ECONOMICS OF CENTRALIZATION
FLEET MANAGEMENT AGENCY IMPROVES UPTIME, TRIMS COSTS
FLEET MANAGEMENT AGENCY IMPROVES UPTIME, TRIMS COSTS
In the early 2000s, the city of Winnipeg, Manitoba's fleet included many units past their prime that
spent a great deal of time being repaired in the municipal garage.
To meet service demands, departments added vehicles and equipment to cover for the units that were down for repair. The result was a larger than required and unreliable fleet of 2,300 light and heavy vehicles and specialty equipment.
After considering a number of options, including outsourcing management of the fleet, the city created the Winnipeg Fleet Management Agency (WFMA) in 2003 to coordinate operations of all departments except for the police, fire and paramedics.
Economy of scale created by formation of the WFMA, emphasizing preventive maintenance rather than corrective repairs and a move to Life Cycle Costing (LCC) principles, have improved uptime and decreased fleet size.
LCC IN ACTION
LCC-a procurement policy based on owning and operating costs for the lifetime of a vehicle instead of just focusing on purchase price-has been central to improvements in fleet operation and efficiency, said WFMA Chief Operating Officer Yvan Lupien.
"Instead of the cost of purchase, we're looking at the cost of ownership," Lupien said. "We're looking at the best value for our dollar over time, not just the lowest price when we buy."
With LCC, the agency tracks and assesses repair and maintenance costs, fuel efficiency and other operating costs, along with initial purchase price and resale value to determine the exact cost of owning and operating each vehicle over its projected life.
Utilizing LCC principles, departments are operating newer vehicles-with increased uptime-for fewer taxpayer dollars.
Additional LCC benefits include:
Preventing Downtime
A preventive maintenance program for all vehicles and equipment has improved uptime and dramatically reduced unnecessary vehicle problems due to neglect.
Adhering to each unit's preventive maintenance schedule, the WFMA is able to keep all vehicles and equipment in optimal operating condition and avoid breakdowns during peak seasons.
Maintenance is performed where it can be done for the lowest cost, whether it's the municipal garage or at a private business. "Wherever there are savings, we'll take it," Lupien said.
Private businesses provide more than 30 percent of the service to city vehicles. The cost of service-not who provides it-is what matters.
A private business with 12 locations in Winnipeg performs oil changes and inspections for all light fleet, city-owned vehicles. Instead of driving to a central location for oil changes, vehicles visit the closest location, which saves time and fuel.
With all city vehicles and equipment purchased through WFMA, departments are able to enjoy economies of scale. Now, 25 units are typically included in one tender to lower the price per unit. In the past, the same 25 vehicles would likely have gone out on several different tenders.
In addition, with group purchases, the city pays the administrative overhead only once instead of on every tender.
In Winnipeg, centralizing fleet management has paid dividends. As Lupien said, "The proof is in the pudding."
Not Business As Usual
The city of Winnipeg continues to reinvent its fleet management program.
"We're always looking for new ways to do things. We use synthetic oil when it makes sense, and we use private companies for service when it is the best thing to do financially and operationally," said Yvan Lupien, chief operating officer of the Winnipeg Fleet Management Agency (WFMA).
The city's innovative approach to fleet management extends to the types of vehicles purchased. More than 40 vehicles in the city's fleet are hybrids. "It makes green sense, and sense financially," Lupien said.
The city rents vehicles and equipment when it is less expensive than purchasing the units.
Beginning in January of 2009, Winnipeg is installing black box idling technology on city vehicles. The black box provides real time information on each vehicle's fuel management system, including idling.
The city has a policy limiting idling, and the monitors will help enforce the code. "We expect fuel savings," said Lupien.
"Instead of the cost of purchase, we're looking at the cost of ownership. We're looking at the best value for our dollar over time, not just the lowest price when we buy."
- Yvan Lupien
WFMA Chief Operating Officer
To meet service demands, departments added vehicles and equipment to cover for the units that were down for repair. The result was a larger than required and unreliable fleet of 2,300 light and heavy vehicles and specialty equipment.
