Episode 226: Fleet Management 101: The Low-Hanging Fruit Most Fleets Ignore

Hey, thanks for tuning in. Today I talked to Steve Saltzgiver, the legend, we all know him, about Fleet Management 101, but specifically the low-hanging fruit. What are some of the things you can do as a fleet professional to make some changes, do something new, but most importantly, do it in a way where you don't need to ask for permission and there's no cost associated with it. Hope you enjoy.

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Thanks for coming back to another episode of the Fleet Success Show. I'm Facundo Tesara, Fleet Success Ambassador here at RTA, joined by Steve Salzgiver, a Lead Strategic Consultant and soon to be a Fleet Success Ambassador. More to come on that soon. So today we're going to talk about the low-hanging fruit. Some of you guys know I've been talking about Fleet Management 101. So doing some of the basics. Um, that— well, not the basics, it's taking things that are potentially more complicated and making them not so complicated. But this is even less complicated, the low-hanging fruit. So we had a conversation this week, I don't remember who I was talking to, it was a customer, and I always say if you want to get a fleet manager talk— uh, laughing, ask them the quality of their pre- and post-trip inspections.

Absolutely.

Typically the response you'll get is a laugh. So that was where kind of we kicked off the conversation this week. So that was the first thing. What do you think? So would you consider that to be low-hanging fruit, pre and post trips?

Absolutely. And I've always said that they're the eyes and ears, the drivers, you know, and they're also the preventive maintenance for the fleet. And obviously if you do things more proactive and less reactive, you're gonna be saving money. That's the low-hanging fruit potential.

You know, it ties in when somebody said that, oh, I remember it was actually a LinkedIn post. Somebody was like, tag me in it. They posted a picture, they found it, they found a headlight that was not working. So they're like, pre-trips and post-trip inspections, they tag me, what do you think? So then I was like, easiest low-hanging fruit thing. So then it's like, my thought when I see that is, well, what happens next, right? So it's low-hanging fruit, things that aren't going to get you in trouble. But when you actually do them, I think there actually needs to be a process by which something can be done quickly, right? Because you show up at the shop, and you have this light that's out, and then it's like, well, wait, we can't help you. But if you have a quick lane or something else, what— how do you think— what's the best way to handle those?

Well, I think you need to handle it at the shop floor level. But, you know, you call— you either have a road call, you have door traffic, or you have a breakdown, right? If you hadn't let at the, uh, the shop level or a dirt door traffic level before it gets out on the road, you can save between 4 and 10x.

Oh, that's right.

Because if you don't, then what happens when you get out on the road? Now you have a road call, you gotta send a mechanic out, you got a driver sitting around making whatever dollars an hour he is, might have to call a tow truck, they get involved in it. So I mean, it just exponentially gets worse if you don't take care of it proactively when it happens.

I think there was a story maybe you shared in the book, I don't remember, but share it. Do you have any stories to share of like, hey, we could have changed that light bulb and it was, you know, $20?

Well, one of the things I always share is I came across Giesland's theory years ago. And it doesn't specifically apply to fleet, but applies to any preventive maintenance scenario, like even buildings. And this guy had done a study basically, and he said that if you take care of things, there's 3 energy states. And if you take care of them in energy state 1, which is basically the PM state when you actually discover it, or in this case what we're talking about, you might have a driver report, might be energy 1, then it is you know, parts and labor, basically. That's all it is. But if you wait till energy state 2, then it becomes the breakdown level. And then the breakdown level actually squares level 1. So if you had a $10 repair in level 1, now you got a $100 repair in level 2. And he did this over and over in multiple studies in different, you know, buildings and different vehicle scenarios. And so, and he kept proving that out, saying, wow, this is incredible, it's squared, actually squared. So then if you get to level 3, which is— level 3 is an accident. Now you're out on the road, now you've broken down, and now you've run into the property or people, and now it's 100 times 100, or what, 10,000, I guess, or 100,000.

I can't do the math in my head here, but I mean, whatever the exponential of— once you're getting into a $100 repair or $500 repair, I can only imagine. Let's, let's say a brake job that might cost $500. Something goes wrong with your brakes. Well, I mean, And who knows what can happen? Accidents, severe injury, death.

