Question: What value do you get from the data-entry headaches of detailed, work-order-based fleet management software?
Answer: We're just starting to use the full-blown system to give us unit-by-unit information—seeing how much time is being spent on individual units and individual job codes," says Bob Nyman, manager of systems and specifications for utility conglomerate Dominion Resource Services. "It's a necessary evil to have all the data. With the changes it has already helped us make, we're not seeing the spikes in maintenance costs, and we're not seeing spikes in ownership and operating costs either. We only have about four years of data, and we're getting better as we gather more."
Dominion and its operating groups had managed equipment life by machine categories, making no distinctions between individual units or between operations. But variations in wear rates from region to region are too great to manage the whole fleet with one set of lifecycle expectations.
Dominion started using all of the work-order capabilities of its M4 software program, from CSI Maximus, in 1999. Work orders entered into the M4 system by Dominion mechanics track maintenance and repair parts and labor. The system also records fuel cost, depreciation and every other input.
Dominion owns or leases 8,000 units for equipment users in several states. Each operation is responsible for its own maintenance. So recording the data requires a great deal of discipline. When they could define cost inputs to each unit in terms of dollars per mile or hour, the company could start managing individual machines.
"The goal is to have a complete set of cost data over the life of each type of unit in the fleet. We'll need it in order to really understand full lifecyle cost," says Nyman. "It will take as long as 12 years for some heavy equipment, but we're already seeing full-life information on light vehicles."
That history has altered how Dominion buys, maintains, and disposes of light trucks and cars.
"The philosophy I hold is not to replace a unit based on what you've spent, but on what you're going to spend," says Nyman. "We tend to look at a class of vehicles and try to anticipate what maintenance to expect for machines in similar operations. Then when we're making a repair-or-replace decision, we look at the vehicle's history to see what we've done and at the whole class of vehicles to predict future maintenance needs."
Nyman says data mined from the M4 database (by copying the data to Microsoft Access and writing custom queries) revealed that one light-truck maker's turn-of-the-century pickups have consistently experienced out-of-warranty transmission failures. The result has been preferred-vendor status for another maker of light trucks even though Dominion typically avoids sole-source contracts.
"It's not easy to make a change like that, or even to start doing the kind of predictive maintenance we want," says Nyman. "When we begin to see regular problems, we have to answer a lot of questions: Are we seeing a group of lemons, or is the problem systemic? Is it a reflection of different geography? West Virginia can be some pretty tough terrain—do we see the same problems with transmissions in all areas?"
Detailed cost information across a broad fleet satisfied those challenges.
Work-order information has highlighted cost anomalies that parlayed into profitable specification changes on a group of medium-duty trucks that carry 55-foot material-handling booms.
"Our tire spend was through the roof in the first year," Nyman says. "Users in one region wanted a flotation tire, so they were swapping out tires as soon as the trucks hit the field. (In 1999, the company expensed approximately $75,000 in tires on 25 new trucks.) Our spec was not right for those users, so we added the tire option to our spec."
Disposal is another crucial piece of the lifecycle cost. Dominion sells about 700 vehicles every year, and M4 records the residual value the company receives at the end of each unit's life. Nyman's group has tackled the task of maximizing these values, developing a pilot program among Ohio operations. They've run reports comparing actual sales to auction results from the Automotive Market Reports (AMR). They've also analyzed which auctions produce the best values. Web markets and consignment opportunities have helped to move specialized vehicles like brine trucks from the gas fields and natural-gas-fueled cars from utility operations.
"There's a big utility auction in Columbus that consistently gets us good value on utility equipment, and an auto auction near Cleveland brings the best vehicle values," Nyman says. "We looked at transportation costs and decided that we are better off bringing all the light vehicles to Cleveland and equipment to Columbus.
"We've seen the average proceeds per sale go from the 75-percent range (of AMR values) up to 109 percent consistently over the last nine months. Proceeds per sale have increased $1,000 per unit."
Gathering machine-specific data one work order at a time is the key that has opened Dominion fleet operations to these changes. Nyman emphasizes that it has not been easy.
"Consistency of how the data is reported is of utmost importance," says Nyman. "We do fleet audits—we look at reports to make sure the data fits within the parameters of the data fields. And we go out and physically verify what we have.
"My group takes training out to the maintenance supervisors (who approve each work order electronically as it is submitted) and their staffs. There are a lot of great people working with us, but we still have a ways to go.
"Administering the system is time consuming, but it's definitely worth it."