TRENDS IN FLEET MANAGEMENT 20TH ANNUAL CONFERENCE SAVANNAH, GA SEPTEMBER 2006 Copyright © 2006 Mercury Associates, Inc. All rights reserved.
PAUL LAURIA
KEYSTONE REVISITED
Kansas Examining State Vehicle “Mess” Tennessee Governor Orders Review to See if State Fleet is Too Large Pennsylvania Legislators Keep Their Own Cars in the Budget NC Monitors Usage of State’s Fleet Vehicles Arizona Limits Use of Fleet Vehicles “What Should the Governor Drive” Campaign Kicks Off in Michigan California Bill Would End State Purchases of SUVs OH Lawmaker Proposes Fleet Cuts Copyright © 2006 Mercury Associates, Inc. All rights reserved.
MORE FROM KEYSTONE
Fleet Contains Too Many SUVs, PA Governor Says CA Lawmakers Could Lose SUVs {MI} State Representative…wants to cut $12.5 million from the $71 million budget for the fleet. Report Finds Philadelphia's SUV Fleet Costly Council Rejects Request to Replace 250 City {of Houston} Cars County Fuel Bill Fills Up with Premium Purchases Alderman Challenges Police Cruiser Take-Home Policy
Copyright © 2006 Mercury Associates, Inc. All rights reserved.
FLEET MANAGEMENT PREOCCUPATIONS IN 2003
FLEET DOWNSIZING
SUSPENDING VEHICLE PURCHASES
OUTSOURCING
RESTRICTING TAKE-HOME USE
SCRUTINIZING VEHICLE ASSIGNMENTS
Copyright © 2006 Mercury Associates, Inc. All rights reserved.
WHAT’S THE DIFFERENCE BETWEEN 2003 AND 2006?
FOCUS ON CUTTING COSTS RATHER THAN ON ADDING VALUE FOCUS ON REACTING TO MANAGERIAL AND POLITICAL INTERVENTION RATHER THAN ON SHAPING OR INFLUENCING DIALOGUE AND DECISION MAKING
Copyright © 2006 Mercury Associates, Inc. All rights reserved.
KEYS TO EFFECTIVE FLEET MANAGEMENT
TIMELY VEHICLE REPLACEMENT
GOOD CUSTOMER SERVICE
COLLABORATION WITH CUSTOMERS
LEVERAGING OF CORE COMPETENCIES
SELF SUFFICIENCY AND AUTONOMY
Copyright © 2006 Mercury Associates, Inc. All rights reserved.
FLEET MANAGEMENT PRIORITIES IN 2006
FLEET RENEWAL AND REPLACEMENT * LIFE CYCLE COST ANALYSIS ALTERNATIVE CAPITAL FINANCING APPROACHES CENTRALIZATION OF FLEET * MANAGEMENT FUNCTIONS FUEL EFFICIENCY ASSET MANAGEMENT PROCESSES STRATEGIC BUSINESS PLANNING* Copyright © 2006 Mercury Associates, Inc. All rights reserved.
FLEET RENEWAL AND REPLACEMENT
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WHY DO ORGANIZATIONS HAVE OLD FLEETS?
LACK OF UNDERSTANDING OF/FOCUS ON LONG-TERM FLEET REPLACEMENT COSTS LACK OF AN EFFECTIVE CAPITAL FINANCING PROGRAM LACK OF FOCUS ON TOTAL COST OF VEHICLE OWNERSHIP LACK OF UNDERSTANDING OF VEHICLE LIFE CYCLE COSTS Copyright © 2006 Mercury Associates, Inc. All rights reserved.
KEY ELEMENTS OF AN EFFECTIVE FLEET REPLACEMENT PROGRAM
EMPIRICALLY VALIDATED REPLACEMENT CYCLE GUIDELINES LONG-TERM REPLACEMENT PLAN, UPDATED ANNUALLY CAPITAL FINANCING PROGRAM THAT MINIMIZES VOLATILITY OF ANNUAL REPLACEMENT FUNDING REQUIREMENTS REPLACEMENT PRIORITIZATION AND EARMARKING PROCESS BUDGETING AND FUNDING PROCESS BASED ON ALL OF THE ABOVE Copyright © 2006 Mercury Associates, Inc. All rights reserved.
