curve of the customer and architect. The most knowledgeable party is the customer who fits into the facility; the architect suggests, but the customer is both accountable and responsible.

The following must be considered in the pre-design stage:
• Pre-design of the site including site selection, site short list and cost considerations.
• Input from fleet managers, administrative personnel, shop personnel and drivers.
• Clerical needs including equipment and work flow.
• Work methods and changes.
• Design layout: architect versus client versus consultant.
• Drawing drafts of the present building that include scale, access and inside versus outside.
• Revisions to the present building including limits, codes to follow, and required permits and fees.
• Meetings:
o Bid preparation, solicitation of bids, and evaluation of bids and bidders.
o Awards: schedule start and track progress.
• Construction site progress:
o Penalties for on-site progress.
o Coordination meetings.
o Changes.
• Completion, warranty, retainage and date of return for evaluation.

Site Selection
Site selection involves consideration of the following:
• Cost to prepare the site.
• Demolition of the site; full and/or partial liability for contaminated sites.
• Site inspection; estimated renovation or rehabilitation required.
• Environmental issues, drainage considerations and wildlife protection.
• Mileage variations to the new facility and cost adjustment.
• Facility growth for five years, 10 years and beyond.
• Alternative fuel use to offset capital outlay.
• Utility access for water, electric and gas.
• Traffic flow.

Layout Alternatives
The following are layout alternatives:
• Stock room access.
• Floor drains: slope.
• Lights: natural and artificial.
• 110-, 220- and 440-volt outlets.
• Ventilation and skylights.
• Concrete finish.
• Water and air lines: freezing.
• Epoxy: hardening.
• Storage: light and heavy.
• Seal and color of concrete.
• Fans for heat and ventilation.
• Compressed air.
• Heavy-duty: workbench, light and air.
• Roof-mounted equipment.
• Drawers: rollout and slide-out.
• Roof integrity: ladders.
• Floor access versus overhead access.
• Floor bolting and painting.
• Oil, air, water and electrical disposal.
• Welding, gas and electric.
• Three-quarter- to half-inch: psi range.
• Posts and doors.
• Antifreeze: new and recycled.
• Brakes and drums.
• Silicon: permanent extended life.
• Cranes: overhead versus jib.
• Recovered oil: antifreeze.
• Waste storage.
• Hazardous versus residual versus commercial wastes.
• Primary, secondary and tertiary storage of hazardous material wastes.
• Line painting: safety.
• Vehicle exhaust system.
• Corner guards.
• Exhaust temperature.
• Convex mirrors.
• Electric fuse box index.
• Mark piping: color code fluid lines.
• Downspout: cast versus aluminum.
• Fifty candlepower at floor level.
• Continuous floor drain: inside diameter.
• Concrete aprons.
• Shop drains: oil water separator.
• Battery room.

Schematic Design
The next step is a schematic design phase during which a layout is drawn to scale, incorporating the customer’s wants and needs and fitting in equipment, HVAC, electrical and plumbing, plus general construction specifications and upgrade of pre-design ideas into acceptable reality. The architect brings experience to the following areas:
• Considerations of present work flow space.
• Whether to leave or transfer present equipment.
• Drafting a new, site-specific layout and defining dimensions.
• Identifying equipment.
• Stating the location of equipment.
• Proposing the fit of equipment in the location.
• Drafting dimensions for electric and fluid needs.
• Brainstorming meetings.

Schematic design issues include the following:
• The new facility is site specific.
• This will alter the present footprint and practices.
• Receptiveness of the occupant to the new layout.
• The cost of change from present practices to new practices.
• The cost per square foot of the new facility for budget purposes.
• Project start date.
• Present date.
• Budget changes.
• Build date.

Design Development
The next stage is design development, which is a solicitations document phase. The architectural drawings are priced from the schematic design phase, and the funding needed is dedicated to this project. If the funding is inadequate, the schematic design phase must be altered to fit the funding, which must include inflation because it will take two to four years to solicit, award, and initiate the project and accommodate the changes.

Retainage – when the general contractor, prime subcontractors and subcontractors are paid, minus a percentage that will be held for warranty resolution – must be defined at this point. What are the amounts, terms and conditions? Target retainage is 15 percent, negotiable to 5 percent. Payment times are six months from the date of occupancy, and any changes have a six-month warranty extension tied to the finish date of that change.

The following elements are included in the design development:
• Drawing submissions and review; traffic and work flow; as-built and final drawings.
• Unique issues:
o Work methods.
o Utilities.
o Communication and time clocks.
o Data processing.
o Security.
• Administration, shop, offices and parking:
o Access for pedestrians and vehicle flow.
o Numbering, odd and even parking spaces.
• Tools and equipment, electric, water and effluent.
• Shop needs:
o Rebuild, repair or preventive maintenance.
o Painting.
o Bodywork.
o Washing.
o Cleaning.

Strategies and Expectations
Strategies
• Follow Wicks Law with a construction management plan.
• Provide construction management of the general contractor, prime contractors and subcontractors.
• Consider design build versus design and build by one or many architects and engineering firms.
• Company management of the architect and builder.
• Bid preparation, solicitation, evaluation and award.
• Start date, work schedule and coordination meetings.
• Meetings for site selection, design, schedule and site remediation as to its footprint.
• Payment and change orders, threshold limits and penalties.
• Warranty and retainage, training and manuals.

Management Expectations
• Construction progress updates, pictures and videos.
• Script: outline, lesson plan and library of videos.
• Facility maintenance schedule and tasks.
• Application-specific manuals for parts and service.
• Warranty and latent defects and liquidated damages.
• Extended warranty, replacement warranties and double extensions.

Equipment Program
A good equipment program involves consideration of the following:
• Specifications and cut sheet.
• Power: location and work flow.
• Delivery, setup and training.
• Acceptance and payment.
• Warranty and 5 percent estimated retainage.
• Liquidated damages for latent defects.
• Videos:
o One thousand dollars per minute, finished product and multiple choices.
o Tripod, script, outline and lesson plan.
o Equipment vendor instructor.
• Move-in:
o Parts, supplies and materials first (weekend one).
o Skeleton staff (weekday).
o Maintenance and repair staff and their tools (weekend two).
o Transition from one weekend to another weekend.
• A person on-site to manage the warranty-poor materials, poor workmanship and design defects.

A critical issue is that the customer who occupies the finished facility expects a turnkey environment. An experienced architectural and engineering firm will provide a professionally qualified employee to be on-site to manage the 5 percent retainage. This person will sit with the customer, teach him or her how the facility is designed to work, and walk him or her through that process. This costs one person’s salary for six to 18 months depending on the complexity and sophistication of the facility and the equipment installed.

Design development is the time during which specifications are developed for the facility and its equipment for solicitation. These specifications must be a combination of functional and technical details and should include training needs, service, parts and supply books, CDs organized in a standard format with a defined warranty for latent defects (i.e., design defects not readily recognizable), and installation expectations with liquidated damage (late installs) documentation for penalties.

Solicitation of Bids and Award
The solicitation phase details all phases so that subcontractors, prime contractors, general contractors and construction management firms can delineate their costs while being aware of specific time and quality issues.

The design documents convey expectations in every detail so that bid prices can be compared, with the best bid being the lowest bid that addresses all issues. Should the award be split, portions can be divided accurately and a valid comparative analysis can be made.

The next phase is to solicit the contract documents for a request for proposal, where the terms and conditions are reviewed with bidders and suggestions are taken and evaluated to make the documents more accessible to more bidders. This increases competition, which leads to more competitive pricing and better responses. With the bid proposal reviewed and updated as deemed appropriate, now a request for quote can be issued. It is important to solicit as many local job site firms as possible, noting start dates of each phase and technological assignments so that one phase is completed and another can begin. Should a phase be extended unnecessarily, it will force other start times to change. In turn, this will cause schedule delays, delay the project completion date and result in a delay for the new occupant to move into the new facility.

Once the bids are received, compared, analyzed and awarded, bonds are posted along with an agreed-upon completion date.

The principals of the project are named, and the construction site is set up with temporary quarters, phones, faxes, telecommunications, personal computers, networks, offices, files, security and information published to enable all principals to communicate.

Construction Begins
Weekly meetings on the job site are scheduled; the meeting format is agreed upon; a numbered day ledger is opened; daily notes are entered; the schedule is posted; meetings are taped and noted; and the meeting minutes are circulated with timetables established, variances noted, and windows targeted and measured.

On-site progress is monitored by weekly photos from four standard locations. Videotapes are made weekly and dated for historical reference. If it is a public project, appropriate notifications are provided to funding agencies of regular meeting schedules with progress reports and change orders. Contractor changes due to nonperformance are discussed, adjusted, and resolved to keep the project on schedule and to hold costs to estimates.

Most governmental projects have regulatory requirements to communicate project progress to the different agencies that fund prorated projects (e.g., 75 percent federal, 10 percent state and 15 percent city). Each entity would contribute, at predetermined times, percentages of the total funding of the monies to pay the contracted firms. A time and completion plan is defined to direct this process.

