Equipment Executive: How to Staff an Equipment Shop

By Andy Agoos, Contributing Editor | January 25, 2013

Our goal is to manage our equipment fleet so that we eliminate unplanned downtime. The primary reason to operate your own shop is to control the quality and timeliness of the various services, so you can better control your downtime. It’s usually not to save money, although in your own shop you can use cheaper non-OEM parts and do certain repairs for less than an outside repair shop.

Shop headcount will be balanced against your equipment fleet ownership and replacement plan. If you replace your loaders every 4,000 meter hours, you won’t have many non-warranty failures. It’s a different story if you keep your loaders to 10,000 meter hours. Likewise, if your company rents a majority of its equipment or buys them with a TM&R (Total Maintenance and Repair) agreement, it strongly affects the amount of service work you will self-perform. Once you decide what services you will self-perform, begin the process of determining what technician and other staffing levels are appropriate.

Doing the math

No workforce is 100-percent efficient. Even the best-run shops have indirect labor costs (defined as mechanic hours spent on things other than direct repairs). Shop indirect labor targets might be 4 percent lost/cleanup time, 6 percent allowed time (paid holidays and vacation), 6 percent training, 2 percent redo, and 3 percent facility/tooling repair.

For the sake of this discussion, consider total indirect labor hours at 21 percent, which leaves 79 percent for actual repair hours billed to shop work orders. This shop has 1,643 technician hours available per year (0.79 x 2,080). Some shops may only have 60 to 70 percent available hours, which obviously means those shops will require more mechanics or overtime to support the fleet. Generally, the more technicians, the more support staff will be required: shop supervisors, parts support, etc.

In the 1960s, the U.S. armed forces conducted studies of its fleets and derived fleet maintenance and repair standards. They put everything into vehicle equivalents, or VE: the technician hours required each year to maintain and repair an average sedan automobile. A useable number today could be 20 technician hours, which equals 1 VE. This example shop has 1,643 technician hours available each year, so the VE per techician is 82.2 (1,643 ÷ 20).

Other organizations, especially in the public sector, further refined the vehicle equivalent approach. The American Public Works Association (APWA) published a basic series of VEs for various equipment groups including common loaders and tractors.

This benchmarking process is pretty simple. Categorize your fleet into equipment types, such as wheel loaders, and determine a VE for each machine. For example, if a loader requires 160 technician hours per year, it would have a VE of 8.0 (160 ÷ 20). Add up all the machine categories for a total fleet VE, and deduct the percent of work to be outsourced, say 20 percent. Our sample fleet might have a total VE of 200.0.

Now divide the total fleet VE by the VE per technician to determine how many the shop requires to perform the work, in this case, 2.4 technicians (200 ÷ 82.2). Round up or down to fit your fleet.

The concept uses averages, so it is not meant to be exact. Each organization needs to tailor the calculation to their fleet age, availability of backup equipment, and other unique factors. In addition to the APWA handbook, now in its 3rd edition, “MRU Analysis And Other Vehicle Equivalency Techniques” provides some guidance. You can find links at ConstructionEquipment.com/staffing.

The concept here is to apply a strategy and methodical approach to your staffing. You probably will struggle to find enough technicians to meet your minimum anyway, so that means more outsourcing, more rentals, or earlier fleet replacement.

Think about it.

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