Use Technology to Track PM Costs

May 8, 2012

Reprinted with the permission of Equipment Manager magazine, the magazine of AEMP.

“What amazes me are that there are people who will invest literally millions of dollars in (equipment) assets and then track the maintenance on a grease board or blackboard.” So says Bob Hausler, marketing and technology vice president for software manufacturer Arsenault Associates.

Reprinted with the permission of Equipment Manager magazine, the magazine of AEMP.

“What amazes me are that there are people who will invest literally millions of dollars in (equipment) assets and then track the maintenance on a grease board or blackboard.” So says Bob Hausler, marketing and technology vice president for software manufacturer Arsenault Associates.

John E. Dolce, fleet manager for Wendell Duchscherer Architectural and Engineering, Inc., agrees in principal. He suggests that technology—telematics, software packages, hand-held devices, laptops and other technology—accounts for only 30 to 40 percent of all diagnostic time spent on a unit.

Tracking maintenance and diagnostic time are small parts of the broader task of tracking preventative maintenance costs, which in turn, is folded into overall operating cost.

“PM costs are just one category of equipment operating cost,” says Mike Vorster, president of CEMP Central. “If you are going to track costs at a unit level, then it goes without saying you will track PM costs at a unit level. If you do not, then you are flying by the seat of your pants, which is not a good thing to do, especially when the weather gets bad.”

The Vendors’ View

Reining in PM costs has long been a mainstay of successful fleet management. Preventing GIGO (garbage in, garbage out) is even more critical today, given the sophisticated technology reflected in Tier 4-Interim engines.

Not surprisingly, a number of telematics hardware and software manufacturers and distributors are accessible nationwide for fleet professionals who want to ensure absolute accuracy of the data and information they use.
A spot check of such suppliers provides a snapshot of the vendor’s view.

“You have to look at rate splits, which most people don’t,” says Wayne Newitts, marketing director for Dexter + Chaney. “The two fundamentals are, one, cost of equipment ownership and, two, cost of operating the equipment. The end-game is that you want to truly understand how to best manage your fleet, what the average age of your equipment should be, and whether you should keep or get rid of certain units, or whether you should shift one machine from one job site to another. The only way to do that is to track PM costs over a period of time.”

That is the key and that is the point where software comes into play, he says. The software allows you to identify these trend lines, among other things. For instance, you might find the fuel costs of a particular wheel loader are more than they should be. The excessive fuel use could be attributed to anything from the use of bad fuel to not cleaning fuel filters often enough. “You’re running a business,” Newitts says, “so you need to know where your money is going.”

Along with other benefits, the software gives you real-time earned-value measurements on your job. “That is the brass ring,” says Newitts. “If you can track such things as PM, reactive repair costs, and scheduled repair costs, then you know where you stand. The real value of that information comes when you submit bids. You create better estimates.”

Steve McGough, chief operating officer for HCSS, agrees. “Accurate operating cost data ultimately results in higher-quality estimating. You can start seeing real differences in maintenance and operating costs among manufacturers who provide similar pieces of equipment. That leads to smarter capital purchasing decisions.”

Outside the direct and marketed purposes, the benefits of telematics hardware and software is that these systems provide an accurate and efficient means of driving meter readings and location information into a tracking/monitoring system, McGough says.

“If you design the work flow, time/cost, and accuracy of gathering and distributing meter readings and location, you start to gain some real efficiencies with respect to the gathering and sharing of large amounts of information,” he says.

Bob Hausler, vice president of marketing and technology for Arsenault Associates, says, “In our business, the meter reading is the Holy Grail. With software, you can load the data in and it spits the analysis back out, which you expect. Knowing how long something has been running is going to drive the PM and, for us, the huge benefit of telematics—which can deliver meter readings, trouble codes and a lot more—is to automatically get the meter readings into the software. When that happens, you’re halfway home. The problem is often the only time a fleet manager gets a meter reading is when the unit comes in for maintenance, and by then it could be too late.”

Telematics data allows software to produce reports with graphs that help prevent, “the big things that come out and get you,” he says.

Hausler has identified three groups of fleet managers: those who cross their fingers and hope they don’t have a problem; the 10 percent “who do everything right;” and those who dial all the thresholds back and do PMs early. That, Hausler says, can be a big waste of money.

“A report and graph is a great visual that gives fleet managers a scorecard,” he says. “They owe it to themselves to get a tool that helps them manage PMs, especially since so much money is invested in equipment.”

In following the sometimes elusive trail of operating and PM costs, three things have to happen, according to Vorster. There has to be a mechanism to trigger an action (telematics can and does help provide the data needed to prompt action); there must be a mechanism to define the action (work orders, checklists, parts lists); and there must be a mechanism to confirm that the action has been performed on time and to standard.

“Competent software that provides reports on PM work orders/checklists that are open or incomplete ensure the action has been performed,” Vorster says. “You track the open or unfinished work orders beyond a stipulated due date in the normal way. What is important for fleet managers to understand is that the term ‘done correctly’ is not just a function. Often it is an attitude, a culture, and a training issue.”