For example, Wicks Law states that a construction management firm must monitor the progress of the general contractor, prime contractors and subcontractors; facilitate changes to keep the integrity of the program on time and uphold the quality of work; and be responsible to the funding agencies to inform them of progress and corrective actions taken to keep the project on time and at the estimated cost. This must be done on a regular basis at a minimum of monthly or targeted quarterly intervals so that payments are received on expected due dates.

During the on-site construction phase, inspectors monitor the progress in the on-site job ledger and discuss issues weekly with the prime contractors and subcontractors.

When the project is completed, a walk-through is scheduled with the general contractor, prime contractors and subcontractors. The walk-through is videotaped and a punch list is developed. Also, a written summary is drafted for tracking fixes with reference to compliance for penalty and payment validation.

Move-In Program
Around the time when closure is evident from the punch list, a move-in program is started with the client. The move-in process is defined, sequenced and prioritized, with shelving, furniture, phones, and equipment in place and tested. A temporary certificate of occupancy is obtained. A person from the construction management firm is assigned to coordinate the move, supervise the start-up, and work out the glitches and bugs with the management of the retainage so that the transition is smooth and a comfort level is established and maintained.

The occupant needs support in the day-to-day operations of the facility, in familiarity with the as-built drawings, and in problem-solving or troubleshooting of equipment problems. The on-site representative of the construction management firm is familiar with the general contractor, prime contractors and subcontractors. He or she can facilitate any problem-solving and troubleshooting with the principals, or the retainage can be used to hire other firms to correct the problems.

The on-site person’s salary and expenses could be funded from retainage. When funding runs out in 18 months, that person would leave because the momentum of the new facility would be up to speed and would meet the design and functional expectations.

Each piece of equipment should have a manual that is standardized in a common format that complements a video of the equipment operations and training, with three sets of each. One set should be kept on-site for day-to-day use, one set should be maintained in the corporate library to copy in case the on-site copy is in use or missing, and one set should be stored off-site for reference and as a copy resource.

Client Involvement
In order for the project to be successful, close interaction is required by the design team from the construction management firm, the design firm and the occupants of the new facility.

The new facility, aside from site specifics and the design complement of topography footprint, should be built around the client-occupant if the client will manage his facility for five to 10 years upon its completion. Designs and work flows are flexible and should fit the client’s needs or perceived needs.

Depending on his or her experience, the architect has a perspective that is limited because he or she does not have experience working in this or any other similar facility. Given a set of circumstances and limitations, the architect can provide alternatives based on his or her experience.

The client will use the facility day after day, so he or she will need to move seamlessly into the new facility and show increased productivity because of the features and benefits the new facility will offer.

Conclusions
Day to day there are three perspectives we need to acknowledge:
• The way one person sees it (the architect/engineer).
• The way another sees it (the occupant).
• The way it really is (general contractor and/or construction management firm).

It is the general contractor and construction management firm’s responsibility to see that the architect, engineer and occupant see what it is in the same way.

This is a once-in-a-lifetime event. You need experience and savvy to do it. If you’ve never done this before, the architect and engineer bring experience and savvy for your consideration. They understand and are attuned to help you get the facility you need to increase productivity and improve your safety experience.

About the Author: John Dolce is a fleet facility and maintenance specialist employed by Wendel Companies, an architectural and engineering firm. He is an active consultant, instructor and fleet manager with more than 40 years of experience in the public and private sector. Dolce has written three fleet-related textbooks and teaches fleet management courses at the University of Wisconsin’s Milwaukee and Madison campuses.

Driver Behaviors that Waste Fuel – and How to Correct Them

Written by Sean M. Lyden on June 5, 2013. Posted in Management.

As utility fleets look for ways to blunt the impact of rising fuel costs on their bottom line, one opportunity for substantial cost savings can be found in training and motivating their drivers to operate their vehicles with more fuel efficiency.

According to a 2011 study by the University of Michigan Transportation Research Institute (http://deepblue.lib.umich.edu/bitstream/handle/2027.42/86074/102758.pdf?sequence=1), the cumulative impact of neglecting good eco-driving practices can take a highly fuel-efficient vehicle with baseline performance of 36 mpg down to 19.8 mpg, a 45 percent drop in efficiency. Considering that commercial trucks are used in much harsher duty cycles and conditions than passenger vehicles, there’s potential for even greater negative impact on fuel economy if drivers aren’t managed effectively.

Biggest Fuel Wasters
Three driver behaviors tend to be the biggest fuel wasters.

1. Unnecessary Idle
Engine idle wastes 0.25 to 0.5 gallons per hour depending on engine size and air conditioning operation, according to the Environmental Protection Agency (www.fueleconomy.gov/feg/driveHabits.shtml). “Whether it’s the guy that eats lunch in his vehicle or, in some cases, we see people who leave the vehicle running almost the entire the day [to keep it cool during hot summers], that’s a significant waste of fuel, as well as additional wear and tear on the vehicle,” said Karl Weber, vice president of enterprise sales for SageQuest (www.sage-quest.com), which is owned by Fleetmatics Group (NYSE: FLTX) and a provider of GPS fleet tracking and management technology designed to improve mobile workforce efficiency.

As a frame of reference, if only one driver excessively idles the vehicle for two hours per day, that adds up to a nearly $1,000 annual hit to the bottom line assuming $3.75 per gallon. Spread that over 10, 20, 50 or more drivers and the loss compounds.

Not all idle can be avoided, however – especially in utility applications. “In some types of vehicles, you have equipment on them that requires the engine to run,” Weber said. “If you take a vehicle in the utility industry that’s equipped with a bucket, often the engine has to be running for the bucket to be engaged and go up [via a PTO provision]. In that instance, organizations are going to be interested in tracking their drivers’ PTO idle versus non-PTO idle.”

2. Speeding
“For every 5 mph you travel over 65 mph, you reduce your efficiency by 7 percent,” said Nick Ehrhart, telematics vice president of business development for Donlen (www.donlen.com), a full-service fleet management company headquartered in Northbrook, Ill., and a wholly-owned subsidiary of The Hertz Corp. (NYSE: HTZ). “So, slowing down when it’s safe to do so will greatly increase your vehicle’s fuel economy.”

This is because as speed increases, so does the aerodynamic drag (wind resistance), which forces the engine to work harder and consume more fuel to operate at the higher speed.

3. Aggressive Driving
Rapid acceleration and harsh braking reduce fuel economy by as much as 33 percent at highway speeds and 5 percent in town, according to the EPA. Therefore, if you have multiple drivers who make it a habit to “punch” the accelerator “off the line,” weave through traffic or slam on the brakes, their behavior is eating a chunk out of your organization’s bottom line.

Correcting These Behaviors
What can fleets do to help drivers break these habits so they become more fuel-conscious? Here are three tips.

1. Hold drivers accountable. “By far the most critical strategy to changing driver behavior is to create a driver policy [that clearly states expectations and consequences for noncompliance] and enforce it,” Ehrhart said. “You want all drivers to have a chance to be recognized or given a token of thanks [for improving behavior], but for those that don’t try and continue to behave poorly, there needs to be some type of repercussion.”

2. Educate drivers on the big-picture consequences of fuel-wasting behaviors. “I think most people realize that aggressive driving is not good, whether it’s from a safety perspective, or wear and tear of the vehicle, or fuel economy,” said Art Liggio, president of Driving Dynamics (www.drivingdynamics.com), a Newark, Del.-based driver training firm for corporate fleets. “We focus on challenging the drivers to think about the responsibilities they have when they’re on the road, getting a little bit deeper into the person’s psyche. Instead of just saying, ‘It’s because you’re going to reduce your gas mileage by 5 miles per gallon,’ the focus is more about how this activity, action or behavior has even deeper consequences, drilling down all the way to how much these [driver behaviors] affect the financial viability of the employer.”

3. Incentivize positive driver behaviors. Weber referred to one client that implemented a driver incentive program, based on vehicle data captured by SageQuest’s GPS/telematics system, that helped reduce daily idle per vehicle from two hours to 45 minutes, saving the company nearly $1,000 in fuel costs per day. “They said, ‘All right, we’re going to rank our drivers every week based on the average idle time per day. And if you hit a certain threshold, you go into a bucket. Once a week, we’re going to pull a name out of that bucket with drivers that qualify based on appropriate behavior. We’re going to give away prizes, such as Xboxes or 40-inch LCD TVs.’ They’ve significantly reduced their idle and maintained it with this [incentive] program.”

Learning Moments
When it comes to correcting driver behaviors, Liggio summed it up this way: “If you want to change behavior, it’s not about throwing facts and figures at your drivers. You have to give them a 360-degree view into how their behavior actually affects others, and their employer in particular. And that opens their mind. Then they have this learning moment where they say, ‘Hmm. Maybe being an aggressive driver gets me to appointments faster or on time, but maybe being three or four minutes late is not as painful as the other things my behavior can cause.’”

