Consulting Tip #16

Maintenance Management

As an outsourced service Managed Maintenance (MM) is probably one of the most effective and cost beneficial. Developed from the needs of FML, where the supplier takes risk on maintenance, it is available as a stand-alone fleet management service.

What makes this service so effective?

The MM service suppliers have significant resources and expertise which is applied to each and every transaction and is available to their customers. These are:

• An electronic record of all maintenance transactions for each vehicle which includes descriptions using a 2 code system of category and sub category codes. e.g. 1^st = Drive Train, 2^nd = fit clutch assembly, or 1^st = tyres, 2^nd = balance 4 wheels. This level of detail facilitates best cost analysis.
• Detailed records of OEM service specifications and job cost standards (parts and labour hours)
• Skilled technicians who are able to correctly diagnose repair requirements
• Significant buying power which translates into reduced parts and labour prices.

What process is applied to achieve expected savings of approximately 20%.

• The driver / fleet manager will direct a vehicle to a servicing dealer (franchise or non-franchise), providing details of required service or repair.
• The servicing dealer will contact the MM service provider.
• The MM service provider will apply the following pre-authorisation process referencing their considerable database of vehicle history, suppliers, parts, service specifications and job cost standards.
  • ID the vehicle and current Kms, to validate vehicle and the service need. e.g. why service at 55,000 Kms when the next service is due at 60,000 Kms
  • This vehicle is still under warranty why use a non-franchise dealer
  • Is this repeat work, if so apply dealer guarantees
  • ID the scope of work and cost. The MM service provider knows either, the details and cost of parts and required labour hours or the current average price for the specified work. Prices are therefore negotiated.
  • The diagnosis is questioned in which case the MM service provider will send out a technical inspector to validate diagnosis, identify alternatives or negotiate price.
• The MM service provider will provide authorisation defining scope and cost.
• The servicing dealer will raise an invoice which is scrutinised by the MM service provider and paid when approved
• The customer will receive a single consolidated Tax Invoice for all vehicles including service fee. Administration is greatly reduced.
• The customer will generally have access to online vehicle history reports for their own reference and possible incorporation into their FMIS system.
• This data base of expenditure enables the MM service provider to accurately identify the operating costs of the vehicle they manage. This is critical to the TCO calculation for each vehicle and ultimately vehicle selection.
• Using a 2 code system the MM service provider can identify, as an example, that Model A’s starter motors routinely experience premature failure. This assists the OEMs in their product support and will benefit customers in financial support from the OEMs.

The above MM process is quick and efficient and overcomes many of the challenges faced by a fleet manager who may not have buying power or access to an in-house FMIS system and is reliant upon a filing system of copy invoices, where information is difficult to access.

Have a question?

Contact Nigel Webb - Latitude Fleet Services - nigelw@latitudefleet.co.za