After considering a number of options, including outsourcing management of the fleet, the city created the Winnipeg Fleet Management Agency (WFMA) in 2003 to coordinate operations of all departments except for the police, fire and paramedics.
Economy of scale created by formation of the WFMA, emphasizing preventive maintenance rather than corrective repairs and a move to Life Cycle Costing (LCC) principles, have improved uptime and decreased fleet size.
LCC IN ACTION
LCC-a procurement policy based on owning and operating costs for the lifetime of a vehicle instead of just focusing on purchase price-has been central to improvements in fleet operation and efficiency, said WFMA Chief Operating Officer Yvan Lupien.
"Instead of the cost of purchase, we're looking at the cost of ownership," Lupien said. "We're looking at the best value for our dollar over time, not just the lowest price when we buy."
With LCC, the agency tracks and assesses repair and maintenance costs, fuel efficiency and other operating costs, along with initial purchase price and resale value to determine the exact cost of owning and operating each vehicle over its projected life.
Utilizing LCC principles, departments are operating newer vehicles-with increased uptime-for fewer taxpayer dollars.
Additional LCC benefits include:
- Tracking service information improves uptime and performance. Scheduled maintenance prevents breakdowns and major failures.
- Providing accurate operations and financial information, so the agency can make informed fleet management choices. The information provides a basis for decision-making on fleet size, optimal vehicle and equipment configurations and fleet improvements.
- Ensuring all vehicles and equipment are replaced at a time that maintains uptime, minimizes maintenance costs and assures the agency receives the best resale value.
- Data gathered for LCC purposes tracks each unit's performance, and operational costs. "If it's not reliable, we replace it," Lupien said.
Preventing Downtime
A preventive maintenance program for all vehicles and equipment has improved uptime and dramatically reduced unnecessary vehicle problems due to neglect.
Adhering to each unit's preventive maintenance schedule, the WFMA is able to keep all vehicles and equipment in optimal operating condition and avoid breakdowns during peak seasons.
Maintenance is performed where it can be done for the lowest cost, whether it's the municipal garage or at a private business. "Wherever there are savings, we'll take it," Lupien said.
Private businesses provide more than 30 percent of the service to city vehicles. The cost of service-not who provides it-is what matters.
A private business with 12 locations in Winnipeg performs oil changes and inspections for all light fleet, city-owned vehicles. Instead of driving to a central location for oil changes, vehicles visit the closest location, which saves time and fuel.
With all city vehicles and equipment purchased through WFMA, departments are able to enjoy economies of scale. Now, 25 units are typically included in one tender to lower the price per unit. In the past, the same 25 vehicles would likely have gone out on several different tenders.
In addition, with group purchases, the city pays the administrative overhead only once instead of on every tender.
In Winnipeg, centralizing fleet management has paid dividends. As Lupien said, "The proof is in the pudding."
Not Business As Usual
The city of Winnipeg continues to reinvent its fleet management program.
"We're always looking for new ways to do things. We use synthetic oil when it makes sense, and we use private companies for service when it is the best thing to do financially and operationally," said Yvan Lupien, chief operating officer of the Winnipeg Fleet Management Agency (WFMA).
The city's innovative approach to fleet management extends to the types of vehicles purchased. More than 40 vehicles in the city's fleet are hybrids. "It makes green sense, and sense financially," Lupien said.
The city rents vehicles and equipment when it is less expensive than purchasing the units.
Beginning in January of 2009, Winnipeg is installing black box idling technology on city vehicles. The black box provides real time information on each vehicle's fuel management system, including idling.
The city has a policy limiting idling, and the monitors will help enforce the code. "We expect fuel savings," said Lupien.
"Instead of the cost of purchase, we're looking at the cost of ownership. We're looking at the best value for our dollar over time, not just the lowest price when we buy."
- Yvan Lupien
WFMA Chief Operating Officer