Said Weber, “Fleets are realizing that they’re not just going to be able to eliminate the behavior, they need to manage it. They need to help drivers understand the benefit to them – ‘If we can cut this [idle] down, we’ll have more money to do other programs.’”

About the Author: Sean M. Lyden is a nationally recognized journalist and feature writer for a wide range of automotive and trucking trade publications, covering fleet management strategies, light- and medium-duty trucks, truck bodies and equipment, and green fuel technologies. He blogs at Lyden Fleet Strategies (www.lydenfleetstrategies.blogspot.com).

Making Effective Choices

Written by Seth Skydel on June 5, 2013. Posted in Fleet Profiles.

With about 14,000 units ranging from passenger cars to Class 8 trucks, the Pacific Gas and Electric Co. fleet is sizable by any measure. Add to that a fleet maintenance operation that encompasses 63 facilities and 80 mobile service vehicles, and employs about 375 technicians and nearly 60 administrative personnel.

Another challenging aspect of the PG&E fleet is that its equipment covers more than 70,000 square miles of service territory including urban, suburban and rural areas. For Dave Meisel, senior director – transportation and aviation services, it all adds up to the need to make highly effective vehicle choices.

“When we’re looking at replacing vehicles, we have several considerations,” Meisel said. “We operate entirely within the state of California, which has the strictest clean air regulations in the country. That means we need to take into account the number of vehicles we have to replace to meet alternative fuel and regulatory requirements.

“We also need to look at vehicle additions that are needed for our business model,” Meisel added, “along with questioning if owning a unit might be more advantageous than long-term rentals. Simultaneously, we have to consider units that are out of life cycle, or will be in the planning year.

“We determine a vehicle’s life cycle by benchmarking against other operations,” Meisel continued. “Once or twice a year, we exchange visits with other fleets, including utility and nonutility operations, to learn from each other. Every time we make those visits, we learn something that we can do better.”

Exchanging Knowledge
As a utility operating about 14,000 vehicles in a single state, Meisel noted, it’s hard to find other operations that can be compared to PG&E’s fleet. That challenge, he related, is addressed by sharing information with some of the few multistate utilities in the country that operate more than 10,000 units, and with other types of fleets such as package, food and beverage operations that are similar in size.

For an industry perspective, PG&E also turns to Utilimarc, a provider of benchmarking, fleet consulting and business intelligence services, to compare specific fleet metrics within its own organization and against an industry database of as many as 400,000 units.

“Utilimarc forces you to provide data in a consistent structure, which gives us a true comparison of where we stand and how we relate to other fleets,” Meisel said. “Their methodology lets us look at detailed reports on costs by mile, unit, type, region and fleet size. We can also poll individual and groups of fleets on specific issues. For a relatively low cost compared to the quality of information we receive, Utilimarc’s analytical data tells us where there are opportunities to improve.”

The PG&E fleet now includes primarily Ford and GM models through Class 5, and Navistar and Peterbilt Class 6 through 8 trucks. The acquisition decisions that are made about the fleet are also the product of an evaluation of financing alternatives.

“Capital is the desired method of purchasing long-term assets in a regulated and decoupled utility like PG&E,” Meisel said. “We buy our vehicles outright in most cases because there is a return on capital associated with that activity. The practice of decoupling also promotes the conservation of energy.

“When we replace vehicles outside of our normal replacement cycle, it’s most often when major components have failed or there’s a structural integrity issue,” Meisel continued. “All other costs are maintenance related, which we handle primarily in-house. We have an outsourcing strategy and it’s not to outsource – except for items that are hard to cost justify internally, such as glass and body work.”

Lessons Learned
PG&E’s approach to managing its fleet is also based on both Meisel’s experience and the lessons he learns by remaining involved in the industry. His career began in the late 1970s as a mechanic at his family’s tractor and trailer rebuilding facility. From there, Meisel went on to management roles at Roadway Express and the Frito-Lay fleet, and at Consumers Energy in Michigan before joining PG&E more than six years ago.

Meisel currently serves on the Electric Utility Fleet Managers Conference board of directors and is a regular attendee at shows like the International Construction & Utility Equipment Exposition. “Many conferences and shows don’t offer a lot of value,” he said, “but these events bring together major players and decision-makers. In a few days at ICUEE we can see a lot of the newest technology that suppliers have to offer. At EUFMC we get very valuable feedback from other fleet managers and get the opportunity to build relationships with some of the most senior players in the supplier world. It doesn’t get any more efficient than that.”

About PG&E: Incorporated in 1905, Pacific Gas and Electric Co. is the San Francisco-based subsidiary of PG&E Corp. and one of the largest combination natural gas and electric utilities in the U.S. PG&E currently provides natural gas and electricity to approximately 15 million people in northern and central California through 141,215 circuit miles of electric distribution lines and 18,616 circuit miles of interconnected transmission lines as well as 42,141 miles of natural gas distribution pipelines and 6,438 miles of transportation pipelines. That utility operation relies heavily on a fleet of almost 14,000 vehicles and the capabilities of a maintenance team that numbers more than 425. In turn, the decisions made by the fleet management operation at PG&E are driving efficiency in all respects.

About the Author: Seth Skydel has more than 27 years of truck- and automotive-related publication experience. In his career, he has held editorial roles at numerous national business-to-business publications focusing on fleet and transportation management, vehicle and information technology, and industry trends and issues.

Modernizing Your Shop: Productivity, Space and Technician Considerations

Written by John Dolce on February 15, 2013. Posted in Maintenance.

In order to keep up with the evolution of your fleet, it may be time to analyze the layout of your current shop to determine if you need to upgrade the facility or design and build a new facility.

To give you an idea of what happens when an organization doesn’t keep up with the evolution of its fleet, let’s review an example of a facility that operated when horses pulled wagons. The horses lived in barns. When the horseless carriage was introduced and there was no longer a need for the horses, they were sold and the barns were used to store, maintain and repair the horseless carriages. As the horseless carriage became more advanced, more were added to the fleet and the barn was modified to meet the needs of the carriages. The increase in the size of the vehicles forced the carriages to be stored outside so that maintenance, service and repair could take place inside the barn.

Lights and equipment such as jacks, lifts, drill presses, welding tools, gantry cranes, parts and supply areas, tire service areas, pits, wash areas and battery rooms were added. This addition process eventually converted the barn into a garage without physically replacing the barn. While it wasn’t an ideal situation, everyone made do. In this case, the symptom was treated, but the root cause was not addressed.

As the fleet increased in size, more staff members were hired. The space, however, stayed about the same. Two people worked on one vehicle in one bay, which was big enough to hold half the vehicle, but the other half extended outside. An unanticipated factor – weather – thus affected productivity. If it rained, the workers got wet and took significantly more time to perform the task at hand. If the weather turned cold, the door was propped open, the heater kept running and the heat escaped the building.

Built for Productivity
In contrast, let’s look at an example of a medical surgery facility that was designed and built for its specific purpose – efficiency and medical excellence. There is one operating room and multiple patients who are waiting to get procedures.

In this scenario, if a patient needs hip surgery, the surgeon speaks with the patient, diagnoses the problem at the office, determines the time it will take to complete the procedure and secures an operating room for a fixed period of time. Using a 10-hour time frame as an example, the surgeon, knowing a hip replacement takes approximately two hours, will schedule five patients for that period of time. Some patients will take 1.5 hours and some will take 2.5 hours.

After 10 hours and five procedures, with backup staff in the operating room to cover breaks and emergencies, this becomes a very efficient process. The operating room has all the tools, space and supplies for all staff members to be productive because it was designed this way before it was built.

In the case of the barn, servicing vehicles is less efficient in that space because – while there is the potential for numerous vehicles to be in the facility at the same time – it was originally built to house horses, not vehicles.

What Impacts Productivity?
With proper space allocation, a garage can offer both the potential of a reduced carbon footprint and the opportunity for increased productivity. Creating the garage is a once-in-a-lifetime event that demands experienced planning. Because almost every act is sequenced for efficiency and productivity, a fleet business requires order and discipline. Tools, supplies, equipment, fluids, monitors and support services must be laid out to efficiently maintain the fleet.

Due to funding limitations and other priorities, organizations often make do with existing facilities, outdated equipment and inefficient worker footprints, which can negatively affect productivity and result in energy loss. Space limitations and unscheduled work, in particular, can impact productivity.

Scheduled work, on the other hand, is easier to manage. When a vehicle is brought into a shop for a preventive maintenance inspection, the technician knows how much time the process will take – it has been performed many times and is sequenced with the technician’s activity. Mechanics are trained in this process, and since all the necessary resources are available, all inspections can be assigned to a bay for scheduled work in a predictable time frame.

When you consider the job requirements of a staff of technicians, there are more than 500 types of tasks they may be responsible for. Some of these tasks are done repetitively, including work on brakes, radiators and water pumps, wheel removal and replacement, and air/oil filter changes. These tasks, however, make up only 30 percent of total maintenance work, meaning just 30 percent of work hours can predictably be assigned to work bays. That means 70 percent of the remaining work is unpredictable and requires more space per job.

