Episode 184: Fleet Math Is Sexy (And It Might Just Save Your Job)

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We're glad you're here. Now let's get into the show. All right, welcome back for another episode of the Fleet Success Show with your hosts, Josh Turley and Mark Canton.

How you doing, Josh? Good.

For those who are joining us for the first time, I'm Josh Turley, the CEO over at RTA Fleet, and we have a fleet management system that we've been writing for over 45 years.

So cool.

So I've been the CEO for 20 years, and my big focus, the thing I'm most passionate about, is actually leadership development.

Yep.

Which we just had an amazing week this week. We'll talk about that on another episode. But for our listeners who is first time listening for DeMar Canton, what's the 20-second intro?

Head of product and consultant here at RTA. I've been in the fleet industry for nearly 30 years, ran a fleet and transportation department in New York City, went on to be a consultant before landing here.

So today, I know a couple weeks ago we talked about what do you do, you know, somebody comes in and says, hey, we got to cut $2 million. What do you do if we do— we've got to totally change our staffing level, or they try to tell you we don't need this technician, right? Because that's usually the first place they want to cut. Yeah, is in technician salaries, because labor is expensive, right? How do you know that you have the right number of techs? How do you know how many you'll need in the future? You know, if things change, what's the process you go through to make sure that your staffing levels are appropriate and that you can justify them?

So key is always good data.

And so, God willing, always comes back to that. Yeah.

God willing, you have a decent data management plan and you're executing it properly, which means you're recording your labor hours. Ideally, you're also recording your indirect labor hours, right? What I mean, the stuff we're billing to work order and/or not, right? What are my techs doing? If you're doing that, then really you have a— you have everything you need to justify how many techs you have. So you can calculate how many hours a tech should be able to bill to work order, right? You know how many hours you pay them. Usually it's $2,080 for a 40-hour work week. And, you know, maybe they're guaranteed overtime or there's some standard amount of overtime that they always seem to get. So you can include that in there if you like. And then you subtract out, subtract out of that, you know, PTO, sick days, those sorts of things, vacation, as well as any training. You usually have mandatory trainings. Hopefully you have not only the soft skills that HR is requesting, but also some technical training. Real quick benchmark is about 40 hours you want to get of technical training each year for your techs. The point is, is you can subtract all that out and you can come up with and you can figure out, all right, they need about this much time to clean up their bay. And what are those indirect things? Yeah, you know, maybe, maybe your organization has paid breaks versus unpaid breaks, right? So you have to calculate that. But the bottom line is, is you can figure out how many hours you should be able to expect them to build to work order. And you can use that for a whole bunch of things. But in this scenario, if you know how much labor you've been putting into maintaining your fleet over the last several years, right, you can, you can take what a tech should be able to do, take the top number in the numerator and divide it by the denominator. And that's how many techs you need, right?

Yeah.

So at a high level, that works extremely, extremely well. And it's empirical. It's very difficult for finance or for anyone else to argue against it. The problem that I see most fleets run into is when they don't trust the numerator all that much, right? And that happens for a multitude of reasons, you know, whether it be because their techs are off, you know, delivering mail or, or welding fences for, you know, public works or something like that. You see all kinds of reasons. Maybe it's a new system. Maybe you just haven't had the discipline around entering that. Maybe you're not using, you know, like our paperless shop where, you know, I time in, I hit a stopwatch, essentially I start the work, I end the work. And so I got really strong data. You know, some folks are writing it in on a piece of paper, leaving it on a desk, and then it's getting in. Maybe it's fat-fingered, maybe it's hard to read the handwriting. So there's a whole multitude of reasons of why people tend to suggest they have bad data, in which case you can, you can kind of run into some trouble there. The, you know, the method we've talked about in the past, you know, is looking at something like AEUs, asset equivalent units, or you'll hear in the industry VEUs, vehicle equivalent units. You'll hear maybe MRUs, maintenance required units. I think it's the R. Anyway, you get the idea. And what you're trying to do is establish how much labor time is needed by class of vehicle. Right. And so typically a sedan is going to be on average If you, if you have an average age of 5 years in your sedan class, you're probably talking about 8 hours a year, right? The 1-year ones are 2 hours. The 10-year ones are on the higher end. So now you know, okay, I have my VEU is 8 hours or in our case, the most common asset in our system across all of our customers is a half-ton truck. And we found that that's about 11.3 hours per AEU. Okay, so here's what you can do if you don't trust your data. You can, you can verify it. Good practice would be to kind of match that up against the ones that you do have good data for. But what you do is you assign an AEU value to each of those assets based on their relative amount of work, right? Like a fire truck is going to be big, it's going to be 5 to 8 AEU, you know, whereas something like, let's say, a minivan, it might be the exact same thing as your sedan. And, and so you correlate it accordingly. If you do that with all your classes and, and I'm skipping a step here because it does require you have a good classification system. If you're bundling every truck you have into a single class, this is kind of out the window.

