Part 1 – Third-Party Maintenance Provider Labor Cost Analysis
When it comes to initiating a new business relationship, it’s important to get a 360-degree overview of the company and what it offers. This is particularly the case when it comes to evaluating third-party maintenance providers. Taking a deep dive and evaluating every aspect of the provider’s services and business practices (discussed in this post, as well as part 2 and part 3) will benefit your fleet in the long-run, maximizing your fleet’s performance, and keeping maintenance costs under control.
Third-Party Maintenance: What’s It Going to Cost Me?
It’s tempting to consider labor rates as the primary (and in some cases only) criterion when evaluating third-party maintenance providers.
Choosing the “cheapest” vendor based on labor rates is not always the best answer. While it should be a consideration, there are numerous other factors fleets should look at — productivity; parts costs, mark-ups, and rebates; technician quality; and outsourcing. For example, you may often find that there are hidden costs associated with outsourced repairs that won’t be revealed directly in a vendor’s labor rate.
Another consideration is the efficiency of the technicians and the quality of their work. Consider this common example when looking at labor rates: If one provider has a labor rate of $75 and gets the job done quickly, and correctly, in an hour, while a $60 provider takes two hours, and may have to redo the work, the “more expensive” provider is actually cheaper. Comparing the vendor’s estimated service times to a standard like Motor’s is often a good process to level the playing field when comparing rates. Also, requiring your vendors hold to certain performance measurements like Task Repeats and SRTs for common services will ensure you continue to receive the best services for the best rate.
What’s best for you?
Running a maintenance shop can be a lot to handle, and costs can quickly spiral out of control. You don’t have to handle everything on your own. Choosing Amerit as your outsourced maintenance provider in one location or across the country can save you time, money and a lot of headaches.
If you would like to learn more about how our fleet management solutions can help your company, contact us today- (855) 832-9922.
Want to read more about this topic? Check out the following blog posts:
- Part 2: Leveraging Third-Party Maintenance Providers to Save: Parts & Technicians
- Part 3: Hidden Cost Drivers: Downtime, Safety, and Transparency