Fleet Management Basics

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Overview of basic concepts of fleet management.

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  • If your small business fleet depends on one or more vehicles, strategic management decisions are imperative to ensuring a smooth operation. Essentially, fleet management is very similar to supervising a team of people. Just as your employee may report sick, mechanical or electrical failure to one of your delivery trucks is a potential spanner in the works. http://hotwireins.com/fleet-management-best-practices-small-businesses/
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  • Life at Sea is quiet special and unique in it’s own way!

    Do you remember your early days on-board?

    Learning how to turn on the search lights, colour codes for the bins, operating the window wipers.
    And, what about understanding the watch permutations, the inert gas system, as well as learning how to let go of an anchor?

    At the time when we started our Merchant Navy careers, all that was fun, exciting and it seemed like a career with travel, variety and early responsibility at its best.

    Moreover, the feeling that Seafarers are the engine that drives the global maritime sector, made the job even more meaningful. For instance, without us our shops would be empty, our cars kept idle and our lights and heating turned off.

    However, these activities and tasks have kept Seafarers on their toes on a 24 hours cycle. And, clearly, with more stringent maritime regulations coming up each year, life as a seafarer has become increasingly more hectic and challenging.

    So, it is worth noting, why Seafarers quit Sea Jobs in an article by Marine Insight below:

    http://www.marineinsight.com/marine/life-at-sea/12-main-reasons-seafarers-quit-sea-jobs/

    Does this situation in today’s world call for an opportunity?
    An opportunity, which helps in settling some of these issues by offering an environment, where Seafarers can relax with their families when at home, leave their families in a safe environment with modern facilities when leaving to sign-on on a ship and socialize amongst like-minded Seafarers and their families, reducing the unsettled life quotient in their lives.

    If your answer is Yes, then MGM Infratech, managed by Master Mariners offers one such life time opportunity, Oceanica.

    Oceanica, exclusively for Seafarers is a Luxury Housing Project with facilities of highest order. It is strategically located in DDA L Zone in Delhi, which is minutes away from IGI Airport, Gurgaon Business District and Dwarka sub-city.

    Idea is to keep life safe and simple in terms of logistics yet, experience a high quality life whilst playing a game of tennis with fellow mariners or watching your kids learn swimming or enjoying drinks with your friends and family in the Club House at Oceanica itself. At the same time being well connected to important facilities like new upcoming AIIMS Hospital (10 mins away), Golf Course (5 mins away), Dwarka Sec 21 Metro Station (10 mins away) and upcoming IP University (10 mins away).


    Interested in more info?


    Please visit MGM Infratech’s Oceanica online -http://www.mgminfratech.com/oceanica.html
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Fleet Management Basics

