Are in house workshops viable
A municipality’s in-house workshop is repeatedly identified as a critical issue which impacts negatively on fleet performance and availability. The simple reason for this statement is that these facilities are often not viable, unless there is volume or they are remote without access to alternatives.
The modern motor vehicle has impacted on their viability with increasing technology, the need for specialised tools, service and maintenance plans, staff training and skills.
There is a long list of key issues that make these workshops unviable. Municipal fleets are a mix of makes and specialised equipment, because of the tender process. There are often extremes of age which brings complexity and redundancy costs to the stores function. An old fleet exposes the municipality to the risk of expensive major mechanical repairs which is outsourced to specialists. Specialised tools are expensive and often not available and workshop technicians do not have the necessary training. Further, new vehicles with strict warranty requirements have to be serviced at dealers. All of these issues in combination reduce activity in municipal workshops.
The Municipality’s internal Purchase Order system is possibly the greatest contributor to workshop inefficiencies. It applies to buying spares, because they are not held in stores, and /or outsourced repairs. The need for a structured expense authorisation process is necessary but the participants and the bureaucracy do not share the same urgency as the operations team. Delays of 30 days appear to be normal but extended periods are not the exception.
A reliance upon internal workshops and the municipality’s administrative processes are a major contributor to vehicles being unavailable, the costs of which are significant.
What then are the options and how can operating efficiencies be achieved. Managed maintenance (MM) is a standard fleet management service which is expected to reduce the maintenance costs of the municipal fleet, reduce turnaround times, increase quality of repair and increase overall fleet efficiency / availability.
MM does require that work is outsourced to selected suppliers who comply with warranty, pricing, quality and BEE requirements.
The MM supplier will pre-authorise expenditure ensuring that the work is correctly diagnosed, is necessary, warranties and supplier guarantees are fully applied and that the cost is correct by referencing to job cost standards. The MM supplier has restricted authority mandates and the pre –authorisation process can require that Municipal supply chain processes are applied. A number of large State organisations utilise the RT46 managed maintenance state tender.
The MM supplier will follow up on turnaround times and receive invoices for validation and payment to the supplier. Municipal expenditure is consolidated into monthly statements.
The use of MM will minimise service and repair activity through the Municipal workshops but they can be retained for small jobs e.g. light bulbs and the all-important vehicle safety inspections. However, the benefit will be improved turnaround times, reduced cost and improved fleet availability.
The financial benefits of improved availability are substantial. For a fleet size of 200 vehicles a 5% improvement reduces fleet size by 10 – 15 vehicles depending on current availability levels. This has a minimum cost benefit of approximately R1.0 million p.a. depending on vehicle type.
Addressing the whole vehicle maintenance process will reduce costs and improve vehicle availability.