A 2018 study by Work Truck magazine reported 50% of mid-size fleets (201-400 trucks) reported retaining all maintenance in house, 43% preferred a mix of in-house and outsourced maintenance and 7% engaged in complete outsourcing. As fleet sizes grew, companies were more likely to outsource a greater proportion of their maintenance needs.
No matter the ratio, successful companies of all sizes view maintenance providers as strategic partners and not just vendors. Both sides must be committed to a mutually-beneficial relationship that helps both sides achieve their goals for operational and cost effectiveness.
As with most significant business decisions, cost is just one factor to consider. Before making the decision to outsource, whether all or in part, companies must have a strong understanding of their own operational priorities, customer demands and costs. Only then can it be accurately determined if outsourcing will improve your bottom line and how it will impact other areas of the business. The following are eight factors to consider when evaluating maintenance outsourcing:
Because of the significant financial risks involved with accident liability and injury, a failure to prioritize safety should immediately remove a provider from consideration. A safety-focused provider will have strict controls in place regarding maintenance procedures, technician training, equipment maintenance and documentation. Ask about a company’s safety policies and evaluate how knowledgeable they are about current safety regulations. Maintenance technicians are your eyes and ears on the ground to identify maintenance risks and ensure your equipment is safe and compliant with DOT and other regulators. Choosing a provider that prioritizes safety is non-negotiable.
In order to successfully outsource, a maintenance provider’s capabilities must closely match the needs of your fleet. Evaluate whether they are well-trained in maintaining your equipment types and whether they have the latest diagnostic software to service your OEM’s equipment. With the ever-expanding technology available in today’s trucks, having a technician team with OEM-specific experience is highly preferred.
In addition to equipment considerations, evaluate whether the provider has the resources to handle your volume of work in the locations where you need it. Do they have the necessary maintenance software to complete and store vehicle service records? Do they offer mobile maintenance or specialty services? If so, ask questions about availability and turnaround time.
3. QUALITY & CONSISTENCY
Two of the most important factors in reducing risk and operating a high-performing fleet is service quality and consistency. Consistent maintenance procedures help ensure proper pre- and post-testing, reduce the risk of technician mistakes and can help identify the root cause of failures, should they happen. When evaluating a new provider, ask questions about quality management. What programs and procedures are in place to ensure maintenance and repairs are done correctly? What metrics do they monitor? How are procedural requirements enforced? Make sure that the provider’s standards are in line with or above what you require. If you are using a provider with multiple locations, ask how they ensure consistent maintenance procedures across their network.
The Red Wrench: Ensuring Safety & Quality
Red Classic’s Red Wrench program began in 2017 with the goal of standardizing processes across all of our 80+ fleet shops and ensuring the highest quality standards. The program, which includes unannounced multi-day audits and ongoing coaching, covers six key areas: asset inspections (40%), parts inventory (15%), tire inventory (15%), obsolete parts process (10%), yard inspection (10%) and shop cleanliness (10%). The program continuously pushes the shop teams to improve their performance and maintain the highest level of service.
4. TECHNICIAN TRAINING & EXPERIENCE
With the considerable amount of technology in today’s trucks and equipment, and with that technology changing every year, ongoing technician training is of utmost importance. Ask a potential provider about the experience of their technician team and what kind of ongoing training is provided.
If you are satisfied with the level of expertise of the technicians, ask what strategies are in place to attract and retain the current level of talent. When shifting your business to a new provider, you want to ensure the same high level of service year over year. While general certifications through organizations like ASE can be helpful to ensure a base level of competence, the more valuable training is OEM-specific, where technicians gain a deep understanding of your fleet’s specific technology and the manufacturer-recommended maintenance procedures.
5. COST SAVINGS
Before evaluating a provider’s rates, it’s critical to have an in-depth understanding of your company’s current maintenance costs. This includes in-house technician wages and benefits, facility expenses, hiring and recruiting costs, management costs, as well as costs directly related to maintenance and repairs. Without knowing the total cost, it will be impossible to accurately evaluate outsourcing cost savings.
When evaluating costs, be sure to look at factors such as ease of expanding or contracting capacity, potential changes in fleet type or size and future upgrades to things like ELD systems or driver assistance technology. Also evaluate whether a change in maintenance providers can reduce the total number of vendors required to service your fleet, which will often decrease time spent on tasks like scheduling and billing.
6. EFFICIENCY & FLEXIBILITY
Unfortunately, unscheduled maintenance and repairs are part of the business. Knowing what to expect from a provider regarding scheduling and turnaround time is critical, especially when the unexpected happens. Find out if a provider’s capacity is flexible enough to handle unexpected events and the expected turnaround time for your most common maintenance work. If the provider is servicing multiple customers, ask about how work is prioritized. The ability to schedule equipment downtime with the least disruption to normal business operations is critical.
7. COMMUNICATIONS & TRANSPARENCY
As you begin a new relationship with a maintenance provider, communication and transparency will be critical to a successful, mutually beneficial relationship. What is the provider’s communication plan for scheduled and unscheduled maintenance? Do they demonstrate transparency when it comes to costs and turnaround times? Do they seem to understand your needs and priorities? If possible, check with other customers to see if the provider is responsive to concerns and if invoices are accurate and complete.
8. LONG-TERM PARTNERSHIP
A quality maintenance provider will bring value to your business beyond just completing the job in front of them. The best providers will contribute to ongoing quality improvement and safety. They will proactively suggest ways to improve efficiency and prioritize communication. They will also have robust reporting capabilities to help you identify positive and negative trends and reduce the burden of administration and maintenance record keeping.
Choosing to outsource can bring an array of positive benefits to your company, but selecting providers and determining the mix of maintenance sourcing will look different for every company. The biggest risk with outsourcing is a loss of control, which is why it is critical to carefully review the above factors before making a decision. A quality maintenance provider will view the relationship with your company as a collaborative partnership, improving service quality, safety and administration as they serve as an extension of your company in the shop. A careful vetting process will improve your decision-making process and result in a maintenance sourcing mix that fits your company’s operational priorities.