Or if you're getting too granular with every single class.

That's a very good point, right?

It's going to be harder because you're not going to have enough data.

Correct. Correct. To your point, right? The data we have shows overwhelmingly there's no difference between a compact, a subcompact, a sedan, or a coupe, or even a wagon sedan, or even these days with the crossover SUVs. Yeah, there's just not much difference. So that's a great point, you know, categorizing those in a good way. You know, if there's a—

you get a statistically sample, right? Exactly. Significant sample size.

Exactly right.

That 5 times faster.

Yeah. If you're— if you have some one-off assets, you might have to kind of put them aside for now. Right. And come back to them and maybe compare them to reasonably similar assets and say, okay, we're going to assume you're about the same. But anyway, once you've done that and you say, okay, well, if it's 8 hours for a sedan and 11 hours for a half-ton truck and so forth and so on, You can essentially take the amount of assets you have in each one of those classes and multiply them out by the labor hour you assigned for each AU. And now you have a fairly decent estimate, you know, of what the amount of labor should be required to maintain and repair that fleet. Are there some other assumptions in there? Yes. Okay. In-house shops, generally speaking, and again, there's always nuance, but generally speaking, in-house shops in North America will outsource between 10% and 15% of their work. Oh, okay. It's very possible that you've been short 2 mechanics for an extended period and you find that you've been outsourcing 25% of your work or more. You have to account for that in the math. Maybe you're in Alaska and you're in a very remote location and you don't outsource anything because there's nobody to outsource it to, right? Again, you can account for that. You should see much higher labor amounts per truck. Nonetheless, those hours still are indicators of how many mechanics that you need, right? So this works very well. It's, it's consistent. We have found it to, to really work very well for fleets of really of all types, from government, local government to very large corporate. You know, it's a fairly applicable thing. What changes is the amount of hours you can expect from the tech. That's where you'll see some variations depending on some of those industries. So So I think that works well. And I think that that's kind of the first step, right? I think you should— you probably can do most of this yourself. If you can't, again, as we always talk about, find the consultant. Sometimes you're just putting out fires and you just need somebody to go off and do a one-off project for you. It's a really good job for a consultant to be able to do for you. And if, if they have experience, it should be fairly straightforward. It should be an easy win for you to at least put that in front of leadership. Now, the other piece we run into is, well, okay, I find that I need 10 techs and I only have 8. You know, now what do I do? And I can't get those other two approved. Or to be honest with you, a very common example is I don't have enough bays. I can't fit 10 techs in here.

Right. Where are they going to work? How they, you know.

Yeah. Right. So obviously there's a few options on that last piece. Maybe you're creating new shifts so that they can share bays. You don't really want sharing bays in the same shift. And ideally you don't share bays across shifts either.

Yeah. Unless there's enough gap. Right. But if they're, because otherwise they got to overlay and yeah. Yeah.

You want to avoid it, but I would rather the latter. You know, it's a workaround that people have put into place that can work, if that makes sense.

Yeah, I've seen people even go so far as to like set up a pop-up.

Yes.

Outside, right? They'll build like a little temporary awning structure and that becomes another bay.

Yes.

Which has its own issues, especially if you're in a hot desert climate or a cold winter climate.

Correct.

You're gonna have to run into those problems, but it's at least a temporary solution that you can kind of get through.

