As the industry continues its path down ever-expanding data collection, it can be a challenge for fleets to determine how best to utilize this surplus of information. To address these challenges, methods such as benchmarking can help provide fleets with the tools needed to create actionable items and improve maintenance operations.
Benchmarking is a process used to monitor and compare the performance of process or system. While it is not a new concept, it is a method that can be employed readily with the use of thorough and accurate data using a standardized format. From the information provided in a benchmarking program, participants can create actionable items that improve an operation.
“Benchmarking allows fleets to identify opportunities to … reduce their maintenance expense, that they would not have otherwise known existed,” says Jim Buell, EVP of sales and marketing, FleetNet America.
Buell has worked on behalf of fleet repair and maintenance service provider FleetNet America to create a maintenance benchmarking program to help provide this information to fleets.
FleetNet America and American Trucking Associations’ Technology & Maintenance Council (TMC) have worked together to create a peer-to-peer Vertical Benchmarking Program for fleets.
As an industry association, TMC works to improve transport equipment, its maintenance and maintenance management.
Started in the fourth quarter of 2017, the program provides an analysis of roadside breakdown incidents. It works by having participants provide all information on their operation’s roadside breakdowns. This information from all participating fleets is entered into a data warehouse, managed by FleetNet America. A report is generated for each participating fleet, providing details on the individual fleet’s miles between breakdowns and cost per repair, as well as the average among all participants.
“If you are running 75,000 miles between a brake failure, you don’t know if that’s good or bad,” says Buell. “But, if you know that someone else in the industry is running 600,000 miles between a breakdown, that might cause you to take the limited management time you have and apply it to my brake program and figure out what I can do to make it better.”
Why unscheduled roadside breakdowns? A higher labor rate for unanticipated service can cost about four times as much as planned service, says Buell. Plus, unscheduled breakdowns are the biggest unknown when it comes to unanticipated maintenance costs.
“Understanding why you’re having roadside repairs gives you great visibility into the efficacy of your maintenance program,” Buell says. “It gives you insight into your maintenance practices – not just roadside practices – but total maintenance practices. The data gives you easy-to-identify opportunities to improve. Whereas before, it was just a game of whack-a-mole.”
Buell advises about 10 percent of a fleet’s operational costs are due to maintenance expenses. But, of that 10 percent, about a 25 to 33 percent of all maintenance expenses are categorized as preventive maintenance and regularly scheduled service. That means up to three quarters of maintenance expenses are due to unscheduled events -whether that be a reported issue on a DVIR, or a roadside breakdown.
“My mission is to see how we can make that less,” says Buell. “Good information is the first step to helping fleets change those metrics and have fewer unscheduled repairs.”
Finding the ROI
Benchmarking can provide an analysis of fleet data, with actionable results, quickly. “There [are] only 168 hours in a week. We want to provide fleets quick information they can use to determine where best can I spend my time,” says FleetNet America’s Buell. “I believe if you understand why your assets are failing on the side of the road, and how that compares to other people that operate similar type of equipment and similar type of runs that you do, that allows you to identify where you can get the best return on your time investment.”
Through the Vertical Benchmarking Program, a quarterly report is shared with each participating fleet, providing information on mileage between breakdowns for designated areas of the vehicle based on Vehicle Maintenance Reporting Standards (VMRS) codes. VMRS is a coding convention to standardize vehicle and shop information. The report provides a mileage report and dollar amount for how much a fleet is below or above the average of other participants. The report also allows participating fleets to drill down to a more granular level to VMRS assembly levels.
When it comes to the amount of time it takes to analyze reports provided by the program, Buell says he expects fleets to spend about an hour of their time reviewing the information when the reports become available each quarter.
“They’ll get the information they’ll need very quickly and it’s very clear: how am I doing against the industry average, and what is the dollar impact to my company’s business if I move that needle?” says Buell.
Taking a look at the report and getting that information is step one, but fleets then need to create actionable follow-up.
Buell confirms the benchmarking program does not track the age of vehicles participating. However, the fleets looking at their own data and comparing it to peers will know the age of their assets.
“The fleet that was best-in-class in the third quarter [2018], I know they have a shorter trade cycle than the industry average. But now, they have data that they can say “Is that a good decision? This is what we’re saving because we’re breaking down less. Does that offset the expense of trading vehicles every three years instead of five?’” says Buell.
In particular, the peer-to-peer comparison proves especially useful to provide a barometer on where the fleet stacks up among like operations.
