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Computers
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answer many,
fleet cost questions
IS IT the make of vehicle, or what you make that vehicle do. that has the greatest bearing on a fleet's profitablility?
One could reasonably expect a commercial vehicle manufacturer to emphasise the importance of the marque. while some operators will either swear by or swear at a particular make.
Last year Mercedes-Benz was using the slogan "Trucks that save you bucks", but this does not mean that the company is ignoring the operator's role in earning the bucks. Indeed, it is this which lay behind the creation of Mercedes' Transport Consultancy.
This was started in Germany in 1970. Since then it has been introduced in the company's export markets and is now available in 16 countries. Transport Consultancy came to Britain in 1978. It is run from the Mercedes office in Milton Keynes by four consultants under the management of Colin Burton.
Its services are available free of charge to the road transport industry at large — operators may be either professional hauliers or from the own-account sector, and need not be Mercedes-Benz customers. Colin Burton explained that non-Mercedes operators using the services are not a source of embarrassment; the company takes a positive view and regards such operators as potential Mercedes customers.
Transport Consultancy is sub-titled "Management aids to fleet efficiency" and offers four specific computer-based services:
Fleet Information System
The first of the four services to be offered was Fleet Information System (FIS). This accounts for the bulk of the Consultancy's work. FIS is a fleet cost monitoring programme. There are around 75 operators using it and over 2,500 vehicles being monitored. Not every vehicle in a fleet has to be on FIS; Mercedes suggests that operators enter a sample of various types of vehicle, or maybee all the vehicles at a particular depot. Interestingly, the UK is the biggest user of FIS, outstripping even Germany. Colin Burton is selective in choosing operators who wish to go on FIS: "We want the companies who are going to use the information, not just those who are attracted because it's free." As a result, the companies who are on FIS include some big names such as Christian Salvesen. Young's Seafoods. Robirch, Bond Delivery and Park Cakes.
Fleets with 20 to 50 vehicles are most likely to feel the benefit of FIS. They may not be considered large enough to justify an in-house computer, but may be too large for close manual control.
The operator has to input quite a lot of data on his vehicle standing and running costs, plus .details of fleet performance such as deliveries, tonnages or revenue. This is married up to fleet data that has to be put on file as part of the initial setting up process — a job with which the consultancy staff help.
Cost data is sent monthly by the operator to Milton Keynes and from here it goes to Stuttgart where it is processed. Stuttgart returns the output information directly to the operators. The cycle takes about three weeks and the results are confidential.
The whole point of FIS is to identify costs and thereby reduce them. To this end, the output is available in a variety of forms, highlighting the aspects that most concern the particular operator. For instance, certain vehicles can be grouped together so that average costs can be obtined for 32 tanners and 38 tonners, or Seddon Atkinsons cornpared with Mercedes-Benz vehicles.
An operator need not have all the available output information. He may just want two or three cost elements monitored, such as repairs and maintenance, in which case the amount of input information is correspondingly reduced.
"Simply measuring some things is enough to bring about an improvement" added Colin Burton. "We are not afraid of the information that comes back where Mercedes-Benz vehicles are concerned. The figures generally confirm that we have a cost effective product".
Economy Calculation
Whereas FIS is a continuous monitoring system, the Economy Calculation is a one-off job. it is run on a computer at Milton Keynes, not Stuttgart. Transport Consultancy carried out over 1.000 Economy Calculations last year. Most came via Mercedes-Benz dealers as a result of operators' enquiries.
An Economy Calculation is a cost-benefit analysis to compare vehicle alternatives when choosing a fleet. In the past year or so the most popular requests have been to compare the 3+2 and the 2+3 combinations for artic operation. The choice of 32tonners or 38 tanners has been another much sought-after calculation.
The service provides theoretical comparisons to help the operator decide on a fleet choice, whereas EIS analyses actual costs of existing vehicles.
The Economy Calculation can be used for the theoretical comparison of one make of vehicle with another, providing all the cost data is known. (All the Mercedes range is on file). Interesting comparison which the operator can make without buying the vehicle are ones between 16 tonners and 13 tanners (or even more so, 7.5 tonners), or the whole-life costs of replacing vehicles after, say, seven years instead of five years.
These types of calculation bring to light some thought-provoking facts. For instance, Colin Burton said that the initial purchase price of the vehicle proves to be surprisingly low proportion of the total operating costs. Over a four/five-year life, the truck's purchase price represents usually just 15 per cent of the total operating costs. This fact gave rise to Mercedes' "tip of the ice-berg" advertising campaign.
