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Complexity of Repairs & Consistency of Practice – Worlds Colliding
by Steve Zerphey, General Manager – Fleet Services
Did you know that the most complex repair procedures lead to the most variation in repair approach? If you were to research and list the repairs in your shop that have the greatest range of repair times, you’ll find that the list contains your most difficult repair procedures. Therefore, driving out that variation can also represent the greatest opportunity for reducing repair times and ultimately repair costs.
Many mechanics struggle with understanding the concepts and inter-workings of the A/C and electrical systems. Therefore, often times instead of performing effective diagnostics, they become “parts changers”. This is especially true with work performed on the A/C system. One of the many problems with this approach is that if the changed part doesn’t fix the problem, the part still remains on the equipment.
With electrical problems that are not properly diagnosed, the outcome can often times equate to drivers leaving the shop and continuing to experience problems leading to repairs made at outside vendors and/or drivers stranded away from the shop and their delivery.
You can help your workforce overcome this dilemma by building Repair Checklists that provide a step-by-step approach to diagnostics and repairs. We have developed and designed A/C checklists that walk mechanics through the entire diagnostic procedure. Furthermore, Standard Operating Procedures (SOP’s) can provide mapping of the component replacement process. Arming your technicians with these tools can help drive out variation, and ultimately cost, from these complex repairs.
Have you found other ways to improve repair quality?
Do you have checklists for procedures other than PM’s?
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We are privileged once again this week to have a member of the Huddle contribute an article. Kirby McLinn, Director of Analytics at KSMTA has submitted the following article relating to Key Metrics. We thank Kirby for his contribution and encourage other Huddle members to submit suggestions or articles for future publications – Steve Zerphey
Metrics Matter: Know Your Numbers to Improve Trucking Profitability
By Kirby McLinn
We are regularly asked to help our clients benchmark their revenues, costs and productivity. Metrics are the building blocks of business planning and profitability, and minor changes in key metrics can have a significant effect on the performance and profitability of any trucking company. The transportation industry has never been more metric driven than it is today; and as a result, access to industry data is becoming more prevalent with new benchmarking endeavors covering all aspects of the business including general financial data, driver recruiting and retention statistics, maintenance and a wealth of operations statistics.
In order to properly use the information available (and to understand your own company’s information) it is important to recognize how key factors are defined and measured. For example, miles, revenue, and trucks, the building blocks of many trucking statistical elements, can each be defined in several different ways.
Mileage-based metrics typically utilize different “miles” depending on the metric. Fuel and many equipment maintenance statistics (tractor maintenance cost per mile, miles per gallon, etc.) are usually presented using odometer, hub or ECM miles. This can be confusing when comparing to fuel and maintenance costs per mile as presented in financial reports which use dispatch miles, and therefore reflect a higher cost per mile, as by definition dispatched miles are less than odometer, hub or ECM miles.
Miles used for billing between two points may be different than miles used to pay the driver between the same two points due to routing or mileage program differences. Understanding these mileage differences is crucial when evaluating or proposing rates to shippers. Historically, the carrier has an understanding of its operating costs and quotes its prices based on the dispatched miles generated in the carrier’s TMS or dispatch system. Shippers may specify the mileage engine (Rand McNalley, PCMiler, etc.) and mileage type (short, practical, etc.) when requesting rates in bids; sometimes shippers provide their own miles. Carriers must understand the variance in the miles used by the shipper and the miles used to generate the carrier’s costs when submitting bids or quotes. Failure to do so may result in under or overpricing the freight; a 3-5% variance between the miles used for calculating operating costs and the miles used for invoicing the customer could possibly mean a 3-5% “discount” given to the customer.
The different types of revenue can also cause confusion when looking at various revenue statistics. Are fuel surcharges or other accessorial charges included in the statistic? When comparing rates among customers or to industry rate indices, fuel surcharges should be included, but when comparing rate trends over a long time period they probably should not.
Truck counts can vary for productivity, driver turnover and other statistics depending on whether the statistic is using total trucks, active trucks, staffed trucks or available trucks and how each of those terms is defined.
The key point is to be aware that there are differences in how various elements used to measure key performance indicators and other statistics are defined. When looking at industry statistics try to find out how the key factors are defined and use similar definitions when comparing your own statistics. This will allow you to more accurately benchmark your activities and results, and to more accurately price your freight.
KSM Transport Advisors provides transportation consulting services to assist fleets improve profitability through gaining efficiencies. Master Fleet and KSMTA have had a long term partnership arrangement allowing us to team up to help fleets in all areas of their operation.