Wheel Loader Life Cycle Capital, Operating, and Total Costs $22 $20 $18
Cost (000)
$16 $14 $12 $10 $8 $6 $4 $2 $0 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
Vehicle Age (years) Annual Operating Cost
Annual Depreciation
Copyright © 2006 Mercury Associates, Inc. All rights reserved.
Annual Total Cost
CALCULATING EQUIVALENT ANNUAL COST: THE FORMULA EAC = NPV ∗
r(1+r)n (1+r)n-1
WHERE: EAC IS THE EQUIVALENT ANNUAL COST OF A STREAM OF FUTURE COSTS NPV IS THE PRESENT VALUE OF A STREAM OF FUTURE COSTS r IS THE DISCOUNT RATE LESS INFLATION n IS THE LENGTH IN YEARS OF THE STREAM OF COSTS Copyright © 2006 Mercury Associates, Inc. All rights reserved.
CALCULATING EQUIVALENT ANNUAL COST: AN EXAMPLE Replacement Cycle in Years:
1
2
3
4
5
6
7
8
5,784 $ 13,035 $
5,719 $ 18,188 $
5,792 $ 23,555 $
5,721 $ 28,936 $
5,478 $ 34,131 $
5,660 $ 39,548 $
5,656 44,992
TOTAL ASSET COST Annual Total Cost $ Cumulative Total Cost $
8,101 $ 8,101 $
NPV of Cumulative Total Cost $ 7,643 $ 12,298 $ 17,159 $ 22,222 Equivalent Annual Cost $ 7,872 $ 6,427 $ 6,066 $ 5,978 $ 5,360,849 $ 4,376,695 $ 4,130,997 $ 4,071,252 Cost Savings (per vehicle) Associated with Replacing in this Year $ 897 Total Cost Savings (all vehicles) Associated with Replacing in this Year $ 610,595 NPV of EAC Stream $
EAC Stream Over Asset's Life
$ 27,298 $ 5,961 $ 4,059,221 $ 914 $ 622,625
$ 32,199 $ 37,310 $ 42,445 $ 5,944 $ 5,988 $ 6,047 $ 4,047,759 $ 4,078,139 $ 4,117,735 $ 931 $ 887 $ 828 $ 634,088 $ 603,708 $ 564,111
$7,643 $12,298 $17,159 $22,222 $27,298 7,872 $ 6,427 $ 6,066 $ 5,978 $ 5,961 $ $ 6,427 $ 6,066 $ 5,978 $ 5,961 $ $ 6,066 $ 5,978 $ 5,961 $ $ 5,978 $ 5,961 $ $ 5,961 $ $
Copyright © 2006 Mercury Associates, Inc. All rights reserved.
$32,199 5,944 5,944 5,944 5,944 5,944 5,944
$ $ $ $ $ $ $
$37,310 5,988 5,988 5,988 5,988 5,988 5,988 5,988
$ $ $ $ $ $ $ $
$42,445 6,047 6,047 6,047 6,047 6,047 6,047 6,047 6,047
Wheel Loader Equivalent Annual Costs $22 $20 $18 $16 Cost (000)
$14 $12 $10 $8 $6 $4 $2 $0 1
2
3
4
5
6
7
8
9
10
11
12
13
14
Replacement Cycle (years)
Copyright © 2006 Mercury Associates, Inc. All rights reserved.
15
16
17
18
TRANSLATING LCA RESULTS INTO ECONOMIC/BUDGET(?) IMPACTS (244 WHEEL LOADERS)
REPLACEMENT CYCLE (YEARS)
18 17 16 15 14 13 12 11
ANNUAL COST SAVINGS PER UNIT
$ $ $ $ $ $ $ $
834 1,495 2,011 2,437 2,751 2,959 3,111
ANNUAL FLEET-WIDE COST SAVINGS
$ $ $ $ $ $ $ $
Copyright © 2006 Mercury Associates, Inc. All rights reserved.
203,397 364,891 490,575 594,683 671,271 721,963 759,138
Dump Truck Equivalent Annual Cost $22 $20 $18 $16 Cost (000)
$14 $12 $10 $8 $6 $4 $2 $1
2
3
4
5
6
7
8
9
10
11
Replacement Cycle (years)
Copyright © 2006 Mercury Associates, Inc. All rights reserved.