As Hausler at Arsenault says, “As long as you know what you are striving for, then the software can help you get there. Our software can’t teach the course, but it can give you the report card.”

There is no question about the value of telematics and software when it comes to managing a fleet, Dolce says. “When you hand-write, for example, a summary of the equipment at a particular location, ones can look like sevens and twos can look like eights, so telematics is a benefit for getting timely, accurate information at your home and field locations.”

But, he adds, “Telematics is a funny thing. It is very expensive and, unless you put it to use, it is a waste of money.”

It may take six months of reports—a couple of hundred—to learn the threshold where you have to take action. He says most fleet managers or supervisors, including him, are “evolutionary learners.” When a technology is introduced they have to learn to use it.

“You have to learn how to properly hook up the equipment, and you have to learn how to interpret the information you get,” he says. “The learning curve is time-consuming. Even though you’ve been through a course on how to use telematics, people who teach the technology don’t know how to fix vehicles. A fleet manager has to take the technology and start working with it. Once you finally do get it, you start to see a payback on the technology you’ve installed.”

Many times, return on investment isn’t realized until after a year or two, depending on the number of vehicles in the fleet. If the fleet is small, say, five or 10 units, there is not going to be a high frequency of reports. With 1,000 or 2,000 vehicles, the learning will come faster, Dolce says.

Then comes the next level: interpreting the information that’s been collected. Telematics provides a soft code and a hard code, Dolce says. You have to drill through the “soft code” to get to the “hard code” to make a decision on what needs to be done.

If a dashboard light or flash comes on, the technician attaches a hand-held device and goes through the discipline of an on-vehicle code determination. For instance, that code might say there is too much resistance in a wire. That would be a soft code. It is telling you that you don’t have continuity to diagnose, but there is something wrong.

The technician cleans the resistance off the wire and now the technology tells you the ohms on sensor 32 exceed the plus or minus range. In this example, sensor 32 happens to be the oil temperature sensor. That is a hard code.

In a situation where the soft code leads to a hard code and, in this example, the oil temperature is an issue, you pull the sensor. If the sensor has a reading of 350 F (it is suppose to be 250 F, Dolce says), the next step is to find out why the oil is too hot. It might be several things: the oil cooler, the level of the oil, a clogged filter, clogged secondary filter or a broken line. “But you have to go through the discipline of inspecting the component that caused the problem,” Dolce says. And it is here that a fleet manager “has to use his savvy to determine why the temperature is so high,” he says.

“The importance of technology is to support the savvy of the people who interpret the information and have the experience to take care of the problem,” he says. “They know the age of the equipment, the load that’s on the tractor-trailer, and the utility truck. They know what’s going on because they have seen it a hundred times over and over again. They know the people, they know the problems.”

Dolce says fleet managers will find that, more than likely, costs that make up 70 percent of PM-generated repairs include tires, brakes, suspension, steering, engine cooling, and electrical.

“The purpose of tracking those PM costs, obviously, is to keep your fleet and classes of vehicles from breaking down in between PM cycles. It’s cheaper to fix the unit in the shop than send out a truck to get it or handle breakdowns in the yards at various locations.”

Dolce says that, generally speaking, a road call is at least double the cost of an in-shop repair of a vehicle on your property within your geographical location. Outside your geographical area, the cost exacerbates—it triples or quadruples since you have to hire somebody to do the work.  These costs are in addition to the costs incurred by the job because the equipment is down and not at work.

System installation

Dolce prefers that his own technicians install the diagnostic technology. “If the system crashes and burns you have accountability,” he says. “As good as vendors are and as good as the relationship you build with them is, after they do the installation on your equipment, they leave to work on other fleets all over the region. It might be two months before they get back to you.”

Software, on the other hand, is a “black hole,” he says. “It’s not something you can see or touch. If a software program writer has to rewrite a program, and he didn’t write the original, you have another situation. You’ve got somebody going into the language, and it’s almost trial and error. I honestly dread dealing with software people,” he says. “They have you at a disadvantage because you don’t speak their speak. They just jump in there and never tell you what they’re doing. Naturally, the software should have a compatible system that it can talk to, but most of us don’t have a compatible system. If they are not compatible, you have to have the manufacturer recommend somebody to make that happen.”

To safeguard vendor relationships and make sure everybody is on the same page, when Dolce puts together a solicitation, it contains terms and conditions that define all the things he wants: training, a five-year warranty on parts and labor and, if more than 5 percent of things go wrong (that means there is a defect in the system), he wants the remaining 95 percent repaired as well.

 “The software tells you the situation needs attention,” Dolce says. “Telematics can give you instant information to initiate immediate corrective action. Your savvy tells you what level of attention it needs and you either initiate corrective action or defer it until the next PM.”

Dolce practices “exception management” to make sure he doesn’t drown in data. Routine information doesn’t cross his desk. “It is too cumbersome, too voluminous,” he says. What he does want to see are alerts that go beyond a pre-established standard.

This clearly defined objective spelling out what Dolce expects from his telematics and software is one of the major foundations of a successful marriage between yellow iron and technology.