Director, Central Fleet Maintenance
City of Boston, Massachusetts
Editor's Note: The following is the second part of Mr. Higgins's article. The first part appeared in the August issue.
One of the most critical and time-consuming parts of a fleet manager's annual requirements is the determination of the required vehicle specifications, for the next year's purchases. The process can be as difficult as one wants to make it or as easy as the following text details.
The following is a comprehensive yet simplified format to follow when specifying your fleet vehicles, and can be tweaked to suit your own personal needs.
What's the environment of the projected vehicle's usage?
Once the primary area of utilization has been established, further consideration should be given to particular characteristics of the specific function required. Are there areas of limited access, such as hammerheads for plowing, cul-de-sacs that have limited turning radius, or loading docks that require extremely tight turning radius? Are there any dead-end or one-way streets that limit access for certain-sized equipment? Servicing customers, located in areas that are restrictive with regard to the size of trucks, requires consideration in the specification process. All of these factors directly affect everything from wheelbase, and number of axles, to gross vehicle weight rating (GVWR).
If the primary area of operation has been established as an off-road environment, the component selection for driveline options should reflect the worst-case scenario for startability and gradeability. The selection of certain items will govern the unit's ability to operate on unimproved roads, and on severe grades, with a maximum load. Some features, found on equipment that is primarily off-road, severely limit usage for any type of on-road operation. Road speed and weight ratings may limit any potential on highway use of this type of vehicle.
If the area of primary operation is determined to be on-highway, consideration should be given to the type of operation the equipment will be assigned. The components utilized for intra-city operations can differ significantly from those employed in an inter-state function. Operating characteristics for maximum load, road speed, and terrain, are all integral factors affecting equipment specifications. Tire size, transmission type, and rear axle ratios all contribute to the overall operating efficiency, governing road speed and engine rpm.
Logistical restrictions are quite often overlooked
An often-overlooked area of equipment application is the logistical limitations that are present. Gross vehicle weight must be considered for all on-highway applications. Emergency response equipment must be able to access all areas. Weather-related concerns could influence vehicle and/or equipment requirements in areas that are not part of this type unit's operating area. Narrow streets, weight-restricted bridges, low underpasses, limited-access highways, and any other physical anomaly that can inhibit access must be considered. In some instances, where the limitation is isolated, and not systemic, a unique and individual piece of equipment can be utilized, and often the service provided can be contracted out. The use of this smaller, particular function unit will then not compromise the application of a larger unit, applicable for a broader range.
If the specification describes a passenger vehicle, or light-duty truck, the GVWR is probably not a factor, within certain parameters. Special light-duty units, in service for fire and police departments, for transportation of people and emergency equipment, can require unique weight ratings. Generally, emergency response vehicles are exempt from the commercial driver's license. The consideration of GVWR is more prevalent with medium- and heavy-duty units. The GVWR is a result of the components that are specified, from springs and axles, to frame rails and tires. The old adage that "it is better to have it and not need it, rather than to need it and not have it" is applicable, with regard to weight ratings.
Consider fiscal or calendar year for budget approval
Most original equipment manufacturers (OEMs) introduce new models in the latter part of the year, generally late September through early November. Given the various methods of budget approval, and the timing for the required departmental review, current model-year pricing can be significantly different from the actual price of the unit, when the order is ultimately placed. In some instances, the best process is to add an escalator for the anticipated price increase, so the budget review process can be accomplished in a timely manner. The use of a previous model-year's price structure, with the percentage escalator factored in, can help the approval process coincide with the new-model release.
Lead time is a requirement for effective equipment ordering
The actual in-service date for a new vehicle or piece of equipment can vary due to a variety of circumstances. After the budget review and approval process, most disciplines require a bid process, prior to the contract award. Once the successful bidder has been identified, a review of the documentation, submitted with the bid, should be completed to ensure compliance with the original specifications. Depending on the vehicle or piece of equipment, identified in the specifications, the lead-time from receipt of order to delivery can be substantial. Factors ranging from popularity of a given model to availability of particular components can have a major impact on the length of time required to place a new unit in service.
Order process with RPOs, LPOs and SEOs One of the factors that will affect any particular vehicle or piece of equipment that is ordered is the selection of various options. Generally, there are three types of options offered by the major manufacturers:
The regular production option and, in some cases, the limited production option have negligible effect on the length of time required to manufacture a vehicle. The special equipment option can have a severe impact on the time frame involved, particularly if the SEO is unique to a limited application or vehicle type.
Arguably, one of the most confusing questions regarding vehicle and/or equipment replacement is when to buy? Given the parameters we have discussed, the decision as to when, in the life of the unit, you replace it still must be addressed. There are various equipment replacement schedules that are utilized, ranging from a pure economic formula, to some that never consider any residual value, and retain the vehicle to the end of its life. Given the intended function of any particular piece of equipment, the role that it serves in service to the operating discipline, and the cost of non-performance, retaining a vehicle to the end of its service life is not generally the most cost-effective option. A simple standard, applied to any unit, can be an indicator of replacement cycle. If the maintenance cost, plus the downtime replacement cost, plus the residual cost approach 80 percent of the replacement cost, it is probably time to effect the change.
Fleet size and the constant requirement for doing more with less can often be a dichotomy that is difficult to resolve. Establishment of the need for any particular vehicle, or piece of equipment, should be the first step in the process. The replacement of any unit assumes the requirement for that unit still exists. Additional unit procurement should reflect a cost/benefit analysis that shows a positive for the new vehicle. As some fleets grow, the expectation is simply, "Well, we have always done it that way," but often, upon some level of reflection, no one knows why there are X number of units dedicated to a given function. A short comparison from the existing fleet size as a base to a zero-based fleet size can often provide useful insight into excess numbers or serious shortages. Too often we can fall into the trap that if one is good, two is better, and three is just great!
The most effective way to look at a cost/benefit analysis includes the original capitalized cost, amortized over the life of the unit, added to the operational and maintenance expense. The cost per unit of time (daily, weekly, and monthly) modified by the utilization rate can develop a base for establishing the economic need for any given vehicle or piece of equipment. A number of other factors should be reviewed in the final phase (i.e., residual value, disposal cost); however, the initial review can establish a benchmark that can be utilized.
As the goal of all fleet disciplines is geared to lower lifecycle costs, both traditional and non-traditional methods of procurement should be reviewed. From a standard purchase, to lease purchase, to seasonal lease and rentals should be applied to the cost/benefit analysis. Several non-traditional sources may be utilized for seasonal requirements. Typically, contractors or off-peak distributors may have excess equipment, idle in time frames that complement departmental requirements. Functions that have unique equipment requirements can, at times, be coordinated with adjacent entities to offer a larger customer base for a potential contractor. This level of mutual-aid, common in rural areas for life/safety issues, can be applied to equipment, as well as function. The more diverse the user base, the lower the cost of operation to any particular entity. These same periodic equipment and/or functional cooperation plans can also serve as the basis for any emergency/disaster aid requirements that develop on a local or regional level.
After the specification has been completed and reviewed by all concerned, a pre-bid meeting with all potential vendors can prove very beneficial. Any major conflicts can be highlighted, and the exact nature of what is being described can be reviewed. Prior to awarding a contract, a review of the potential recipient, as to fitness, will aid in the process. Finally, and most importantly, be sure to check that the unit you receive is, in fact, the unit you described. Apply the basic management principle that, "You get what you inspect, not what you expect."
To reach David Higgins, please call 617-635-7555 or send e-mail to email@example.com.