Right, and what you can do is designate certain kinds of jobs in there. Yeah, that makes all the sense in the world. And again, depending on how your shop is set up, you know, you may, you may be well set up for the tip we're about to give, which is, you know, some folks have PM bays, they have welding bays. In other words, they have job-specific bays or asset-specific bays, which is great. And so that I would say is the next thing to look at. What we often find with fleets is when we, when we go to that next layer is, all right, I got 6 heavy-duty technicians and 2 PMs. And nothing in the middle, right? And then you find out, well, half the work they're doing is running to a shop, you know, or running to get parts or something like that. The point I'm getting at is look at— take your VMRS codes, right? And look at the kind of work that you're doing closely and determine, you know, what kind of tech do I really need for that type of work? You can go a step deeper into when am I doing that type of work? Right, right. And so instead of having maybe 10 techs of the exact same type and training and background and certification requirements, you might want to— and I know most folks don't actually have that literally, but you might want to divvy that up. You can pay a PM tech a lot less money, you know. So you might, you know, and hopefully 80% of your work is PMs, right? 70, 80. So, so getting a PM tech in there that maybe just got out of a dealership, or even you can teach, if we're being honest, you can, you can train a PM tech, right? So get them in there and get most of that work done. And, you know, that might have to change some of your logistics around, do I do my PM at the same time that I'm doing my brake job? Maybe, maybe not, right? But, you know, that's definitely something you can tackle, right? And what we find there is just like we talk about with rightsizing the assets, right? A lot of people hear that and they assume we mean remove vehicles, right? And yeah, sometimes it does mean remove vehicles, but we often find a lot of money by changing the mix.

It is right typing instead of right sizing. Yeah.

Get you out of that 1-ton truck and get you into that, you know, compact crossover SUV. You know, it can save a lot of money. And so— and the reverse is true, by the way. You know, if you— if you got a 10-yard dump truck and every job that you do is you need a 20-yard dump truck, guess what? You're doubling your trips, right? And you need more trucks. So again, it's a two-way street. Same thing here with the techs. You can find a lot of money and a lot of efficiency by looking at the work. And by the way, make sure you track those indirect hours, right? Because that'll tell you how much time am I doing with shop cleanup? Well, you know what, maybe you call facilities and you make a deal with them and say, you guys come in and do, you know. So it's really important to track those indirect jobs as well.

Well, because those all add into the denominator, right? Like you got to figure out how many, you know, I guess the numerator, but you've got to figure out, you know, how many hours do I actually have to work with here? And if you're subtracting out, well, then you've got to account for everything in between, right?

Right.

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I know one of the things, you know, we talk about the history of the company, right? And those who don't know, Ron Turley was my grandfather, ran UPS. And while he was there, one of the big things that he was all on was efficiency. Bingo. And how do we get more out of the techs we do have?

Yeah, he was brilliant in this way.

So this kind of assumes that just status quo, which I'll tell you is probably fine, But you actually may find that you have inefficiencies which are driving up your tech demands.

Correct.

So not just bad data, but bad process, right? When I look at what he did, they were able to change the size of the fleet almost 80% and they didn't hire one more technician.

That's amazing.

Which is incredible. They found 80% of efficiency savings in their workforce. Yeah, it was nuts. But you may have to go through and do something very similar. You need another 2 techs. Well, what if we just made your 8 techs 20% more efficient, right? Well, now they can do the work of— what does that come out to? Um, 10, 11? Yeah, right, roughly.

Yeah, exactly.

Uh, 25%. Yeah, so that would put you right there. If you— so just kind of going through that and thinking about that, there's opportunities. If you need 10 and you don't have 10 bays, or, you know, maybe you don't need 10, right? You just need to look— have you efficient— have you got them as efficient and productive as you can, right? If you've done that, then by all means you need 10.

No, but that's a great point, Josh, because if we're being honest, most leads haven't done that.

Most leads haven't even done that, right? To do the spaghetti diagrams, to do the process mapping.

That's a big one, yes.

You know, that's probably my favorite is to just follow your techs. Like just spend some time and say, okay, what jobs are they spending the most time on?

Right.

Start with that job and literally just draw a line on the paper as you follow them around and see how many times that line overlaps itself. And then how long, you know, when they jump over here and do this, how long did it take them for that little distraction? Do they have the right tools for the job? You know, one of the big things that Grandpa found is they wouldn't allow them to use impacts when, when they were disassembling the engines, which he thought was weird because Cummins uses impacts to assemble them at the factory, right? Why won't UPS allow them to use them when they're doing it? It's because they were, you know, afraid of breaking bolts, uh, driving up in the Northeast, I guess, you know, salt, rust, all that fun stuff, and cold. Yeah, they did at least allow for the use of a 3/8 half or a 3/8 ratcheting wrench.

Okay, right.

So they got an air ratchet that speeds up the job tremendously, tremendously. But then they would find, oh, they lost this air hose. All right, well, let's get everybody air hoses, right? So let's invest a little bit in the equipment. And they, you know, the job that they did this big study on was they had an engine that needed to get swapped out and took 12 hours or whatever, because they would pull it off— it was a very simple engine, uh, but they would have to pull off the water pump, they'd have to pull off fuel pump, they'd have to pull off all this stuff. And every time they pull something off, well, they'd have to put it back on the new block.

