3rd

EDITION

Plant
and Vehicle
Management
Manual
Institute of Public
Works Engineering
Australia Limited
Plant and Vehicle Management Manual
Institute of Public Works Engineering Australia Limited

Institute of Public Works Engineering Australia Limited

National CEO, Level 12, 447 Kent Street, Sydney, NSW 2000
Ph: +612 9267 3001 Fax: +612 9283 5255
Email: national@ipwea.org.au
Website www.ipwea.org.au

in association with

Uniqco International Vehicle Management

Managing Director
PO Box A366 Australind, WA 6233
Ph +618 9797 0700 Fax +618 9797 0729
Email: info@uniqco.com.au
Website www.uniqco.com.au

Plant and Vehicle Management Manual

Third Edition, July 2012

ISBN: 0-646-43419-5

Important Note to Readers

While information contained in this Manual is believed to be correct at the time of publication, the
Institute of Public Works Engineering Australia, and their working parties and agents involved in
preparation and publication, do not accept any liability for its contents or for any consequences
arising from its use.

© This work is copy of the Institute of Public Works Engineering Australia Limited (IPWEA). Apart
from any use as permitted under the Copyright Act 1968, no part may be reproduced by any
person without prior written permission from the Institute of Public Works Engineering Australia
Limited.

Requests and enquiries concerning reproduction and rights should be addressed to the publishers:
Chief Executive Officer, Institute of Public Works Engineering Australia Limited (IPWEA)
Level 12, 447 Kent Street, Sydney NSW 2000 Australia, Tel: +612 9267 3001 Fax: +612 9283 5255
Email: national@ipwea.org.au, Website www.ipwea.org.au

Plant and Vehicle Management Manual – Third Edition 2012© Page ii

Foreword

What was your first experience with plant and vehicle fleets? Unless you are a plant and vehicle
management expert, your experience might have been a bit like mine.

I first learned about the application of plant and vehicles in a Project Management elective during
my undergraduate studies in Civil Engineering. This was followed, in greater depth, at the School of
Military Engineering. The emphasis, in both cases, was on the application of plant and vehicles to
engineering construction tasks. If there was anything on the management of fleets, it left absolutely
no impression on me.

In retrospect, some of my military postings involving workshop operations, the specification and
purchase of engineering plant and establishment of one-time repair limits, provided useful
background to what lay ahead. However, the concepts of hire rates, optimum fleet sizes, plant and
vehicle economics and the like were quite foreign to me after 16 years of military life.

My first appointment in local government was as works engineer to a capital city council.
My responsibilities included management of the entire plant and vehicle fleet and the council
workshops. But there were much more exciting things to be done, such as project management of
the city’s first pedestrian mall! I lived and breathed that project until one day the city engineer visited
me on site and quietly advised me that the Plant and Vehicle Account was not looking very healthy
at nine months into the fiscal year, and I should do something about it.

So began a very much deeper interest in fleet management. Unfortunately, the IPWEA Plant and
Vehicle Management Manual was not available at the time, so I had to start from scratch, using
whatever reference material was available at the time, and develop my own systems. Fortunately,
they worked and, I’m relieved to find, share many of the principles contained in this Manual.

The importance of good plant and vehicle fleet management should not be underestimated.
The Toowoomba City Council’s plant and vehicle operations have recurrent expenditure of $7 million
and capital expenditure of $3.5 million per annum—roughly 8% of the total budget. It represents a
significant small business and any improvement in efficiency can reap significant rewards. In
another local government, optimisation of light vehicle replacement resulted in savings of 25%
per annum.

The IPWEA Plant and Vehicle Management Manual will provide a long-needed reference to best
practice for novice and experienced practitioners alike. Its continuing development will be an
added bonus.

Peter Taylor
BE(Hons) prc LGE FIEAust CPEng
FIPWEA FASCE RPEQ
Former Chief Executive Officer, Engineers Australia
(Past National President, IPWEA)

Plant and Vehicle Management Manual – Third Edition 2012© Page iii
From the Institute

The IPWEA is pleased to deliver a major update to this important document to the local
government and public works industry.

In producing the original Manual in 2003, it was the aim of the Institute to raise the profile of plant
and vehicle management as an essential part of business in public works. Since that time, we have
seen over:
• 650 Manuals sold and two updates,
• 2000 people trained or attending professional development workshops and
• 290 enrolments for the popular Fleet Management Certificate

Each professional development workshop attracts new faces and record attendances were
achieved at the 2011 workshops, which is a clear indication of the growing success of the IPWEA’s
Systems Plus Plant and Vehicle Management Program.

While the management principles have remained constant, there have been changes in many
other areas of plant and vehicle management over the past eight years and this third update has
involved a significant rewrite in recognition of the change.

Thanks must particularly go to the main authors, Grant Andrews from Uniqco International Vehicle
Management and Ross Moody, IPWEA National Executive Officer (also the Editor), for their efforts
in compiling this third edition of the Manual.

Thanks also go to the National Systems Plus Panel for their input and peer review and to those
individuals and organisations who have contributed in some way.

