Episode 127: Everything You Need to Know About Fleet Performance

Hey everyone, welcome back for another episode of the Fleet Success Show. My name is Tony Yankovich and I'll be your host today. I'm super excited to have Hall of Famer Steve Salskiver join me today. Steve's a regular contributor to the Fleet Success Show, not just because he works here at RTA with us, but he really is one of the great fleet minds and thought leaders in the industry. Steve's experience managing fleets advising to fleets and sharing his knowledge through podcasts and blogs, webinars and industry conferences and workshops is unmatched. So we're really lucky to have him with us today and we're going to pick his brain for the next 30 minutes or so. So as you may have guessed it by my hat, I'm a huge Kansas City Chiefs fan growing up and living most of my life in the Kansas City area. So after the last big win on Sunday, I was tempted to go rogue on this podcast and then do an entire episode on the Chiefs' road to the Super Bowl and what it's going to take for them to win their third championship in four years. But I do love working here at RTA, so I figured I'd better stick with talking about fleet instead of the Chiefs for the next 35 minutes or so. So with that said, over the last few months, we've done a lot of podcasts and blogs talking about fleet performance. Mostly from an overarching perspective, you know, really looking at things from the 35,000-foot level, we've discussed what fleet performance means, the fundamental elements of fleet performance, what you should be reporting, how you should be reporting that, the frequency of reporting, essentially the what, the whys, and the hows of managing performance and tracking meaningful, meaningful KPIs within your fleet. So today we're gonna take that information and knowledge that we've already shared, and we're gonna go in a little more depth and talk about some specific things that you can do to improve performance in a few critical areas. Now we could probably spend an entire podcast talking about each one of these locations or each one of these areas or topics. But today what we're gonna do is we're gonna hit on the key elements of things that you can put in place in your fleet organization today to that can help you improve performance. So with that, the first question I'm gonna ask Steve is we talk a lot about the importance of conducting regular and thorough PMs or preventive maintenance services and how a solid PM program is really one of the most important areas of any fleet maintenance operation. Steve, in your experience, what are some of the ways that an organization can work to improve PM compliance?

Well, I think the first thing you can do is actually track it. You know, a lot of people try to do it on spreadsheets or on pieces of paper. I think the very first thing is you need to have a robust fleet management information system. If you have a system like that, it will actually produce notifications, alerts, you know, and it'll also give you statistics and reports and things so that you can keep on top of it. So I think that's the very first thing you need to do. There's no, in fact, I don't know any other way to do it unless you have a regular system that gives you that information. Then you have to be vigilant and go and communicate with all your users. Make sure you schedule proactively at a time that's convenient for them. A lot of people criticize me sometimes because I really think sometimes the fleet should be working off-hour shifts, not day shifts when other people are working, so that they can get a handle on the preventative maintenance after hours, you know, when the vehicle's not moving around. But I think that's truly how you improve your PM compliance. And then lastly, what you need to do essentially is track it and graph it. You know, we recently had an engagement with one of our clients where we started out, you know, they had somewhere around 40% PM compliance. After almost a year, we've got that up to almost 80% compliance. And all that happens is just tracking it, graphing it, and showing it and sharing it with the team so that they can see. Everybody wants to improve. Everybody likes to win. You know, you talked about the Kansas City Chiefs. We all want to win, all of us, you know? So that's really the way to do it.

Well, Steve, those are great points. And you touched on something that I think is very important, and you kind of alluded to it, but it's the education process that it that goes along with your PM program. So many people are experienced with maintaining their own vehicles that they don't really understand the concept of what a true PM is in the fleet world. It's so much more than just a fluid and filter change. Can you talk a little bit about how you can educate some of the, you know, whether you're supporting a department or a division or drivers, can you tell them a little bit about the difference between what we consider in the fleet industry 3 FPM versus what you can drive down the street and get, you know, for $49.99.