What is the impact of unscheduled work? Let’s say a technician brings a vehicle into the shop that has been identified by a driver as having noise in the engine and a lack of power. If the technician diagnoses the number five cylinder as the problem, removes the piston and finds the wrist pin is also defective, a delay occurs. Since the shop does not stock wrist pins or fit pistons, the work on this part will have to be sent out. This causes the bay to be tied up until the parts come in and the technician installs them. What do the technicians assigned to this bay do while waiting for the part? They should be put to work in another bay. Theoretically, each unscheduled technician needs one-and-a-half bays assigned to him or her to be productive. Doubling up people in a bay can lead to delays and is unproductive.

Calculating Space and Technician Needs
How, then, are space needs calculated? Since space is a capital issue, having too little space can be just as bad as having too much space. This expense has to be prioritized and a three- to five-year return on investment – or more – has to be justified.

Let’s assume that a fleet workload was 20,000 hours in the last 12 months. As the fleet gets older or grows, the work increases 10 percent per year with a limited replacement program. Of the 20,000 hours, 2,000 were completed outside the shop while responding to road calls, breakdowns and tire changes, leaving 18,000 hours for shop work. Based on that information, how much space is needed? If the shop is open eight hours per day, five days per week, 52 weeks per year on one shift, that is 2,080 hours per year, per bay available on one shift. The 18,000 hours divided by 2,080 hours in bay availability equals 8.65 bays on one shift, which means that nine bays are needed at a bare minimum for vehicle service. For 20,000 hours with one shift, 9.62 or 10 bays are needed at a minimum. If you have multiple shifts, this requirement could be broken down to five bays on two shifts or four bays on three shifts.

How many technicians are needed? If one technician works five days a week, eight hours per day for 52 weeks, that would equal 2,080 payroll hours. In addition, technicians are also paid for 280 hours when they are not at work, as follows:
• Three weeks for vacation (120 hours).
• Two weeks for holidays (80 hours).
• One week for training (40 hours).
• One week for illness (40 hours).

This brings the total working hours down to 1,800. If you factor in time for washing up and coffee breaks, this adds up to 225 hours. If another 275 hours are added for diagnostic, cleaning, parts retrieval and toolbox time, working hours now total a net of 1,300 hours per available technician.

If you divide the 20,000 hours (the 12-month workload) by 1,300 (the hours per technician), this equals 15.38 technicians. Let’s presume the .38 is used in overtime or vendor work and that 15 technicians are needed for the 12-month period. If you factor in 10 percent inflation for the aging of the vehicles, that equals 22,000 hours. Divide that by 1,300 for a total of 16.92, or 17 technicians that will be needed for the next year.

If the average of scheduled work is 30 percent and the unscheduled work average is 70 percent, the number of bays needed is calculated below:
• 17 technicians x 30% = 5 technicians who need 1 bay each for a total of 5 bays.
• 17 technicians x 70% = 12 technicians who need 1.5 bays each for a total of 18 bays.

This shows that 23 bays are needed for one shift, 12 bays are needed for a two-shift operation and eight bays are needed for a three-shift operation.

If this is a nine-bay shop and there is only one shift working, 14 bays need to be added. If it is a two-shift schedule, three more bays need to be added, the work needs to be sent to vendors or the staff needs to be reduced to fit the nine bays. Three shifts would work. In most cases, until space is expanded, productivity is being choked.

Keep in mind that there are reasonable solutions to these problems, but they first need to be identified. A logical process must be followed when determining whether to expand or reduce the size of the present shop, relocate to another facility or build a new shop.

Consider Your Options
What are the costs of upgrading an existing building compared to building a new facility? Which is more cost-effective?

Consider the impact of a no-build or existing building upgrade option at $125 per square foot. In addition to the square-foot cost, facility and shop equipment costs will add an estimated 30 percent to the total no-build estimated cost. These total costs for upgrading should be compared to the total costs to build a new replacement facility.

Next, consider designing and building a new garage with the proper number of work bays – which are typically 20 feet wide and 50 feet long – and a parts support area that is 20 percent of the total work space for a light-duty fleet, with 33 percent of the total work space allotted for a heavy-duty fleet, including offices, locker rooms, showers, toilets, a lunch area and other support services. The square-foot cost of a new facility is estimated to be $200 per square foot plus the cost of equipment such as lifts, lathes, benches, cranes, storage shelves and optional equipment. These costs will add an estimated 30 percent to the total new-build estimated cost. Note that some items can be disassembled from the old building and reassembled in the new facility depending on their age, condition and project life cycle.

A service provider may want to consider the option of building a shared facility that is equally accessible to other fleet maintenance providers. This option can significantly reduce funding requirements.

Environmental upgrades add cost to the new building option, and you will also need to consider the layout of the new site in terms of parking, traffic flow, and bay and support area configurations.

In addition, organizations need to determine if they can work in the present facility while upgrading or if they will need to relocate to a temporary facility. This is determined by the present operation and the type of equipment being used. Shuttle time from domicile to route assignments should be considered as well.

With the construction cost calculated and its features and benefits evaluated, a comparison of the new alternative can be made to the no-build alternative, and a choice can be made: rebuild the present facility, replace it with a new facility, partially rebuild the present facility or do nothing. With the do-nothing approach, the present facility is used as is, work not handled cost-effectively can be outsourced, and/or part of the workload can be relocated to another smaller facility closer to the domiciled vehicle location.

Unless you choose the do-nothing approach, the next step is implementing the chosen solution. Be sure to pick up the next issue of Utility Fleet Professional for an in-depth look at the implementation process.

Pulling All the Levers

Written by Seth Skydel on February 15, 2013. Posted in Fleet Profiles.

George Survant, senior director, fleet at Time Warner Cable knows exactly the direction he wants to focus on for the future of the telecom provider’s vehicle operation. “We have to manage for the minimum cost per month over the life cycle of the vehicle,” he said. “If we use best practices to drive up reliability, we not only have lower costs, but we’re in a better position to meet customer expectations and improve our customers’ experience.”

Joining Time Warner Cable in mid-2012, Survant brings more than 30 years of utility fleet management expertise to an organization full of highly skilled and experienced fleet operations professionals. “We have an opportunity to make sure that our service fleet and its management programs are as leading edge as the entertainment, communications and information technology that Time Warner Cable provides,” he stated.

Aggressive growth at Time Warner Cable, which now serves more than 15 million residential and business customers in 29 states, has presented the company’s fleet managers with a number of challenges. Its 21,000 vehicles are spread out from coast to coast, and in Hawaii. Large groups of trucks were brought into the operation as a result of acquisitions. More than 70 dealerships were involved in spec’ing equipment and negotiating purchases, and with 95 percent of the fleet’s maintenance outsourced, hundreds of service providers were in the mix.

Significant Muscle
“About three years ago,” Survant related, “the management consulting, technology services and outsourcing company Accenture began working with Time Warner Cable to address organizational strategies. The company was understandably decentralized in different areas, including fleet. Operating like many small companies rather than one entity meant lost opportunities to flex the organization’s significant market muscle.”

Applying that lesson to managing its fleet, Time Warner Cable has embarked on a comprehensive set of initiatives to take advantage of economies of scale, to centralize the fleet operation, and to leverage existing and new best practices across the entire equipment and maintenance organization.

“One objective is to drive up reliability,” Survant said. “There is a hidden cost of having many different vehicles sourced in small groups. Also, trucks simply become less reliable with age so we needed a consistent replacement plan that can only come from a national supplier relationship.”

Taking Advantage
In July 2012, Survant noted, the median age of a standard service van or pickup truck in the Time Warner Cable fleet was 6.7 years. “Ideally,” he added, “the median age target for this type of vehicle is 3.75 to 4 years. Moving in that direction, we’ve lowered the median age of our fleet to under 6 years in just six months, and we’ve reduced acquisition costs by working with OEMs directly on a national level, and by taking advantage of utility fleet pricing programs.”

The current Time Warner Cable fleet consists of 11,000 vans, primarily Ford E-150 and E-250 models along with some GM units. Its 4,000 quarter- and half-ton pickup trucks are also mainly Fords and there are 2,600 Class 5 Ford F-350 and F-450 bucket trucks. The balance of the fleet consists of fewer than 100 Class 6-8 trucks and some passenger cars and vans.

To adopt better solutions, remarketing of vehicles being phased out of the Time Warner Cable fleet has also been addressed. Today, when groups of vehicles become available, the company invites auction houses to bid and investigates the resale value it can realize by selling the trucks to dealer auctions or wholesalers, taking into account the cost of prepping vehicles and providing required paperwork. Resale value is going to be a factor in new vehicle purchases going forward, Survant also noted.

Nationwide Program
Turning its attention to maintaining the fleet, Time Warner Cable’s fleet management team focused on creating a single, nationwide program. In the fall of 2012, the company began using the vehicle fleet management services company ARI at all locations, except for the four in-house service facilities with on-site vendors that it operates in the Midwest and in New York City.