  1. 1. To properly manage a fleet at its optimum level, understanding Total Cost of Ownership (TCO) is critical 2 Fleet TCO (Total Cost of Ownership) Fuel Internal Strategy External Strategy Assets Vehicle Replacement & Excess Disposition Vehicle Depreciation Maintenance Vehicle Maintenance Vehicle Parts • Assets – aligning holding periods for vehicles will impact TCO • Maintenance – once vehicle holding period is set, maintenance programs must be aligned • Fuel – determining the right fuel strategy will impact TCO and operations
  2. 2. TCO, measured against an operational activity, is a key metric in establishing a baseline for fleet efficiency, deployment strategy and operating costs TCO / Activity TCO / Vehicle Fuel Costs Asset Costs Maintenance Costs Activity / Vehicle Fleet Deployment Efficiency Asset Utilization Routing Efficiency Vehicle Design Flexibility 3 Fleet Efficiency Levers Key Metrics for Evaluation • How can revenue be increased with same number of vehicles? • How do I lower the cost per vehicle? Operating Cost Levers
  3. 3. TCO can be managed by optimizing vehicle holding periods Lifecycle Strategic Approach  Define optimal holding periods for each major type of vehicle asset  Establish policy to ensure vehicle holding periods are managed appropriately  Identify critical parameters to be managed (i.e. source costs, residual values, should be maintenance costs, etc.) 4 Fleet maintenance practices will need to be aligned with holding period strategy Longer holding period Light Duty Car & Truck Specialized Vehicles • Higher source cost • Significant up-fit cost • Low mileage fleet • Lower source cost • High resell market • Maintain high residual value Shorter holding period 1 YR 10 YR5 YR Medium and Heavy Truck • Lower source cost • Minimal up-fit cost • Potential resell market • Average mileage vehicles
  4. 4. 5 •Reliability Improvements •Cost Reductions •Service Level Improvements •Management Capability Advancements •Asset Optimization PM and PdM •Technical Ownership •Time Directed / Condition Directed •Run to Failure •Parameter / Intervals •Operations Role •Availability Work Identification •Operating Standards •Operator Training •Operator Troubleshooting •Equipment Monitoring •Equipment Numbering / Location •W.0. Information Standards Authorization / Prioritization •“Need” vs. “Want” •Priority Standards •Equipment Criticality •Authorization Levels •Cost Review Planning •Job Scope •Estimating (Labor & Parts) •Equipment Histories •Standard Jobs •Integration with Planning Backlog Management •Ownership •Duplication •Cost Benefit Analysis •Review of Aged Work •Cancelled Work Process Scheduling •Daily Scheduling •Operations Input •Priority Issue Resolution •Resource Allocation •Outsourcing Schedule •Material Schedule Work Assignment •Technicians (Who) •Detailed Job Explanation (What) •How Long (When) •Job Location (Where) •Repair Specifics (How) •Safety / Environmental Req Progress Management •Work Criticality •Awareness of Job Status •Identify and Document Barriers •Reassign As Necessary •Communication •Decision Making Process Work Evaluation and Action •Goal Setting •Documenting problems •Problem ID (Root Cause) •Problem Solving & Measures •Progress of Past Problems Key Measurements •Cause Indicators •Workload / Scheduling / PM Comp •Effect Indicators •Performance / Cost / MTBF •Distribution and Utilization Maintenance Objectives Work Order Requirements Define and develop processes that tracks and captures data through the entire repair cycle
  5. 5. 6 •Reliability Improvements •Cost Reductions •Service Level Improvements •Management Capability Advancements •Asset Optimization Progress Management Work Evaluation and Action Key Measurements PM and PdM Backlog ManagementWork Identification Authorization / Prioritization Planning Scheduling Work Assignment Work Order Requirements Reliability •Equipment Criticality •Root Cause Analysis •Reliability KPIs (MTBF) •Failure Analysis •Equipment Design •Warranty Management Organization Development •Strategic Planning •Team Building •Organizational Alignment •Functional Accountability •Responsibility Defined •Management Ownership Maintenance Engineering •Maintenance Support •Repair Strategy •Standard Job Input •Capital Resources •PM/PDM Analysis & Requirements Contractor Management •Outsourcing Decision •Contractor Safety / Insurance •Contractor Training •Selection Procedure •Cost Tracking •Incentives Skills Training •Ranking & Tracking Systems •Identify Skill Set Requirements •Establish Skill Set Goals •Employee Review & Input •Establish Training Programs •Recognition Production Support •Equipment Operating Stds •Equipment Monitoring •Permitting •Product Handling •Emergency Planning Support Functions Maintenance Objectives Develop the functions needed to support and define the repair process