12
13
14
15
TRANSLATING LCA RESULTS INTO BUDGET IMPACTS (1,313 SINGLE-AXLE DUMP TRUCKS)
REPLACEMENT CYCLE (YEARS)
ANNUAL COST SAVINGS PER UNIT
15 14 13 12 11 10 9 8
$ $ 168 $ 295 $ 432 $ 649 $ 827 $ 959 $ 1,008
ANNUAL FLEET-WIDE COST SAVINGS
$ $ 220,866 $ 387,060 $ 567,604 $ 851,636 $ 1,085,876 $ 1,259,228 $ 1,322,968
Copyright © 2006 Mercury Associates, Inc. All rights reserved.
Pickup Truck Equivalent Annual Cost
$22 $20 $18 $16 Cost (000)
$14 $12 $10 $8 $6 $4 $2 $1
2
3
4
5
6
7
8
9
10
11
12
Replacement Cycle (years)
Copyright © 2006 Mercury Associates, Inc. All rights reserved.
13
14
15
TRANSLATING LCA RESULTS INTO BUDGET IMPACTS (681 PICKUP TRUCKS)
REPLACEMENT CYCLE (YEARS)
14 13 12 11 10 9 8 7 6
ANNUAL COST SAVINGS PER UNIT
$ $ $ $ $ $ $ $ $
240 382 525 647 745 828 887 931
ANNUAL FLEET-WIDE COST SAVINGS
$ $ $ $ $ $ $ $ $
Copyright © 2006 Mercury Associates, Inc. All rights reserved.
163,574 260,388 357,431 440,605 507,069 564,111 603,708 634,088
CUMULATIVE EFFECTS OF TIMELY VEHICLE REPLACEMENT (3 ASSET CLASSES; 25% OF THE FLEET)
VEHICLE TYPE PICKUPS DUMPS LOADERS TOTAL
QUANTITY 681 1,313 244 2,238
ANNUAL SAVINGS $ 634,088 $ 1,322,968 $ 759,138 $ 2,716,194
SAVINGS RANGE FROM 9 TO 22 PERCENT OF CURRENT ANNUAL COSTS. Copyright © 2006 Mercury Associates, Inc. All rights reserved.
IMPACT OF FUEL EFFICIENCY ON FLEET COSTS (681 PICKUP TRUCKS; 1% ANNUAL DETERIORATION IN FUEL EFFICIENCY)
REPLACEMENT CYCLE (YEARS)
14 13 12 11 10 9 8 7 6
ANNUAL COST SAVINGS PER UNIT
$ $ $ $ $ $ $ $ $
ANNUAL FLEETWIDE COST SAVINGS
240 382 525 647 745 828 887 931
Copyright © 2006 Mercury Associates, Inc. All rights reserved.
$ $ 163,574 $ 260,388 $ 357,431 $ 440,605 $ 507,069 $ 564,111 $ 603,708 $ 634,088
IMPACT OF FUEL EFFICIENCY ON VEHICLE LIFE CYCLE COSTS
(681 PICKUP TRUCKS; 3% VERSUS 1% ANNUAL DETERIORATION IN VEHICLE FUEL EFFICIENCY) ANNUAL REPLACEMENT ANNUAL COST FLEET-WIDE CYCLE SAVINGS COST (YEARS) PER UNIT SAVINGS 14 $ 206 $ 140,006 13 $ 384 $ 261,497 12 $ 590 $ 401,734 11 $ 791 $ 538,838 10 $ 968 $ 658,936 9 $ 1,115 $ 759,402 8 $ 1,245 $ 847,722 7 $ 1,345 $ 916,058 6 $ 1,429 $ 972,815 5 $ 1,447 $ 985,530 4 $ 1,462 $ 995,630 Copyright © 2006 Mercury Associates, Inc. All rights reserved.
IMPACT OF FUEL EFFICIENCY ON VEHICLE LIFE CYCLE COSTS
(681 PICKUP TRUCKS; $3.60 VERSUS $2.50 PER GALLON FUEL COST) REPLACEMENT CYCLE (YEARS) 14 13 12 11 10 9 8 7 6 5 4
ANNUAL COST SAVINGS PER UNIT $ $ 356 $ 553 $ 748 $ 921 $ 1,068 $ 1,199 $ 1,302 $ 1,391 $ 1,416 $ 1,440
Copyright © 2006 Mercury Associates, Inc. All rights reserved.