“ARI has an advanced maintenance management solution that it uses to leverage maintenance relationships with vendors nationwide on our behalf, and a breakdown call center that makes sense for the size and scope of our fleet operation,” Survant said. “We dictate preventive maintenance practices based on OEM recommendations and our own needs and experience, and ARI’s extensive network of dealers, leasing companies and independent service providers does the work. They also manage our national account program with Goodyear to meet all of our tire needs.”

ARI is also handling equipment upfitting when Time Warner Cable places new vehicles in service. Included is the installation of aerial devices supplied by Altec, ETI and Versalift, and Masterack interior shelving and ladder racks from Leggett & Platt. “A considerable amount of detail goes into the layout and correct upfitting of these items in service vehicles,” Survant stated. “We have a high volume of demand for field service so it’s essential to have the right tools, equipment and inventory on our trucks at all times.”

Customer Expectations
“It is increasingly challenging to meet customer expectations for time and service requirements,” Survant continued. “Along with fielding reliable vehicles, we need to ensure the fleet is in the right place at all times. While Time Warner Cable’s dispatch and operations management and planning practices have been very successful, enhancements to the installed AVL and GPS systems will continue to help them address that need even more effectively.”

For Time Warner Cable, the second largest provider of video, high-speed data and phone services in the U.S., a field service fleet operation that consistently achieves customer satisfaction goals is critical to success.

For the fleet management team at Time Warner Cable, Survant is quick to point out, reliable vehicles are at the top of the list. “It’s common sense,” he said. “A 4 percent failure rate means the same percentage of our service guarantees are at risk. Using best practices to field the right equipment and maintain it correctly eliminates those issues.”

Streamlining Choices

Written by Seth Skydel on June 11, 2012. Posted in Management.

A valuable resource for utility fleet managers, the industry’s providers of rental and leasing services use their understanding of each fleet’s unique needs and objectives to match the most appropriate financing and acquisition strategies to particular operations.

For most fleets, a balance of ownership, rental and leasing is an effective choice. Utility Equipment Leasing Corporation (UELC) points out that understanding the benefits of those options is an effective way to run a fleet. Ownership is the clear choice for fleet managers, but gaps in fleet portfolios are a reality. Rental units maximize the immediate demand necessary to fill current gaps while leasing can be structured for longer-term, fixed and potentially lower payments that preserve capital for investment in a business and may not impact existing lines of credit. Depending on their structure, lease payments may offer a tax advantage and leasing can also avoid the risk of equipment obsolescence that comes with ownership through upgrade, trade-in and return provisions designed to provide flexibility.

In business since 1967, UELC provides utilities, municipalities, contractors and other fleets with a single source for their equipment rental and leasing needs. UELC has a complete rental fleet to meet daily, weekly, monthly or long-term needs. Late-model equipment in the nationwide rental operation averages 2.5 years old. This equipment is offered at a fixed cost without hidden charges for mileage or hours of use. The all-inclusive rental rate also includes maintenance for hassle-free utilization of the equipment. Customers are only responsible for fuel, lubricants and daily inspections to ensure safe operation.

Lease programs from the company include standard packages or customized solutions for long-term lease options toward the purchase of new or late-model equipment. Through DUECO Inc., a UELC sister company, Terex bucket trucks, digger derricks and cranes can be built to each fleet’s specifications. UELC structures financing programs for the equipment using capital, operating, municipal and split lease solutions.

Other UELC rental options include a rental purchase agreement that gives fleets the option to purchase or return the vehicle at any time during the term of the rental. This enables operations to test equipment prior to purchasing and to leverage the payments already incurred toward the purchase of the vehicle.

To learn more about UELC, visit www.uelc.com.

Empowering Solutions for Utility Fleets
When the cold winter winds whip across the prairie, folks there count on NorthWestern Energy to supply the gas and electricity they need to heat and light their homes. And the folks at this innovative and award-winning utility company count on ARI to help them manage a complex fleet of nearly 1,000 vehicles – from passenger cars and pickups to service vehicles to bucket trucks and digger derricks – ensuring vehicle readiness and reliability while providing up-to-date reporting, visibility, accountability and significant savings.

“We picked ARI because of the services they offered, their software and the way they managed vehicles,” said Ron Anderson, manager of fleet and equipment for NorthWestern Energy. Throughout its expansive service area, customers count on NorthWestern for dependable service – and ARI helps keep NorthWestern’s fleet on the road so the company can maintain its reputation for reliability.

The relationship dates back to 1995, when ARI began providing fueling and maintenance services for a South Dakota utility that NorthWestern later acquired. As NorthWestern grew into the company it is today, its relationship with ARI grew. Today, ARI provides a comprehensive range of fleet services for NorthWestern, including accident management for leased vehicles, licensing and title management, fuel management, renewal management, fleet administration, preventive maintenance and more.

“NorthWestern is a growing company, and we’re always looking for ways to support them, whether by reducing fleet-related costs or by helping make sure their vehicles are always ready for the road,” said Rob Hoysgaard, a utility fleet expert at ARI.

Recognized by Forbes as one of the nation’s 100 most trustworthy companies, and a five-time winner of the utility industry’s prestigious ServiceOne Award, NorthWestern operates in 121,000 square miles spread across Montana, Nebraska and South Dakota. For vehicle maintenance, the company often relies on vendors throughout the area, in towns large and small. In-house mechanics can’t always check up on shops in outlying towns. As a result, it can be difficult to ensure that preventive maintenance is done on schedule and to maintain high quality standards. To address this issue, ARI recently implemented its Garage Management System (GMS) application, customizing it to meet NorthWestern’s needs.

“We took a look at the system and said, ‘What if …?’” said Anderson. ARI responded by streamlining the process of opening and closing work orders, eliminating functionality not essential to NorthWestern’s operation, like scheduling, and making other changes to reflect the way NorthWestern works. ARI customizes all of its technology solutions in this fashion to meet clients’ needs.

A part of ARI’s Integrated Fleet Solution, the Web-based GMS combines maintenance data from internal and external sources for more efficient, accurate, up-to-date reporting and – ultimately – lower operating costs. It feeds cost information into the ARI insights system and tracks parts.

The GMS increases productivity, streamlining the maintenance process by helping the company manage technicians, vehicle preventive maintenance schedules, unscheduled repairs and parts inventories, while consolidating all vendor-in/vendor-out data with other fleet activities.

Using ARI insights, NorthWestern can capture all vehicle activity, including new vehicle delivery, licensing renewal, IFTA/IRP, DOT and ANSI inspections, accident repairs, and used vehicle removal and remarketing. The ARI fuel management program automatically captures fuel transactions and uploads them within 24 hours. All the company’s fleet information is available on the secure ARI portal – vehicles, preventive maintenance fuel costs and more.

“When I open the ARI website, I can take a look at the alerts we’ve established, look at fuel costs on an ongoing or monthly basis. It’s very helpful for my budgeting,” said Anderson. “If someone calls me about maintenance, I can put in the vehicle number and the information is all there – the last service, what was done. When we get ready to sell, if we take the vehicle to a local auction, we can print out a complete record from the day the vehicle came into the system.”
The site is easy to navigate and customize. Most important, NorthWestern can use ARI insights to improve operations, enhance productivity and, ultimately, reduce costs – and that all supports a better bottom line.

ARI is committed to its partners’ success, and it demonstrates that commitment every day. Robb Zavitz, ARI’s Minneapolis-based account manager, is often in touch with NorthWestern. Dave Robinson, the account coordinator, provides a daily single point of contact within ARI to ensure that everything is working smoothly. Jerry Allen, an ARI regional manager, served NorthWestern from 1995 until he retired from ARI in December 2009. That longevity is unusual in fleet management, but typical for ARI. In fact, most of the ARI team has more than 20 years of vocational fleet experience.

Whether it’s handling the paperwork for licensing and titling in every county in the three states where NorthWestern has operations, or providing insight into vehicle specifications, ARI does what it takes.

“If we have a question on specs, we can go to one person at ARI, and it gets taken care of,” said Anderson. Once the company, which has a contract with a vehicle manufacturer, finalizes the specs, ARI handles the ordering and then provides updates on the status of production and delivery, including everyone from the chassis manufacturer to the upfitters of bucket trucks or digger derricks. When it’s time to look at replacements, NorthWestern relies on a unique vehicle replacement analysis model (VRAM) designed to save maintenance dollars and ensure that mission-critical vehicles remain up and running. In addition to age and mileage, VRAM incorporates maintenance costs, model year, criticality and other factors that impact life cycle – all based on data already in the ARI insights system. VRAM then ranks each vehicle in the fleet for replacement priority.

“We can tell you which vehicle is No. 1 for replacement, and which is 956,” Anderson said. A faster, more accurate vehicle replacement model delivers value by helping companies like NorthWestern optimize their assets, lower their cost of ownership and ensure that mission-critical vehicles are available when they need them.

For more information, visit www.arifleet.com.

