Fleet Management 101; Post #2: Costs

Know your costs!!  Do you?, know your costs?  What are employee costs?  Wages?  Benefits?  Contributions made by employer for workman's compensation, unemployment compensation, retirement, insurances, uniforms, training, tool allowances, etc.  What are your overhead costs?  Building & grounds including payments, taxes, insurances, maintenance.  What about electric, water, heating, How are costs allocated?  How do you support parts room and parts room personnel?  How do you account for support persons, i.e. secretaries, laborers, etc.  Who pays the wages of supervision?  I have encountered way too many public employees who naively believe they are more competitive against the private sector soley due to the fact that the public sector is not profit driven.  The fallacy in this belief is the persons espousing it, don't factor in all their true costs, i.e., the fully burdened labor costs.  First and foremost, we must figure our true costs, don't cheat.  We cannot improve unless we know our current status.  Figure your costs and then look for ways to decrease those costs.  Next, develop ways to increase productivity and efficiencies, or vice versa.   For example:  if your true costs are $60.00 per hour per employee, your costs are $1.00 per minute.  A ten minute "potty break" cost your organization $10.00 and there is "no return on that investment", well maybe for the employee.  If your public sector shop mechanic spends two hours on a complete brake replacement, your labor charge for that job is $120.00.  What if you can decrease the time required by that mechanic from 2 hours to 1 hour simply by changing the layout of his work area, location of his tools, and deliver the parts needed to his work area by parts room personnel?  Your labor charge for the same brake job is now only $60.00.  In doing this, you have decreased overall time required on this job, but not his "hands on" time he needs to actually perform the brake job.  What you need to find out is, how much total elapsed time is spent on any given task and how much is actual hands-on time.  You want to streamline the task so the time committed is actually working on the equipment; i.e. "hands on time".  I plan to offer tips on cost containment, ways to increase efficiencies and ultimately increase productivity.  We will also need to figure out what we are really good at and what we should outsource.