“We also provide our average cost for that breakdown and project how much money you would be able to save if you could at least get to the industry average,” says Buell. “Or, if you’re way above the industry average, the program we’ve written tells you ’This is how much money you are saving your company,’ because you’re better than average.”
In the fourth quarter of 2018, the average cost per roadside mechanical repair, not including tires, saw an uptick to $334.20, according to Vertical Benchmarking Program results. This is up from the lowest point in the first quarter 2018, with an average of $296.34 per breakdown.
“We are hearing from service providers that parts prices are going up. And, the technician shortage is driving higher labor rates,” Buell explains, of the increase in repair costs.
How one fleet uses the data
While participation in the Vertical Benchmarking Program is anonymous, Jarit Cornelius, vice president, asset maintenance & compliance for Sharp Transport openly discusses the benefits of the program and how it has impacted his operations.
Founded in 1979, Sharp Transport is a family-owned truckload carrier based in Middle Tennessee, operating dry van, flatbed, heavy haul, end dumps and dedicated contract services.
Cornelius was taught about VMRS early in his career, and he appreciates the attention to the standardization of the program, because he has used VMRS for years.
“Technology is out of this world nowadays,” he says. “I have a multitude of portals I have to look at on a daily basis. It is imperative that the processes and the equipment and the technology that we put in place is simplified and you can easily dissect it, look at it, get a snapshot and move on to the next project.”
With VMRS, Cornelius advises his fleet can control all aspects of reporting and categorizing in-house, but it has historically been challenging to compare information from outside vendors or other fleets. This means paperwork like outside vendor invoices must be processed and categorized into VMRS format for Sharp Transport in order to have a full view of the maintenance operation.
“When you’re trying to identify weak points in your maintenance program, it’s really easy to look at your data and reports in-house – which you have complete control over,” Cornelius explains. “But, you really open up a lot of variables and a lot of different factors when you talk about anything outside [the organization], scheduled or not.”
Because the Vertical Benchmarking Program utilizes VMRS and provides the same standardization as his in-house data, Cornelius says “it brings the whole maintenance program full circle – in-house and outside.”
In his team’s regular maintenance meetings, the Sharp Transport team will review the high-cost items for the month – both unexpected and expected, compared to the forecasted threshold for the total cost of ownership and maintenance costs. Cornelius says he has incorporated the benchmarking reports as part of his regular review of operations to check these areas as well.
“On the maintenance side of things, we’re not in the business of making money for the company,” says Cornelius. “We don’t generate revenue by delivering loads. We make the money by saving the money. It’s the absolute highest point of utilization and the lowest total cost of ownership. Sometimes it’s easy to lose sight of that, and hard to wrap your head around that on a day-in and day-out basis, because you get caught up in the whirlwind of things.”
“This industry is a razor thin industry,” says TMC’s VMRS Services Manager, Jack Poster, about margins in the maintenance operations of a fleet. “We’re going through good times now, but a recession could be a year away. The better that the fleet owners, the accountants, the buyers buying parts, know what’s going on, it just adds to the bottom line.”
The importance of data and standardization
Buell’s team at FleetNet America analyzes the data on a quarterly basis, then providing reports to the participating fleets. This data is compiled in a virtual warehouse, managed by that same team. IFTA fuel mileage is used to determine the miles per breakdown, says Buell. Participating fleets can submit data one of three ways:
- As a FleetNet America customer, data is already collected and placed into the Vertical Benchmarking Program.
- TMC members have received authorization to complete their own coding, which is then uploaded to FleetNet America. Buell confirms this information is re-checked by FleetNet America personnel to confirm coding is accurate.
- Fleets can opt to have FleetNet America input the benchmarking data utilizing the fleet’s invoices. “We code it and put it in the warehouse for them,” says Buell.
There are two critical rules that must be followed by each participant of the benchmarking program, according to Buell. He says it is critical that every single roadside incident be reported by the fleet, and that every item be accurately coded using VMRS.
“Bad data is worse than no data,” he says. “With bad data you’ll make the wrong decision with confidence. We’re sticklers to have those two requirements.”
The crux of the standardization for all information filtering through the program is VMRS.
“Without VMRS, to sort through the data, collate the data, try to figure out the data would take forever because of all the intricacies of the written language, and colloquialisms of local language that some shops and mechanics use,” TMC’s Poster explains. “VMRS (is) the one ‘language’ that pulls it all together, and makes it easy to recall it through the computer.”
Real-world examples
When it comes to the top roadside breakdown causes – tires, lighting, brakes, wheels/rims/bearings and exhaust systems – Buell provides some examples from participants on how they utilized the data to review and improve different aspects of their maintenance programs.