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When it comes to warranty recovery – “Mind your C’s and P’s”
Your ability to successfully recover warranty depends primarily on your ability to tell the OEM “the story” of what got repaired, when and why. There are specific details that they will be looking for to assist them with determining whether the repair met their warranty criteria.
Therefore, you need to promote a process on the shop floor that requires mechanics to provide the information needed to file the claims. They need to provide – Complaint, Cause, Correction, Component and Position. In the course of making the repair, they already know all these factors. It’s simply a matter of having them provide the information in their write-up or in the electronic repair order.
Having this information available at the time the warranty claim is processed will save time and increases your success with warranty recovery. There will be fewer occasions when the person filing warranty will have to track down the technician and retrieve this information. Also, it’s easier for the mechanics to provide these details when the repair process is fresh on their minds.
So, prompt them to remember the 4 C’s and P:
- Complaint – What was wrong with the equipment/component
- Cause – What caused the defect to the equipment/component
- Correction – What specifically was done by the mechanic to rectify the situation
- Component – What component(s) were needed to repair the defect
- Position – If there are multiple places where this component is located, what was the specific position for the component replaced
When it comes to warranty, more information is always better. Coach your mechanics to provide as much detail as possible upon completion of the repair. Increase your odds of receiving the warranty coverage you’ve paid for and deserve.
Are there things you have done in your shop to improve warranty recovery?
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“Place Your Parts Ordering On Automatic”
Establish accurate Min’s and Max’s for your inventory and establish expectations
that your parts personnel use these parameters for re-ordering parts
There are shops that we have visited that do not use the data available in their software system to decide when to order or re-order parts. We have seen shop leaders use a couple different methods for making that determination:
- Knowledge that a part was installed on a piece of equipment
- Observation of parts bins with low stock age levels
- Communication from a technician that a part was consumed
The problem with this approach is that sometimes parts are consumed and none of the above occurs. When this happens, stocking levels for parts can reach low levels and parts could be unavailable when needed for repairs.
Virtually every maintenance software system will have a tool for placing a min and max on all inventoried parts. Sometime the labels are different – safety point, target point, etc. But, at the end of the day, using data on actual parts in inventory, and establishing re-order points for purchases, is the most efficient and cost effective method for managing parts inventories. So, take the guess work out of this area and require your associates to perform automatic re-ordering of parts based on an established min/max system.
The other area for consideration with this process is re-ordering quantities. Ensure that:
- If a discount is available for purchasing a certain quantity of an item that your order meets that quantity requirement
- The number of parts required for the discount can be consumed in a reasonable amount of time
- You use your software system to identify and prompt you for the most cost effective re-order point
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Are there other inventory management techniques you would like us to cover in future articles?
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“Bring definition to your shop’s Pull Standards”
We visit with many shops that do not have properly defined pull (replacement) standards. The difference between pulling a tire at 4/32’s versus 3/32’s can equate to over $12,500 in added cost based on just 500 tire replacements a year. From a cost standpoint, establishing and monitoring technician decisions relating to pull standards is one of the most important tasks performed by shop management. However, it can be difficult for some managers to peer over the shoulder of their techs to ensure compliance with the company’s expectation around removal standards. Therefore, we need to arm them with leadership skills that allow them to perform this task without de-grading or insulting the tech.
Additionally, we need to ensure that we have selected pull standards that fit our business model. We need to publish specific measurements or requirements that need to be met before a component is replaced. Pull Standards for things like brake linings, tires, and air filters are important to ensure mechanics don’t replace them early or arbitrarily. It is not uncommon, when we visit fleets and ask mechanics about when certain components are replaced to receive differing answers. And, often times when left on their own to make these decisions, mechanics will chose to remove components earlier than what is required. This is understandable as it’s their name, and to some extent, their reputation that’s tied to the quality of repairs.
Another step that shop management can undertake is to provide technicians with specific tools for them to use to decide on replacement standards. Producing Go-No go gauges can contribute to consistent standards being applied to decisions to replace certain components. More and more, shop employees rely on “wear bars” on components such as brakes. Even though we see that as an acceptable approach with brake linings, we need to ensure mechanics are armed with knowledge and understanding of component life, performance and company-directed replacement standards.
What process do you use to establish replacement standards?
What tools do you provide to your technicians to assist them with replacement decisions?
What different components do you publish pull standards for?
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