Well, you and I are both big advocates of preventive maintenance training. And I don't know if you have, but I have conducted and built several training programs around preventive maintenance, you know, throughout my career as a fleet manager and also as a consultant. So I've done some onsite training. I think the most important thing you need to do is build that into your cadence if you're a fleet manager. Everybody needs training. Everybody needs focused, up-to-date training. All that information is generally available through the original manufacturers. You know, they provide owner manuals, things like that. So you can put together a training program. And one thing I like to do after I put together a training program to take people through things like the individual preventive maintenance checklist. Things that you should be checking. Uh, I like to also have a certification program where I, I take all my mechanics and, uh, technicians and certify each and every one of them through a training program and actually give them a certificate that they have been trained in the way of ABC Fleet or whoever you're managing your fleet with. Um, by doing that, it really lends the credence to the program and the importance that you place on preventative maintenance.

I think so, Steve, and that's a great idea. And I really like to see that training even stretch out to the customers that you support. You know, once they understand why we're doing a PM and why the frequency is what it is and what it entails, then I think we get a lot more buy-in from the users. You know, on a lot of our consulting engagements, we meet with customers and we talk to them about their experience with Fleet. And a lot of them were saying, well, you know, they want our vehicle every 3 months and, you know, every 75,000 miles. 500 miles and, you know, we just can't give up the vehicle. You made a great point about doing PMs off hours, which I completely agree with you. But I think also educating them with why are we doing this? We're doing this robust PM program. So to avoid future breakdowns. I mean, really what we're trying to do is catch things before they become issues. So I like your education and your training to expand beyond just the fleet people, but also to the people that are using the vehicles.

You made a good point. One of the things I used to do, well, I've done it several times, is do a short little orientation to each of the customers to tell them exactly those kinds of things. So when you engage with your customers, you let them know the importance of that and really let them know that you're trying to help them. We're not trying to take the vehicle away from you so you can't do your job. We're actually taking the vehicle away from you when it's convenient so that you can actually continue to do your job and not have to worry about breaking down. So that's really what you kind of let them know.

Well, and you mentioned notifications, and, you know, most fleet management information systems will create some type of notifications, whether it be automatic, whether it be based on, you know, intervals that you've set up in the system or however you set that up. But I think it's important also for a follow-up mechanism. You know, we're not going to get 100% PM compliance generally, and there's good reasons for that. You know, this piece of equipment's on the job site and it's going to be there for another 30 days and we can't move it because it's just too important to the job site. So we're going to delay that PM for a while. But for those people who just simply fail to bring their vehicle in for a PM, you know, what are the ways that we can escalate those notifications to maybe eventually ping the right person to, you know, come down on them and say, hey, listen, this is important and we need you to get that in?

You know, I mean, I, I would exhaust every possibility of, you know, contacting the primary contact to make sure they understand the importance of bringing it in. But there is obviously, you could build in escalation processes where you could go to their next level up supervisor. You could go past that, do a skip up to the next supervisor if you can. I mean, at some point in time, somebody has to understand that the longer you delay and the longer you push that preventative maintenance out, the more apt it's going to be to have a catastrophic failure. You know, and worst comes to worst, I've seen some fleet managers actually shut off their fuel access, things like that. You know, that's a little punitive in my mind sometimes, but, you know, whatever it takes to get that vehicle in, you need to be able to do that. Because ultimately when that vehicle fails or you blow up an engine, they're going to come to you first, you know, and you don't want to, you know, you should take responsibility for that if you're a fleet manager. So you need to do everything you can to get that vehicle in on a timely basis.

Absolutely, Steve. You know, one of the things that we've suggested for some clients because they had a real issue with PM compliance was in addition to shutting off the fuel card or maybe as opposed to that is simply charge them. If you have a chargeback rate system in place, we simply suggested charging them for the PM whether they came in and received the service or not because their supervisors who are looking at that budget and looking at those costs on a regular on a regular basis are saying, okay, now we're being charged for this, you know, these services and goods that we're not even consuming. So maybe you better get that vehicle in. So Steve, these are all great ideas and we could really talk about PMs for the next, you know, probably 2 days, but let's go ahead and move on.