Commented Colin Burton: "That 15 per cent figure surprises a lot of operators and shows them that discounts are not so important as they might imagine. In fact, a one per cent improvement in fuel consumption is worth an extra 21/2 per cent front-end discount."
Driver costs come out typically as 20 to 32 per cent of total life costs. Demonstrating the system Colin Burton ran the 3+ 2 and 2+3 comparison on the computer using the Mercedes 2028 and 1628 tractive units as examples. Based on last year's costs (so vehicle price and taxation elements are slightly out) the Economy Calculation reveals that on pure costs there is little to choose between the two configurations when four years' operations are considered.
The 3+ 2 configuration is more expensive to purchase and so time depreciation and other standing costs are higher. But the 3+2 combination is rather cheaper on tyres than the 2-i-3 (less trailer tyre scrub) and this almost squares up the comparison, so that the 3+2 costs 47p per kilometre and the 2+3 costs 46p per kilometre at 38 tonnes gvw. So the moral, according to Colin Burton is to choose largely on the strength of operational requirements rather than costs.
Optimum Replacement Cycle
Colin Burton admitted that the Optimum Replacement Cycle (OPEZ) is probably the least beneficial of the four Transport Consultancy services because it is most difficult to model real-life circumstances on the computer. There are too many unpredictable factors that influence vehicle replacement decisions.
For instance, unforeseen cash flow problems might prevent a planned replacement. And it is difficult to account for the value of the company's image of new vehicles — a factor which can be more important in some branches of road transport than in others.
That said, OPEZ could be used to calculate the theoretical optimum lifespan of a vehicle and that, at least, is a starting point. The in put into OPEZ covers depreciation, repair costs, dowtime costs, notional interest and the effect of the company's tax bill if a vehicle is retained or sold.
All of these factors are calculated year-byyear for the vehicle's projected life. When the annual average of the cumulative costs reaches a low point, that is the theoretical best time to replace the vehicle.
Colin Burton said that experience with OPEZ has taught that the replacement point is not as crucial as one might imagine. The cost of keeping the vehicle an extra year is usually a tiny per centage of the whole life costs.
TRASCO TRASCO
TRASCO is an acronym for Traffc Simulation by Computer. The purpose of simulating a lorry in traffic conditions is to help an operator choose the best drive train options. Faced with a choice of engine, gearbox and rear-axle ratio options, it is possible for him to choose the combination that best suits his type of operating conditions. TRASCO will "drive" each combination of drive train on the computer and arrive at the optimum choice.
To do this it has to simulate a wide range of road and traffic conditions so that a particular operator's type of mileage can be used. Last year, a 1633 tractive unit pulling a tri-axle laden to 38 tonnes gcw covered 3,000km (1,860 miles) on a variety of British roads. All the motorways and main trunk routes were included and sensors and instruments fed the details into the recording equipment that packed the cab.
With this data for British roads now on file, the operator's typical milage — say 70 per cent motorway, 20 per cent B-road and 10 per cent urban — can be duplicated. And other factors included, such as running speeds, height of the vehicle, use of an air deflector, and so on. Using this knowledge TRASCO will try the various gearbox, rearaxle and engine options that Mercedes-Benz offers and determine which combination will be the fastest or most economical.
Originally, TRASCO was developed by the manufacturer's research and development department to help with vehicle design. Transport Consultancy now offers a simplified version to assist the customer's drive train choice. Britain was the first country to have this operator-biased MASCO and it is cur rent's/ being demonstrated via Mercedes-Benz dealers; the first public showing was at the Institute of Road Transport Engineers exhibition at Solihull in May.
TRASCO is the one Transport Consultancy service that is restricted to Mercedes-Benz vehicles. Only Mercedes drive train options are in the data bank.
"It is important to us that the customer chooses the best drive train options," explained Cohn Burton. "For Mercedes-Benz to be seen in the best light the capability of the vehicle has to be fully utilised."
All four Transport Consultancy services have one thing in common; they are designed to give some factual and objective assitance to operators, either in specifying the . best vehicles in the first place or in keeping the fleet at a maximum efficiency. Computers — even German ones — cannot replace experience and knowledge, but it is reassuring if Transport Consultancy can confirm a "gut feeling". Especially if the service is free, although Mercedes-Benz hopes that this is not its main attraction.