Presentation on theme: "Vehicle Replacement Cycles"— Presentation transcript:
1Vehicle Replacement Cycles Sam P. Lamerato, CPFP Superintendent of Fleet City of Troy, MI
2Vehicle Replacement Derailed Tight BudgetsFurlough DaysReduced StaffDeferment of Vehicle ReplacementDealing with City ManagementAttending City Council Meetings
3Budgets Zero Growth Budgets Reduce or Deferment of Vehicle Replacement BudgetsTransfer Funds from Capital to Operating?Reduced Staff Positions and HoursSignificant Increase in Maintenance CostsAvoid Peaks and Valleys – Reserve Fund?
5SECTION C - EQUIPMENT TO BE REPLACED ITEMEQUIP. #DESCRIPTIONAPolice Patrol $3,500 each10$35,000BDetective $3,500 each5$17,500C9022007 Ford Expedition 4X4 Command$8,000D632003 Chevrolet Tahoe 4X4$6,000772002 Ford Explorer 4X4$4,500E1721999 Plymouth Breeze$2,000173F2472000 Chevrolet Cargo Van$2,500256G2362002 Dodge Pickup$3,000242246262H2021998 Dodge Pickup 4X4$3,5002662002 Dodge Pickup 4X4 W/Plow$5,000I4002001 Dodge 21/2 Yd. Dump Truck 4X4$5,500401406411J4142002 Vactor Catch Basin/Sewer Jet$125,000K4211991 GMC Crew Truck W/CompressorL4391994 GMC 5-7 Yard Dump W/PlowM4351997 Ford Yard Dump W/PlowN4701997 John Deere Skid Steer LoaderO6221999 John Deere 72" Mower$273,500
6Furlough Days & Reduced Staff Same Equipment Fewer Repair Hours (96 per Tech)Same Equipment Fewer TechsSame Equipment Same Repair Dollars96 less wench turning hours
7Deferment of Vehicle Replacement Deferred vehicle replacement appears to be the key factor behind the increase in maintenance expenses in CY-2009.More expensive repairs due to aging inventory.Older fleets were incrementally impacted by a spike in unscheduled, higher cost maintenance.Increased downtimeSource: Automotive Fleet – March 2010.
8Replacement FundingEven in good economic times, securing sufficient funds for timely vehicle replacement is a challenge for many organizations. This challenge stems in part from a lack of understanding of the trade-off between a vehicle capital and operating cost.Source: Government Fleet March/April 2010
9Dealing with City Management Vehicle Replacement PlanLife Cycle Cost Analysis – Best PracticesProject Long-Term Replacement (5 – Year Plan)Extended Warranties (5 years 100,000 Miles – Power Train)Advanced Design & TechnologiesLower Cost per MileReduced Downtime
10Vehicle Replacement Program Best Practice MethodSurvey a number of Best in Class fleet organizations which have comparable fleets. Take into account factors unique to each fleet organization such as annual usage levels, types of use, number of back-up units available, weather and operating terrain.FASTER 15 Point Report 3109
11Vehicle Replacement Program (cont.) Developing a set of vehicle replacement criteria establishes the foundation for a planned approach to fleet replacement. Fleet organizations can use one of two primary methods for establishing vehicle replacement cycles.Empirical Method: Involves using a formal life- cycle cost analysis technique (such as equivalent annual costs) to calculate the least costly life-cycle per class of vehicle.
12Vehicle Replacement Program (cont.) Best Practice Method: Involves surveying peer organizations with similar fleet and operating conditions.Regardless of which method is used, life-cycles must be developed with the goal to:Minimize overall fleet cost;Maximize vehicle availability;Provide fleet users with safe and reliable tools to perform their jobs.Source: APWA Vehicle Replacement Guide
13Vehicle Replacement Funding Ideally, a vehicle should be replaced around the same time that the total cost of ownership is at a minimum – before the total cost curve begins to turn upward.Decision makers who assume cutting replacement purchases is a good way to help balance the budget must understand such cuts usually transfer a portion of the fleet costs from capital to operating.Source: Government Fleet March/April 2010
14ECONOMIC REALITY OF VEHICLE REPLACEMENT TOTALCOST*Ideally, a vehicle should be replaced around the time this total cost of ownership is at a minimum – before the total cost curve begins to turn upwards.OPERATINGCAPITALTIME/USAGE
15Quality of Service Source APWA Calculating Public Fleet Rates The quality of services declines when the fleet wears out, becomes technologically deficient or requires repetitive or ongoing maintenance. Fleet assets have at least three lives:Service Life – Amount of time (years, miles or hours) it is capable of providing service.Technological Life – Productivity decline of current fleet asset compared to newer assets.Economic Life – Total allocation of cost associated with the vehicle over a period of time.Source APWA Calculating Public Fleet Rates
16Vehicle Score Card (Sedans & Lt. Truck) Age – One point for each year – based on in service date.Miles/Hours – One point for each 10,000 miles or 250 hrs. of usage.Type of Service – Points assigned as depending on the type of service the vehicle performs.Reliability – 1 – 5 points based on frequency that a vehicle is in the shop for repairs per month (P.M. work is not included).M&R Cost – 1 to 5 points based on the total life M&R cost (not including accident repairs).Condition - 1 – 5 points for body condition, rust, interior condition, anticipated repairs, etc.Point Range – Under 18 Excellent, 18 – 22 Good, 23 – 27 Qualifies for replacement and 28 and above Immediate Replacement
22Attending City Council Meetings Be prepared to answer tough questions.Know Your Fleet - Run it like a business.Have your facts straight and in-hand.Convert Engine Hours into Miles (30 miles per hour)Utilization of Vehicle/EquipmentLife-cycle Cost – 15 point FASTER report, etc.Inform Mayor and Council of the importance of timely vehicle replacement.Cost Savings Information – Reduced DowntimeLife-Cycle costing calculates ownership and operating expenses throughout the working life of equipment.CPM Average age of vehicles by class. Put the focus on them.
23Keys To SuccessKeep Management and Councils in the loop with quarterly Fleet updates.Invite Management and Council for a site visit of your Fleet Operation.Don’t replace underutilized vehicles.Buy the correct vehicle for the job.Maximize resale & trade-in values. (benchmark)
24QuotesABILITY is what you are capable of MOTIVATION determines what you do ATTITUDE determines how well you do it. Excellence is not a skill. It is an attitude.
25THE TRICK IS TO FIND THE MAN IN THE COFFEE BEANS: This is bizarre - after you find the guy - it's so obvious.Once you find him - it's embarrassing, and you think, 'Why didn't I see him immediately?'Doctors have concluded that if you find the man in the coffee beans in 3 seconds, the right half of your brain is better developed than most people.If you find the man between 3 seconds and 1 minute, the right half of the brain is developed normally.If you find the man between 1 minute and 3 minutes, then the right half of your brain is functioning slowly and you need to eat more protein.If you have not found the man after 3 minutes, the advice is to look for more of this type of exercise to make that part of the brain stronger!!!And, yes, the man is really there!!!