Lastly, I've just had a thought about the chargeback system. Everybody should have that. I mean, that's absolutely critical. But I mean, you could have something in there like a missed PM penalty fee.

You know, that's a great idea.

Those are things that you could put in there and start tracking those and give out reports to, you know, upper management and nobody's going to want to call on the carpet for missing a PM.

So, right. Hey, Steve, what a great idea. Yeah. You know, rental car companies do it all the time. They have late fees if you rent a vehicle and you bring it back later than you're supposed to and don't notify them. So a late fee or some type of penalty fee, that's a great idea. In fact, you know, one of the things I usually tell people is when I when I, when we do these things together, or Steve, when you and I are on site meeting with a client, I always learn something new every day from you. So I just learned something new. It's a great idea. It's gonna be on my next recommendation for my next client engagement. So that's fantastic. So the next question I wanted to talk a little bit about with you, Steve, was we know the importance of a PM program. We know it's gonna help limit breakdowns and decrease the number of unscheduled repairs in our fleet. But are there other things that we can do within our fleet organization to increase the mean time between failures?

Well, yeah, I think a couple of the good things you can do obviously is everybody should be required or mandated to do a prevent— a pre-trip and a post-trip inspection of their vehicle. That's an absolute. I know they used to be like when you rented a car, they would make you go through that. They're not so diligent anymore or vigilant about that. And even if you're just a light-duty vehicle, you should still do that. You need to ensure that vehicle is safe for you to operate. And that gives you an opportunity to take 5 to 10 minutes to walk around the vehicle, you know, check for tires that may not have tread on them, listen to the engine to make sure it's not missing or having weird, strange noises to it. And that really gives you an opportunity to catch those issues before they fail. You know, the more you do that and the more you share that information, with your management, fleet management team, the more they can take that information and look at it during the preventive maintenance process.

Absolutely. I think the importance of the pre-trip and post-trip inspection can't be overstated. Obviously for commercial vehicles, you're required to by the Federal Motor Carrier Safety Administration. So they do have a required pre-trip inspection and post-trip, and it's very detailed. I mean, it is not a 2-minute walk around inspection on those commercial vehicles. It's a very detailed and thorough inspection. And I think the importance of expanding those pre-trip and post-trip inspections to not only the federally mandated vehicles, but also to every vehicle in your fleet. Like you mentioned, Steve, when we travel quite a bit and we have rental cars, I mean, there's not one time that I don't do a walk-around inspection and note any major scratches or dings or dents, because when you bring that vehicle back, you will get dinged for that and charged for those things if you don't do your own pre-trip inspection.

Absolutely. That's just a critical conscientious thing to do. I mean, you are taking that vehicle out in the public and it needs to be safe, not only for yourself, but for those that you're driving around.

Right. And, you know, I think, you know, personal stories and personal analogies are always good. And I don't want to throw one of my sons under the bus, but just a couple of weeks ago, you know, he drives his own car to school every day and he's halfway to school in the morning, 2 weeks ago, and he calls me and said, Dad, my tire, my car is pulling strongly to the right. I think there's something wrong with my tire. I said, well, okay, when you get in the lot at school, get out and take a look. And of course he gets to school. Thank goodness school's only about 2 miles from our house. And he pulls in, parks, and the tire is literally almost flat. I mean, there may be a little bit of air in the tire. Thank goodness it didn't damage any of the wheels or rims or anything. But You know, I've even told the kids before you get in your car and drive to school, before you go to the practice or game or whatever you're doing, take a quick walk around, especially in the winter, make sure your tires are inflated properly. And, you know, if he would have just taken the time to walk around the vehicle, he wouldn't have seen that. And we could, you know, got a little air compressor in the garage. We could have filled up the tire and wouldn't have been an issue. And so I asked him, I said, you know, you have an onboard, what is it, TPS system. That identifies you when your tires are low. And I said, Brad, I turn your car on, it's on. Why didn't you tell someone? Why didn't you stop and go get air? He goes, eh, it's always on. I'm like, thanks a lot, dude. I said, let us know and let us, you know, fix that before it becomes a real issue. So we were lucky to get it taken care of. But, you know, even for those that just have vehicles at home, I think, you know, a walk around inspection is pretty important.

