“My father had 34 years in the business,” notes Jim Meckley, vice president and general manager of Meckley’s Limestone Products Inc. in Herndon, PA. “When I took over the business, I didn’t have that luxury. I had to hit the ground running. I needed a tool to quantify things, put numbers to suspicions like ‘that piece of equipment is down more than others.’ We had the information; the problem was that it was buried in filing cabinets filled with old work orders, making it cumbersome, inefficient, and time-consuming to make decisions from. With software, I can access that same information almost instantaneously, easily making choices that make us more profitable.”
Grading and excavating firms utilizing fleet management software report significant savings in time and money, with fleets as small as six to 10 units of on-road and/or operating equipment. There is remarkable agreement among users regarding the key benefits that this software delivers, but they also offer words of caution on the “non-negotiables” of implementation. We’ll look at the users’ experiences. But a question nags: If users are so pleased with the return on investment this software offers, why aren’t more excavating and grading firms using it?
“Grading and excavating firms are definitely behind other niches in the trucking/heavy-equipment sector in making use of the benefits of fleet management software,” notes Rick Rosenberg, president of TMT Software Company in Chapel Hill, NC. “In 1993, 35 percent had some sort of computer in their operations, now it’s up to 60 percent.”
“But probably only 5 percent have the truly integrated real-time systems that can fatten their bottom line,” adds Pamela J. Nelson, CEO of CCG Systems Inc. in Norfolk, VA. “Fleet management culture is so overwhelmingly driven toward executing the repair that the savings that can be realized on infrastructure are overlooked. Maintaining million-dollar pieces of equipment can’t be done by memory. There is just too much information to be managed. Big bucks will be spent on job-cost accounting software, but nothing is spent on fleet management software.”
But the industry is waking up. “At the 1999 CONEXPO,” Nelson points out, “we were inundated by construction and excavating firms wanting information on our software. It’s a huge opportunity for them to save big dollars.”
PM and Downtime and Parts . . . Oh My!
Let’s tantalize the 95% who have yet to convert. Logically, all reported paybacks come from the information-slicing-and-dicing capabilities of the software: (1) more accurate preventive maintenance (PM) and more reachable vehicle history, (2) a reduction in dauntingly costly downtime in the field and file-cabinet fumbling in the shop, (3) comprehensive and time-saving parts inventorying and ordering, (4) liberation of both floor space and cash flow, (5) warranty and life cycle tracking, and (6) availability of data needed to make fast and accurate management decisions.
PM Power and Vehicle History. “I really don’t see how people can do proper preventive maintenance anymore without a computer,” quips Roy Daniels, equipment manager for Corman Construction Inc. in Annapolis Junction, MD. “With a grader, your 1,000- and 2,000-hour services are almost impossible to keep accurate track of. Computers don’t drop the ball. They don’t let you slip on a PM that ends up costing you big time in the field.” The PM power of software ranks high for all users.
Dan J. Sullivan, equipment manager for All State Asphalt in Sunderland, MA, says, “We wanted to get a handle on the real dollar cost per vehicle of our fleet. In the past we didn’t have a good way to track this; everything was on paper. Our firm has 11 lines of business, from paving to grading, with many different types of equipment and manufacturers. Now mechanics no longer have to thumb through a pile of papers to get vehicle history. Punch [the info into the computer], and they immediately find the last time they did the brakes.”
Todd Arsenault, vice president of Arsenault Associates in Altco, NJ, speaks on behalf of his firm’s experience in the industry. “The increased efficiency of software positions scheduled repair work to be 80 percent of all work performed; vehicles go from PM service to PM service without a breakdown while reducing rework by mechanics and vendors by 85 percent.”
Despite these benefits, with or without software, PM is still an uphill battle in the grading and excavating industry. “A lot of my employees didn’t understand the importance of preventive maintenance,” Daniels remarks. “There still is resistance to a certain extent. It’s hard to take a piece of equipment down for PM. That’s money and time lost in the field. But grading and excavating firms have such high-investment equipment working in such bad environments that maximized PM can deliver especially high paybacks through reduced costly failures in the field. ”
Decreased Downtime in Both the Field and the File Cabinets. “In this business you are working only seven to nine months out of the year with your equipment 100 miles away on a job. Every minute counts. You can’t afford to be down,” confirms Sullivan, who oversees over 200 pieces of equipment in five 40-ft. bays with six full-time mechanics.