ANNUAL FLEET-WIDE COST SAVINGS $ $ 242,369 $ 376,452 $ 509,419 $ 627,219 $ 727,061 $ 816,280 $ 886,896 $ 947,182 $ 964,554 $ 980,324
IMPACT OF VEHICLE AGE ON INDIRECT M&R COSTS REFUSE TRUCK MAINTENANCE AND REPAIR COSTS AS A FUNCTION OF VEHICLE AGE AND USAGE COST PER GALLON OF FUEL CONSUMED
$6 $5 $4 $3 $2 $1 $0 1
2
3
4
5
6
7
8
Copyright © 2006 Associates, Inc. AGEMercury IN YEARS All rights reserved.
9
10
11
IMPACT OF VEHICLE DOWNTIME ON FLEET USER ORGANIZATION COSTS NUMBER OF VEHICLES IN THE FLEET WORK DAYS PER YEAR VEHICLE WORK DAYS PER YEAR
8,700 251 2,183,700
VEHICLE DAYS OUT OF SERVICE @ 5 PERCENT AVERAGE DOWNTIME RATE
109,185
MARGINAL PRODUCTIVE DAYS LOST PER YEAR @ 2 HOURS PER VEHICLE DOWN DAY
218,370
FTE EMPLOYEES WORTH OF LOST PRODUCTIVITY AT 1,720 PRODUCTIVE HOURS PER EMPLOYEE PER YEAR
127
ADDITIONAL SALARY AND FRINGE BENEFIT COSTS PER YEAR @ $60,000 PER FTE EMPLOYEE $7,617,558 TO COVER LOST PRODUCTIVITY Copyright © 2006 Mercury Associates, Inc. All rights reserved.
CENTRALIZATION OF FLEET MANAGEMENT FUNCTIONS
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TYPES OF CENTRALIZATION
PROGRAM CONSOLIDATION
CENTRALIZED POLICY SETTING
CENTRALIZED BUDGETING
CENTRAL SERVICE PROVIDER LEADERSHIP
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THEORETICAL BENEFITS OF CENTRALIZATION
EFFECTIVE MANAGEMENT DUE TO INVESTMENTS MADE POSSIBLE BY ECONOMIES OF SCALE
PROFESSIONAL FLEET MANAGEMENT STAFF
STATE-OF-THE-ART FMIS
POLICIES, PROCEDURES, ANALYTICAL TOOLS
EFFICIENCIES ARISING FROM STANDARDIZATION, AVOIDANCE OF DUPLICATION OF EFFORT, AND SHARED USE OF RESOURCES EQUITABLE TREATMENT OF FLEET USERS FOCAL POINT FOR FLEET-RELATED ADVOCACY, ACCOUNTABILITY, AND CONTROL
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THEORETICAL BENEFITS OF DECENTRALIZATION
UNDERSTANDING OF OPERATING ENVIRONMENT AND RESPONSIVENESS TO OPERATING NEEDS DIRECT AND IMMEDIATE ACCOUNTABILITY FOR PERFORMANCE AVOIDANCE OF CROSS-SUBSIDIZATION OF RESOURCE AND SERVICE COSTS (EQUITABLE TREATMENT OF FLEET USERS) AVOIDANCE OF BUREAUCRATIC PROCEDURES THAT DO NOT ADD VALUE Copyright © 2006 Mercury Associates, Inc. All rights reserved.
OBSTACLES TO CENTRALIZATION
STATUTORY AUTHORITY CUSTOMER SERVICE NEEDS CUSTOMER SERVICE ORIENTATION POLITICAL ADVOCATES ORGANIZATIONAL CAPACITY CONTRACTUAL OBLIGATIONS (PURCHASING, CB, ETC.) REGULATORY COMPLIANCE ACCOUNTING RULES COSTS (TRANSITIONAL AND/OR ONGOING) Copyright © 2006 Mercury Associates, Inc. All rights reserved.
KEY STEPS IN PURSUING CENTRALIZATION 1. 2. 3. 4. 5. 6.
BE CAREFUL WHAT YOU ASK FOR IDENTIFY MOTIVES VERIFY STATUTORY AUTHORITY AND POLITICAL STANDING CONFIRM CAPACITY/CAPABILITY TO PERFORM ADDED RESPONSIBILITIES WELL ESTABLISH PRIORITIES BASED ON ABILITY TO ADD VALUE (IDENTIFY LOW-HANGING FRUIT) IDENTIFY COMPARATIVE STRENGTHS AND WEAKNESSES OF TARGET FUNCTIONS/PROGRAMS Copyright © 2006 Mercury Associates, Inc. All rights reserved.