That's a really good point. A lot of people see those warning lights and alerts on the dash and they don't even pay attention to them anymore, you know, and it's, uh, that's a good time to remind people those are there for a purpose.

Absolutely. I couldn't agree on— couldn't agree more. Well, Steve, moving on to the next question. Um, so maybe someday, not in the foreseeable future I don't think, and probably not while we're still working, but we will have autonomous vehicles that maybe never require M&R, or that the maintenance repair are done by robots, uh, which You know, hey, if we rely on Elon Musk, that'll probably happen sooner rather than later. But until that time comes, what are some of the things that a fleet can do to at least minimize downtime and reduce the time that a vehicle or piece of equipment needs to stay in the shop for whether it's receiving a PM service or maintenance or repair?

Well, again, I go back to the very first, the very first thing you should do is track it. You know, you can't measure what you can't see, or how's that going? So you've got to be able to track it. You know, I mean, we recently did another engagement where we were tracking vehicle availability, you know, and just by tracking vehicle availability, downtime, you know, hours in a shop. I mean, most things that somewhere around 80 to 90% of your repairs should be out of that shop within 24 hours. You know, about 20% of your repairs may be longer than 48 hours. And then somewhere around, you know, 5-10% of your repairs might be longer than 72 hours. But you should have metrics in place that you can track those type of measurements so that you have a good handle on that. And the more you track and the more you have data, the more you can dig into it if you have a problem in your operation. So, I mean, we were able to take availability, for example, just by tracking it on a daily basis from 70 to almost 90%, 95%. You know, that's, it's just simply by making it visual, making everybody see it every day, you know, and no one, once you get up to 95%, no one wants to see a slip back to 90, you know, so it just keeps that present in mind. And it's, that's the best thing you can do is simply just track that information. Now, the other thing you can do too is have a shop that's fully equipped. You know, with the right tools, the right diagnostics equipment, the right trained mechanics and technicians, you know, the right equipment, a good environment that's clean and safe, all those things add to minimize downtime.

Well, Steve, that brings us up to another kind of a sub-element of the same question. And, you know, you really hit on it. And that's what are we going to do in our own shop versus what are we going to have commercial vendors do? You know, we talk a lot about specialization and you know, more often than not, your shop, whether it's a trucking shop or, you know, a refuse truck shop or just a, you know, maybe a government fleet operation, you're probably not gonna do much body work anymore. You're probably not gonna do, be straightening any frames. You're probably not gonna be doing a ton of upfitting and probably aren't gonna be doing large component rebuilds. But, you know, just about every time you send your vehicle out, if you have an in-house shop and send it to a vendor for the specialty repair or because you just don't have the capacity in your shop, you know, this week or whatever the reason may be, that takes time. That, that's gonna extend your downtime for that asset more than likely.

Yep. I agree. You should hold your vendors accountable to the same standards you hold your mechanics to internally. I mean, if you inspect your mechanics, do a quality control inspection or QCI, we call it in the business, you should be doing that periodically with your maintenance vendors. You know, just set up a time to go on site, walk through with their mechanics or with their shop foreman, and let them know what you expect. You kind of, it's that kind of that thing, you know, inspect what you expect, kind of a, you know, and if you let them know that, you know, it's important, you're doing the work for us, we expect you to do it this way, you know, and, you know, again, build in punitive things or whatever you need to do, the processes, procedures. Make them use your inspection sheet that you have. You know, whatever it takes, they need to be doing the same thing to mirror that for you because ultimately they're your mechanic and you're responsible for them.