Expert Advice
Each fleet has unique financing needs, notes PHH Arval, a provider of fleet management services. At the company, consultants work with fleets to tailor lease financing to meet needs while also making sound economic sense. Among the many variables considered are the expected service life of vehicles, current interest rates, and a company’s risk profile and business culture.

PHH offers multiple fleet lease structures to best meet each operation’s requirements. Included are fixed or floating rates, open or closed-end leases, and self-funding or bank plan options.

PHH integrates its experience with information provided by vehicle manufacturers, safety-rating agencies, and its own data to help select and order fleet vehicles appropriate to each set of needs. Online tools make it easy to perform side-by-side comparisons of fleet vehicles, and analyze life-cycle costs based on replacement policies.

PHH also offers a pool of fleet vehicles ready for immediate delivery and an out-of-stock vehicle locator system, which finds vehicles in existing dealer inventories.

For more information, visit www.phharval.com.

Proven Practices

Written by Seth Skydel on March 13, 2012. Posted in Fleet Profiles.

During the 2011 Electric Utility Fleet Managers Conference, fleet managers detailed the successful approaches they’re employing for acquisition, maintenance and parts strategies in their operations.

Baltimore Gas & Electric
An affiliate of Constellation Energy, Baltimore Gas & Electric (BGE) provides electric and gas service in a territory of about 2,400 square miles surrounding the Baltimore metropolitan area of central Maryland. BGE Fleet Services, with 80 employees, including 46 technicians, manages a fleet of more than 1,500 vehicles and 400 pieces of equipment. The operation has a central shop at its headquarters location where all major repairs, new vehicle preparation and maintenance on local units is performed, as well as seven shops located throughout its service territory.

“Our replacement cycle has been based on economic life, the evaluation of units, user input and a review of maintenance records,” said Gill Nichols, supervisor, fleet engineering. “Budgetary and business cycle constraints can limit replacement activity, but our annual replacement plan is developed within current financial constraints and with the concurrence of users.”

BGE, Nichols reported, recently completed a five-year leasing contract. “A finance evaluation proved that leasing was less expensive than buying for BGE’s cost structure,” he said, “so we established a contract with a funding source and a separate services provider.”

BGE Fleet Services, Nichols explained, develops standardized specifications for each vehicle and equipment type in the utility’s operation. “A user-needs review identifies any necessary departure from standard offerings,” he added, “and modifications are controlled through an engineering review and user management approval of costs.”

Alliance agreements with major component suppliers have been established by BGE Fleet Services to provide for lower parts pricing and on-site training sessions. “The agreements cover most chassis, body and aerial components, and equipment types,” Nichols related. “These partnerships also allow us to collaborate with our suppliers on new product development and to serve as testing ground for new technologies.”

Preventive maintenance (PM) on the BGE fleet is usually based on manufacturers’ schedules, although BGE Fleet Services does modify schedules based on mileage, engine hours or fuel usage if those parameters are observed to be out of range. In addition, the fleet’s managers conduct data analysis of vehicles and equipment showing any higher than scheduled usage. In use is AssetWorks FleetAnywhere software. “We’ve been using this system for over 10 years,” Nichols stated. “It provides data on historic cost of repairs, labor hours, fuel usage, ownership costs and parts expenses, which we also use for setting charge-back rates and for benchmarking our operation.”

Maintaining the BGE fleet is a team of PM trainees, PM technicians, master technicians and senior master technicians. “We established these roles so our technicians can move from job to job based on attaining required certifications, meeting established performance standards and job qualifications, and demonstrating the ability to perform required tasks,” Nichols said.

“Our technicians are provided with information about what is required to advance and are given opportunities to advance at their own pace,” Nichols continued. “Manpower utilization in our shops is planned on a monthly basis using estimated repair activity and PM schedules. Shop-to-shop labor transfers are made to manage spikes in workload, vacations and long-term medical absences.”

BGE Fleet Services makes extensive training opportunities available to its technicians. An established program for new hires encompasses seasoned workers as well as high school graduates. The highly structured program teaches shop functions, computer systems, safe work practices, tool and equipment use, and basic elements of maintenance and repair work. Trainees are instructed daily on how to perform PMs and other repairs by working in the fleet’s central shop with a senior master technician.

Manufacturer training sessions are also provided to trainees and all technicians to familiarize them with new models, systems and functions of vehicles and equipment. Additionally, a contracted training program has been developed to provide basic through advanced training in electronics, braking systems, engines, hydraulic systems and other areas.

BGE Fleet Services has also worked with all of its major suppliers to establish warranty repair agreements, enabling the fleet’s technicians to perform repairs on covered items. “We actively manage the warranty recovery process, set annual recovery goals and include this in our bonus performance award program,” Nichols related.

Parts inventories are managed closely at BGE Fleet Services. Established through competitive bidding, contracts are in place for high volume items using specialty suppliers where applicable and larger suppliers for the majority of stocked parts. The fleet’s Operations & Support Unit monitors and manages inventories, orders stock parts, and collaborates with shop personnel to add or delete parts from stock based on usage patterns. The group also assists in ordering specialty or long-lead items.

Successful acquisition, maintenance and parts programs, Nichols pointed out, are the result of finding effective solutions on a consistent basis. “We address short-term issues through teams composed of members from all areas within the department and customers,” he explained.

“We also hold an annual planning conference to develop short- and long-term goals and initiatives for the department,” Nichols concluded. “Prior to the conference, feedback is solicited from all members of the department about improvement ideas or suggestions, and identification of problems or issues that need to be addressed. Department management and leadership use the responses to formulate strategies to improve performance, address issues and develop goals to pursue.”

Progress Energy
Covering a territory that encompasses 34,000 square miles across North Carolina and South Carolina and 20,000 square miles in Florida, Progress Energy serves more than 3 million customers. Its fleet of nearly 3,900 vehicles and equipment is maintained in 26 regional garages by 124 employees, including 88 technicians, along with supervisors, administrators and other support personnel.

The Progress Energy fleet includes 2,500+ light-, medium- and heavy-duty vehicles from a variety of manufacturers. Also in the operation are more than 1,300 pieces of equipment including trailers and off-road excavating equipment.

“We have a $50 million annual operational and maintenance budget,” reported Gary Butler, Progress Energy Carolinas manager of fleet assets and maintenance. “About one-third of that covers vehicle ownership, one-third is for maintenance and the balance is for fuel.”

Each of those cost areas is then the focus of efforts by the fleet’s managers. Equipment utilization is reviewed periodically to ensure proper allocation of the fleet, and vehicles can be moved after a review of job duties, equipment sizing and other considerations.

Current replacement cycles for the Progress Energy fleet are five years or 125,000 miles for light-duty vehicles, seven to eight years for medium-duty models and 11 years for heavy-duty units. Service buckets are usually replaced after four to five years and trailers in the operation last 20 years.

The Progress Energy maintenance operation handles 93 to 95 percent of the fleet’s maintenance and repair needs in-house, including using 20 traveling preventive maintenance trucks. Day and night shifts also complete dielectric testing on aerial units.

Shops are manufacturer-approved warranty repair centers for GM, Ford, Dodge, Freightliner, International, Sterling, Western Star, Altec and Terex. Warranty recovery utilizing the services of a third-party warranty administrator totaled $45,000 in 2010 and was projected to rise to $75,000 to $100,000 in 2011, Butler reported.

About 5 to 7 percent of the Progress Energy fleet’s maintenance and repair work is outsourced, including tire work and alignments, windshield and body repairs, automatic transmission work and hydraulic cylinder rebuilding.

“We occasionally outsource maintenance due to workload and logistics considerations, and when we identify savings opportunities,” Butler related. “Current maintenance intervals have been set based on regulatory and manufacturer requirements. Preventive maintenance intervals can also vary depending on make, model and application while costs can be affected by hourly labor rates for technicians, which are dependent on progression in salary and other variables.

“Our preventive maintenance intervals are also based on oil sampling,” Butler added. “The data indicates we could extend the intervals, but we established a conservative approach and set mileage limits to ensure that extremely excessive mileage does not occur.”

Parts supplier agreements in place at Progress Energy are resulting in cost savings. Costs are kept in check using volume pricing and rebates, centralized billing and reporting and tracking capabilities.

Progress Energy’s fleet managers also pay close attention to fuel costs and use the information to bolster fuel consumption awareness, including idling practices, routes, weight and stop/start operations. Fuel hedging serves as insurance against steep price increases.

An all-around approach, Butler noted, is minimizing rising vehicle costs at Progress Energy. “We have vehicles and equipment, and driver teams that address issues like utilization, maintenance and fuel consumption,” he explained. “Management system and benchmarking data supports our cost reduction initiatives. In the last 10 years, we’ve held costs flat and absorbed labor increases.”

