MANAGEMENT
When should you repair, replace, rebuild or
remanufacture a part, component or even an
entire vehicle system? Th is is a complicated question.
It requires knowledge of costs, usage and
a strong stomach to be able to guess the future.
Is there a best strategy universally? Is there a
comprehensive approach? Th e answer to these
questions is “yes.” But, there is one caveat: Th e
assumption is that none of the scenarios have
an even moderate probability of causing a safety
issue. For this discussion, we will assume
all choices have the same (very low) chance of
introducing a safety issue.
When determining to repair, replace,
rebuild or remanufacture, anticipated lifecycle
44 Fleet Maintenance | October 2018
of the unit is a major consideration.
Determining the amount of life left on a part
or component is an assumption we make
about how long the unit will operate, but
this is always an educated guess based on a
number of factors.
Th e simplifi ed lifecycle costs include:
Parts costs with labor for the lifecycle
Ownership costs with capital, licenses and
insurance
Operating costs such as fuel, fuel tax, etc.
Downtime cost, including cost of the loss of
the unit
Overhead costs, including cost of the building,
lighting and heat, computers, etc.
Cost of money today, in the future and the
value of any savings in today’s dollars
Different scenarios
impact decisions
Th ere are several drivers to this decision
that are outside simple arithmetic, including
vehicle or system effi ciency (e.g. hybrids or
high-effi ciency components), obsolesce (53’
trailers, automated manual or automatic
transmissions) and technology trends (GPS
and equipment telemetry).
In addition, let’s take a more in-depth look at
some other real-world variables that can drive
decision-making:
Variable #1: Operating costs
It doesn’t matter if a low-effi ciency engine
will last another fi ve years when it is 2 mpg
less effi cient then a new engine. Consider this
calculation, for example:
Utilization: 100,000 miles/year
Cost of fuel (2018): $3.20/gallon
4 mpg average ($80,000 for fuel) versus 6
mpg average ($53,333 for fuel) = $26,666
Cost diff erence per mile (penalty for low
effi ciency): $0.27/mile
It is important to note this calculation is
based on the cost of fuel as a constant. In fact,
increases in fuel cost will change the return
on investment.
In other words, it costs approximately $0.27/
mile more to operate the lower effi ciency vehicle.
Variable #2: Productive
output, such as cube-miles,
for freight carriers
For lifecycle considerations on trailers, when
looking at the cost to repair versus replace a
shorter trailer, it is important to evaluate other
aspects of the business.
Changes to regulations may provide additional
opportunities. For freight that is calculated
by cubic volume, longer trailers can carry
more freight. Consider this calculation, for
instance: a 53’ trailer carries nearly 30 percent
more cubic volume than a 40’ trailer. However,
the costs of operation are similar.
If a fl eet grosses $200,000 with a 40’ trailer,
they can make $260,000 with a 53’ trailer.
In this instance, it makes more sense to
replace with new technology than to repair.
Variable #3: A major breakdown
When a major breakdown occurs, fl eets have
several approaches to get the unit back on
the road. Most oft en fl eets will just replace
the part with an OE equivalent. But variables
may impact how to approach the breakdown,
such as a more rigorous evaluation and decision
making process, or considerations such as
the unit nearing the end of its lifecycle.
Below are options a fl eet may consider when
handling a major breakdown:
Replace
Replace the part with an OE equivalent.
To confi rm and obtain this part, fl eets can
contact the OEM or local dealer and order
the part according to their parts manual and
system. Th is part or component should be
the same specifi cations as the original one
removed or an approved replacement by
the vehicle manufacturer. OEM spare parts
are usually held to be the gold standard for
parts. Depending on the circumstance this
might be the easiest option.
How to address the
age-old question on
remanufactured parts
When to repair, replace, rebuild or remanufacture
parts, components and entire vehicle systems.
» When determining to repair, replace, rebuild
or remanufacture, anticipated lifecycle
of the unit is a major consideration.
Photo from iStock
By Joel Levitt
PRESIDENT, SPRINGFIELD RESOURCES
Springfield Resources (maintenancetraining.com) is a
management consulting firm that services a variety of
clients on a wide range of maintenance issues. Levitt is
the president of the company, and has trained more than
17,000 maintenance leaders from more than 3,000 organizations
in 35 countries. He is also the creator 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.
/maintenancetraining.com