You're so right, Steve. You know, and to touch on what you said earlier, you know, we really can't define our performance unless we're keeping score. I mean, you know, the Chiefs and the Ravens, they kept score last week to determine who was gonna, whose performance was good enough to go on to the next game. And I think your shop needs to do the same thing. Now, you know, most of the organizations that we work with, not all, but most, are not a for-profit organization. So they're not looking to make money on all of this, these services and repairs. So we're not recommending typically to use, you know, the flat rate times or standard repair times. But I do think it's important that at least we track that information and we report on it because, you know, if we're taking 2 or 3 times as long to do a brake job as we should be on a specific class of vehicle, then maybe we have an issue Maybe we have, you know, a training issue with a specific technician. Maybe we just have people that don't care and they're not, you know, in a hurry because they don't see the relevance of that. So I think it is important to, like you said, let's track this stuff, let's measure it, let's manage it, let's post it, let's make everyone aware of it. Good point.

I think standard repair times are critical in a shop. You gotta have that. You also need to track direct labor, you know, how much time you're spending on your mechanic is turning a wrench, for example, that's critical. Because if your mechanics are only turning wrenches less than 50% of the time, maybe you don't need a mechanic. Maybe you need a helper. You know, you need to use those metrics to drive the right activity and behavior in your shop.

Well, exactly. And the other thing that I like to see is, you know, a lot of the work that we do in shops is what I call deferred maintenance, deferred repairs. You know, yeah, I have this issue, but it's not a safety issue. It's not going to it's, you know, hinder me from doing my regular, you know, operation. But you know what, next time it's in the shop or next time I have a break or a rainy day, I really would like to get this fixed. So some of that deferred maintenance stuff, you know, if we can schedule it in advance, then the shop knows about it and then they can have the parts available. You know, a lot of people are going to just-in-time parts where they're not ordering the parts until the need comes because they don't want to carry the inventory on the shelf. They don't want to carry the money on the books. So they're doing the just-in-time thing, which is great in most aspects, but if that's gonna delay the repair of the, of the, of the asset, then we really need to rethink some of that.

I agree.

Awesome. Well, let's talk a little bit, Steve, about how the maintenance and repair effort is correlated to the age of the assets in your fleet. I think we all understand or have heard about or have seen the economic theory of vehicle replacement, or at at least seen the illustrations and the graphs that show the impact age has on both the cost of the asset from the CapEx side as well as from the operating side. So I think we're on video, but, you know, the capital cost of the vehicle is highest at the point when you first acquire it. And then over time, the capital or the value of that asset decreases until it finally kind of flattens out when you get towards the end of the useful life of that asset. And at the same time, the operating costs, so the cost of fueling the cost of maintenance repair starts off very low and then increases over time. Now, one of the things that, that we have to remind our fleets that we work with is that that optimum replacement point in time, whether it be at 6 years or whether it be at 12 years for whatever asset it is, it's going to be different for every asset. And fundamentally, the, the value of that asset decreases over time, meaning that the fuel and maintenance costs will increase at the same time. So essentially a younger fleet is going to be cheaper to own and operate. But how do we know what that point is? How do we know when we should replace a specific asset or a class of assets?