Notes Meckley, “It is helping me to evaluate the true cost of downtime: equipment failure, planned repairs, waiting on parts, hours per user that a piece of equipment is down. None of that information gets to a manual work order. We didn’t realize the true levels of downtime we were experiencing. We replaced a number of pieces of equipment. Once you have the data, some things become crystal clear.”
Parts Inventorying, Ordering, and Purchasing. “Before, PM and purchasing were done by memory and by paper,” laughs Eugene Daniels, shop foreman and equipment manager for Washington County Highway Department in Jonesboro, TN. “I’d sit for a couple of weeks several times a year at our old Cardex system with a number-two pencil and an eraser, changing costs and list and selling prices. Whew! We also farmed out a lot of heavy-equipment repair work, spending 15 to 60 dollars an hour on outside labor with little control. Software allowed us to expand our shop; do those repairs in house more cost effectively.”
This highway department has 110 employees paving, mowing, and crushing stone with 309 pieces of equipment supported by 15 service technicians. “Huge time and money savings in ordering parts. There is no way to maintain it all in your head. For example, oil and air filters. We have to deal with over 400 different part numbers in oil and air filters alone. We maintain 20-year-old machinery to new. Software allows us to condense and manage information, cutting down on inventory. You keep a minimum 10 items on the shelf, it automatically requisitions when you fall below. You can let stock run down and not order as often.” This aspect alone saves shelf space, cash flow, and employee time.
“We cleaned house,” declares Bill Lundin, transportation supervisor with Washington County, UT, “and eliminated 30,000 dollars’ worth of inventory for vehicles that don’t exist anymore. Software allows us to order everything overnight instead of having tens of thousands of dollars tied up on the shelves.”
Bob Kelly, sales manager for Qqest Software Systems in Salt Lake City, UT, points to several trends in parts. “With electronic imaging, parts are on CD-ROM instead of in huge books or on microfiche. You start with an image of the equipment, clicking to subsequently closer views until you arrive at the part you need.” Another trend is electronic purchasing. “Only 1 percent of manufacturers currently participate, but it holds great promise. You order directly from your terminal, saving 5 to 10 percent in manufacturers’ discounts.”
Warranty Tracking and Life Cycle Costs. Everyone agrees: Improved warranty tracking alone will pay for your software investment. Parts Manager David Bonnet at All State Asphalt remarks, “Software is worth its weight in gold when it comes to warranty tracking. Before we purchased, we talked to a number of shops that paid for their software with just warranty tracking. When you have to thumb through 10 years of paper to find out if a part is under warranty, no one is going to do it. Records don’t get lost in the computer, and they are easy to access.”
Robert Dillon, product manager for DP Solutions in Greensboro, NC, points out, “One of our customers paid for its software in battery replacements under warranty alone. With a manual system there is no reward. The mechanic will keep his mouth shut because he doesn’t want to be digging into files to find the warranty. Even if the office secretary is doing the dirty work, who’s got the time?”A number of users originally moved to software to determine true vehicle costs. Industry veteran Paul M. Setne, president of Fleet Computing in Albuquerque, NM, stresses, “True profit can only be determined on a life cycle basis, not on a job-bid basis, as is predominant in grading and excavating. Software allows you to track true costs so that real numbers can be used in the bidding process rather than some crazy number pulled from thin air.”
Does Software Take Over for Humans as a Management Tool? Systems are excellent administration tools. They don’t let equipment managers forget to order parts. Foremen instantly know which work orders are open. Critical details can’t be forgotten. And operational details can be quantified, measured, and improved. “Sometimes I hear, ‘Joe’s great! He keeps it all in his head.’ But what happens when he wins the lottery and moves to Tahiti?” wonders TMT Software’s Rosenberg. “Software stores all the information, makes it systemic rather than reliant on any one person. And everyone can benefit from the knowledge built within the system. Data become information, information becomes knowledge, knowledge becomes power.”
“With software,” Arsenault points out, “you identify hours worked versus paid and productivity percentage by mechanic, track reworks, measure mechanics against shop or manufacturer averages, and identify poor operator performance. One hundred percent of your maintenance decisions can be based on facts, not guesswork.”
