With a large fleet spanning a vast territory — 4,400 light- and medium-duty vehicles dispatched from about 400 depots — Schwan's Home Service trucks are a ubiquitous part of the commercial landscape. These vehicles help the company's sales team deliver more than 350 home-style foods to millions of customers in 48 states.
While Schwan's may be making dinner easier for its customers, the large and geographically diverse nature of its fleet can make managing preventive maintenance (PM) a challenge.
So, Jeff Schueller, director of fleet maintenance for Schwan's Home Service, built an in-house fleet management group from the ground up — one that is very similar to a third-party service provider.
Fitting the Fleet
The first step was to determine how the internal PM process would look.
"I spent week after week writing processes, so that when it comes to hiring employees, they can actually sit down at a desk and perform the tasks simply by following the work instructions and flow charts," Schueller said.
Other important components were to partner with national parts and tire suppliers. To do so, Schueller and his team issued requests for proposals (RFPs) to major suppliers in the industry with the intention of establishing long-term relationships.
Then came a very important step — hiring the right people for the right job.
"When I hire, I look for people that have worked as a technician at some point in their career and also have management experience," Schueller noted. "Each member of my team knows what it is like to be in a shop and knows how to work well with independent shop owners and technicians. That is key to building good relationships."
With field staff to train their independent service provider network, an in-house warranty administrator, and an in-house technical support team with vast experience in mechanical repairs, Schueller sought to bring management of PM in-house, and create what he calls a "cultural and managed change" within field operations.
"Success for changing the process is greatly dependent on our ability to effectively manage a fleet maintenance network of more than 390 independent vehicle maintenance service providers," he said. To ensure each of these service providers was capable of properly performing PM on Schwan's trucks, the company named a regional fleet maintenance manager in each of its six regions. This role is responsible for training service providers on alternative-fuel vehicle repairs and other various repair trends unique to the company's fleet.
"The strategy also required the creation of company standards and uniform processes for the Home Service depots and maintenance service providers to follow," Schueller said.
Before implementing the strategy, it was important to establish PM benchmarks. So, Schueller and his team audited the major cost categories within fleet maintenance, which included preventive maintenance, major engine, tires, brakes, and electrical.
This audit discovery process resulted in the development of a "Scheduled Major PM Service Strategy," which included the combination of services performed during a scheduled comprehensive inspection checklist along with engine oil and other drive-train fluid changes. During this interval a proactive engine tune-up is administered and DOT inspection service is performed.
"Based on the information gathered from the audits, my approach to creating cultural change within the field operations hinged upon carefully establishing and measuring specific performance benchmarks," Schueller said. "The ongoing process of this cultural change initially required careful monitoring, as do all changes, but the result has been significant decreases in operating expense as well as a longer useful vehicle life."
Between the audits and newly negotiated rates with service providers, the company estimates an annual savings of more than $1 million — a direct reduction in variable truck expense for the corporation.
Charting the Inner-Workings of In-House PM
Because maintenance is performed by independent service providers, Schueller and team needed to give depot managers plenty of time to schedule maintenance around their route schedules. As a result, they automated a system that flags each piece of equipment 30 days in advance of when routine PM is due.
PM flags are only removed once the service provider submits an invoice.
"If the interval goes beyond 30 days, it is considered past due, and, in those rare cases, the fleet-maintenance manager gets involved," Schueller said.
Overall, the company maintains a 99.7-percent PM compliance rate.
Scheduling PM also includes ordering standardized oil and tune-up kits that are assembled for each model type and model-year of trucks. The oil is delivered directly to each depot via the company's own distribution network, minimizing pricey shipping costs. Kits arrive quickly, too — when shipped by the company's national supplier, they arrive within two days from anywhere in the U.S.
To ensure independent service providers perform all aspects of the required PM inspection, providers can visit the company's fleet portal using a user ID and password to access the appropriate inspection form. There, they can print checklists to complete for each inspection.
The fleet portal also allows Schueller's team to post updates for service providers and eliminates paper invoicing. Instead, invoices are sent electronically to the Accounts Payable department for payment. The system, which was built in-house in partnership with the Schwan's IT department, eliminates the handling of approximately 5,000 invoices per week.
Benchmarking Against Third-Party Providers
Although the Schwan's PM program has led to major cost savings and is a well-oiled machine, Schueller and his team benchmark against third-party providers to ensure it continues to be the right choice. So far, the in-house program is still the most effective path.
Similar to third-party providers, Schueller's program provides POs for work to be performed after estimates are submitted; provides technical support in alternative fuel, electrical, brake, engine, and transmission diagnostics; and performs in-house warranty administration with major OEMs, such as GM and Isuzu.
"As a result of benchmarking with leading fleet management companies, we have received feedback from them that they do not feel they can reduce our costs," Schueller commented. "In fact, we are operating at an efficient level, and a gap exists between us and their model that is well into seven figures more in cost to have a third-party maintenance provider."
Tips for Establishing an In-House PM Program
For fleets considering establishing their own in-house PM program, Jeff Schueller, director of fleet maintenance for Schwan's Home Service, offered the following advice:
- Have a thorough understanding of your current state and how you want the future state to look.
- Evaluate the cost of employees vs. third-party providers. With in-house employees, you have a team that is dedicated to the success of the company and shares the common goal.
- Rely on your technical staff. Seek out the best technologically savvy people you can and treat them with the utmost respect for their knowledge.
- Continuously improve on processes to maintain an edge in efficiency.
- Develop clear and concise key performance indicators so everyone on the team understands them and has vested interest in positive impacts.