Well, again, I think you need to track it. I mean, you know, it's, if you, those of us in the fleet business, we see the maintenance curve versus the capital curve, you know, and where those two curves meet, based on lifecycle cost, that's where we typically start to get an idea where to replace it. I mean, the curve actually flattens out a little bit. So you've got a number of years there, 2 to 3 years where you can capital or you can actually replace it. But again, that, that comes back to that question we talked about earlier. You got to have the data, you know, so you got to track all your maintenance costs. You got to track all your capital cost depreciation, residual values, all those things that lead into that formula. And it's, it's always been interesting to me. I mean, I, I've seen fleets that are hardly used when it comes to utilization and those that are used quite a bit. And they usually come out around the same years when it comes to replacement, which is really a weird dynamic. I've never been able to figure out, or at least it doesn't make sense to me, but I've seen it. And so you need to be able to track that. So, because you always have these people out there that say, oh, we hardly put any miles on our fleet. They know We don't need to replace them. Well, I can tell you looking at the data that that's not correct because I've seen it both ways where underutilized vehicles, and you know, maybe those are things like environment, weather, driver behavior, you know, you know, just things that are not related to miles that are causing those issues.

Great point. And I think really when we look at fleet renewal, we really need to look at it in a couple of different ways. I think we need to look at it from the strategic perspective. You know, if we have a fleet fleet of a couple hundred vehicles or a couple thousand vehicles, I think you really need to know, you know, whether it be a 10-year, 15-year, or even a 20-year planning horizon, how much money do we expect to replace every year in vehicle replacements? You know, the folks that are managing the purse strings and the budgets, they need to know. We can't just blindside them and say, hey, we need $450,000 this year to replace these 10 vehicles. You know, it's always better to have a plan, have that identified well in advance so people people can start planning on that. But I think the other thing that needs to be tied into those fleet renewal plans is the tactical decision-making. You know, just because this vehicle is scheduled to be replaced at 8 years, maybe we have a little bit lower utilization, maybe we have a very conscientious driver that takes care of the vehicle, maybe this vehicle for some reason is in great condition, very little maintenance repair on it. But at the same time, you might have that same a vehicle in that same class being scheduled for replacement, you know, in 8 years. But at year 6, that vehicle's in the shop once a month. There's an issue with it. Now, I know we don't have as many quote unquote lemons anymore, but there are still vehicles that should be, you know, taken out of the fleet sooner rather than later. And what kind of factors do you look at, Steve, when you make those annual tactical decisions on what vehicles to replace?

Well, I think the first thing you do is you take a look at their maintenance cycle and, you know, I mean, you look at that graph and see where they're at. But typically maintenance costs and downtime are those two things that you look at. For example, if it's down a lot and it's out of service a lot and you have a number of high-cost maintenance items on that vehicle, that's a good time to look at it. So you have to have some kind of a priority process that you go through. So at the end of the year, you take a look at all your vehicles that you have scheduled for replacement. Or all of your vehicles in general. You can actually look at those that may not be scheduled just to make sure that you, you have them on the list and in front of you. Because I think sometimes, like to your point, they may be prematurely wearing out or prematurely breaking down. So you want to have a way to prioritize those vehicles. You know, one of the things that I was thinking about, you know, we talked about chargeback systems a while back. We, you and I know, we see people that have chargeback systems at $45 an hour in their shop. Shop, you know, or that's how much they charge for the mechanic. Well, if you continually charge that low rate, your vehicle's never gonna come up for replacement for a long time because the going rate now is like $200 an hour, right? So you gotta make sure you have your charge back at the rate so your maintenance costs are reflected accurately in your operation.

So true, Steve. You know, a lot of times we'll do formal, you know, lifecycle analysis or optimum replacement cycle analysis. And part of the calculation is your maintenance and repair repair costs? Well, it's not only parts, but it's also that labor. And if your labor rate's wrong, that's going to throw off that optimum replacement cycle recommendation. So instead of replacing something at 8 years when you should be, that the math is going to tell you to replace it— oh no, you can keep it for 18 years. And we've actually seen that. We've seen organizations that have argued that no, no, no, we should be keeping this, you know, uh, 3/4-ton pickup truck 18 to 22 years because that's what the math says. And then we, we dig into calculation and say, well, yeah, at a $50 an hour labor rate, sure, that, that's what it's gonna come out to. But when we fully calculate your fully burdened labor rate and it's $185 an hour, now you can see the impact that has on the calculation. And guess what? You know, our 8 to 10 year window is probably a lot more accurate than your, you know, 18 to 22 year window for replacement.