The Institute sees the Manual as a ‘live’ document that will continue to develop over time and
suggestions for improvement are welcome any time.

Any comment or contributions should be e-mailed to national@ipwea.org.au, or addressed to:

Chief Executive Officer,
IPWEA National
Level 12, 447 Kent Street,
Sydney NSW 2000

I congratulate and thank all those who have contributed to this significant project.

Paul Di Iulio
National President
Institute of Public Works Engineering Australia

Plant and Vehicle Management Manual – Third Edition 2012© Page iv

About this Manual
Introduction
The IPWEA Plant and Vehicle Management
Manual provides public works professionals and
civil contractors with far more than a general
guide to plant and vehicle management—it
provides vital information to assist in
establishing an efficient and cost effective fleet
management program.
Fleet assets represent a significant investment
for local government and public works
agencies. One of the aims of the Institute has
been to raise the profile of this essential part of
the business and to increase awareness of its
importance among senior management.
Plant and vehicle management has long been
the most neglected area of asset management,
often overlooked for assets such as roads and
buildings. Now, asset management and related
business functions hold equal importance.
Many leading business operations rely on a
well-equipped and properly maintained fleet in
order to provide a cost-competitive and efficient
service.
The role of the fleet manager is now also that of
asset and investment manager. The fleet
manager must be concerned with returning the
best value on the capital investment, not just
financially but operationally and socially, as
environmental considerations are also of
importance.
Today, effective fleet management goes well
beyond simply fixing vehicles when they break
down! Issues such as right-sizing the fleet,
replacing equipment, knowing when to hire,
when to lease or when to purchase demand
more attention than they have in the past. Fleet
management is now far more complex and has
to cover such areas as establishing programs to
preserve the value of equipment investments;
minimising the incidence of unscheduled
repairs; and collecting, analysing, and reporting
necessary data so that intelligent asset
management decisions can be made.
Another important aspect of fleet management
is the recognition that the primary service
provided to customers is mobility.
Organisational mobility is essential for providing
Plant and Vehicle Management Manual – Third Edition 2012©
public services by moving people, materials and
tools to remote job sites. A Fleet Manager’s
customers’ costs are not limited to direct
expenses for such items as repairs and fuel, but
also include the substantial indirect cost of lost
employee productivity when plant and vehicles
are out of service due to maintenance or
breakdown.
Good plant and vehicle management demands
that managers not only understand the
mechanics of owning and operating a fleet, but
are also able to communicate effectively with
management, accountants and the broader
public.
Best practice management is a balancing act:
high utilisation of plant and vehicles, minimum
downtime, and astute buying decisions.
This Manual forms the cornerstone of the
IPWEA program Plant and Vehicle
Management ‘Systems Plus’, which
incorporates:
• this Manual
• training
• professional development workshops
• newsletters
• online Tools
• the Fleet Management Certificate.
What’s in the Manual
The Manual starts off with a Quick Guide and
the Top Key Performance Indicators for
effective plant and vehicle management.
The Manual is divided into modules,
encompassing all the significant aspects of
plant and vehicle management in a public works
environment.
Step By Step Approach
Most modules are introduced with a flow chart
that provides a step-bystep approach for quick
reference.
Numerous case studies are provided, detailing
real examples provided by plant and vehicle
managers in public works.
Page v
Acknowledgements
This Manual has been developed jointly by the Institute of Public Works Engineering Australia
(IPWEA) and Uniqco International Vehicle Management.

IPWEA and Uniqco wish to

acknowledge the contributions made
by organisations and individuals in
delivering the third edition of this
Manual to the public works industry.

Organisations and individuals providing

content used in the Manual
Main Author
Organisations
Grant Andrews
Director Uniqco International Vehicle ALS Global
Management Daimler Trucks Australia/Pacific Pty Ltd
www.uniqco.com.au
Fleet Safety Solutions
Thales Telematics Australia
Western Australian Local Government
Association
Uniqco International Vehicle Management
Peter G Rufford, Director of PEECE Pty Ltd.
Matthew Turner, Plant Safety Assessor
Colin Supple and Associates Pty Ltd
Byron Shire Council
Sutherland Shire Council
Author and Editor
Moreton Bay Regional Council
Ross Moody Rockhampton Regional Council
IPWEA National Executive Officer City of Stirling
and Emeritus Member
New South Wales Roads and Maritime
Services
Michael Stangherlin, TEXA

Members of the Systems Plus Panel

involved in this Manual update
Steven Colliver, Dubbo City Council
Michael Borg, Rockhampton Regional Council
Andrew Railz, Bundaberg Regional Council
Warren Mashford, Moreton Bay Regional Council
Paul Gallagher, Clarence Valley Council
Ray Wilson, Sutherland Shire
Trevor Wicks, City of Knox
Greg Fannon, Hobart City Council
Ian Barker, City of Wanneroo

