Episode 179: Fleet Stress: The Hidden Costs Killing Your Fleet (and How to Find Them)

This is the Fleet Success Show dedicated to helping you and your fleet succeed using the experience of fleet professionals and Hall of Fame fleet legends. The show that explores how the pillars of stakeholder satisfaction, intentional culture, resource efficiency, and risk management all combine to lead your fleet to success. We're glad you're here. Now let's get into the show.

Hi everybody, and welcome back to another episode of the Fleet Success Show. I am Mark Canton, your host. I am joined by my colleague, the Fleet Whisperer himself, Steve Salzgiver. How you doing, Steve?

Doing great.

Welcome back to the show. As always, a little bit about us. My background is in fleet management. I was a fleet manager and transportation director in New York City at Fordham for about 20 years. And then I went into fleet management consulting and worked in every vertical and every segment for some time. I was the senior manager for data analytics over at Mercury Associates before coming over here to RTA. Where I help run and, and, and kind of work with you on consulting. Steve, you're really the lead, and I also, uh, am the head of product. So my guys, uh, do the design work here on the software. That's a little bit about me. Steve, tell us a little bit about you. Give us the, the high-level quick version, if that's even possible with your resume.

I was director for two states, I was vice president for two corporations, and was a city manager of fleet, and I worked in transit. And school bus and federal. I'm in the Hall of Fame, you know.

That's the quickest version I've ever heard. You didn't even— we, we— I feel like we need to name drop some of those places, but that's okay. Most people will know who you are. All right, marketing, we love you. We did what you asked. All right, uh, Steve, this is what I wanted to hit you with quick, uh, today. We're seeing a real uptick, Tony Yankovich, uh, and you are really, um kind of getting pinged a lot. The team, Scott Rood, Griffin Scott, um, you guys are really being, being approached a lot. People have a lot of needs out there today, and that's a good thing for us, but it's also a good thing for the industry. Um, what are you seeing? We're getting all kinds of requests for engagements and engagements. What are the things that are kind of hot right now that people are asking for, uh, our help with? And sure, I'm sure others help with too, right? Um, You know, what are the kinds of tasks and engagements that we're doing right now?

Well, we currently are close to, I think, 16, 17 projects right now in the hopper. And I would say, like most, most times, our most common one is best practice assessments where we go in and we, we look at their operations. It's really more or less a, you know, competitive analysis or a best practice analysis. Whether they're using those things or not. Probably some of the hot ones we're seeing, we've had a couple of facility assessments. So a lot of people are looking at their facilities right now and determining if they're adequate to do the maintenance work that they have. Couple other ones out there that's, they're always hot are right-sizing analyses. Those ones, I think we've got 3 or 4 of those right now that we're working on. And then the other one is replacement analysis. And lately we've had quite a few cost of service analysis. So, you know, it really kind of goes the gamut. So—

See an uptick in staffing too, right? I think I've seen a lot of that.

Yeah, quite a few. Yeah, on staffing analysis, make sure they have the right people. And a lot of that could be, you know, growth of fleets, technology causing more hourly work, could be a shortage of technicians, right? Retention. So a lot of those things, you know, they play into that.

Sure. So let's go through some of those just to make sure there's clarity on, you know, what exactly that means. So I'm just going to do them in the order I remember them. But replacement planning is probably the straightforward one, right? That's helping folks develop a long-term strategic plan for their replacement program so that they, you know, they don't get too far behind or to help them get out from under being too far behind. On their replacement needs, which cause all kinds of issues that we've discussed many times and we'll discuss again. But it's that kind of project, right? Identifying, prioritizing, figuring out funding, figuring out financing, whatever else it may be. You know, how are you going to do replacement over the, over the long term, the short and long term, right? Then you mentioned rightsizing. So that's, you know, figuring out what is the right quantity, and usually we do right typing with it. What is the right amount of assets to have? And also what is the right type of asset to have for the particular role and the work to be done? That one's kind of a, you know, one of the things I like about doing right-sizing projects, Steve, is it's always a win. You know, it's just a matter of how big of a win, you know. And what I mean by that is the cost of those projects, they always pay for themselves. They always more than pay for themselves. I've never seen anything less than double or triple. Pay for themselves. So there's something cool about, about those. Talk to me about facility assessment. So you said, is the facility adequate for its need? Give me, give me some examples of the kinds of things we're checking out and making sure is right in a facility assessment.