Right.

And so that was kind of the trade is, well, if you're doing that with a ratchet, it's much—

that takes forever.

Yeah. But right, if you have an air ratchet, it's at least a little—

totally changes. Yeah, it changes the job pretty significantly.

And obviously now we would probably use electrics, you know, and that would be much better. But, you know, back then they worked with what they had. And so they took that 12-hour job and got it down to 6 hours, potentially even 4. And then they went and found the next job, right? And they rearranged some of the things in the shop bay. They got all the parts there originally.

Yeah, there's a good—

this is a huge tip, right? If you want to make your fleet more efficient, preload the parts.

Absolutely.

So the tech doesn't have to go get the parts from the parts clerk and wait for the parts clerk to get them and get distracted on the way there.

Common use parts should be right there by the bay. Yeah, you can still track them in inventory. If they're walking away with them, you'll know. Yeah, it's a great point.

And so you go through and you do that, and that will save you a huge amount of time per every job that they have, and then the number of times they have to go to parts room, moving the wash bays to central locations. We love, you know, putting the computers in the base. So giving them laptops, giving them mobile tablets. Absolutely. So that you don't have to walk back and forth to like a single workstation.

And let's put those two together super quick because the other thing is don't let your mechanics go to the parts room. They lose too much time. These days and age, you should be able to open up that tablet or that computer and say, hey, this is the—

this is what I want.

Parts room brings it to them, right?

Shopping cart. Yeah, absolutely. It's like Instacart for you.

Yeah, sorry to interrupt you, but yeah, you know, the amount of time you can save today with doing those things to your point, you know?

There's just too much of a risk. They walk away from there and now somebody's going to talk to them about the game on Sunday.

Exactly.

And then somebody else is going to ask them about this job that they're working on.

Right.

And that little, you know, it might only take them 3 minutes to walk from the bay to the parts room. And that 3-minute walk will actually turn into a 30-minute walk.

Yes.

Just because of all the interruptions and the delay in getting it there. So preload the parts room, you know, take the parts, put it in the bay.

Right.

When the vehicle gets in. Exactly. And now the tech has everything they need right there.

Right. The goal should be to never let them leave the bay. Other than their, their breaks and their eating and whatnot.

So I mentioned the computer stations though, because that's the same problem. I walked into so many shops. In fact, we have one here locally, they have one computer station for everybody. For everybody.

Yeah, that's a challenge.

And it's a bay. I want to say it's a double-sided garage, so they actually have room to work on, you know, almost 15 or 20 vehicles at one time.

Wow.

Right? So it's a big garage. Wow. Yeah, they've got one workstation. Are you kidding me?

20, 30 years ago when computers were super expensive, I get it, I get it. But now you, for $500, you can get a computer that's more powerful than anything. Yeah.

But they all do. Like, you know, I've seen like, in fact, a school district here locally, same thing. They've got enough bays for probably 8 school buses and yet there's one computer in the entire shop. Instead of like, there should be a computer terminal at everything. And why? Well, IT won't install the drops, right? We can't get power drops over here. We can't get network drops over here.

That's killer.

And that's where I was like, okay, well use a tablet.

Use a tablet.

You know, just plug in a Wi-Fi adapter somewhere. Get Wi-Fi in the shop. And use the tablet. We don't want to do this.

Seriously.

Thank you.

We would rather, yeah, exactly.

Right, but put the tools in their hands so that they don't have to leave the bay.

Exactly.

And then, so I mentioned as you're doing the spaghetti diagram to look for how many times it overlaps.

That's the best.

Then you go into work sequencing and that's just, you know, you look at, well, how many times did we go around the vehicle? Well, like 20 or 30.

Right.

Why? Like, can we sequence the work so we only have to go around 5 times?

Exactly.

So these are all the things that Grandpa did.

Yeah.

In order to double, almost double the size of the fleet without hiring another technician.

He was doing that when, in the '70s?

This is, yeah, '75 through '79.

That's still a technique we use today. I mean, you know, Steve wrote an article on it. Well, I mean, and when you think about the math on that, because folks will be skeptical. First off, I will tell you that when we do them, we can sometimes save 15, 30 minutes if it's like a big truck, you know, something very complicated. It's quite a bit of time you can save. But even if it's something small, if you save 5 minutes a job, think about how many PMs you do in a year.