Plant and Vehicle Management Manual – Third Edition 2012© Page vi


Quick Guide to
Plant and Vehicle Management
An Overview
Why is it necessary to proactively manage the
mechanical plant and vehicle fleet?
Apart from ensuring value for money is
achieved from procurement and operational
performance, actively managing the plant and
vehicle fleet is essential to delivering efficient
works and services.
• Managing the mechanical plant and vehicle
fleet, like any other resource, requires
accurate, reliable, timely, relevant and
quantifiable information. Such data are
required to set charge-out rates, undertake
needs analysis and buy/hire assessments,
develop maintenance programs, and set
service and works programs and budgets.
Next to employment costs, the plant and
vehicle fleet rates a close second in
determining total service and works costs.
• Procurement and management can be
based on outdated policies that no longer
reflect market conditions, and are restricted
by capital and maintenance budgets that
bear no relevance to operational needs or
conditions. Replacement schedules can be
inadequately resourced and replacement
reserves can be seen as easy targets and a
source for balancing otherwise
unachievable budgets, or for delivering on
previous commitments; or promises for
works and services. Plant and vehicle
management is a dynamic environment in
which to work, so is subject to constant
change. It is important not to lock into
policies that may become redundant the
day after they are introduced. Changing
technology, differing markets and better
management regimes make for a very
dynamic mix. Plant and vehicle changeover
policies that are flexible can take advantage
of positive turns in the market for second-
hand items by bringing forward the timing of
changeovers or changing the fleet mix.
Plant and Vehicle Management Manual – Third Edition 2012©
Q
Q
Quick Guide
Case Study
After the 2008 global financial crisis, some
organisations continued with a 40,000 km 24-
month changeover policy for cars. Optimum
replacement points have varied, and continue
to vary, up to 5 years or 150,000 km. By being
locked into a fixed change point, organisation
cannot respond to market fluctuations and
change vehicles at the lowest cost point.
Case Study
The motivation for a Melbourne metropolitan
council to develop a business-case approach
for fleet management arose after the council
significantly reduced the plant replacement
capital budget requested by the fleet
operations department. The initial request was
perceived to be well in excess of the level of
funding the Council was prepared to allocate
without more supporting information. The age
and useful-life argument was deemed
insufficient.
In response, fleet management, with some
external assistance, proposed to undertake a
best-value analysis for assessing each item of
plant/vehicle/equipment and the options for
renewal or purchase. A business case would
be prepared that considered the financial
benefits of the purchase and would be subject
to prioritisation as an investment like other
items of capital expenditure. In addition,
information would be provided on the history of
the item, for example cost and reliability. The
business case would also consider options to
replace/purchase, such as lease, hire and
process change.
Financial analysis included use of Net Present
Value (NPV) and Internal Rate of Return (IRR)
for assessing the viability and ranking of
options. A priority matrix was developed with
criteria and weighting based on operational
effectiveness and financial, staff and
community benefits. The total score allowed a
ranking of projects and a cut-off line to be
drawn if funding was less than that required.
Page vii

Policy and decision makers may see the plant
and vehicle fleet as ‘status symbols’ for the
relevant manager. This perception can be
changed through detailed analysis of plant and
fleet needs and operations together with a total
life cycle ‘value for money’ approach to
assessing plant and fleet requirements.
• Understanding the operational business
unit’s constraints and requirements is an
essential part of good fleet management.
• Applying systematic analysis to the
procurement, management and maintenance
of the plant and vehicle fleet will provide a
foundation to maximise the return on
investment. This will be very difficult to
achieve without an effective fleet
management system.
• Plant and vehicle fleet items are capital
goods. They need to be treated and
accounted for in a similar way to fixed capital
assets, such as land and buildings. In
procuring capital goods, investment of capital
from borrowings, reserves or the plant and
vehicle operating returns (profits) is required.
Case Study
A regional city in central west NSW
established a dedicated fleet management
section in 1994. Prior to this, council was like
most others of the time, where the engineer’s
or administrator’s secondary task was to
purchase and dispose of plant and
equipment. The city recognised the old
arrangement as being a relatively ad hoc
process that failed to take advantage of the
considerable saving that could be made by
effectively managing a substantial asset – in
this case a capital investment of
approximately $15 million.
Prior to 1994, reporting mechanisms were
poor. In many cases the council had little or
no idea of the cost of operating and
maintaining individual fleet items on a routine
basis, and exception reports were time-
consuming and difficult to extract. With a
stand-alone fleet management section, the
city was able to progress the management of
the fleet from an operational function to a
branch that could provide a strategic direction
and a value-added service when providing
plant and equipment to the organisation.
Plant and Vehicle Management Manual – Third Edition 2012©
Quick Guide
• Investments in capital goods form part of the
business strategies of a business aimed at
maintaining, extending and improving the
delivery of works and services.
• Investments in plant and fleet vehicles are
aimed at increasing the performance and
output potential of the operating business
unit. Higher levels of efficiency are delivered
through increased productivity and optimising
service delivery.
• Utilisation is the key to the procurement and
management of the plant and vehicle fleet.
Low utilisation raises questions of ownership
versus hire. There may also be issues
relating to operational management, such as
coordination of use between work sites and
operational units.
• Promoting and rewarding innovation in the
workplace can result in new ways of doing
things with improvements in quality,
productivity and cost savings. The fleet
manager should take the time to observe
and understand the business in which the
fleet end-user is engaged.
Case Studies
Some examples of innovations are:
• Traditional turf topdressing with sand using
a fertiliser-spreading contractor. Most
fertiliser-spreading contractors can adjust
the delivery of their machines to suit
topdressing. The high flotation required for
agricultural jobs helps minimise damage on
fine turf given the correct conditions.
• Side filling behind kerbs using a fertiliser-
spreading contractor. By simply fitting a
cross-feed conveyer to the back of a
spreader bin in place of the spinners,
contractors are able to feed soil over the
kerb with minimal disruption to traffic.
• The use of a multi-handler in a yard
application where there was a need for a
forklift and a skid steer loader but utilisation
could not support ownership of both.
The advantage of this concept is that it
allows greater utilisation of a forklift and
loader in one machine. However the multi-
handler may not be as effective as either of
the specialist items.
• Demountable fire pumps and water tanks on
Page viii
 Q
Quick Guide