Well, usually before we do a facility assessment, or as part of the facility assessment, we do what we call a staffing analysis. And the reason we do that is we You know, based on the size of your staff, you need to have a workspace for them to work in. You know, typically we do it by what we call asset equivalent units, or others may call vehicle equivalent units, maintenance repair factoring, you know, whatever you want to call that. That analysis is done, and then we look at your fleet overall. We know, for example, that basically for one light-duty vehicle you need one bay. If you have a whole bunch of heavy-duty vehicles, you need a bay and a half. And a lot of that comes in, you know, staging, repairs, those things. So if you get— you gotta say you have a heavy-duty into a bay and, and, um, you don't have a part on hand, then now you got to go out and you don't want to take that vehicle out of the bay, per se, if it's coming really soon. So then you have to have another bay to put it in. So those are the things we'd look at. You know, some things on the staffing analysis can be handled or mitigated by having multiple shifts. Some happen because you have to have a bigger operation or a bigger facility. So there's a number of different factors that we look at. Some are, you know, do you have the right equipment, right? Like overhead reels with fluids in them. Do you have lifts? Do you have break areas?

Larger for the equipment you're working on, right? Do you have the right equipment for the nature of the fleet you're working on?

Mechanics spend a little day there, right?

So yeah, so let me go back a step further. So the staffing analysis is you're figuring out for folks how many techs they need, how many parts professionals they need, uh, do they need a fleet management analyst? To your point earlier, uh, do they need to be two shift or one?

How—

what's the most efficient way to accomplish that, you know, uh, etc., etc.? And then from there you look at the facility and because that tells you then things like, all right, this is how many bays I need, this is how large of a part space I need, right? After you've assessed the fleet as part of that, you know, we've, we've come into where you can't get, you know, people will have vehicles in their fleet that they literally can't drive through the bay doors, right? It's too, it's too short or it's not wide enough.

Or they hang out of the bay doors.

Yeah, exactly right. Not enough space between bays, right? You see parts rooms that make no sense where they are relative to the base. So those are the kinds of things when you say the facility assessment, you're looking for that and you're trying to help folks come up with the key information they need for design. Sometimes we'll even help them with an actual PE firm-ready design that they could take to a PE firm and say, all right, go get some architectural drawings and go from there.

Well, a lot of them are fast-growing, fast-growing cities that have run out of room. They're now doing work out on the apron in front of the bays and, you know, things like that.

But it is interesting to hear that, right? Because, you know, we obviously know about technician challenges these days. But so clearly folks are kind of double— they're kind of doubling down and checking, you know, do I have the right count? But the facilities piece is interesting, right? That would indicate usually some level of growth, as you just mentioned, right? The growing cities. So What's the other one there that you mentioned? So you have the right typing, the right sizing, the fleet. Oh, the cost of service. Right. Talk to us. What's the cost of service about? What are you helping folks with there?

Well, typically what we're trying to do there is find out what their— I mean, if you boil it down to the brass tacks, I guess, is we're trying to find out what their fully burdened labor rate is. We're looking to see what they, you know, like if they're managing their operation like a competitive business. Essentially where they're making costs transparent to the users. I mean, the one thing I've always liked about Fleet, and we always talk about that, is it's a very transparent business. If you're charging somebody $500 for an oil change and outside competitors are doing it for $100, your customers are going to see that because they all have cars. They all drive and maintain their cars. So that's kind of what the cost of service is, is really getting down to What does your operation cost your entity? Right. So that's kind of what, you know, I mean, it's more complicated than that, but I mean, that's kind of in a nutshell.