Oh yeah, lawsuits, you know, all kinds of mitigation, legal fees, you know. So I mean, that's, that's why it gets potentially worse, is because of all those add-ons that happen. That's why it's— and that, and that's absolutely low-hanging fruit. Take care of it when it happens. Do not chance. I mean, I had a story, and I don't know if I put this in the Fleet Success book or not, but If I recall, I might have. I was at a particular beverage company years ago and we had one of these issues where we had noted on a DVIR that the tires were bad, okay? And then it was also on the PM inspection, but we, for some reason, during the Christmas vacation, we didn't fix that vehicle like we should have. We let it go out sometime in January, got into a severe collision. We actually killed some people. And, you know, nonetheless, that fleet manager wasn't around after that because he let that happen. But that's the kind of stuff that can happen, you know, if you don't take care of it. And then we're completely exposed and naked because first thing a legal company or a lawyer does is ask for discovery. So they come into our property now and they're asking for all the maintenance records and we show that, yeah, we checked it, but we didn't do anything about it, you know? And that's where you become really liable, so.

I had a fleet manager the other day tell me, I think it was Tim Coxwell from a sheriff's county, a sheriff's organization in Florida. He said to me that he's told his team that when you catch anything that you suspect or feel needs to be changed, you're doing it. That's why it's here, especially on a sheriff's vehicle. There's no, ah, let's wait to do it when it comes back. If we need to hold it for a little bit longer than we were gonna hold it for, let's do it.

Especially if that's a safety item. So if it's cosmetic, you know, you might be able to get away with it. But if it's a safety item, you absolutely have to do it.

Yeah. Okay, so I've got a couple ideas. Anything coming to mind in terms of other low-hanging fruit that you've seen or done over your career?

I mean, obviously low-hanging fruit are you can audit your fuel transactions. You know, there's, especially if you have it outsourced to somebody, you know, as a third party, there can be a lot of fraud, a lot of misabuse and abuse. People could put in, more fuel in the tank than they're supposed to. They could be fueling off hours when they're not supposed to be doing that, which then becomes suspect. And then you're wondering what they're doing out there, right? Or they could be sharing fuel cards or in all kinds of scenarios. The other thing too is always look at your fleet constantly for rightsizing opportunities, you know, because I mean, assets are always worth more today than tomorrow. That's just a universal principle in law. And so if you can get rid of them today, you can get more return on them, residual value, and then you can offset your budget. Which, you know, that determines if you have a good replacement program, obviously, because that could be why they're hoarding vehicles if you don't, so.

That's like my favorite. I'm going to try really hard not to get off topic here, but that's my favorite thing in fleet is utilization studies. Like there's so much you can do with it, reducing the size of your fleet, motor pools. I love motor pools. I know we recently talked about motor pools. That's a good one. But so, so, okay, so you talked about the one thing. The other thing that I would add to what you said is if you're a fleet that does some significant part, whatever significant means, whether it's a few percent, it's a couple percentage points or several, you know, 10, 15, 20, 30% of your fleet that you're contracting out for something, auditing that work, especially if you have a significant amount of your fleet that you're having a third party do that because there's, how do you know if, you know, you did a starter and then it comes back, you know, you get it back from the shop, everything's fine, that starter fails, then you pay for it again?

Well, and there's a lot of pre, you know, proactive things you can do there. I mean, you can have service level agreements with those vendors. You can hold them accountable to certain things like comeback rates and, you know, in-shop rates, downtime rates, things like that because that's where the real low-hanging fruit is. If you got a vehicle out of service, for weeks at a time because it's sitting at a vendor, you need to rectify that somehow.

So you mentioned— so we mentioned low-hanging fruit. So I'm thinking, when I'm thinking about this, I'm thinking about low cost, no cost. So when you said audit, people are like, oh man, that's going to be expensive. But you can— by auditing, you can randomly select yourself or somebody on your team an invoice or vehicles, or look at this invoice that came in, I'm going to search just to see if something else— like, there's different levels of audit. You don't have to spend thousands of dollars to have a third party doing audit, right?

