The shop managers flicks on the lights to start a brand new week with the thought in mind that he has X number of potential labors hours to use this week. Simultaneously he’s contemplating the precursors that will prevent him from meeting his utilization & service goals and other resources at his disposal. As the fleet wrenches turn, their efficiency will mirror the profitability of the organization. In short, it’s imperative to control mechanic productively in order to reduce the volatility of variable maintenance costs. Reducing this instability of expenditures will free up capital to improve asset lifecycle management as well as improved profitability of the organization. Due to the lack of personnel, data, or processes some organizations have chosen to go with a full service leases or to outsource their maintenance that comes at a much higher cost and reduced utilization. However, with controls this to can be mitigated. To effectively capitalize on this opportunity we must first understand the individuals whom typically fulfill these roles, how to lead, hold them accountable, as well as their vendor counterparts.
It’s no secret the mechanic shortage is just as prevalent as the driver shortage. Mechanics are a group who capture their sense of accomplishment from tackling and solving mechanical problems. It’s this sense of accomplishment that perpetuates their willingness to crawl under a piece of equipment that is dripping snow or rain at least the ones who are mechanics by nature.
The shops of today are mixture of baby-boomers, generation X & Y mechanics making a complex palette of diversity. Most, if not all will do the job if they understand why and agree how the job needs to be completed. However, to successfully manage a variety of generations while remaining impartial takes a talented leader. Generation X & Y mechanics are young, smart, and brash. They want to work, but they don’t want work to be their life. As such, specific expectations and guidelines must be established. Individuals are brought up living a certain economic lifestyle and strive to meet that economic level. Moreover, due to the lack of good mechanics in the industry many individuals become mechanics to fulfill their economic aspirations.
The majority of shop managers come from within the ranks and while they have strong technical skills, many lack the management and leadership skills required to cost-effectively oversee the copious details of a large fleet. However, these are skills that can be acquired if the individual recognizes the need and is compelled to do so. Eighty-five percent of what a frontline manager’s knowledge should be how manage their resources. However, many are dead set on improving technical skills rather than stepping out of their respective comfort zones to improve their management skills that will go directly to the bottom line. Eventually all poor leaders are replaced causing more chaos driving costs even higher.
Labor is the maintenance cost driver lagging slightly behind fuel and tires. Ultimately the quintessential mistake made by many companies is keeping mechanic wages as low as possible. However, the solution is quite the contrary. One of the pillars of any successful maintenance program is a competitive wage structure that includes a defined competencies and progression plan for technicians to advance. This program coupled with culture ingrained with a fabric of trust and integrity and the aforementioned technician shortage vanishes.
Reducing maintenance and procurement costs is only a matter of developing and implementing defined processes and holding individuals as well as vendors accountable to follow them. This is accomplished by the use of “standard repair times” (SRT’s) as well as accurate monitoring of direct vs. indirect times which is a measure of time actually spent twisting wrenches. Furthermore, the threat of fraud always exist, however with defined processes these losses are mitigated.
In this highly competitive and regulated industry the two (2) procedures where a stringent process is imperative to keep cost, service, productivity, and utilization in-check is during the troubleshooting process, and performing a PMI inspection. Moreover, solutions to complex problems must be communicated throughout the organization in order to further reduce costs, improve service as well as utilization.
Here are a few techniques to prevent the clogs normally found imbedded in the wheel of profitability:
· Repairs charged at standard repair times not actual repair times.
· Hold repair costs within 10 % of estimates.
· Accurate monitoring of “direct” vs. “indirect” labor.
· Performance based vendor contracts.
· Agreed upon metrics & scorecard to control mechanic and vendor productivity.
· Communicate solutions throughout the organization.
· Shop leader & mechanics that are willing to develop their skill-sets.
· Retention thru leadership, accountability, development, and competitive wage structure.
· Rigorous PMI inspection process
· Methodical troubleshooting process.
· Treat mechanics with respect & acknowledge their unique skill-set.
So how do you keep the wrenches turning effectively? In the industry with paper thin margins it’s imperative to get the most out of the maintenance dollar. The umbrella of success to not only to operate a financially strong organization but have defined processes and build a culture that retains top talent. Leaders in any industry must be proactive in regards to managing their variable costs as well as total cost of ownership. It’s a combination of leadership and management that enables effective sustained cost control and the primary factor that goes into it is trust. You must have integrity (trust) to influence and inspire individuals to foster improvement and be consistently profitable.
The maximum ROI is captured when the wrench is on the right nut turning in the proper direction.