Management Techniques

By Carol Birkland, Editor-in-Chief

Making the
outsourcing decision
When it comes to optimizing maintenance dollars,
outsourcing maintenance may provide solutions for some fleets
When it comes to outsourcing outsourced. To me this is a question spend any money until (not unless)
maintenance, one approach does not of what is most cost effective and you have to. To me this is a runaway
fit all. Every fleet n:\akes outsourcing meets my needs. If your needs are program and very costly in the long
determinations based on its own ever changing it will be as challeng- am. Monday morrung quarterbacking
Linique practices and needs. But, add ing to make the necessary internal will blaine the outsourcing provider,
in the unknowns of a poor economy changes as it will be to find outsourc- the economy or anyone else for the
and fleets may want to rethink their ing providers that can keep pace with ujiexpected results. I have been
decisions. your changes and provide some sort involved in outsourcing, primarily as
of budget compliance. If your chal- a provider. Those that understand
Economic factors lenges are the difficulties of manag- what fleet maintenance is
Vince DiSchino, director of business ing your internal operations, i.e. comprised of, know their
development for Regional staffing, technology changes, etc. true costs, have an asset
International & Idealease, says, "I feel then outsourcing may be the direc- management program
the economy should have little to do tion. This is still more operational in place that will keep
witli maintenance procedures except than fiscal." their fleet balanced, and
how it effects fleet mileage and uti- CHSchino goes on to say, "If have a way to monitor
lization. To further answer this, you your maintenance approach and manage results
must start with your maintenance is reactionary and break- can
philosophy. If your maintenance down-ini ha ted, your philos-
approach is preventive and 'fleet ophy is to not
ready' you will continue to spend
doLlars effectively as the fleet needs
it. This approach
takes planning,
asset managing,
and mainte-
nance support
in place,
whether
internal-
ly or