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And you've done a lot of recently of all kinds of other analyses that maybe you haven't done as much in the past, but folks are looking for help with, you know, things around, you know, good practice with applying VMRS codes, assessing standard repair times. We've seen an uptick in that, which is interesting to me. It's not something that traditionally we've seen a lot of. So I'm not sure what I make of that as far as reading the industry. Does that mean folks are are, you know, growing more sophisticated? Is it an efficiency need? You know what, I don't know if you have a take on it, but I do find it interesting that we're doing more and more of those kinds of jobs that maybe we didn't do as many in the past.

Well, I've always said there's— I mean, if you're really looking to become more efficient, there's really two buckets of costs that you probably need to look at the most. One is your assets, which goes along with the right sizing the replacement program. The other one is your people. Those are your two highest costs. If you are short technicians constantly, there's only two things you can do. You can hire more technicians or you can make the ones you have more efficient, right? More productive. And so that could be part of the uptick in VRMS codes and SRTs, standard repair times, you know, to make sure that you're— who you have are doing things efficiently. I mean, there's two different metrics I always say you have to have for technician productivity. One is the direct labor that we always talk about. You know, what percent of time is that technician turning wrenches? A good metric is 65% to 75%. But that doesn't mean that they're actually efficient, right? That means they're turning wrenches. But if you couple that with standard repair times, and they're hitting the standard repair time, like say a preventive maintenance inspection might be an hour. If they're hitting that in an hour and they're doing 75% of their work is all on preventive maintenance and they're doing it all in an hour, now you know they're effective.

Yeah, things are going well. Very good.

Okay.

All right. Now I'm going to kind of flip it on you here. What is it that maybe folks aren't asking for that as you get into these fleets and you're digging into these fleets, programs that you're seeing a need around? Is there anything that's, you know, you're seeing a trend around that, hey, folks need more of this and they're not really asking for it? You know, whether it's training, you know, for their supervisory staff or— and I'm just kind of grasping at things, but is there anything that's kind of, you know, something you're seeing regularly that you would encourage people to ask for some more help on?

Yeah, I got a couple of things to think about. One would be workflow. Process. You know, how does your preventive maintenance workflow look? You know, is it aligned with your preventive maintenance inspection checklist? Are you doing it in an efficient manner? Are you staging parts? Do you have parts kits? I mean, the whole process around efficiency is making sure the technician is on that vehicle from start to finish, because the more they deviate away from the vehicle to go get a part or go over and get a tool or whatever that is, they're losing time. So I always talk about, and that's really a lean management, Takt Time Test, whatever you want, it's really deployment. Just make your processes, remove the non-value-add tasks and the time wasters, things like that. The other thing I see that people I think need more than ever is a more organized shop environment. You know, I see, I go into a lot of shops and I see a lot of, for lack of a better, junk laying on tables. I see cords strewn all around the floors. I see shops without shadow boards, you know, where they have tools hanging on the wall in order, you know, kind of that old 5S thing that Toyota productivity system invented years ago. Making sure those shops are productive, they're organized, they're clean, they're good at good environment for people to be productive. And then the other thing too is just I don't think enough people really focus on policies, procedures, and work instructions. And here we are talking, you know, on some of these podcasts about the perfect storm, loss of institutional knowledge, those kinds of things. People really need to take the time to document what they do.

Yeah, it's— and it's the hardest thing. Nobody wants to do it. It's tedious. It's, you know, uh, or it can be anyway. And everyone feels like they're busy putting out fires and they never kind of step back. It's like something you and Josh talk a lot about, working on the business instead of in the business. Um, but you're right, most folks, if you're lucky, if you have a policy manual when you see them, and if they do, they're 10 years old, 20 years old, uh, haven't been updated in forever. That's very interesting.

Yeah. Another thing too, obviously, is the way they capture data. You know, are they looking at that? Are they— we talked a little bit about VRMS codes, SRTs, making sure they're accurate in the system.