Oklahoma Gas & Electric
Serving 765,000 customers in a 30,000-square-mile service territory in central Oklahoma and western Arkansas, Oklahoma Gas & Electric (OGE) fields a fleet of more than 2,400 pieces of equipment, including 1,300 light-, medium- and heavy-duty vehicles. The fleet is maintained in 11 garages, including one central facility in each of the utility’s larger districts that supports at least one smaller district and/or power plant.

OGE employs 23 mechanics and three garage supervisors as well as eight support personnel in its maintenance operation. Senior mechanics are assigned to one-person shops, mobile service units or as lead technicians in larger facilities. The staff also includes journey and apprentice mechanics as well as interns.

“Many of our garages are one-person operations,” said Herb Kramer, fleet maintenance supervisor. “We move larger jobs to external sources or to our main shop, or we move resources to accomplish the work. We do not want the one mechanic in a facility to be overwhelmed or to create a backlog with a larger time-consuming job. All but three mechanics work from 3 to 11:30 p.m.,” he added, “which means if there is a problem during the day it is repaired that night and the unit is back in service in the morning.

“We handle 75 to 80 percent of the work our fleet requires internally,” Kramer continued, “and we outsource work that we feel we cannot handle as cost effectively as an outside supplier. That may have to do with our available resources, but in all cases we limit the number of suppliers we use.”

At OGE, Kramer reported, all bodywork, windshield repair and virtually all tire work is outsourced. In addition, the fleet outsources 80 percent of light-duty vehicle warranty work, 10 percent of preventive maintenance on those vehicles, and 70 percent of repairs and larger issues found during PMs on light-duty models. Dealers servicing the fleet are required to provide pickup and delivery services.

“We’re very focused on vehicle inspection,” Kramer stated. “Engine oil is sampled at every drain interval and hydraulic oil is tested once per year unless contamination is found. Every time a vehicle is in a shop we try to correct anything we find. We created a checklist so mechanics know what to focus on and we started requiring shop supervisors to check 10 to 20 percent of all work.”

During and between routine PMs, OGE shops are also focusing closely on vehicles and equipment with higher utilization, and those with harder duty cycles. “When we find high-mileage newer vehicles,” Kramer noted, “we move them to areas with lower utilization. That helps us stay on track for replacement cycles and reduces repair costs.”

For parts, OGE is moving from one to three suppliers. “The theory was that we could do a better job of managing costs with one supplier,” Kramer related, “but that made it hard to compare, and having one pipeline increased downtime. To reduce downtime we allowed mechanics to buy locally if it meant they could get the vehicle back in service, and that drove up costs. With our new arrangement we realized a 20 percent reduction in parts costs.”

OGE’s other practices are paying off as well. A proactive approach to maintenance and repairs has reduced downtime and breakdowns, cutting the number of service calls from more than 100 to fewer than 10 per month. Increased uptime, measured as mean time between repairs, has improved.

“That was partially from upgrading equipment and moving high-use vehicles to lower-use areas,” Kramer said. “It’s also a result of better diagnostics and parts availability, as well as keeping mechanics focused on completing a job by giving them the responsibility to manage their own schedules.

“When we started down this path our costs started to rise,” Kramer continued, “because we were fixing things that were broken but never reported. Over time we started seeing our efforts pay off. Today we’ve realized a $700,000 drop in maintenance costs, and a reduction in annual tire expenses from over $950,000 to $550,000.”

Critical to this success, according to Kramer, is meeting with major vendors three or four times per year, and having information on the fleet’s operation and analyzing that data often. OGE also uses the benchmarking services of Utilimarc.

“We measure everything possible and question it regularly,” Kramer stated, “including mean time to repair data, and repair costs for internal and outsourced work. We also evaluate warranty and utilization. Overall, we’re focusing on reducing our annual budget from a variable $11 to $15 million to a lower and steady $9.5 million per year.”

Editor’s Note: The annual Electric Utility Fleet Managers Conference will be held June 3-6, 2012, in Williamsburg, Va. For more information, visit www.eufmc.com.

Ensuring Fleet Readiness

Written by Seth Skydel on March 13, 2012. Posted in Maintenance.

Improving communication and access to information during service events leads to less downtime.

Whether you outsource some or all of your fleet’s maintenance and repair work or handle everything in-house, an efficient and accurate exchange of pertinent information is vital to success. One solution that is steadily growing in use among fleets is the Web-based Decisiv Service Management Platform.

The Decisiv platform was designed to connect fleet managers with internal and external service locations. “The platform pulls together historically separate silos of information and places them within a single Web portal,” explained Dick Hyatt, president of Decisiv. “With the platform, fleet, service location, mobile service and call center personnel can all share information and effectively communicate throughout a service event. The result is the ability to save hours per service event, getting trucks back in service faster.”

The volume of service business handled on the Decisiv platform in the past two years topped 630,000 cases. Continued growth in fleet usage has brought the number of assets from more than 175 fleets loaded onto the platform to more than 150,000.

Decisiv also continues to expand the capabilities of the platform to more readily integrate telematics devices and a growing scope of applications from third-party developers. For example, the platform is enabled to provide real-time alerts and information from telematics devices. Included are location, mileage, engine hours, fault code and other relevant data, which is then used to open service events and initiate requests to service locations. In addition, telematics driven in-context information is used to trigger repair and maintenance operations, and to populate the platform’s date-/time-stamped electronic folder with fault codes and vehicle information.

“Fleet managers are inundated with information from multiple portals, websites and information sources,” said Hyatt. “By seamlessly integrating with third-party and OEM applications, including accessing real-time information from telematics devices, the Decisiv platform provides an in-context service initiation and management solution that greatly simplifies the service management process.”

The Decisiv platform is now in use at more than 500 service locations as MVASIST at Volvo Trucks North America and Mack Trucks dealers, as the WheelTime Customer Service Platform at WheelTime Network Detroit Diesel-Allison distributors, and as the Decisiv Service Management Platform at Freightliner dealers and other facilities. To learn more, visit www.decisivconnect.com.

Facilitating Service Operations
Properly specified, installed and maintained shop lifts can enable technicians to work on vehicles more productively.

The first consideration for fleet managers when choosing vehicle lifts is the type of services a facility performs. Available from several manufacturers are different types of lifts used in truck maintenance facilities.

Another important consideration is whether the lift has received certiﬁcation by the Automotive Lift Institute (ALI). The industry association founded by vehicle lift manufacturers promotes the safe design, construction, installation, operation and maintenance of lifts, including those used to service commercial vehicles.

ALI testing includes veriﬁcation of the structural integrity of a lift’s systems and components, proper function of its controls and load-holding devices, proper lowering speeds and overload protection. ALI has also developed standards covering a lift owner’s responsibilities regarding operation, inspection and maintenance, as well as a standard on the installation and service of vehicle lifts. Visit the ALI website at www.autolift.org for more information.

Lift Choices
There are several different types of vehicle lifts based on design, including:

In-ground lifts that raise the vehicle by its axles and retract when not in use occupy less floor space, ease the movement of vehicles in service areas and provide excellent access to vehicles during service.

Two-post lifts provide easy access to the vehicle’s undercarriage and drivetrain. Featuring two sets of lifting arms attached to two columns used to lift a vehicle at designated points on the frame, two-post lifts are offered in symmetrical designs that are preferred for use on large vehicles.

Four-post lifts in a range of lengths and lifting capacities, and with adjustable runway track widths to accommodate most vehicles, are often among the fastest and simplest to use because no setup is required to drive the vehicle onto the runways and raise it to a comfortable working height. These lifts can also be ﬁtted with rolling jacks to lift the front or rear wheels off the runways.

Parallelogram lifts include surface mount, surface with recessed mount and ﬂush mount designs. Featuring runways that are raised using a parallelogram motion, these lifts can also be fitted with rolling jacks.

Mobile column lifts link four or six portable columns that are rolled to a vehicle and connected using control cables. Highly portable, these lifts are used to turn open space into inspection or service areas.

Pit lifts expand maintenance and repair capabilities of service pits. Types of pit lifts include ﬂoor-running, with wheels so they can be rolled anywhere in the pit, rail-mounted that move along a rail system at the bottom of the pit, and suspended pit lifts that ride on rails installed at the top of the pit.

Placement, Maintenance, Training
Vehicle lift selection and placement should also be part of the shop planning process. Each type and model of lift’s footprint and the turning radius and length of vehicles being serviced in the facility should be considered.

To keep lifts functioning safely and properly, manufacturers advise that fleets follow maintenance and adjustment recommendations. Lubrication is especially important for maintaining lift performance and longevity. Annual inspections and repairs, such as seal replacement or pressure testing, should be performed by qualiﬁed lift service personnel.

It is also essential that technicians operating lifts know how to use them correctly. All lift manufacturers offer training materials for this purpose.

Lift Suppliers

ARI-HETRA (www.ari-hetra.com)
Products: Heavy-duty lifting systems for 48,000- to 320,000-pound loads. Drive-on models include Surface Mounted Scissor Lifts and Flush Mounted Scissor Lifts with platforms wide enough for dual-wheel vehicles.