Step 2 – Address low utilisation

tipper trucks. By using
demountable tanks on
tippers, a tree-watering Where low utilisation is identified, a business
facility can be provided case study may need to be made to ensure
that will increase the that the low utilisation is either acceptable due
utilisation of trucks while to the nature of the business or lack of hire
reducing the capital options.
outlay to provide the
service.
The business case for retaining ownership of
• Posthole borer on a crane an item with low utilisation must address the
truck. By having a following questions:
posthole borer attachment
• Is the item essential to the business
for a crane truck, the
operation of the end-user client?
borer attachment can be
used when there is the • Is there a contractor available to provide a
requirement to erect quality service at a competitive cost?
poles, plant trees, etc.
• Is the item to be dry hired? If so, at what
cost? Are our operators sufficiently skilled to
Quick steps to managing the fleet provide the service at a competitive price?

Step 1 – Measuring utilisation Step 3 – Establish internal hire

rates from whole-of-life costs
How is utilisation defined?
To develop internal hire rates, it is necessary to
Utilisation is usually measured by hours worked first establish the average annual whole-of-life
or distance travelled in a nominated timeframe, costs. The elements of whole-of-life costs
which for comparison or benchmarking
include purchase price, resale value,
purposes is taken as a calendar year.
opportunity costs (cost of capital), fuel, repairs,
maintenance, insurance, oil, registration, and
Why is measuring utilisation important?
administration costs.
Without knowing the utilisation, an accurate
assessment of the following management When establishing annual whole-of-life costs,
issues cannot be made: budget items are allocated directly to either
fixed or variable expenditure over a 12-month
• Is the item needed on a permanent or
period. The sum is then either charged out as
intermittent basis and should the item be
an annual rate or recovered via timesheet
owned or hired as required?
hours or engine hours or kilometres travelled.
• What are the servicing requirements per
annum?
• How much fuel and oil will be required per
annum?
• What staff resources are required for
servicing and repairs?
• What will the tyre wear be per annum?
• When can major maintenance be
programmed?

Utilisation information provides the foundation

for best-practice plant and vehicle A standard FEL replaced with a multihandler for general
management. application in a works depot.

Plant and Vehicle Management Manual – Third Edition 2012© Page ix


Case Study
A NSW central west council’s fleet
management section placed a high priority on
the need to be cost competitive with external
providers. Their business performance was
measured by comparing internal and external
hire rates for like items. As part of the
reporting responsibilities, the fleet manager
was required to provide an annual report to
the council, which shows a direct comparison
between internal and external hire rates.
Internal hire rates were regularly benchmarked
and were found to be consistently lower
(between 20% and 40%) than external rates
for the same equipment.
As a result, fleet management outsourced a
number of maintenance tasks, including tyre
management and fabrication work.
Specialised plant items were hired when
required, as opposed to being owned, and the
decision to hire or own became based on
documented usage patterns and utilisation
percentages.
Fleet management adopted the approach that
if any item failed to obtain 65% utilisation, then
a detail costing report would be required to
maintain ownership. A pivotal role within fleet
management was a centralised hire
coordinator responsible for all external hire of
plant and equipment. This was to ensure that
all plant and equipment would meet the
required safety standards, insurance and
legislative requirements. It also allowed fleet
management to provide the organisation with
accurate usage rates and detailed reporting
mechanisms.
Step 4 – Establish 10-year
replacement program
The next step is to create a 10-year capital
purchase forecast. A 10-year plan is
recommended as most equipment will have up
to a maximum of 10-year optimum replacement
life. By budgeting in advance for a capital
replacement program, fleet managers are
making sure their financial counterparts are
fully aware of their long-term capital needs.
The planned replacement program can be
funded using the depreciation and cost of
Plant and Vehicle Management Manual – Third Edition 2012©
Quick Guide
capital components accounted for in whole-of-
life costing.
Plant and vehicle replacement reserves are
recommended in order to ensure plant is
replaced in a timely manner without the risk of
deferring replacement because of lack of
funding.
Deferring replacements compounds costs by
increasing maintenance costs, and reduces
operational efficiency of services through
downtime due to mechanical failure.
Step 5 – Monitor downtime and
maintenance costs
Downtime is the hidden cost of fleet
management. In many cases, downtime costs
are substantial and fleet managers, just as
much as owner/operators, need to be aware of
how machine downtime can affect business
unit productivity.
Downtime costs have two major components:
1. Hire of a replacement machine. This also
incorporates the cost of holding additional
machines in order to compensate for the
mechanical downtime on other machines. Dry
hire of an externally supplied machine may
involve on-site and off-site charges and these
to need to be incorporated into the hire
charges.
2. Fixed costs related to the loss of an
operational machine on a specific task. The
fixed costs of a machine are the costs incurred
as a result of ownership. These include licence,
insurance and finance costs and depreciation.
In addition to the fixed costs related to the
plant, it is necessary to establish a cost related
to the operator’s downtime, subject to whether
or not the operator is allocated another
chargeable job while his machine is down.
However, there may also be costs associated
with lost productivity of associated plant and
labour, and these costs are often ignored in
calculating the true cost of downtime.
Maintenance can be substantial and a good
record of maintenance undertaken allows
informed decisions for continual improvement
of the fleet.
Page x

