As fleet managers are asked to cut costs in every direction, expenditures are under heavy scrutiny — particularly with large acquisitions such as sweepers. Nevertheless, keeping an aging unit requiring major maintenance and expensive to operate can weigh heavily on a fleet's budget as well. To make the best budgetary choices, fleet managers must know the annual costs associated with operating their sweepers — and those units they may purchase.
A lifecycle cost analysis helps fleet managers know exactly how much a fleet unit costs to operate over its service lifetime. This analysis can lead to other important conclusions, including whether to keep an aging vehicle or which new models are the best purchase. To help, sweeper experts weigh-in on the best approach to performing a lifecycle cost analysis of these important fleet units.
1. Devise the Right System
Performing an accurate analysis is based on simple organization. Before you begin, create a system — a database, spreadsheet, or other electronic resource - that will accurately collect all data and store it in one organized place.
Rick Longobart, fleet services superintendent for the City of Inglewood, Calif., says fleet managers may consider purchasing a software program that performs the work for them, depending on their budgets and organizational acumen.
"In terms of software, there are many different ways to perform a lifecycle analysis, and no one way is right or wrong. One approach is to use fleet management software that does everything behind the scenes: You input the data, and it accumulates it. You can also use a simple Excel document by collecting all the costs and creating a formula to show what you're spending each year. Other software programs are designed specifically for lifecycling," he said.
"Many tools tare available to choose, but the choice depends on what works best for the fleet and what you're willing to spend. Whichever tool you choose, the most important thing is what you take away from it and how you interpret the results," Longobart added.
While purchasing a lifecycle-specific software program might not seem practical, Jeffrey Haase, senior VP of Environmental Products of Florida, an Elgin Sweeper dealer, says investing in a program can do more than simply calculate costs.
"A software package will also help you in scheduling preventive maintenance. Your costs over the long run will be lower if you maintain your sweeper in a timely fashion," he said.
2. Gather the Data
In analyzing the cost of an existing or new sweeper, fleet managers should look carefully at the unit's operating costs, including acquisition price, fuel, tires, maintenance, main broom life, gutter broom life, replacement parts, and importantly, labor costs. This data generally is found in fleet records or the operator's manual, or from the manufacturer or distributor. Additional factors to consider include accident history, depreciation, and inflation.
Elgin's Haase offers his formula. "Capture all your repair, maintenance, and broom usage costs, assign a value for each day the sweeper is out of service, add the acquisition cost, and subtract the residual value," he said. "Gather all repair orders to the repairs from outside vendors. Accounting departments can supply the acquisition cost. The sweeper dealer is the best one to set the residual value. Depending on their systems, all the costs are right under fleet managers' fingertips."