MOHAWK LIFTS (www.mohwaklifts.com)
Products: Two-post lifts in 26,000- and 30,000-pound capacity models. Four-post lifts ranging in capacity from 19,000 to 75,000 pounds. In-ground lifts in 55,000-, 66,000-, 82,500- and 99,000-pound capacities. Mobile column-style lifts with per column capacity ratings of 12,000 to 40,000 pounds. Parallelogram lifts with capacities from 36,000 to 100,000 pounds and track lengths from 26 to 48 feet, in surface or flush mount designs.

ROTARY LIFT (www.rotarylift.com)
Products: In-ground scissor lift for any medium-duty or heavy-duty vehicle weighing up to 60,000 pounds. Mobile column hydraulic lift with adjustable wheel forks for different wheel sizes. Suspended and floor-running pit lifts. Parallelogram lift systems in capacities up to 100,000 pounds and platform lengths from 26 to 48 feet. Any of these models can now be ordered with a new wash bay package featuring marine-grade paint and stainless steel feet to resist corrosion caused by constant exposure to water, grime and chemicals. Rotary Lift’s wash bay lift also includes an ALI-certified stainless steel control panel.

Jenny Electric Two-Stage, Horizontal-Tank Stationary Air Compressors
Electric two-stage, horizontal-tank stationary air compressors from Jenny Products Inc. displace between 9.1 and 107 CFM at 175 PSI. The 22 belt-driven models in the product line include:

• 2- and 3-HP; 60- and 80-gallon tanks; 9.1 and 13.4 CFM
• 5-, 7.5- and 10-HP; 60- to 120-gallon tanks; 18.3 to 43.6 CFM
• 15-HP; 120- or 240-gallon tanks; 72.4 CFM
• 20-HP; 120- or 240-gallon tanks; 92.6 CFM
• 25-HP; 120- or 240-gallon tanks; 107 CFM

The Jenny compressors feature a heavy-duty, two-stage cast-iron compressor pump; powder-coated, ASME-certified tank; manual tank drain; tank gauge; large canister intake filter with replaceable filter elements; and a pressure-relief safety valve. A large flywheel provides for extra cooling and easier startup, and a directional air shroud also helps reduce pump temperatures.

To help maintain consistent pressure levels, an automatic start/stop control with a pressure unloader is standard on the company’s two-stage series. A constant-run feature can be installed for operations requiring a continuous, heavy flow of compressed air, and a dual-control option is offered. Visit www.jennyproductsinc.com for more.

Resale Value

Written by Seth Skydel on October 24, 2011. Posted in Management.

An important part of any fleet manager’s responsibility is the remarketing of used vehicles. For a growing number of fleets, the highest used values are being realized by turning to auction companies that specialize in the disposal of used utility vehicles and equipment.

In a recent roundtable discussion with Utility Fleet Professional Editor Seth Skydel, representatives of three leading auction companies discussed the trends that are impacting their remarketing choices and success, and the reasons that utility fleet managers should consider auctions as they manage their fleets’ remarketing efforts.

Roundtable Panel
Richard Aldersley, Divisional Manager, U.S. Southwest, Ritchie Bros. Auctioneers (www.rbauction.com)
Armando L. Camarena, President/Owner, US Auctions (www.usauctions.net)
Jake Josko, Vice President, PPL Group LLC (www.pplgroupllc.com)

Please detail industry trends that are impacting used vehicle values and either limiting or enhancing remarketing success.

Camarena: The biggest factor affecting the utility industry in California is the California Air Resources Board (CARB) initiative on emission control standards. This regulatory activity has forced utilities to sell off older units much sooner than anticipated. That’s having a financial impact because fleets would have normally kept these vehicles on the books for 10 years and now they have to replace them several years before they are fully amortized. At the same time, the CARB environmental protection initiatives have been met head-on by utilities, which have taken steps forward in their use of alternative fuel vehicles. In some cases utility companies in California are moving faster than the agency.

Aldersley: CARB emissions standards have dramatically devalued used equipment in the California market. Basically, they have restricted lower tiered-level vehicles from being sold. While these stringent regulations devalue equipment locally, the majority of noncompliant CARB utility fleet vehicles in the California market will leave the state and a good number will also go out of the country. Newer or late model utility fleet vehicles meeting CARB emission standards are more likely to stay in the local market.

Josko: Government regulations can play a large part in secondary remarketability. In the last four years we have seen some great auction prices on used fleet vehicles, as buyers don’t want to incur the EPA tax expense associated with new vehicles. In some instances, we’ve sold 2-year-old vehicles for more than they cost when they were new.

What other issues are impacting utility fleet remarketing efforts?

Aldersley: Smaller utility companies and government agencies are experiencing budgets cut as a result of the economic downturn and are under severe constraints about how much money they can spend on vehicles. As a result, they are looking more closely at the used equipment market as an alternative. These days, more utility companies and government agencies are coming to auctions because they see them as a legitimate place to source the equipment they need.

Josko: The vehicle’s application and configuration play a role. Things like four-wheel drive and air conditioning can have a large effect on remarketing to specific geographical regions. We are also seeing a lot more fleets going toward quad cabs these days as they want to get more employees to job sites with fewer depreciating assets on the books.

Camarena: We’ve seen a downward trend in resale prices since 2005. However, demand for late model Tier 2 trucks has increased prices since the beginning of 2011, and the resale market for utility trucks has improved along with the sale of older alternative fuel vehicles.

When selecting an auction services provider, what should fleets consider about the company’s expertise in specialized vehicles used by utilities?

Josko: I always recommend to prospective clients that they come to a sale, walk around, talk to buyers and sellers to get their opinion of the event, observe the operation for themselves and even call past clients for their experiences. Most importantly, ask the auction company to take the risk out of the market. If the auction company says the equipment has a specific range of value, it should be willing to make a reasonable cash offer or guarantee to earn the business. The auction company needs to be big enough to serve its clients’ needs, but small enough to want to still earn their business.

Camarena: The first consideration to review is how long the auction company has been in business, who is operating the company and whether they have experience with utility fleet vehicles. To effectively auction utility line equipment, you must have personnel who have the experience to sell boom trucks, backhoes, digger derricks, etc. Do your homework before you choose an auction company. Meet the owners and staff, visit the auction site and attend a live auction. We also recommend starting with no more than 10 pieces of mixed equipment to be sure you’ve made the right choice.

Aldersley: Fleets should consider what audience the auction company is targeting. They should also look at the method by which an auction company sells utility vehicles and make sure that prospective buyers are able to inspect the equipment they’re interested in buying. That includes allowing customers to come to the auction yard before and on auction day to inspect, test and compare equipment. We even encourage them to bring along a mechanic.

What benefits do auction companies bring to utility fleets compared to other used vehicle remarketing options?

Camarena: Auction companies are using a variety of remarketing strategies on behalf of utility companies. For example, we’re not just conducting traditional land-based auctions. We also have online capabilities where we can offer equipment across the U.S. This can require sellers to complete accurate condition reports and take pictures and to coordinate with the buyer to deliver the equipment. On our part we have to qualify bidders and ensure they can pay for the vehicles. Overall, buyers are now more comfortable using online sources.

Josko: A live auction, unlike online or retail sales of utility fleet vehicles, is naturally more competitive. An auction will always beat out other methods because it captures the human emotion of competition and the price always goes up, rather than a negotiated sale where the price almost always goes down.

Aldersley: Auction companies provide fleets with easy and convenient bidding options on-site or online. Auction companies can also connect utility fleets to a large and diverse number of buyers worldwide. Where else can you go where you have 2,000 units for sale and know that every item will be sold by the end of the day? For utility fleets there is not a better resource.

GM FleetTrac

Written by UFP Staff on June 6, 2011. Posted in Maintenance.

GM FleetTrac offers fleet managers an opportunity to dramatically simplify the vehicle maintenance process. The new solution from General Motors offers the convenience, flexibility and reduced administrative costs of a system that consolidates vehicle maintenance invoices, documents vehicle repair history and minimizes the repair authorization process.

Available to fleets of all sizes, GM FleetTrac is designed for organizations that schedule vehicle repairs at outside repair shops without the use of a fleet management company. The program also enables fleet drivers to utilize a conveniently located network of GM dealers for vehicle maintenance and repair.

With the GM FleetTrac program, invoice details are delivered through a secure website and can be customized to fit any fleet’s business structure. Through FleetTrac’s consolidated service billing, drivers are also able to eliminate out-of-pocket expenses and account reimbursement processes.

“Our customers have consistently asked us to help simplify their fleet management processes,” said Brian Small, general manager, GM fleet and commercial operations. “GM FleetTrac has been built specifically with the needs of self-managed fleet customers in mind. It will help us offer our customers unsurpassed convenience while simultaneously helping them reduce their administrative workload and costs.”

FleetTrac is offered without enrollment or processing fees and includes flexible client-specified purchase policies and 30-day payment terms. GM FleetTrac agents, located throughout the U.S., are available to assist customers with program or invoice questions. For more information, visit www.gmfleettrac.com.

Tag: Management