KEY STEPS IN PURSUING CENTRALIZATION 7. ESTABLISH BASELINE MEASURES OF COST AND QUALITY 8. BUILD AND PRESENT BUSINESS CASE 9. DEVELOP DETAILED IMPLEMENTATION PLAN 10. CONSIDER “NON-INVASIVE” ALTERNATIVES TO FULL-SCALE CONSOLIDATION OF PROGRAMS a. POLICY SETTING b. COORDINATION/LEADERSHIP c.
TRAINING AND TECHNICAL SUPPORT
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DEVELOPING A STRATEGIC BUSINESS PLAN
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WHY DEVELOP A BUSINESS PLAN?
TO MANAGE THE EFFECTS OF CHANGE TO GUIDE AND ACHIEVE IMPROVEMENT TO PROMOTE AUTONOMY AND SELF SUFFICIENCY TO ATTAIN STATURE AND INFLUENCE TO PROVIDE OPPORTUNITIES FOR GROWTH AND PROFESSIONAL ADVANCEMENT Copyright © 2006 Mercury Associates, Inc. All rights reserved.
BUSINESS PLANNING PROCESS 1. DEFINE MANAGEMENT ROLES
8. MEASURE RESULTS
2. DEFINE MANAGEMENT FUNCTIONS
7. REENGINEER AND IMPLEMENT
3. DEFINE RESPONSIBILITIES
6. DEVELOP ACTION PLANS
4. IDENTIFY AND PRIORITIZE IMPROVEMENTS
9. REFINE/DEFINE 5. OUTLINE NEW STRATEGIES STRATEGIES
Copyright © 2006 Mercury Associates, Inc. All rights reserved.
MANAGEMENT ROLES
BUSINESS PROCESS EXECUTION
POLICY AND PROCEDURE DEVELOPMENT
BEST PRACTICES AND TECHNOLOGY MONITORING AND EDUCATING INDUSTRY LIAISON GOAL SETTING AND PERFORMANCE REPORTING
EQUIPMENT MANAGEMENT ADVOCACY
EXECUTIVE MANAGEMENT SUPPORT Copyright © 2006 Mercury Associates, Inc. All rights reserved.
SAMPLE VEHICLE MANAGEMENT FUNCTIONS MAINTENANCE MANAGEMENT
PRE-TRIP INSPECTION PM PROGRAM DEVELOPMENT WORK PLANNING AND SCHEDULING DEFECT REPORTING AND SERVICE WRITING WORK ESTIMATION AND ASSIGNMENT M&R SERVICE DELIVERY WORK SUPERVISION ROAD CALL MANAGEMENT FIELD SERVICE MANAGEMENT WARRANTY MANAGEMENT QUALITY ASSURANCE Copyright © 2006 Mercury Associates, Inc. All rights reserved.
SAMPLE BUSINESS MANAGEMENT FUNCTIONS HUMAN RESOURCES MANAGEMENT
ORGANIZATION STRUCTURE DEFINITION DEFINITION OF JOB RESPONSIBILITIES STAFF ASSIGNMENT AND UTILIZATION MANAGEMENT EMPLOYEE CLASSIFICATION AND COMPENSATION EMPLOYEE RECRUITING EMPLOYEE TRAINING AND PROFESSIONAL DEVELOPMENT EMPLOYEE PERFORMANCE MANAGEMENT Copyright © 2006 Mercury Associates, Inc. All rights reserved.
POSSIBLE RESPONSIBILITY ASSIGNMENTS
FLEET MANAGEMENT ORGANIZATION ALONE
FLEET USER ORGANIZATIONS ALONE
FLEET MANAGEMENT LEAD
USER ORGANIZATIONS LEAD
SHARED EQUALLY BETWEEN FLEET MANAGEMENT AND FLEET USER ORGANIZATIONS Copyright © 2006 Mercury Associates, Inc. All rights reserved.