Well, and you should have a good process too involved where they need to call you for approvals, because one of the things that third parties do are upsell. You know, I always use that scenario of if my wife goes into a quick lube place and they come out of the back room with a dirty air filter, and she's immediately going to say, oh yeah, it needs to be changed because I can document the sample one in the back. Yeah, it could be one dirty one they had, would not even be yours, you know. And So you really have to be aware of that. And if you're a fleet guy, of course, you're going to be aware, hopefully, and avoid those upsell kind of things that are going on. So you got to make sure you know the intervals of your equipment and make sure they don't have a coolant flush too prematurely, things like that.

Yeah. Random side note, I took my wife's Subaru in for a recall. And they, well, we recommend you do all these things, right? And I was just looking at the price of like replacing a set of pads and all these things. I was like, nope, nope, nope. I can do those even if I, you know, if I do it myself, but I know I can do it much cheaper at a different shop. So that was fun.

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Well, I mean, I've been buying a car this week off and on.

Oh, that's right. Yeah.

So I mean, I had the dealer trying to throw in a— what they throw in the tow package.

You mentioned the tow package.

Yep. They wanted $1,400 for it. I finally took it out because I was comparing dealer against dealer. Well, it turns out U-Haul can do it for $500.

Yeah.

So I'll just do it myself and use another third party. And so you always look at the dealer. I mean, they say sometimes they're giving you their cost, but question that always. You know, same with running boards were $1,000 or $1,100, I think. I could do that for $300 on Amazon. Yeah. And in my case, and probably your case, we just, we have some mechanic aptitude, so we just do it, right?

Yeah. If you're not feeling lazy that weekend, you can. So, okay, the other thing that was, I mean, I'm sure when you were in fleet, and a favorite activity of mine to this day is, even though I'm not a fleet manager anymore, is walking around the shop with other fleet managers. And I can tell who does that because I can tell the relationship as they're walking around the shop and talking to people as we're walking by. And I can tell the folks that don't do that as much. So another low-hanging fruit is just walking around the shop and so many things—

just be present.

Yeah, like ideas that you may have or if you're reading an article or something and you see something in your shop that there's an opportunity that something that you read might fit well over here. But I always found that walking around your shop is a great way to clear your mind, get different perspective, show you're present. But there's a lot of opportunities there and it's free.

Well, and they appreciate it.

Yes.

You know, I mean, it's good for morale. It's good for engagement. I remember a story when I was getting my master's degree. They had a situation where a guy— a guy retired. He was a shop foreman and They had high productivity and engagement scores and everything else, but when he retired, they went completely downhill because they brought a guy in that didn't really know how to engage. He wasn't really up on that. He was, but he was very intelligent when it came to analytics, things like that. And so then they did a post-study and they said, what is the difference? Because all this stuff just skyrocketed down. And it turned out when they asked all the mechanics and all the workers, they said, well, Joe was always present here. He'd walk up to me and talk to me and show me how to do things. He'd hand me a rag to wipe the grease off my hands. He just did those things that the other guy sat in the office and was running numbers all day. So that's why that's so important. It's always stuck with me that—

yeah, I would always— so a couple stories I have when I was at the City of Norfolk. One that I have to keep PG because it wasn't PG at the time. So, uh, one of the shop supervisors after some time and, you know, got to know me he told me that, uh, he would tell— he told me the story of a guy that back in the day when you could smoke in the shop was smoking, and he had like, at the time, he had like 2 cigarettes in his mouth because, you know, he was all stressed out. And the fleet manager came out and he was like, you know, what the eff are you doing out here? What is the office on fire? And I was like, oh geez, like that, that's not how you want to be, uh, going out there. And I would always So what I would do on purpose is, you know, after a Sunday where the Washington Commanders, I guess Redskins at the time, would lose, which was often back in the day, I would go out in the shop on purpose because I knew that there was like Giants fans and Eagles fans and Cowboys fans. And I would put myself out there so they could talk a little trash and, you know, whatever. But just so I could, we could not talk shop for a minute. And just be out there. So the simple things of being out there and doing things like that and engaging with them kind of humanizes the fleet manager a bit.

