Numbers Tell the Tale

Sept. 28, 2010


Visual inspection serves as a safeguard against relying only upon the point system that Harris has created. Before replacing any piece of equipment, he checks to ensure it's the right decision.
Harris assigns a point to each machine, then uses those points to build a numerical system that allows him to make management decisions.

Headquarters: Lynchburg, Va.

Specialty: Snow removal, leaf collection, water-line maintenance, water treatment

Equipment Value: $10 million

Fleet Makeup: Basic sedans, police cars, mini-vans, pickups, dump trucks, snow-removal equipment, mowing equipment, and general maintenance equipment such as backhoes and wheel loaders

Support Staff: Supervisor, one team leader, eight technicians

Facilities: Central garage, fire division for fire equipment maintenance, school bus division for school bus maintenance landfill and refuge at landfill

Market Range: Lynchburg (50 square miles)

David R. Harris, Operations Supervisor

When it comes to fleet-equipment replacement, David R. Harris does it by the numbers.

As operations supervisor-fleet services, for the City of Lynchburg, Va., Harris is responsible for keeping the fleet of vehicles and machines used by the city's departments not only mechanically sound, but also properly pruned. Once a unit reaches the end of its usefulness, it has to be replaced.

Equipment managers use various methods for making replacement decisions, but Harris's process is purely numerical, assigning value points to each machine.

Harris, who is a certified equipment manager (CEM) through the Association of Equipment Management Professionals (AEMP), heard about a similar value point system more than five years ago. "I didn't reinvent the wheel," he says. "I did some investigation, came up with something, and modified it to better meet the needs of our individual fleet."

The results have paid off for the city and taxpayers, he says. Cars used in the fleet, for example, used to be replaced every 60 months. The cars were then sold and the money went back into the equipment-replacement fund. Previously he could expect a car to sell for about $1,800. After implemention of the point system, Harris says, the replacement cycle shrank to 48 months. Last year, cars sold for about $6,000. Similarly, resale values of dump trucks have increased from $2,000 or $3,000 to as much as $12,000, he says.

"We are now more efficient and are getting a better resale value because the vehicles are replaced on time, not when they are ragged out," says Harris.

Increased efficiency is reflected in the decline of workload. Although he is down two technicians, Harris has been able to keep the work up to date and not have more than a couple of days back log. He estimates that efficiency has increased from 69 to 77 percent since the system was implemented.

Although he has never calculated how much money he has saved taxpayers, he has managed to stretch budget dollars.

Harris replaces problem vehicles ahead of time, which cuts down on maintenance costs. One particular brand and model year of a sedan has a tendency to blow heat gaskets when it reaches a certain mileage, he says. "We've been able to get rid of a bunch of them prior that that happening."

The numerical system also allows city officials to do more accurate budgeting, Harris says. "If, for instance, the grounds department wants to know why a dump truck wasn't replaced as scheduled, we can show that the vehicle wasn't used that much," Harris says. "It might total only 4,000 miles a year. It has age on it, but the condition is good and the department keeps it. This keeps the vehicle from being replaced prematurely, allowing us to get full life cycle value out of it."

Harris uses a software package called CCG/Faster as a starting point for his modified point system. He has fine-tuned his approach based on a piece of equipment's life cycle. When a new vehicle or machine is purchased, it is assigned a specific life cycle, in years, depending on its application.

"From the time the new equipment is entered into the system," says Harris, "the system calculates data during that time frame and tells us when the unit needs replacing."

Using the value point system that he developed, Harris goes through the vehicle list and assigns a point to each unit based on such factors as application, the unit's age, mileage, maintenance cost, maintenance history, and reliability.

Application points could start at "1" for a sedan that is used to run around town. Snow removal or heavy load equipment might get four points. "A police car, on the other hand, that runs 24 hours a day, would be assigned five points," Harris says.

One point is assigned for each year of chronological age, and one point is assigned for each 5,000 miles of usage or for every 250 hours of operation.

Harris also accounts for maintenance. If maintenance costs are greater than or equal to 81 percent of replacement costs, the unit receives a five-point rating. At the other end of the spectrum, if maintenance costs are less than or equal to 20 percent of replacement cost, the unit is assigned one point.

"All this gets valued out and added and we come up with a point value," Harris says. "For instance, if a vehicle's scorecard totals zero to 17, it is rated as excellent, which means do not replace. Rating of 18 to 22 is good, and the vehicle should be reevaluated for next year's budget. A total of 23 to 27 points is satisfactory and qualifies the vehicle for replacement in this fiscal year, if the budget permits. Any vehicle with a rating of 28 points or above is in poor condition and needs priority replacement."

To provide checks and balances, the equipment-replacement system requires each city department to justify its request for a new vehicle or machine, says Harris. Justification includes details on why a unit needs replacing, overall condition and deficiencies. If a department wants a different type of vehicle, it must provide justification for the change.

The system also prevents replacing equipment just for the sake of replacing equipment, Harris says. "If someone has a seven-year-old pickup with 30,000 miles on it and just wants a new truck, we will not replace it," he says. As valuable as the point system is, Harris doesn't depend on numbers alone to make replacement decisions. Before he pulls any vehicle out of the fleet, he physically inspects it.

"I don't just go on the numbers," he says. "We also ask the departments to tell us why the vehicle, maintenance wise, is not meeting their needs anymore."

As Harris points out, his primary responsibility is to give the departments what they need, "but not for free. We don't waste the taxpayers' money."