The “shop improvement” conundrum

July 5, 2019
How can fleets measure productivity enhancements and time saved if it doesn’t directly impact the bottom line?

You believe in continuous improvement, don’t you? Of course you do. Since the 1970s when the first Japanese vehicles came to the U.S. and Toyota Production System (TPS) management techniques became known, manufacturers worldwide learned you must work on continual improvement to become a low-cost producer. The alternative tongue-in-cheek approach was famously offered by quality guru and management consultant W. Edwards Deming: “It is not necessary to change. Survival is not mandatory.”

Let’s say you decide to move into the modern age (like about 1970) and buy some pneumatic impact wrenches. These will certainly save you time and do a better job, especially if you do a lot of tire work. How would you know if they are a good idea? And, how good of an idea are they? The answer is: it depends.

Some improvements that can potentially pay well depend on what happens after the improvement is implemented.

It depends on what the technician does with that time. If he or she spends that saved time shopping for cool new jeans and reading their Twitter feed, then it wasn’t a great idea. If they do an extra work order or two a week, then it was a very good idea. It is important to note that no one is working harder or speeding up, just wasting less time.

Is it worth it?

There are a couple of ways to figure out if an idea is good. How good of an idea, again, depends on how the work would have been handled. If it was nothing special – no overtime avoided – then the savings might be the true wages of the technician (wage plus benefits). If the work was pulled in from an outside shop, then the savings is the outside shop rate.

Most organizations chose an average rate for all time saved. Explain the issue to your company’s financial team and encourage them to choose a rate that fairly represents the value of the time saved.

This savings is why UPS locates parts rooms centrally. The central location saves steps. Saved steps are saved time. It is also why well-designed shops follow some common rules with toolboxes at the head of the vehicle, air lines at both ends, and bulk oil and antifreeze hoses at the head of the bay. These and hundreds of other continuous improvements have become a competitive advantage.

Direct versus indirect savings

Direct savings are savings that make it through to the books of the company. For instance, if you change a PM frequency that requires a parts replacement from monthly to quarterly, the avoided parts (four sets rather than 12 sets) will show up on the books as a reduced expense.

There are also indirect savings to consider. If the PM takes an hour, then the fleet will save eight hours a year. Where will eight hours a year show up? These kinds of savings are more of a challenge to calculate because the savings will be very difficult, if not impossible, to see in the company’s books.

Since small savings of labor are not real, should we still do those time-savings projects?

It turns out those indirect savings are also important. Think of the UPS parts rooms being a few steps closer to the bays. That setup means more valuable work and less wasted effort.

Constant improvement in processes, products, or techniques is the key to a well-run fleet. We pursue both kinds of savings. By being vigilant about reducing the labor, parts, and overhead of the maintenance operation, we are contributing to the success of the enterprise.

Joel Levitt is the president of Springfield Resources, a management consulting firm that services a variety of clients on a wide range of maintenance issues. Levitt has trained more than 17,000 maintenance leaders from more than 3,000 organizations in 38 countries. He is also the creator of Laser-Focused Training, a flexible training program that provides specific, targeted training on your schedule, online to 1-250 people in maintenance management, asset management, and reliability.

About the Author

Joel Levitt | President, Springfield Resources

Joel Levitt has trained more than 17,000 maintenance leaders from more than 3,000 organizations in 24 countries. He is the president of Springfield Resources, a management consulting firm that services a variety of clients on a wide range of maintenance issues www.maintenancetraining.com. He is also the designer of Laser-Focused Training, a flexible training program that provides specific targeted training on your schedule, online to one to 250 people in maintenance management, asset management and reliability.  

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