FUNCTIONAL RESPONSIBILITY DEFINITION MATRIX ROLES AND RESPONSIBILITIES
BUSINESS PROCESS EXECUTION
BEST PRACTICES & TECHNOLOGY MONITORING & EDUCATING
INDUSTRY LIAISON
GOAL SETTING AND PERFORMANCE REPORTING
MANAGEMENT FUNCTION POLICY AND PROCEDURE DEVELOPMENT
EQUIPMENT MANAGEMENT ADVOCACY
EQUIPMENT ASSIGNMENT 1
EQUIPMENT BUSINESS NEED DEFINITION
C
D
C
NA
NA
C
2
EQUIPMENT PROVISION ALTERNATIVES ANALYSIS / DECISION MAKING
C
D,C
C
NA
NA
D,C
3
PRIVATELY OWNED VEHICLE USE REIMBURSEMENT MANAGEMENT
C
D
C
C
C
C
4
TAKE-HOME USE MANAGEMENT
C
D
C
C
C
C
5
EQUIPMENT SPECIFICATIONS DEVELOPMENT
C
C,D
C,D
C
NA
C
6
CONTRACT ESTABLISHMENT AND MANAGEMENT
C
C
C
NA
NA
C
7
AD HOC PURCHASING
C
C/D
C
NA
C
C
8 9
EQUIPMENT ACCEPTANCE, PREPARATION, AND DELIVERY COMMERCIAL EQUIPMENT RENTAL
C
C/D
C
C
C
C
C
D/C
C
C
C
C
10
EQUIPMENT DEACCESSIONING
C
D,C
C
NA
C
C
11
EQUIPMENT DISPOSAL
C
D
C
C
C
C
12
EQUIPMENT PERFORMANCE MANAGEMENT
C
C,D
C
C
C
C
13 14
OPERATOR CERTIFICATION AND RECORD KEEPING OPERATOR TRAINING
C
D,C
C
C
C
C
C
C/D
C
C
C
C
15
PRE-TRIP INSPECTION AND RECORD KEEPING
C
D
C,D
C
C
C
16
EQUIPMENT MISUSE/ABUSE MANAGEMENT
C
D
C
NA
C
NA
17
ACCIDENT REPORTING, INVESTIGATION, AND MANAGEMENT
C
C,D
C
C
C
C
18
SUBROGATION
C
C
C
C
C
C
19
EQUIPMENT UTILIZATION GUIDELINES ESTABLISHMENT
C
C
C
NA
C
C,D
20
EQUIPMENT UTILIZATION DATA CAPTURE
C
D
C
NA
C
C
21
INVESTIGATION OF UTILIZATION "ABNORMALITIES"
C
C/D
C
NA
C
NA
22
EQUIPMENT REASSIGNMENT OR DISPOSAL
C
C/D
C
NA
C
C
EQUIPMENT ACQUISITION AND DISPOSAL
EQUIPMENT OPERATION MANAGEMENT
EQUIPMENT UTILIZATION MANAGEMENT
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IMPROVEMENT DEFINITION AND PRIORITIZATION CRITERIA
IMPACT ON FLEET PERFORMANCE
QUALITY OF CURRENT PRACTICES
REENGINEERABILITY
OPPORTUNITY FOR INNOVATION
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FUNCTIONAL IMPROVEMENT PRIORITIZATION MATRIX PRIORITIZATION FACTORS MANAGEMENT FUNCTION IMPACT ON PERFORMANCE
QUALITY OF CURRENT PRACTICES
REENGINEERABILITY
TIMING OPPORTUNITY FOR INNOVATION
EQUIPMENT ASSIGNMENT 1
EQUIPMENT BUSINESS NEED DEFINITION
H
L
H
L
2
EQUIPMENT PROVISION ALTERNATIVES ANALYSIS / DECISION MAKING
H
L
H
M
3
POV REIMBURSEMENT MANAGEMENT
M
L
L
H
4
TAKE-HOME USE MANAGEMENT
M
L
H
M
5
EQUIPMENT SPECIFICATIONS DEVELOPMENT
H
M
H
H
6
CONTRACT ESTABLISHMENT AND MANAGEMENT
H
M
M
H
7
AD HOC PURCHASING
H
L
H
H
8
EQUIPMENT ACCEPTANCE, PREP, AND DELIVERY COMMERCIAL EQUIPMENT RENTAL
H
M
H
M
9
H
L
H
M
10
EQUIPMENT DEACCESSIONING
H
M
M
L
11
EQUIPMENT DISPOSAL
H
M
H
H
12
EQUIPMENT PERFORMANCE MANAGEMENT
H
L
M
H
13 14
OPERATOR CERTIFICATION AND RECORD KEEPING OPERATOR TRAINING
15 16
EQUIPMENT ACQUISITION AND DISPOSAL
EQUIPMENT OPERATION MANAGEMENT H
L
H
M
H
L
M
H
PRE-TRIP INSPECTION AND RECORD KEEPING
H
L
M
H
EQUIPMENT MISUSE/ABUSE MANAGEMENT
M
L
M
M
17
ACCIDENT REPORTING, INVESTIGATION, AND MANAGEMENT
H
L
H
H
18
SUBROGATION
M
L
M
L
19
EQUIPMENT UTILIZATION GUIDELINES ESTABLISHMENT
H
L
H
L
20
EQUIPMENT UTILIZATION DATA CAPTURE
H
L
H
H
21
INVESTIGATION OF UTILIZATION "ABNORMALITIES"
H
L
H
L
22
EQUIPMENT REASSIGNMENT OR DISPOSAL
H
L
H
L
EQUIPMENT UTILIZATION MANAGEMENT
Copyright © 2006 Mercury Associates, Inc. All rights reserved.