A vocal fan of software’s managerial potency, Meckley also cautions against micromanaging mechanics. “You can track mechanics against equipment, time, whatever. We don’t. Why provide an incentive for mechanics to avoid fixing what they discover during scheduled PM, because that job ‘should only’ take an hour and cost 55 dollars? If you use that to manage and incentivize, you’ll have mechanics afraid to fix what they see, shooting for the wrong benchmark. We are an abusive industry. The bottom line is to fix everything that needs to be fixed. Downtime is way more costly if it breaks in the field.
“Software guides me and makes me look at things. But it’s not a tool that makes decisions for me. Each individual shop has to determine the balance between data and repair.” Each shop should decide what is truly profitable to track and measure. Sullivan agrees. “You have to determine what it is you want to track. For example, on road vehicles, mileage is your measurement. In our industry, hours are the useful unit. And we don’t track tires. We expect our tires to get punctured. There is nothing you can do about it, so why measure it?”
How do you make sure you make a wise purchasing decision when you don’t know a RAM from a mouse? Both manufacturers and purchasers emphasize the critical importance of analyzing your operations and what you want to get out of it. Sullivan remembers, “We looked at an awful lot of systems, the four of us-the equipment manager, shop foreman, parts manager, and our president. We had to make it so it was user-friendly; make it easy so they would use it. Our provider came here for a week to analyze our operations, and we’ll be doing it again this fall to ensure that our system is as customized as much as possible. You have to make sure it works for you and for your operation.”
Users unanimously advise to spend lots of time figuring out what information you are looking for and then expect that to change once you implement the system. The huge increase in options over the past several years complicates the decision-making process.
Meckley emphasizes, “The main thing is to not buy for the sake of saying that you are computerized in your shop. There has to be a lot of thought to what you are looking for. Maybe you could get by with a much less sophisticated system. Avoid overkill.”
Involve Users: Purchasing and Training. “You must involve your shop up-front, because you will get zero if they don’t use it,” warns Meckley. “They are the first people you have to sell the idea to. Are the type of people you have in your shop there to punch a clock or do they care about the productivity of the shop and business? Our mechanics feel much more empowered now that they have an easy way of getting the information they need and can control how efficiently they get jobs done.”
To quote one manager, implementation is not “all peaches and cream.” There are a number of issues that can potentially stall maximum use of any system and dampen usage and payback. Several stand out for industry professionals: pre- and postimplementation training, transition traumas, real-time or batch data entry, shop-floor configuration, and managing the transition from DOS to Windows. And the winner in the “don’t shoot yourself in the foot” category is.training.
Pre- and Postimplementation Training: When Is Enough, Enough? A mechanic confides, “I’m sure it’s a good thing to be able to keep track of how much you are spending on your vehicles. I came here about six years ago, just after they got the computer.” He laughs, “Well, I sure don’t like working on the computer. They expect you to learn it on the job and still get your job done. It’s frustrating. You have to choose something that isn’t going to get done.”
CCG Systems’ Nelson points out, “Fifty percent of your implementation costs are going to be human infrastructure, training.” Build the costs of and budget the time for training into your purchasing plans. “It’s an education issue, reducing fear in mechanics who are usually not communicated with and are usually not strong communicators themselves. But once you get over the fear hump, you’ll find that mechanics are naturals. By nature they are problem-solvers. They know that a PC on the shop floor is going to make them better at what they do best.” Rosenberg goes even further: “Don’t do it until you are ready to do it right. For every dollar you spend on software, plan on spending at least that much on training.”
Nelson also asserts, “Find someone who will actively embrace technology-champion and pioneer it-to lead the pack. They will make your implementation a success.” Eugene Daniels agrees. “It’s critical to have people with experience on that program, or one like it, to help you get off the ground. Fleet maintenance, equipment.you need to have some working knowledge about how it all fits together or you are going to be at a disadvantage. Every time you have to sit down and read the book, it’s lost time.” Believe it or not, it’s less expensive to invest in training. Make sure you have a few people who have the software down cold.
Transition Traumas: Cultural, Technical, Managerial. “Even if it was a conscious decision in the past to keep information from mechanics, it doesn’t make sense anymore,” observes Rosenberg. “Typically those people had a lot to offer in the first place. Mechanics are second only to drivers-they are hard to come by. Giving them the information maximizes their creative and analytical skills, keeps them optimized, and makes money for the operation.”