He sites one example where a large national fleet with multiple locations had seen a year-over-year uptick of $60,000 in tire expenses. With the data, the fleet was able to narrow down the issue to two specific locations.
“The data said you have an increase in your tire expense, and 80 percent is coming from these two locations – they discovered those locations had backed off the company’s standard tire policy,” Buell explains. “They were able to coach them to reinstate their tire policy. Their costs went down the next quarter.”
In another instance, Buell indicated a separate fleet was able to narrow down an improvement in lighting incidents down to two or three locations. Buell advised the fleet had been testing out a new procedure utilizing a third-party organization to conduct an additional walkaround of the trucks before leaving for the day. He advised the fleet was able to verify the performance of that program, and expanded it to other locations.
Cornelius reiterates that the Vertical Benchmarking Program allows his fleet to analyze the “miles between breakdowns” or “miles between events” approach. By way of example, he offers up more details on how Sharp Transport improved its tire program through analysis of the reports.
After receiving the first quarter of data, Cornelius had determined valve stems were accounting for up to 30 percent of unscheduled tire issues.
“We implemented replacing all the valve stems on all replaced tires over the road,” says Cornelius. “The very first quarter, the first time we did anything, the numbers were about 30 percent. It stayed at 30 percent the first three quarters. But just now, the fourth quarter, I’m showing I’m down to 3 percent on valves. That tells me that we’re doing something right.”
In addition to improving the number of tire-related breakdowns, Cornelius confirmed he saw a 25 percent improvement in miles between tire breakdowns.
“Something as simple as a valve stem, that costs a few dollars, it can really magnify and consume you without even knowing it,” he adds.
Current challenges
Participation from enough fleets is critical to providing valuable and usable information.
“We don’t have near enough fleet participation that I think it’s really been intended for,” says Sharp Transport’s Cornelius. “The more fleets you have to participate, the more you can break that out into different application types – dry van, flatbed, intermodal, refrigerated, local, regional, long-haul, whatever.”
“The more data we have the better it’s going to be, because you can smooth out some of the outliers. We have enough people participating that the data integrity is safe and solid. But boy, we want more people in it,” Fleet Net America’s Buell adds.
For participants who run mixed fleets, Buell says data provided can still be useful.
“We make a call as far as where’s the predominance,” he explains. “Nobody is perfectly clean in this business anymore. We don’t think it damages the conclusion that the customer is able to draw.”
When coordinating this program, TMC’s Poster advises it was important to not get inundated by all of the data.
“One of the questions we had was how deep into the woods did we want to go? It’s easy to start out small and build up bigger, versus inundating everyone with too much data,” he says. “We didn’t want to get data that’s so esoteric or not looked at very often, to fill up space. We did top-five VMRS systems for each quarter. And it makes it easier to digest.”
The future of the program
Currently, the program has one cohort, or vertical, for the truckload segment.
“As we get more people participating in it, we will be able to slice it finer and be able to say ‘Let’s just look at regional people.’ Or, we could just pull out reefer fleets. But right now we’re looking at everybody truckload – that is dry van, reefer, we’ve got some flat bed in there,” says Buell.
He anticipates the launch of additional verticals for less than truckload (LTL) and tanker this year.
As the program expands with more participants, more data and more verticals, Poster says fleets will be able to get more granular with information. One example is honing in on specific component information, to aid in predicting failures before they occur.
“The next step would be saying that at 150,000 miles the DPFs are failing,” says Poster. “That is the next step in this, to get a little more granular. Right now, it’s a basic overview, but it gives everybody a good idea of what’s going on. Using VMRS, we could go more into an exact component. What in that string of (the exhaust system) parts is failing – at this interval, this interval and this interval. And, what part is never failing?”
Overall, Poster and Buell hope to expand the program as more fleets get involved. Because the program is relatively new, Poster expects another year or two of data will help provide further insights.
Cornelius also sees a great opportunity to integrate the data from the benchmarking program into computerized maintenance management software, allowing for even more in-depth analysis.
Overall, the program has started the process of providing a clear direction on analysis to improve maintenance operations and lower maintenance costs.
“Without peer-to-peer benchmarking, or year-over-year benchmarking, you get so busy and so wrapped up in whirlwind of today, that you don’t have the time to step back and say ‘What’s really happening here, what’s not happening here, and how can I affect the action?’” says Buell.
“Benchmarking cuts down the time needed to understand where you’re really, really good so you don’t inadvertently change something, and where you have an opportunity to improve,” he adds. “Then, spend your gray matter figuring out what you do about it.”