Yep.

How many inspections you do in a year. You know, if you probably do thousands upon thousands of them, the amount of—

to your point, the amount of hours you get back from that adds up really quickly.

It does add up. So don't be skeptical of this. You put these, these tips into place, you will save time for your technicians. You absolutely will. And I bet most fleets out there can squeeze another technician or two out of just taking those steps. Yeah, I would be shocked. You know, again, obviously how big you are matters. The bigger you are, the more you can get out of it actually. Right? Yeah. Which is interesting.

Well, so I think we've given you some good tips. You know, somebody's coming in trying to ask you, hey, how many techs do you really need? You know, and I think this is one of the misnomers when we hear the question, how many techs do you have per asset? And that's such a terrible question. Oh, it is a terrible question because it has no indication about how many PMs you do per year for those assets. There's no, you know, because that's all based on utilization.

Correct.

There's no inclination about what's the mix of the fleet.

Exactly.

Are you all running, you know, it's a taxi company and there's just a bunch of Ford Crown Vics, right? Or is this a mixed fleet where we've got everything from road graders to back trucks down to squad cars?

Right.

Which completely changes all of your exact times. So we look at all those things and how much outsourcing you're doing, how much outsourcing is a huge one because that's just forgotten. You don't even think about accounting for those hours that somebody else is paying for.

Right.

'cause they're not on your timesheets. Exactly. So definitely a lot of things to go look at to, you know, answer that question is do we have enough techs? Do we have too many techs? And what are we doing to make sure that we're making the best use of the techs we do have? So, and then training, that's another way to drive up efficiency. Yes. Teach your techs.

Yes.

Teach them how to do their jobs.

And Josh, thank you for saying that. 'Cause we touched on it, I kind of flew by it, but most people see the training as lost time for the techs. And I get it. I get the temptation. But if you put in that training with them, you'll drive so much efficiency.

Yeah, train them on the engines, right? You know, call up your, your OEMs. Like, you guys are buying vehicles from these guys in bulk. They should be willing to provide free training to your techs.

Absolutely. That should be on your purchase order. Yeah, absolutely.

And it should be part of— exactly, should be part of the RFP.

Yep.

But when you go through, you know, get them to the bargaining table and say, look, we are going to buy from you. You know, Ford's over here throwing in free training. GM, what are you going to do? Stellantis, what are you going to do? Force them to come to the table and be like, yeah, we'll train you on the new stuff and we'll teach you how to use these new engines and, uh, you know, the new EVs that we're coming out with. Train them on that, get as much training, because that will make them faster. Uh, and continuously train on that thing. Train them on the FMIS. You know, they should absolutely— you want to get them faster and you train them on how to do that.

It's a great point.

It's not just on-the-job training that counts, but there's oftentimes we'll find we're training somebody Like, oh, I had no idea you could do that, right? You know how frustrated I've been about this thing and you just showed me a way that's going to save me 5 minutes per work order? Yeah, awesome.

Exactly.

That's as good as saving a parts, uh, trip to the parts room. Yeah, you know, absolutely. So invest in your techs, invest in the training, and get your suppliers to offer training for free. Yeah, like we do.

Yeah. And by the way, in the same way you can use the MRS to figure out maybe what techs mix you need, that also can indicate what training you need.

Yes.

If you see, hey man, look, we're just constantly doing brake jobs, just to pick something, right? Well, boy, you better, better have, better have people know how to do that quickly and efficiently, right? If you never touch transmissions, don't put a ton of time into, you know, learning how to do transmissions, right? So yeah, there's just so many tools out there for folks. And I think I speak for you where it's, you know, the great fleets, you see them doing this, right? And the fleets you don't see doing it, it's like, oh man, you know, I wish I could go out there and and do it for you. I can't. But, but it's, but it's there for you. It's there for you to grab, you know. So I'd love to see more people doing that kind of stuff.

All right. Well, I think that's going to do it for this week's episode. And as always, we thank you for listening.

Yeah.

Have any questions? Love to hear from you at podcast@rtafleet.com. If you want to go check out a copy of the Fleet Success Playbook where we put all this stuff, we even have the spaghetti diagrams and BU analysis, all that fun stuff. You can go to fleetsuccessplaybook.com and go download a copy of that. Not download it. Order a copy of that. We'll send you a hard copy.

Right.

But otherwise, we'll see you next time.

Take care, everybody.

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