YEAR 1
YEAR 2
YEAR 3
SAMPLE IMPROVEMENT STRATEGY
EQUIPMENT DEACCESSIONING ISSUES AND OPPORTUNITIES
CONTROLLING FLEET SIZE REQUIRES A FORMAL PROCESS FOR REMOVING UNNEEDED ASSETS FROM THE FLEET RETENTION OF “REPLACED” ASSETS FOR BACK-UP PURPOSES RESULTS IN UNPLANNED INCREASES IN FLEET SIZE ASSETS THAT HAVE BEEN REPLACED CAN SERVE TEMPORARY AND SEASONAL EQUIPMENT NEEDS OPERATING EQUIPMENT BEYOND ITS USEFUL LIFE INCREASES FLEET OPERATING COSTS AND IMPAIRS FLEET SAFETY
STRATEGY DEVELOP FORMAL POLICIES AND PROCEDURES GOVERNING THE RETENTION, USE, REPAIR, AND REMOVAL FROM THE FLEET OF FRONT-LINE ASSETS Copyright © 2006 Mercury Associates, Inc. THAT HAVE BEEN REPLACED All rights reserved.
SAMPLE STRATEGY
MANAGING TAKE-HOME USE OF DOT VEHICLES
ISSUES AND OPPORTUNITIES
TAKE-HOME USE CAN SERVE AS A FORM OF COMPENSATION TAKE-HOME USE CAN INCREASE EMPLOYEE PRODUCTIVITY, EFFICIENCY, AND EFFECTIVENESS TAKE-HOME USE IS SUSCEPTIBLE TO UNDER USE AND ABUSE
TAKE-HOME USE INCREASES FLEET COSTS
TAKE HOME USE INCREASES DOT’S LIABILITY EXPOSURE
STRATEGY ANALYZE COSTS AND BENEFITS OF CURRENT TAKEHOME PRACTICES PREPARATORY TO THE DEVELOPMENT OF FORMAL POLICIES AND PROCEDURES GOVERNING SUCH USE Copyright © 2006 Mercury Associates, Inc. All rights reserved.
SAMPLE STRATEGY
PERFORMANCE MEASUREMENT AND REPORTING
ISSUES AND OPPORTUNITIES
QUANTITATIVE PERFORMANCE MEASUREMENT IS A KEY TECHNIQUE FOR IDENTIFYING IMPROVEMENT OPPORTUNITIES THE DISSEMINATION OF PERFORMANCE DATA HEIGHTENS AWARENESS IN FLEET MANAGEMENT AND FLEET USER ORGANIZATIONS OF THE SOUNDNESS OF THEIR PERFORMANCE DESPITE ITS SHORTCOMINGS, EMS CAPTURES DATA THAT IS SUITABLE FOR CALCULATING MANY HIGHLEVEL FLEET-RELATED PERFORMANCE STATISTICS
STRATEGY DESIGN AND IMPLEMENT AN EQUIPMENT AND FLEET MANAGEMENT PERFORMANCE MEASUREMENT PROCESS USING DATA FROM THE CURRENT EMS Copyright © 2006 Mercury Associates, Inc. All rights reserved.