An awareness of the cause of failures enables
the operational manager to have a proactive
approach to staff training and correct
equipment application. This, in turn, may result
in reduced operational costs and increased
equipment availability.
With established reasonable records on
downtime and maintenance, fleet managers
can use their information to effectively manage
the cause and reduce the effect.
In order to reduce downtime, the fleet manager
should consider:
• After-hours servicing.
• Ensure scheduled maintenance occurs no
less often than the manufacturer’s
recommendations.
• Improving the training of plant operators.
Case Study
A typical example follows showing the cost of
downtime for an organisation with a grader.
The grader failed at 8.30am one day and the
driver and supervisor spent most of two days
recovering and replacing it with a dry hire
unit. In turn, this held up the maintenance
crew for some time at a cost of $1120. The
cost of external dry hire of a grader for 26
days while the transmission was overhauled
cost $9843. The finance and depreciation
cost on the unit over the 26 days cost $1649.
A total cost of $12,612 was incurred before
paying for the repairs.
In addition, there was a further cost of $2826
caused by the downtime of the three trucks,
roller, water cart and eight staff working on the
grader operation. Therefore the total downtime
cost was $15,438. This must be added to the
repair cost of $28,400 to show the full cost
impact of the failure.
Step 6 – Liaise with end-users in
preparing specifications
Users of the plant and vehicle fleet have a
substantial role to play in reducing the potential
costs of the fleet. By incorporating input from
end-users into specifications, the fleet
manager will increase the likelihood that the
Plant and Vehicle Management Manual – Third Edition 2012©
Q
Q
Quick Guide
most appropriate item is selected to undertake
the task required of it.
All too often, when the fleet manager delivers
the new item, end-users spend a substantial
amount of time and money tailoring the vehicle
to their needs. If these items are included
when the vehicle is purchased, the
modifications and tailoring are undertaken
during production, thereby reducing the cost.
Case Study
An example of an incorrect operational
specification is a situation where, traditionally,
a skid steer loader was used to remove
kerbing. The continual impact upon the end of
the kerb to remove the concrete caused
repeated drive chain failures. Subsequent
replacement of the skid steer with a small
excavator made the job more efficient and
cost effective.
A second example involved a station wagon
vehicle that was due to be replaced for a
survey crew. After discussion with the crew, a
crew cab vehicle with a tailored tradesman’s
van body was selected in preference to a
station wagon. The crew were provided with a
vehicle that could securely and safely store the
theodolite, staffs, stakes and drawings.
At the same time, this allowed the manager to
simply swap the body to the next crew cab at
every changeover, reducing downtime and
costs substantially.
Step 7 – Purchase and disposal
Purchase of plant and equipment in the public
sector is an involved process that needs to be
open and accountable at all times.
Step 8 – Consider regulatory
requirements
Operating plant and fleet attracts inherent
liabilities for an organisation directly related to
various regulatory requirements. It is the
responsibility of the fleet manager to not only
be aware of regulatory requirements but to be
proactive in ensuring compliance with the
various Acts, Regulations and Codes of
Practice in their jurisdiction.
Page xi
 Quick Guide

Case Study – Adopting best practice principles

“The Principles in Practice” Workshop Operations

A Queensland council commissioned a review Deficiency

of fleet services that resulted in a number of
recommendations, including the need to Staff were giving their best efforts but were
appoint an experienced fleet manager who was aware of the problems and wanted to learn and
given the brief to implement change in improve the business.
the following areas.
• 95% of workshop maintenance was reactive
Fleet Management Software • Limited preventive maintenance completed
• Maintenance staff had received limited
Deficiency training
• Limited processes in place for workshop
There was an urgent need for the
operations
implementation of fleet management software
to assist with the management and • Incomplete costing of repairs
maintenance of council’s fleet of vehicles,
• No job sheets
plant and equipment.
• Poor reporting of previous work carried out
Improvements • Staff had a blame culture
• Implementation of computerised • Poor customer service was provided.
maintenance and scheduling system for all
vehicles, plant and equipment

REACTIVE VS SCHEDULE MAINTENENCE

100%
95%

90%
Reactive
80%
71%
69%
70% 67%
61% 62%
60%
60% 57% 56% Scheduled
52% 52%
50% 48% 48%
%

43% 44%
40%
39% 38%
40%
33%
31%
29%
30%

20%

10%
5%

0%
2003 May-05 Jun-05 Jul-05 Aug-05 Sep-05 Oct-05 Nov-05 Dec-05 Jan-06 Feb-06 Mar-06 Apr-06 May-06 Jun-06
Review
MONTH

After the introduction of planned service schedules, reactive maintenance decreased to less
than the target benchmark of 50%.