But this brave new world can be a culture shock for mechanics. “For the old guard, open work orders would go in the left pocket of your gray or blue Dickies work shirt with your pen and tire gauge. When you were finished, it would go in your right rear pocket. That was your filing system in the past,” laughs Dillon. Says Roy Daniels, “I had a parts guy who’d thumb through his parts manual to find what he needed instead of using the table of contents. When we moved to computers, he was lost. You can’t thumb through a CD-ROM.” Whether the transition is from paper to computers, DOS to Windows, or microfiche to CD-ROM, users agree: Don’t underestimate transition issues.
Real Time Versus Batch. Sullivan notes: “We run a paperless shop now. Our mechanics have taken to the system pretty well. They say it’s better than carrying around a greasy work order. Before they had to dig through a pile of papers to get at vehicle history, now they can have it in seconds. The only way you can get that a vehicle history is if everyone stays on top of what they are supposed to do. Real-time data entry and staying on top of it is the only way to go. But everyone has to do their part.” A clean-as-you-go data-entry culture has to be supported and enforced.“I feel real time is much more beneficial than batch entry,” stresses Barry E. Martz, service manager for Meckley’s Limestone Products. “Batch is not much better than what we used to do when we were manual. Mechanics have responded pretty positively to the extra time it takes to get up and running with real time. They have a terminal on the floor so they can not only check on history, they can also do research on other vehicles: Why did that one fail on that equipment, did it fail on others? Real time is much more beneficial for us.”
Floor Configuration and Dummy Versus PC. Configurations range from one to six mechanics per terminal, though having two seems to result in the highest reported satisfaction. Many employ PCs instead of dummy terminals. “Our software runs equally well off either,” reports Richard L. Goodrich, vice president of marketing for Ron Turley Associates in Phoenix, AZ. “But PCs are so inexpensive now, and often fleet can obtain them as hand-me-downs from accounting or management.” Nelson adds, “The trend is toward using PCs. They enhance productivity. Mechanics can access the Internet, for example. Some upper management balks at that because they’re afraid that people will screw around. If you can’t trust your people, you’ve got other problems.”
DOS to Windows: Avoiding Nightmares. Some users report high rates of dissatisfaction and frustration with DOS-to-Windows conversions. Fleet Computing’s Setne observes, “The transition to Windows was the first make-or-break in our industry. Sales almost stopped in the mid-1990s, and vendors scrambled to make the transition. If a company had low revenue or lack of foresight, it didn’t survive. We saw it coming and were ready. The critical issue? Is the programming user oriented or not; is it simple and easy to use, or does it employ unnecessary newest, latest, and fanciest that will frustrate the mechanic who’s just trying to get his job done? An opportunity was missed to ease this transition. If you keep it simple, Windows is easier than DOS because it’s intuitive and graphics-based. I’ve heard of some programs having shocking differences between Windows and DOS.”
“What you have is a whole generation of software that just isn’t easy to use, is C++ and DOS-based, is not fast, and isn’t user friendly,” shares industry consultant Daryl Pullin, director of performance management consulting at R.W. Beck in Seattle, WA. “Unfortunately, too often fleet mindset is that you don’t turn around and spend money for a different, better system. You spent money on a system and that’s it. But software is different than graders. An updated system will provide payback. You do have to reinvest regularly.”
Payback and Profit in Fleet Management Software
Overall, fleet management software users report getting paybacks within one day to six months. “We paid for our investment in six months,” affirms Lundin with Washington County. “I wasn’t paying a 20-dollar-an-hour mechanic to spend an hour or two looking for warranty information. I don’t have to pay a secretary to file stuff. And we now have a true picture of life cycle costs, of when it’s time to get rid of a piece of equipment. Our resale values increased four times with software because of our maintenance documentation.”
There are additional benefits that are important in the face of the narrow margins and unforgiving competition that are characteristic of the grading and excavating business. “[This software] allows us to take our fleet management process to another level,” confirms Meckley. “I feel that my job as a general manager is to give people tools to get their jobs done. Our foreman feels better because he can get the data instantaneously versus in a day and a half. It gives me the incentive to ask questions where I would have hesitated before. It allows me to expect more of my people. And it keeps paying dividends. Now I wouldn’t be able to function without it.”