Geiger, presidenta ''iffúarcot tntematioM

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 intelligently approach and consider
outsourcing. Those that lack these fac-
tors usually are lookingforsomeone
to pass the responsibility to and blame
when it doesn't work."
Some fleets are committed to doing
their own work regardless of eco-
nomic conditions. David Foster, vice
president of field maintenance at
Southeastern Freight Lines, says, "If
anything we have tried to up the
quantity of transitions completed by
our own shops instead of outsourc-
ing. I see no benefits in outsourcing if
you can get the work completed
yourself. It is required for part of our
business where we do not have
shops, or cannot get the equipment
moved to one of our shop facilities.
We do a more efficient, quality repair
in-house. That is not to say we do not
have some quality vendors in some
locations."
Darry Stuart, president and CEO of
DWS Fleet Management Service, says,
"In my opinion and practice, you
should always provide maintenance
as if Chapter 11 was on the threshold.
That does not mean that you do not
spend money; it means you always
spend your money wisely. Whether
you outsource or provide in-house
repairs and maintenance. Take the
checkbook out of the hands of the
technician and provide mechanical
repair and business guidance.
"I do not think that either doing
maintenance in-house or outsourcing
it has drawbacks. Both have benefits,
and sometimes you have no choice,
based of how many trucks and loca-
tions are in consideration. As an
example: a small shop with two dif-
ferent technicians on first and second
shifts is cost prohibitive for a fleet of
two trucks. When you factor in
salary and benefits — it would be
cheaper to outsource one of the
shifts. It's true that technicians are
onsite to support the operation, but if
an outsourcing agreement helps to
cut cost, it's worth it."
Stuart goes on to remind fleets, "We
are not in the maiiitenance business
— we are really in the asset manage-
w\A/w.fleetequipmentmag.conni
ment biLsiness, of which our process is and experience to manage that, out-
fixing trucks. Outsourcing clearly sourcing maybe the answer. That's
costs more money, unless your main- where full service leasing comes into
tenance program leaves much to be play"
desired. If you factor in management At the end of the day, you have to
Outsourcing tire maintenance
As the owners of a mid-size fleet. Doc Hyder, liis brother and sister are
"hands-on" when it comes to fleet operations. Located in Dade City, Fla.,
Rowland Transportation operates a fleet of 63 tractors and 80 trailers —
all refrigerated. Its Kenworth T600s and T660s deliver perishable food-
stuffs throughout the lower 48, but concentrates more of its business in
the southeast. "With time-sensitive food products, the onus is on us to
deliver on-time, and that promise to customers is made easier thanks to
our relationship with Goodyear and the fleetHQ program," says Hyder.
"If we have a problem with a tire, Goodyear has a network of dealers
who can get us back up and running fast. And we don't have to haggle
over pricing — what we pay for a tire on the road is what we pay for the
tire at home."
The comer on curbing costs and downtime was turned four years ago
when Rowland developed a relationship with McGee Tire to provide a
era die-to-grave tire
program. The compa-
ny even began using
retreads — utilizing
Good year's UniCircle
process. McGee also
put the company's 4-
Tires-Now emergency
roadside service into
place tor Rowland.
The program evolved
into fleetHQ iii 2008.
"When Rowland
and other customers
signed up for
fleetHQ, we develop
a tire list so that when
fleetHQ is called, dis-
patchers know imme-
lál " *:5XCTt^^^.^¿c.- ^ ^ diately what type of
V «S^M^ii^^^^^^^Bwwi^^^B tires are needed for
'^ ^ ^ ^ ^ ^ replacement," says
Duane Koscielski of McGee Tire. "And, our customers can track online
the status of repairs and the history of using our emergency roadside pro-
gram. Plus they don't have to pay an incidence fee for using the service.
They just pay the service cost, and what they pay on the road for the tire
is what they pay if they bought directly from us. And we provide the bul
— so our customers get just one invoice."
"It doesn't get much better than that," says Hyder. "fleetHQ helps us
tremendously. It allows us to control our costs and control what tires are
going on our vehicles. It's also allowing us to get back up and running
faster than ever, which not only makes our drivers happy, but our cus-
tomers as well."
FLEET EQUIPMENT February 2009 2 3
plug in all the costs, real costs and maintenance expenses. ventive maintenance soluHon for
the burden costs, like building and He goes on, "Spend your time on trucks, regardless of manufacturer.
utilities, downtime, efficiency, and so planning and reviewing results. Note Since maintenance is as close as the
on. However, says Stuart, "Out- that the drawbacks of outsourcing nearest participating Kenworth deal-
sourcing just may be easier, sort of may appear to be more costly and er, fleets like Darcol don't have to run
like valet parking on a rainy day — difficult to sell to upper manage- empty miies to get trucks back to the
you know there's an upfront cost, but ment. Also, there may be difficulty shop for regular PMs or rely on unfa-
the benefits of staying dry in a down- keeping a provider in the loop when miliar maintenance shops to com-
pour may be worth the extra money. internal changes occur. Then there is plete the work.
At the end of the day, it's all about the possibility that a supplier may About three years ago, when Darcol
cost. Based on size, doing it yourself cancel, leaving you with few options, moved its warehouse operations to a
may put you in position to be the or the supplier may not give you the new 3 1 /2-acre cross dock facility in
low-cost provider." priority you feel you deserve." Winnipeg, Geiger enrolled his com-
pany in the maintenance program
Benefits, drawbacks Outsourcing with an OEM through Custom Truck Sales, the
There are many things to consider Darcol Intemationai operates an all- local Kenworth dealer. While he
when choosing to hire an outsource Kenworth fleet of 35 trucks, includ- expected results from the program,
maintenance provider. When it ing Kenworth T800s, W900s, and Geiger said he was surprised at just
comes to benefits, DiSchino believes T660s. Paul Geiger, president and how much money it saved his com-
that a fieet's service provider has the founder, says, "Our customers rely pany. Darcol reduced fleet mainte-
responsibility for proper staffing and on our promise to deliver their ship- nance costs by $55,000 in the compa-
skill fulfillment as follows: ments safely and on time. Having a ny's first year with the Kenworth
• It should be operating under good preventive maintenance pro- program. Darcoi realized the savings
some industry standards for time gram is absolutely critical to ensuring by outsourcing its maintenance
and labor charges. that our power units are in top shape needs. Before Kenworth
PremierCare, the company operated
• It is responsible for compliance and we don't have delays due to
a maintenance shop, supplying it
with OSHA, EPA, DOT, etc. equipment failure. That's why we
with parts and its own technician.
• The work should be guaranteed. rely on the Kenworth PremierCare
• The company should provide you Preventive Maintenance Program to Plus, when Darcol's trucks are out
the needed reports that you have stay on top of truck maintenance. on the road, drivers can call 80Ü-KW-
requested in your negotiations. The maintenance program provides ASSIST to reach the PremierCare
• The outsourcer prepays all your fleets of any size a customized pre- Customer Center, which operates
seven days a week, 24 hours a day.
The program representative can
Jf Did you know... make the necessary arrangements,
authorize service and handle all of
The top 5 "new technologies" expected to be added to the financial matters. Darcol dis-
mediuni'/heavy-duty power units in the next five years are: patchers no longer have to make calls
to arrange service, and drivers do not
• Auxiliary Power Units/idle Reduction Products have to worry about billing issues.
• Roli Stabiiity/Accident Prevention Products The dispatchers also use the
• GPS/Sateiiite Tracking/Communication Products Kenworth PremierCare Maintenance
• Super Singie Wide Based Tires Manager's online service tracker to
• Automatic/Automated Transmissions determine when repairs will be com-
pleted. That function is important to
Source: CK Commerçai Vehicle Research 2008 Fleet Study. For more Darcol, which offers an online freight
information on how to obtain the iuU 30-page report, please send tracking and customer order feature
inquiry to dmQniz@babcQx.com. on its website to provide customers
the option to monitor freight wWle in
CK Commercial Vehicle Research also transit or check the availability of
publishes the quarterly Fleet Sentiment Darcol trucks. Using the information
Reputt, which covers equipment buying from the maintenance manager, dis-
pians and fleet opinion on current industry RageareÂ. patchers can update the company's
issues, www.ckcvr.com freight tracking and order system on
the Darcol website, »ic

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