Fleet Management Information for Sweeping Professionals
Determining Whether to Work on Vehicles In-House or to Sub Repair Outby John Dolce
One of America's icons of fleet management provides food for thought when considering whether to do repair work on your own vehicles or to sub the work out. His analysis includes determining the real cost of mechanics, as well as the facilities required to do repair work in-house.
Is it time to perform your sweeper, and related other types of repair work, in-house? How do you tell if you have enough work to justify use of an in-house mechanic. How much repair work can each one you hire handle in a year's time? Does your facility have the space needed for one or more mechanics? The following will help you decide the answers to these questions.
Let's first look at the mechanic who'll be doing the work, basing this on the hours of scheduled and unscheduled maintenance work you estimate you'll need annually. In your decisionmaking, you may make the mistake of computing that the person working full-time for you will be there eight hours a day, five days a week; forty hours a week. If that's your assumption, it's a textbook mistake. Based on that assumption, you might figure the output they'll provide you is based upon fifty-two weeks, times forty hours a week, which is 2,080 hours. Let's make it more conservative by using two thousand hours for easier math.
You must remember that there's sick leave, vacation leave, jury duty, mental health days, holidays, whatever... all of which are not work time. On average, that will run five hundred hours a year. So, five hundred from two thousand leaves you with fifteen hundred hours. That means that for whatever you're paying them for -- theoretically two thousand hours -- they're physically at the workplace for only fifteen hundred of those hours.
To that you'll still need to add in 'on-the-job indirect time.' This is a term for the time used when they have to go for parts, fill out paperwork and so forth. It's non-wrench-turning time. That will usually be another five hundred hours. That leaves you with a thousand hours left. So, if you pay your mechanic $20 an hour and they work a thousand hours but you're paying for two thousand hours, they don't cost you $20 an hour: they cost you $40 an hour.
This is the kind of information many managers don't know to consider prior to making a conscious decision in regard to having an in-house shop or continuing to sub repair work out. On the other hand, if you now have an in-house facility you need to crunch the actual numbers to see if your operation is really a good idea to continue.
Now, let's go one step further. Of the five hundred things that technicians, mechanics and laborers with semi-skills do, only five percent of them do they perform over and over again. Since five percent of five hundred is twenty-five, that means only twenty-five tasks are, on average, ones they do over and over again. Unfortunately, those are really the only ones where you're going to truly get one hour of work out of a one-hour job. Although that's only five percent of the total tasks, this component typically makes up 30% of their total wrenching time. So, thirty percent of one thousand hours is three hundred hours. This means that only on about three hundred of the hours they're on the job during the year are you going to get a one-hour job done in one hour.
The other seven hundred hours are 'onesies-twosies;' stuff they never really do over and over again. On those, it's going to take two to three hours to do what should be a one-hour job. After years of analyzing this stuff, my guess is you're only going to get one third of the remaining seven hundred hours as productive time. Let's say that's also three hundred hours. So, three hundred scheduled and three hundred unscheduled is six hundred hours.
Let's make the arithmetic a little more doable by figuring the above at a little higher, at seven hundred hours. That way, when you divide 700 into 2080 you get one third. The unfortunate fact is that at twenty dollars an hour in payroll for your mechanic it's actually costing you $60 an hour. When you add in facility cost, including amortization of the floor space, heat, electricity and everything else in that category, it gets pretty close to $75 - $100 an hour. These are the real facts regarding productivity and costs.
After doing your own cost analysis on these factors should you make a your decision: Do you want to go to an 'expensive' vendor for everything (because you now realize that will cost you less); do you want to hire a semi-mechanical laborer for $10 an hour to change tires and do those sorts of things and vend the rest out; do you want to hire a real, trained technician -- or some combination?
Before you can make a firm decision, though, another question is 'Do you have the space you need to do the work in-house?' Let's talk about how much space is needed for in-house mechanics.
Most people will agree that you need one bay for each of your mechanics, so they can stay busy. However, that's only if they're doing scheduled work. If they're doing unscheduled work, which happens a lot with heavy equipment, especially sweepers, here's a typical scenario: The number five cylinder is bad and the mechanic pulls it out but has to get a part. Because you don't inventory that stuff, the vehicle can't be put back together until UPS brings the part. That's often two or three days.
In the meantime, the vehicle sits in the bay and the mechanic has to work outside. In a four-season environment that's sometimes not an option, since you have 180 good days and 180 bad days. As an alternative, you push the vehicle outside, which takes time and sometimes can be unsafe and invite vehicle damage or theft.
The above means that, generally speaking, only if you have a scheduled mechanic with scheduled work does s/he need only one bay. If you have one mechanic who does scheduled and unscheduled repair work, you need two bays: one to tie up sometimes and one to keep them working. The good news is that if you have two mechanics all you really need is three bays because between the two of them they're only going to tie up one extra bay. Before you take the plunge to hire a mechanic(s), make sure you have the proper space you'll need.
The above are the results of years of experience in this field. However, the information needs to be used as a guideline, not gospel, and tailored to your individual fleet management situation. However, I guarantee that if you keep these concepts in mind when you make your decisions, then you'll be much better equipped to put your organization into the best position possible to minimize its vehicle outlays.
John E. Dolce has more than 30 years of experience operating fleets of various types and sizes, in both the public and private sectors. Dolce conducts university-level seminars on vehicle maintenance, management, and fleet management in the US and Canada, and has written two texts on the subject. John Dolce may be reached at (973) 226-9061.
Another fleet management article by John Dolce is offered on the WorldSweeper.com website. It is entitled 'Managing Tomorrow's Fleet Assets Today'.
Dolce offers a handout called 'Daily Vehicle Management Activity.' This is available for download as a pdf file from WorldSweeper.com's forms area.
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