Plant and Vehicle Management Manual – Third Edition 2012© Page xii
 Q
Quick Guide

Improvements • The acquisition and disposal method was

• Increased frequency and quality of
preventive maintenance
• Introduction of job sheets and costing of
repairs
• New office accommodation for supervisory
and administration staff
• Review of all suppliers
• Processes for defect reporting and fault
rectification
• Training of operators/drivers in daily
maintenance requirements
• Implementation of failure investigation
reporting for all reactive maintenance
• Reduced outsourcing and insteadtrained
internal staff, which reduced costs and
improved skills
• Improved communication with customers
• Change of culture to ‘building customer
relationships’ from one of ‘blame’
Fleet Management
Deficiency
• Chart of accounts was hard for staff to follow
• There was no whole-of-life costing for any
assets
antiquated and ineffective
• Poor consultation with the users when
purchasing new equipment resulted in a high
level of downtime and expensive repairs
• Charge-out system relied on user work
sheets to recover costs, resulting in under-
recovery of most plant and over-recovery of
frequently used plant
• The asset data base was incomplete
• Plant was being over-depreciated
• Fleet was being under-utilised
• Replacement of fleet was ad hoc
• No useable data were collected for the
management of the fleet
• Fleet was often used in wrong applications,
causing failure and downtime.
Improvements
• Liaison with finance department to streamline
the chart of accounts
• Annual rates for all vehicles, plant and
equipment
• Software to collect and analyse whole-of-life
costing, failure trends and optimum
replacement periods
• Regular meetings with customers to listen to
current issues and future needs

YEARLY TOTAL OF FAILURES

2 LACK OF DAILY MAINTENANCE

4
12 1
MECHANICAL WORKSHOP ERROR

7 LACK OF SCHEDULE MAINTENANCE

3 VEHICLE AGE

OPERATOR TRAINING

VEHICLE DESIGN FAULT

11
USED IN WRONG APPLICATION
17
DRIVER ERROR UNFAIR WEAR & TEAR

Recording of reasons for failures provides valuable management information.