SAMPLE ACTION/TASK PLAN INVESTIGATION OF EQUIPMENT UTILIZATION ANOMALIES 1. DEFINE AND CONFIRM DOT GOALS WRT THE DISPOSITION OF APPARENTLY UNDER-UTILIZED ASSETS A. DEFINE PURPOSE OF FOLLOW-UP INVESTIGATION OF ASSETS WITH "ABNORMAL" USE B. SECURE STAKEHOLDER APPROVAL 2. DEFINE RESPONSIBILITY AND AUTHORITY FOR THE INVESTIGATION OF APPARENTLY IMPROPERLY UTILIZED PERMANENTLY ASSIGNED ASSETS A. DETERMINE RESPONSIBILITY BY ASSESSING PROS AND CONS OF CENTRAL OFC VERSUS DISTRICT INVESTIGATION OF ANOMALIES B. DETERMINE CONSISTENCY OF RECOMMENDED RESPONSIBILITY WITH CURRENT AUTHORITY AND IDENTIFY NEEDED CHANGES/CLARIFICATIONS Copyright © 2006 Mercury Associates, Inc. All rights reserved.
SAMPLE ACTION/TASK PLAN INVESTIGATION OF EQUIPMENT UTILIZATION ANOMALIES (CONT.) 3. DEVELOP PROCESS FOR INVESTIGATING AND EVALUATING THE CAUSES OF AND DETERMINING REMEDIES FOR, OVER OR UNDER UTILIZATION ASSETS A. DRAFT FORMAL POLICY AND PROCEDURE STATEMENT OUTLINING INVESTIGATION AND DECISION MAKING PROCESS B. TEST PROPOSED PROCESS AND IDENTIFY NEEDED REFINEMENTS C. SOLICIT FEEDBACK FROM SELECTED STAKEHOLDERS AND FINALIZE PPS 4. SECURE APPROVAL OF FORMAL POLICY AND PROCEDURE STATEMENT A. SUBMIT DRAFT PPS TO MANAGEMENT SERVICES FOR REVIEW AND APPROVAL B. SUBMIT DRAFT PPS TO ASST COMMISSIONER FOR OPS FOR REVIEW AND ©APPROVAL Copyright 2006 Mercury Associates, Inc. All rights reserved.
SAMPLE ACTION/TASK PLAN INVESTIGATION OF EQUIPMENT UTILIZATION ANOMALIES (CONT.) 5. DEVELOP POLICY AND PROCEDURE IMPLEMENTATION PLAN A. IDENTIFY TASKS, TIMELINES, END PRODUCTS, RESOURCE REQS, RESPONSIBILITIES, ETC. B. ESTABLISH BASELINE PERFORMANCE AND RESOURCE METRICS C. DEFINE ONGOING PERFORMANCE MEASUREMENT AND REPORTING PROCESS
Copyright © 2006 Mercury Associates, Inc. All rights reserved.
MEASUREMENT OF RESULTS
VEHICLE AVAILABILITY OR DOWNTIME RATE IN-SERVICE BREAKDOWN RATE RATIO OF ACTUAL TO BUDGETED EXPENSES ACCIDENT RATE PM SCHEDULE ADHERENCE RATE AVERAGE WORK ORDER TURNAROUND TIME AVERAGE MAINTENANCE AND REPAIR BACKLOG MECHANIC PRODUCTIVITY RATE DIRECT/BILLABLE HOURS BY MECHANIC EFFICIENCY RATE BY MECHANIC REPAIR COMEBACK RATE BY MECHANIC PARTS ORDER FILL TIME PARTS ORDER FILL RATE INVENTORY TURNOVER RATE PERCENTAGE OF INVENTORY WITH NO MOVEMENT IN LAST 12 MONTHS Copyright © 2006 Mercury Associates, Inc. All rights reserved.
KEY CONSIDERATIONS IN PURSUING IMPROVEMENTS
TECHNICAL RIGOR
A STRATEGIC PERSPECTIVE
SENSITIVITY TO USER NEEDS AND OPERATING CONDITIONS RECOGNITION OF POLITICAL REALITIES CONTINUOUS INTERACTION WITH STAKEHOLDERS
IMPLEMENTABLE STRATEGIES
FOCUS ON RESULTS Copyright © 2006 Mercury Associates, Inc. All rights reserved.
FOR MORE INFORMATION CONTACT: Paul Lauria Mercury Associates, Inc. 16051 Comprint Circle Gaithersburg, MD 20877 301 519 0535
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