Fleet budget buy-in
It can be stressful figuring out how to balance competing metrics when specifying a new work truck. You want to make sure your employees have the appropriate tools and a safe and comfortable work environment, and your company wants to stretch the budget as far as possible.
Savvy fleet professionals recognize that sometimes an initial higher acquisition cost can save money over the life of the asset. Investing in a high-quality product can deliver results above and beyond the norm, thanks to technologies that help improve jobsite safety, save fuel and maintenance costs, and optimize efficiency.
Auxiliary power units (APUs) — or engine-driven all-in-ones — are an effective way to reduce total costs, but they do sometimes require spending more upfront. It may take some work to convince the rest of the organization that investing in a premium product is the best solution.
Learn how to justify and champion a premium purchase with three different stakeholders in your organization: your budget approval team, the service manager and your service techs.
Benefits for financial stakeholders — reducing cost of ownership
- Stakeholders who approve your budget are focused on the big picture and want to understand how this decision will impact other parts of the organization. Go in armed with total cost of ownership stats and all the benefits they’ll get from your premium solution.
It’s important to understand the financial impact of truck setup and how it affects other parts of the organization. While the financial stakeholders may balk at a higher sticker price, it’s only part of the story. The total cost of ownership must also include the cost of maintenance, fuel and downtime over the life of a truck.
Generally, a PTO system may come with a lower upfront cost compared to a truck with an APU. The initial savings is usually eliminated by the expenses associated with the additional chassis engine hours and run time needed to operate and maintain the PTO system. A PTO setup can require 75% more truck engine run time on a jobsite. This increases the risk of downtime, since high engine hours at low rpms can quickly clog the diesel particulate filter (DPF) and force the truck engine into a regeneration cycle. In addition, the more a truck engine runs the more frequently it requires maintenance, which drives up service costs.
It’s also important to factor in fuel costs. To run a PTO system, the work truck itself needs to be running. On average, this wastes 34% more fuel. All-in-one systems allow operators to shut off the truck — which usually has a much larger engine — and run only the all-in-one engine, which results in much better fuel economy. Also, if a PTO truck operator is using compressed air and welding or using generator power, both the truck and the welder/generator are running, driving up fuel expenses.
An added benefit to APU-style solutions vs. PTO is the potential for higher value of an asset at the end of its service life or longer replacement cycles. Reducing engine hours may allow an organization to keep its trucks in service for a longer period of time. Lower engine hours combined with an auxiliary power unit can bring higher resale value.
Getting your service manager on board
- Service managers demand and expect reliable equipment. Dealer reputation is at stake. If they have a truck that is out of service for repairs, they must reroute a service tech to respond to equipment service calls, which is inefficient and expensive. It also creates the potential for longer response times to customers. That’s where your recommendation for an APU solution comes in.
An APU can help decrease the time and money spent on unplanned repairs or increased maintenance cycles by reducing how much the truck engine runs.
In many cases once a vehicle is purchased, the budget responsibility goes to the service department. Routine and preventive maintenance are easily budgeted for. However, unplanned repairs or increased maintenance cycles due to high chassis engine hours are difficult to budget for and erode the bottom line. Because of the high number of low rpm or idle engine hours, PTO trucks tend to require more routine maintenance and have a higher risk of unplanned repairs and downtime — averaging 54% more in maintenance costs compared to trucks with APUs. Unplanned repairs make it difficult for financial teams to accurately budget for expenses.
In addition, there are other costs associated with this downtime that are hard to quantify, but they include lost service revenue opportunities for as long as a vehicle is out of service, costs associated with not being able to meet customers’ needs or expectations, and costs related to the inefficiencies of rerouting other technicians to meet workload demands. An APU can help address all of these challenges by reducing truck engine run time and extending time between maintenance periods.
Excessive engine idling can also affect warranty coverage. Idle hours count as engine hours, which measure how much an engine has run since it was manufactured. Warranties are typically measured in engine-run hours rather than miles traveled. As idle hours add up in engine hours, the powertrain warranty can be voided faster than anticipated.
It is important that service managers and fleet managers are communicating to understand the costs of an asset over its life cycle.