  6. 6. 7 •Reliability Improvements •Cost Reductions •Service Level Improvements •Management Capability Advancements •Asset Optimization Progress Management Work Evaluation and Action Key Measurements PM and PdM Backlog ManagementWork Identification Authorization / Prioritization Planning Scheduling Work Assignment Core Elements Reliability Organization Development Maintenance Engineering Skills TrainingContractor Management Production Support Support Functions Support Equipment •Scheduling •Scheduling Break Policy •KPIs Inventory/Purchasing •Requisition Process (Roles) •Stock & Non-Stock Procurement •Material Receiving / Storing •Security •Inventory Management •Inventory KPIs Tools and Equipment •New Hire Tool Policy •Technician Required Tools •Specialty Tools Responsibility •Inspection and Repair •Contractor Tools Asset Support Maintenance Objectives Identify the necessary actions and support needed to insure assets are available for the repair function
  7. 7. 8 •Reliability Improvements •Cost Reductions •Service Level Improvements •Management Capability Advancements •Asset Optimization Progress Management Work Evaluation and Action Key Measurements PM and PdM Backlog ManagementWork Identification Authorization / Prioritization Planning Scheduling Work Assignment Core Elements Reliability Organization Development Maintenance Engineering Skills TrainingContractor Management Production Support Support Functions Support Equipment Inventory/Purchasing Tools and Equipment Asset Support Unscheduled Work •Troubleshooting •Labor and Equipment Req. •Labor and Equipment Avail. •Technical Support •Present Maintenance Schedule •Communication Other •Communication / Cooperation •Inaccurate Inventory •Pilfering and/or Theft •Inadequate Materials Inspection •Equipment Availability •Budget Constraints Maintenance Objectives Indentify and address the constraints to the repair process
  8. 8. 9 •Reliability Improvements •Cost Reductions •Service Level Improvements •Management Capability Advancements •Asset Optimization Progress Management Work Evaluation and Action Key Measurements PM and PdM Backlog ManagementWork Identification Authorization / Prioritization Planning Scheduling Work Assignment Core Elements Reliability Organization Development Maintenance Engineering Skills TrainingContractor Management Production Support Support Functions Support Equipment Inventory/Purchasing Tools and Equipment Asset Support Other Constraints Maintenance Management System •Holder of Maintenance Process •Accessibility and Table of Authorities •Compatible with Other Business Systems •Cost Tracking to Specific Equipment •Labor •Parts / Materials •Equipment & Repair Histories •Planning, Procurement, Scheduling & Executive Interface •KPI Development & Generation Unscheduled Work Maintenance Objectives Tie all the elements together with a system that meets organizations objectives
  9. 9. CostperHourorMile 0 200 400 600 800 1000 1200 1400 1600 0 10 20 30 40 50 60 70 80 90 Ideal PM Interval Accumulated Time or Miles Establish maintenance intervals that balance costs and operational considerations
  10. 10. Inspecting maintenance work improves reliability through assurance of quality Quality Inspections Lagging Leading PM Inspection Process Number and type of breakdowns Provides insight to PM Quality Helps predict future issues Implement a quality control system for maintenance repairs
  11. 11. Fuel Strategy Development 12 Fuel Card Bulk Fuel Mobile Fueling Lubricants Maintenance Strategy Internal Fueling External Fueling Fleet Activity Reports •Driver Usage •Vehicle Usage Expense Reports •Fuel Costing •Fuel Tax Refunds •IFTA Management Reports •Total Vehicle Cost •Fuel Spend by Locn. •Fuel Budgeting •Price Trend Analysis Variables To Consider Evaluate Options Minimal Reporting Requirements
  12. 12. Controlling Miles per Gallon Can Pay Big Dividends 13 In this example a company operating a fleet of 1k trucks, averaging 100k miles per year /per truck can reduce its fuel expense by more than $640k per year by increasing its average fuel economy by only one-tenth of a mile per gallon Avg 6.5 MPG Avg 6.6 MPG Number of Trucks 1,000 1,000 Avg Annual Mileage 100,000 100,000 Total Annual Miles 100,000,000 100,000,000 Avg. Mile Per Gallon 6.5 6.6 Price Per Gallon of Fuel $ 2.75 $ 2.75 Annual Number of Gallons Consumed 15,384,615.38 15,151,515.15 Annual Fuel Expense $ 42,307,692.31 $ 41,666,666.67 Annual Savings Between 6.5 and 6.6 MPG $ (641,025.64)
  13. 13. The Best Way to Improve Fuel Economy Is To Reduce Idle Time 14 35% Idle Time 30% Idle Time Engine ON Hours Per Truck/Per Week 75 75 Percent of Idle Time 35% 30% Number of Idle HRs Per Truck 26.25 22.5 Gallons of Fuel Used Per Idle Hour 1 1 Gallons of Fuel Consumed Per Truck Per Week at Idle 26.25 22.5 Weeks Per Year 50 50 Annual Gallons of Fuel Consumed Per Truck at Idle 1,312.50 1,125.00 Avg Price Per Gallon of Fuel $ 2.75 $ 2.75 Annual Cost of Idle Fuel Per Truck/Per Year $ 3,609.38 $ 3,093.75 Annual Savings Per Year/ Per Truck By reducing Idle Time By 5% $ (515.63) •An OTR truck idling an average 26.25 hours per week, will consume more than 1,365 gallons of fuel in the period of a year •In this example, reducing idle time by only 5% (3.75 hours per week) results in a savings of more than $515 per week through reductions in fuel usage. •On a fleet of more than 1k trucks this would amount to more than $500k annually
  14. 14. For more information contact James L Cade at 901-651-0157 15

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