Plant and Vehicle Management Manual – Third Edition 2012© Page xiii

• An accurate fleet database
• A five-year capital replacement program
based on optimum changeover for each
type of plant
• A process for acquisition and disposal of
plant and equipment, ensuring full
consultation with customers, including
supervisors, drivers, health and safety
officer, and fleet maintenance staff
• A strengthened specification and tender
evaluation process
• Disposal of underutilised plant it if the
‘business case’ couldn’t justify ownership
Small Plant and Equipment
Deficiency
• Meetings with all sections of operational
staff revealed a consistent dissatisfaction
with small plant and equipment (chainsaws,
weedeaters, etc.)
• Failure and breakdowns of small plant was
impacting on staff’s ability to respond to the
region’s needs
• Inventory inspection revealed:
–m
 ore than three times the number of
small plant the Council previously
inventoried
–9
 0% of small plant was rated as being in
poor condition. Most had passed its
useful life, with some over 12 years old
–n
 o controls on who could purchase
equipment
–m
 ajor repairs were being conducted on
equipment that was worthless
–n
 o preventive maintenance carried out –
no training provided for users
–m
 ixed makes and models purchased
– c ondition of equipment was so poor that
user departments had to stock three
times the number of items required,
simply to cover ‘downtime’ of the
equipment
– A ‘blame culture’ existed between fleet
and the end-users
Plant and Vehicle Management Manual – Third Edition 2012©
Quick Guide
Improvements
• Disposal of all items in poor condition
• Purchase of new equipment in consultation
with customers
• Limit purchases of small equipment to only
two brands
• Implement ‘actual needs’ analyses with
users (kit for each truck)
• Implement scheduled maintenance system
• A replacement program
• Customers’ input in the purchase decision
to ensure equipment meets their needs
• A small-equipment hire service managed
and run by fleet management
• Increased number of tradesmen repairing
small equipment, from two to five
• Reduction in the number of items owned
from 670 to 440, with downward trend
continuing
Change Summary
The fleet section now has:
• A customer-orientated culture
• Measurement of utilisation
• Optimum replacement of plant, vehicles and
equipment
• Calculation of whole-of-life costs
• Measurement of downtime and associated
costs
• Recording and monitoring of downtime
• Maintenance failure reporting
• Monitoring of reactive versus scheduled
maintenance
• Improved parts and materials controls
• Specialist servicing using private service
providers
• Fewer mechanics
Page xiv
Table of Contents
Section 1 Utilisation 7.11 National Heavy Vehicle Regulator 7.9
1.1 Introduction 1.1 7.12 Tips for Truck Operations 7.9
1.2 Why Measure Utilisation? 1.1 7.13 Regulations Relating to Road Use 7.10
1.3 How is Utilisation Measured? 1.1 Section 8 Earthmoving Plant Page
1.4 Timesheet Hours and Engine Hours 1.2 8.1 Introduction 8.2
1.5 Benchmark Utilisation 1.3 8.2 Business Case Analysis 8.2
1.6 Optimum Replacement Timing 1.3 8.3 Plant Classification and Specifications 8.2
1.7 10-Year Plant and Vehicle Replacement Plan 1.4 8.4 Tips to Use When Purchasing Construction 8.3
1.8 Operating Risk Assessment (Deferring Beyond 1.5 Equipment
Optimum Replacement) 8.5 Resale Values 8.4
Section 2 Whole-of-life Costs 8.6 Lifting with Earthmoving Plant 8.4
2.1 Introduction 2.1 Section 9 Grounds-Care Plant and Equipment
2.2 Depreciation 2.1 9.1 Introduction 9.2
2.3 Fixed Cost Allocations 2.4 9.2 Agricultural Tractors 9.2
2.4 Variable Costs Allocation 2.5 9.3 Outsourcing of Grounds-Care Activities 9.3
2.5 Operator Costs in Whole-of-life Costing 2.7 9.4 Attachments 9.3
2.6 Expected Life (Optimum Replacement) 2.7 9.5 Dedicated Grounds-Care Plant 9.3
2.7 Whole-of-life Cost Calculation 2.7 9.6 Benchmark Utilisation (KPIs) 9.4
2.8 Internal Hire Rate Calculation 2.7 9.7 Tips 9.4
Section 3 Buy/Hire Decisions 9.8 Vehicle Hygiene (weed control) 9.5
3.1 The Buy/Hire Decision Checklist 3.2 9.9 On-Road Registration Requirements 9.5
3.2 Hiring Plant 3.3 Section 10 Ancillary Equipment
Section 4 Funding the Fleet 10.1 Managing Ancillary Equipment 10.1
4.1 Introduction 4.1 Section 11 Mechanical Maintenance
4.2 Reserves 4.1 11.1 Introduction 11.2
4.3 Leasing 4.2 11.2 Key Performance Indicators 11.2
4.4 Loans 4.3 11.3 Actions to Reduce Unscheduled Maintenance 11.6
Section 5 Tendering Guide and Evaluation Process (repairs)
5.1 Introduction 5.2 11.4 Owning and Operating a Workshop 11.8
5.2 Tender Documentation 5.2 11.5 Programming Maintenance 11.8
5.3 Tender Assessment 5.5 11.6 Guide to Maintenance Management 11.9
5.4 Risk Assessment 5.7 11.7 Workshop Staffing 11.14
Section 6 Light Vehicles 11.8 Workshop Staff Training 11.16
6.1 Introduction 6.2 11.9 Mechanical Repairs and Maintenance – inhouse 11.17
6.2 Average Annual Vehicle Costs 6.2 or outsource
6.3 Optimum Changeover 6.2 11.10 Workshop Safety Plans 11.19
6.4 Developing a Fleet Profile 6.4 11.11 Daily Checks 11.22
6.5 Purchase and Disposal of Light Fleet 6.5 11.12 Parts Inventory 11.23
6.6 Optional Extras 6.7 11.13 Tyres 11.24
6.7 Managing Fringe Benefits Tax (FBT) 6.9 11.14 Oils 11.24
6.8 Environmental and Safety Considerations in Light 6.10 11.15 Environmental Controls 11.24
Fleet Purchasing Section 12 Service-Level Agreements
6.9 Comment on Fuel Options 6.12 12.1 Introduction 12.1
6.10 Motor Vehicle Fleet Safety 6.13 12.2 Contents of a Service-level Agreement 12.2
6.11 Driver Vehicle Inspection Checklist 6.13 12.3 Benefits of Service-level Agreements 12.2
6.12 Regulatory Requirements 6.13 12.4 Application of Service-level Agreements 12.3
Section 7 Heavy Vehicles 12.5 Levels of Service 12.4
7.1 Introduction 7.2 Section 13 Safer Driving
7.2 Truck Configurations 7.2 13.1 Introduction 13.2
7.3 Benchmark Utilisation KPIs 7.3 13.2 Safer Managers – the Contribution of Line 13.5
7.4 Special Application Options 7.3 Managers
7.5 Options Affecting Resale Value 7.5 13.3 Safer Drivers – the Contribution of Drivers 13.10
7.6 Chain of Responsibility 7.6 13.4 Safer Vehicles – Purchase/lease and Maintenance 13.11
7.7 Chain of Responsibility Legislation 7.6 of Vehicles
7.8 Heavy Vehicle Accreditation 7.7 13.5 Safer Driving Support Systems – Creating 13.12
7.9 Heavy-Vehicle Driver Fatigue 7.8 Management Systems to Assist Safer Driving
7.10 Implications for Local Government 7.8 13.6 Moving to Best Practice 13.14