And it is funny, a lot of fleet managers think a lower labor rate is favorable to them, you know, where they actually shoot themselves in the foot because they end up sending a message to, to management. So maybe they're trying not to get outsourced or whatever it is, I don't know. But they end up sending a message to management that our mechanics do this for next to nothing. We should always do internal labor. And that inevitably keeps the vehicles longer, which is a detriment to them in the end.

Steve, and I'm sure you have the same story over and over again, but you know, sometimes we go in and we, we, I, we do that. We look at their chargeback rate structures and what What's your, what's your labor, you know, shop labor rate? And they'll say, oh, it's, you know, $62 an hour. And then when we dig into it, okay, how did you get to this number? Well, we did a survey. We called all the shops around us, you know, whether the government shops, the shops down the road, you know, Bob's Repair Shop, and we saw what they were all charging and we wanted to be the lowest. So we set ours lower than anybody else's. And it's like, okay, but now we're not looking at the data correctly. So it's, you know, we get to see and laugh We've had a lot of funny things in the fleet industry, but you know, that's why it's important, like you said, Steve, you know, and if your labor rate's higher than everybody else's, maybe we need to look at something. Why? Why is that? And we can use a chargeback rate structure and model those costs and identify why is it. Maybe it's our indirect costs, maybe our costs from, you know, that we are charged to support everybody else, whether it be payroll and HR and the legal team and, you know, the camp, you know, maintaining the vehicle or the, buildings on the campus. Maybe those are really high for our organization. And, you know, generally indirect costs should be somewhere between 10% and 15%. Typically, you know, if your indirect costs are somewhere in the 25% to 35%, then we know, hey, our labor costs may not be wrong. It's those indirect costs that are impacting our labor rates.

Well, you know, I've seen that. Some of the clients that we've been out on site with, I've seen one where fleets an internal service fund, and so they end up throwing all the indirect costs into the fleet. You know, I've seen one fleet where they had like 20, 30% just in IT expenses, which is outrageous, you know, and that was because they were an internal service fund and the city felt like they could dump all that in there for the fleet, which affected their rate, which made them non-competitive to the outside world. You know, so you got to really look at that. And again, it comes back to everything we've talked about on this call today. Or this podcast today, and it's you gotta track things. You gotta track all these measurements. You gotta track all this data. If you're too high on your labor rate, if the going rate out externally to you is $185 and you're at $200, then you need to know that because there's things you can do to cut that labor rate down. You know, you can do a lot of things. It could be your mechanics are taking too long. It could be you aren't staging your PM parts. It could be you're not, optimizing your processes, you know, using lean and Six Sigma processes, right? It could be anything. And if you don't have that data, you can't drill into the actual root cause.

I wish more people understood that, Steve. You know, it's just because our parts markup or our labor rate's higher than what we would want or the industry standard or what our peers are doing, don't be embarrassed. I, you know, embrace that number and let's find out why. You know, like you said, maybe, you know, maybe there's costs in there that we shouldn't be paying for. Maybe we have a training issue. Maybe we have an efficiency issue. You know, I remember a couple studies you've done where you've optimized their PM processes and simply by moving and restaging the equipment in that PM maintenance bay and having the parts available through parts kits and having the equipment available and having the tools necessary and eliminating technician I mean, literally steps that they are taking during the process, that can really have a huge impact on your efficiency.

Well, I've always shared the one I've did in a couple of fleets. I've done it twice. But one, we actually had a guy doing an 8-hour PM that we got down to 2 hours. I mean, that's like a 300% to 400% improvement. And all it is is just optimizing the process. It's that simple.