So this is some of the low-hanging fruit that you're talking about, this engagement, being present. This is all in the Fleet Success Playbook. This is all what we call intentional culture. It's very simple. You treat people like you want to be treated. And there is a tremendous amount of savings and cost avoidance that can happen when people feel valued.

Yeah, I was at a shop in, um, South Florida a few months ago. I'll shout him out now, Dave Prasad. And what was incredible to me was that he talks about it a lot, and we talk about it a lot, and it's sometimes hard to find the culture that we experience here at RTA in a shop. It exists, but it's hard. And his shop, he's done a great job where you He would go out there and he would know everybody's name and he would ask them what, you know, the kids, and it would ask by name, hey, how did Johnny's game go this weekend or whatever? And, um, you know, just the interaction, you could tell he was out in the shop a lot and you could tell that he's created an environment where people feel empowered, which, you know, that kind of brings me to the next point, which I was thinking about, which is empowering your team costs nothing. Right, to empower them to make decisions, give recommendations, speak up when they don't feel comfortable. A lot of those things goes— they go a long way.

Yeah, absolutely. The other thing too, I always tell people, and it kind of ties into the culture a little bit, is another piece of low-hanging fruit is just simply technician productivity. Here we are in a world for the last decade or more where we can't get enough technicians. Well, if you can double their work or incrementally increase the percentage of work they're doing. And I always tell people, you know, there's two sides to this metric. There's the direct labor metric and there's the SRT metric. I remember years ago I worked in a shop and I've seen this in my consulting too where you'll see an old seasoned mechanic walking around with a hammer and a screwdriver tapping on things, you know, when the boss comes by and you go, what's he doing? Well, he's doing direct labor, but he's not fixing anything. You know, so how you correct that is you say, okay, You need to get that brake shoe done in an hour and a half or whatever it is, right? Now you've got both sides of that equation. And if you're keeping people productive, then you need less mechanics, you know, less money to spend and all those kind of things. So that can happen right away. And when we go in and do consulting, that's the first thing we look at is because people are always with vacancies. Well, let's increase productivity somehow because that will overcome. Vacancies. In my personal life, we increased productivity by 300% at one of our shops just by process mapping a PM, making sure you're doing it in the right order, getting rid of all the waste.

So my assumption here is like, if, if you see high productivity but a line for miles of vehicles outside, or vehicles that are in the shop for too long, that's when you start asking the question like, hey, there's You may be producing stuff, but you're not doing anything.

Yeah, it's just a couple of metrics there. You know, 90% of your vehicles should be out in 24 hours. Yeah, 80% in 48, 70% in 72. Make sure you're tracking those metrics to see how your throughput is.

Okay, so what else? What did we not talk about? What— there's— I tried really hard to not go down— so the utilization thing, um, some of their points, I tried not to really dig into those too much to really take a squirrel and start talking way too much about that. But what didn't we talk about that we should mention in terms of low-hanging fruit that fleet managers can consider doing that's not going to cost them much, that's easy to do, that they don't have to go out and get approval for? What recommendations would you give them?

I would say one final one might be— and I see this everywhere I go. I go to a lot of shops too, like yourself, and I see an awful lot of what I consider are surplus vehicles sitting around that really need to be auctioned off or gone. And they've just been sitting there for months and months because whatever factor or reason. Get rid of them immediately. First of all, they're clutter. Second of all, they're worth more today than tomorrow, like I mentioned. And you really don't have to do much usually because hopefully you have a contract or you have some auctioneer that can come get them. You know, or sell them. So that's another area that you can do that.

Is there a particular, um, let's just use the word excuse that you hear from people as to why they're there? I've heard a couple, but I'm curious what you've heard.

I think more often than not, they're just out of sight and out of mind. I mean, they're working on, you know, hair on fire in the shop trying to manage, you know, the day-to-day chaos, and they've been sitting in a yard somewhere in the back and nobody pays attention to them after a while.