Plant and Vehicle Management Manual – Third Edition 2012© Page xxi
Section 14 Tyre Management Page Section 2 Whole-of-life Costs
14.1 Tyre Selection 14.1 Appendix 1: Whole-of-life Cost Calculation Examples 20.6
14.2 Distinguishing Tyre Features 14.2
14.3 Application of Radial Tyres 14.3 Section 3 Buy/Hire Decisions
14.4 Load Rating Index – Compliance with Legal 14.3 Appendix 1: Business Case Assessment Example 20.11
Requirements Appendix 2: Hire Plant Contractor Performance Assessment 20.13
14.5 Prolonging Tyre Life 14.4 (Sample)
14.6 Inflation Pressure 14.5
14.7 Rims 14.6 Section 5 Tendering Guide and Evaluation Process
14.8 Tips 14.8 Appendix 1: Truck Tender (Sample Only) 20.14
Section 15 Oils and Oil Analysis Appendix 2: Sample Tender Document 20.17
15.1 About Oils 15.1 Appendix 3: Best Value (Tender) Assessment Example 20.24
15.2 Equipment Condition Monitoring through Oil and 15.2
Debris Analysis Appendix 4: Pre-Purchase Risk Assessment (Example) 20.27
15.3 Spectrometric Oil Analysis 15.3 Appendix 5: Risk Assessment 20.30
15.4 Debris Analysis 15.4
Section 6 Light Vehicles
15.5 Choosing a Laboratory 15.6
15.6 Effective Condition Monitoring 15.6 Appendix 1: Light-Vehicle Fleet Analysis – Existing Vehicle 20.33
15.7 Conclusion 15.7 Response Form
Section 16 Fuels and Environmental Issues Appendix 2: Motor Vehicle Fleet Safety Guidelines 20.35
16.1 Background 16.2 Appendix 3: Vehicle Inspection Checklist 20.54
16.2 Environmental Factors Affecting Fuel Emissions 16.2
Section 7 Heavy Vehicles
and Fleet Management
16.3 CO2 Outputs 16.4 Appendix 1: Truck Replacement Notification Form 20.55
16.4 Dispensing Fuel 16.5 Section 8 Earthmoving Plant
16.5 Fuel Tax Credits 16.6
Appendix 1: Plant Replacement Notification Form 20.56
Section 17 Fleet Management Reporting, Software Systems and
GPS Tracking Appendix 2: Tips for Operating Plant and Machinery 20.57
17.1 Introduction 17.2 Section 11 Mechanical Workshop Maintenance
17.2 Establish Reporting Needs 17.2 Appendix 1: Daily Vehicle/Plant Inspection Checklist 20.60
17.3 What Methodology to Deliver the Reports? 17.4
17.4 Fleet Management Software 17.5 Appendix 2: Estimating Workshop Labour Requirements 20.61
17.5 Tips 17.6 Appendix 2: Attachment 1: 8 Tonne Truck – Service 20.63
17.6 GPS and Fleet Tracking 17.6 Example
Section 18 Developing a Plant and Vehicle (Fleet) Asset Plan Appendix 2: Attachment 2: Small Cars, Large Sedans, Utes 20.65
18.1 Introduction 18.2 and Vans Service
18.2 Levels of Service 18.4 Appendix 2: Attachment 4: Plate Compactor Service/ 20.66
18.3 Future Demand 18.5 Inspection Time
18.4 Risk Management 18.6 Appendix 3: Example Workshop Hazard Inspection Checklist 20.67
18.5 Life Cycle Management Plan 18.7
18.6 Financial Projections 18.9 Appendix 4: Workshop Job Card (Example) 20.70
18.7 Asset Management Practices, Performance and 18.10 Section 12 Service Level Agreements
Improvement Plan Appendix 1:Service Level Agreement Responsibilities 20.71
Section 19 Occupational Health & Safety
Section 15 Oils and Oil Analysis
19.1 Introduction 19.2
19.2 Definitions: Acts, Regulations and Codes of 19.2 Appendix 1: Standard Oil Analysis Table 20.75
Practice Section 17 Fleet Management Reporting, Software Systems and
19.3 National Model OH&S Laws 19.2 GPS Tracking
19.4 Duty of Care 19.4
Appendix 1: Key Requirements of a Fleet Management 20.76
19.5 Consultation 19.5
System
19.6 Codes of Practice 19.5
19.7 Self Regulation 19.6 Section 19 Occupational Health & Safety
19.8 Hazard Identification, Risk Assessment and Risk 19.6 Appendix 1: Sample Risk Assessment 20.80
Control
19.9 Plant and Fleet-Specific Safety Obligations 19.7
Section 20 Appendices Definitions and Abbreviations 20.80
Section 1 Utilisation
References 20.87
Appendix 1: Utilisation Calculation Examples 20.1
Appendix 2: G
 uide to Assessing Plant and Vehicle 20.3
Operating Risk

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