Yeah, that's a great point. So two things that, you know, we're doing over, you know, in our software, Steve, and not— I'm really not trying to plug it, but it's interesting you brought those up. But we have like a, what we call a fleet wiki system. Which enables you to record your policies and procedures right in the soft— in the software so that it's right next to where you're doing that PM, for example. Right. Which I think is a neat tool between samples you can get from us and, you know, whether or not you contract us to write your policies and procedures or one of our competitors, you know, that that's something that you got to do and you get them set up and you put them right in there. And frankly, it's never been easier to do, if I'm being honest, because You know, AI can help a lot, go a long way towards that as long as you have it tied to good resources there. So that's really interesting. There's all kinds of tools out there to help you document. So if you're not doing it, you're missing, you're missing a boat there for sure.

One thing too related to cost of service analysis is make sure you have some teeth in your policies, your processes. I mean, I go back to, I mean, I was looking at an article I wrote in Automotive Fleet back in, I think it was 2004, so almost 20 years ago or over 20 years ago where we had a particular problem getting good odometer readings. I was in the state of Utah then. And so we implemented, we had a chargeback system. We were charging people for the, you know, for what they consumed. And as part of that process, we implemented an errant odometer reading fee. And over the next 12 to 14 months, I saw that fee go from thousands to next to zero because people didn't want to pay that fee. And it really was related to the operator just being lazy. That's, that's the power of a chargeback system. We're consumers. We don't want to pay for things that are— have none, no value, right? So, you know, a lot of people need to think about those kinds of things. A lot of, a lot of, there's always a lot of miscellaneous misuse and abuse of vehicles. Are you charging those agencies for that so you're not, other agencies that aren't misusing or abusing aren't, you know, occurring those costs or incurring those costs? So lots of things you can do.

It's a great point. I think a good cost allocation and chargeback system is probably the single greatest tool that you can deploy for incentivizing good behavior, good stewardship of the fleet assets and other resources, and frankly disincentivizing bad stewardship, right? If used properly, it's a good point. And then by doing that, you'll then lead to a more efficient fleet, which is interesting. Okay. Yeah. So any other thoughts? What are you seeing out there? What do you think, you know, people should be asking more for or Or again, something you're doing a lot of that maybe others might want to hear about and, you know, and think of. You mentioned, you mentioned the policies and procedures. I know we just got engaged on one of those recently, which was kind of nice to see. Those folks kind of need some help.

We actually have about 3 of those right now going on, policies and procedures. We've got another one yesterday. So that's always a good one, you know. And I think the one I really like is the deep dive on policies that we have with one of our clients now. That is, we're not only writing policies for them, but we're actually analyzing them and looking at them to see, because one of their issues is they're not enforceable. So our job will be to help them make it enforceable. Now, ultimately, it does take management action to enforce, but that's where punitive measures come into play, right? You have to give people incentives. You either incent them or you or you penalize them, one or the other. My preference is always to incentivize them, obviously, but you have to have some teeth in those policies. The other thing too that we're seeing are, you know, fleet modernization goes along with our fleet replacement as people are trying to put more alternative fuel vehicles in there, electric vehicles. Sometimes to reduce your carbon footprint, it's not really as many electric vehicles as you think. Sometimes it's just a matter of renewing your fleet, you know, things like that.

So, and well, what's interesting about that too, that I don't think most people get is if you really are struggling with your maintenance program and you're just not making headway, one of the best ways to mitigate those challenges is by a better fleet replacement program. And people struggle to connect that dot.

That's the same thing about not enough technicians. It goes along with that.

Yeah, exactly. There's less work. You need less technicians, right? Yeah, that's interesting. All right, Steve. Well, it's always a pleasure talking with you. With that, we're going to call it a week here, and I'm going to say thanks. Can't wait to have you on next time. Hope you enjoy your weekend. And folks out there listening, thank you. You know, if you have any questions, hit us up at podcast@rtafleet.com. Let us know if you have any questions or if you have ideas for podcasts or topics you'd like for us to talk about. By all means, share those. Thank you for listening. Thank you for participating in our community. We love having you. And yeah, with that, have a great weekend. Go RTA. Take care, Steve.

Thank you.

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