Exactly. It's crazy, crazy stuff, but it's great stuff, Steve. You know, You know, we have a few more minutes, so we might as well hit on this next one. Obviously, the cost of fuel has a significant impact on fleet costs. What can we do as a fleet manager to control the cost of fuel?

Well, a couple of things. I'm going to be like a broken record. You got to track it. You got to have the data in front of you, you know, and be able to track all the gallons and all the frequencies of use and how however many times they fill up that vehicle. Once you have all that data in place, then you need to be able to look at things like utilization, miles per gallon, cost per mile, things like that on where your fuel is at, you know? And then that lets you drill. If you've got somebody, for example, if you've got a class of vehicles like, oh, let's say like an SUV class, and the average miles per gallon is somewhere around 18 miles a gallon, a gallon. Just throw a number out there. But you got a couple of people out there that are somewhere around 5 miles a gallon. You want to know that because there's something going on. You got to get to the root cause of why that's happening. You know, is it the driver with a lead foot? Is it a guy putting in the wrong type of fuel? Is the guy fueling at the wrong place at the high cost? Is it somebody stealing fuel? Is there fraud involved? Is there misuse involved? So you need to know all those —things. That's why you gotta track that data. And if you track that data accurately, you'll be able to minimize your fuel costs.

Right. And, and I think, you know, we talked about fleet renewal. You know, you're, the, the newer vehicles today have much better fuel efficiency. So just by renewing your vehicles, you're gonna, you're gonna improve your, your fuel efficiency and lower your fuel costs. So I think that's one thing. I think another thing that, that a lot of people don't necessarily think about is right typing your vehicle. You know, if, Just because you had a 3/4-ton pickup truck used in this application for the last, you know, 5, 10 years doesn't mean that's the appropriate type of vehicle anymore. Today, maybe that half-ton pickup truck is just as capable, has just the same payload requirements and capacity as the 3/4-ton truck 10 years ago did, and you're gonna get better fuel mileage. So I think there's a lot of things that people can look at when they are looking at the type of vehicle for the mission that they're using it for.

It's a really good point. You and I have seen it where somebody replaces a vehicle and it's, say it's a 1-ton truck and then code enforcement needs a vehicle where they could use a golf cart and then they end up with a 1-ton truck because it was available. You know, all those things add to higher fuel costs. So you need to be strategic and tactical in the way you do this. Right, right.

You know, and I think the other thing that, again, it's not going to save you a bunch of money today. Today, but it's one of those things just to keep in mind. But, you know, for every 100 pounds that you remove from your vehicle, your fuel efficiency increases by 1 to 2%. And again, not a whole lot if we're just removing 100 pounds, but, you know, if you have some of these work trucks that you have every possible piece of equipment on it just in case, man, you're, you're really impacting your fuel efficiency in that vehicle.

And not to overlook the— going back to your original, uh, story a little earlier, tire pressure is a you can save somewhere between, you know, 5% to 8% just having the right tire pressure in your vehicle at all times. Yeah.

Will you tell my son that? Well, good. Steve, this is great stuff as always. You know, we're running out of time for this episode of the Fleet Success Show. So we'll go ahead and wrap it up. But Steve, another big thank you for sharing your thoughts with us today. I learn from you every day. Hopefully others that are listening and joining us on this podcast are learning and listening to what you have seen out in the real world. I mean, your experience is real-world experience, not just textbook theory, things that you've learned in a book, but you've actually experienced this being a fleet manager on the ground dealing with these issues on a day-to-day basis. So really appreciate your continued contribution to the show. Show. Um, for those that are listening, if you have any comments on this episode or any suggestions for topics for future episodes, please send us a note at podcast@rtafleet.com. Feel free to share this podcast with your friends, your staff, others in the fleet industry. Our goal here at RTA is to help fleets succeed, and we hope that these regular podcasts will help you succeed in your fleet operation. With that, we'll sign off for today and wish everyone have a Great week. Thank you.

Great success.