So, the percentage of repair dollars are up. Find me some more juice! Squeeze that orange some more.

So, the percentage of repair dollars are up. Find me some more juice! Squeeze that orange some more.

Stuart sites a case:
Recently, there was a situation where one fleet, which is managed by a very competent VP of maintenance, converted the ailing maintenance program from truck-stop-breakdowns in route maintenance program to a sophisticated PM program that drove costs down, increased vehicle utilization, reduce the vehicle count and by all the beanies microscopic data management, verified the results of having the lowest maintenance, Cost per mile, in the history of the company. But each year as the “budget” was put together, as the freight rates fell, the percentages increased in maintenance cost as a percentage of revenue. Each year had a decline, but the pressure to continue to “take out the steak and leave only the sizzle” changed the PM philosophies, which this VP used to drive cost down and become more efficient. The point of this? Management, who contended that there was too much labor, changed the PM practices he previously used and that drivers were backed up waiting for PM’s to be completed in the shop. The CEO said, “Pump the trucks through the shop. Cut staff and I want you to just change oil, throw some grease at it and do a 10 point inspection, one hour per truck. The “in and out” plan sounds like a hamburger joint.

In defense of senior management, uncontrollable non-maintenance related costs were rising; revenues were dropping, at some point percentages do not work in the real world of maintenance. He had been using good PM procedures and the front line, on the floor management, to find more juice. The VP, unable to, unwilling, to compromise historical successful practices was sorted out by another CEO looking for juice; he found it in this VP, now squeezing again.

The moral of the story is if you are using a great PM program with sound management practices, squeezing out more juice, after a while you may get only dried orange peels. In other words, rising road breakdown costs, driver issues, employee frustrations and the lack of understanding from management becomes a cost reality.

For more information, visit www.darrystuart.com or email comments, questions or requests to Darry at: [email protected].

 

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