Yeah, you know that whole thing, you have to ask why a certain amount of times before you can get to whatever that number of why, but typically when I ask— okay, so when I Well, for this question, it's usually like 2 and I can get there, which is, you know, hey, all those vehicles, what are they waiting for? Service? Oh no, they're waiting to go to auction. Oh, what? They're waiting to go to auction? Well, why are they waiting to go to auction? Well, because we don't, you know, just send them once a year to go to the auction. Well, why? Yeah, well, because that's the time where we do it. And sometimes, depending on who I'm talking to, like, I just leave it there. Well, obviously we can talk about losing value. Other things that can go wrong with them. You know, maybe it started before, now it doesn't start anymore. All of the different things that can happen by them just sitting. So, okay, so—

I was managing a fleet up in Connecticut years back. We had a garbage truck, brand new. It had an electrical problem, broke down right outside the shop door. I got there 6 months into that being out front. It had been sitting there 6 months because it had a full hopper full of garbage. Nobody wanted to touch it anymore. Brand new truck, and the station was right across the street. All you had to do is push it over there and empty the truck manually. But it literally sat there down all that time, a brand new garbage truck, because nobody wanted to touch it. Things like that just adds up. That's a lot of money. When you think about it, garbage trucks are $300,000.

They were $300,000.

Yeah, almost $400,000 now, you're right. Fire trucks are over a million now. I mean, so. Anything you can do to assuage or lower that depreciation factor is huge.

One tradition that I've stolen from, uh, probably like the most famous podcaster in the world that I was turned on to here not that long ago, I found it really interesting. So he asks his previous guests to, before they wrap up, to leave a question for the next guest without knowing who that guest is. So the question that was left for you was— and it's a great question for you. I mean, it was perfect. What are you doing to encourage the next generation into the fleet profession?

That's a really good question.

That's an excellent question.

The things that I talk a lot about with people are, first of all, you got to have a passion for this job. That takes a lot of research, a lot of reading, a lot of study. I do that every day. Even now, I've been in the business well over 40 years. I'm reading articles. Trying to improve my craft. It's always changing. You've got to stay up with the latest technology, the latest best practices. And then I always say, make sure you get out there and learn from somebody. Because I've been in consulting now for almost 20 years, and I learn every day. I learned something about a Tesla today that I didn't know. Yeah, we did. Literally 20 minutes ago, you had a conversation. So I mean, you can't stop learning. Don't get stale. Don't get static. Don't rest on your laurels and just keep moving forward because this is a great career. I love it. Still love it after all these years.

Yeah, I was— well, thanks for that. The one thing that I've been thinking about lately, and we actually talked about it this week, was you're never going to stop learning. Even in the state, in the— in your— in your— the country, in the state, in your county, there's always stuff to learn about fleet management. People are always going to do it differently. Um, so I'm never going to give up on thinking that I know everything. Forget it, there's way too much to learn, just like you said. But one thing I've started to do is I've started to create a network outside this country, like in the UK, other English-speaking places, Spanish-speaking places, since I speak Spanish as well. And I'm planning a trip to go to the UK and visit different shops, especially on like the government side, because I think what I'm anticipating finding is that they're going to tell me about a solution or their issue with fleet management or not fleet management or hiring technicians or not, that they'll, you know, here's the way we've always tried to do this and it seems to work well in the US. And they might say, well, we have that same problem and we did that and, you know, slightly tweaked it or added this or removed that. And I'm just really looking forward to getting the different perspective from around the world, you know, because I think that's what— I mean, that's maybe a game changer, right? As you start bringing in solutions from different parts of the world to issues that we never had or issues that we don't have yet.

You can never underestimate the power of networking.

No, that's—

and asking questions.

The reason I am here today is, well, one, because I failed the FBI polygraph. Yeah, I always tell that story and got into fleet management, but two, very much so because of networking. And who do you— I always ask people, who do you know that I need to know?

Actually, most of us fell into fleet management.

Yeah. So anyway, that's it. Thanks for joining us. You can tune in anywhere you listen to podcasts. Check us out at rtafleet.com. See you next time.

Thank you.

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