Executive Summary
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Transportation Consultants, Inc.
8302 Dunwoody Place
Suite 352
Atlanta, GA 30350
404/250-0100
404/250-0253 FAX
tci@transpconsult.com
April 24, 2001
Mr. Shawn O'Leary
Director of Engineering and General Services
City of Salina
300 West Ash Street, Room 205
Salina, KS 67401
Dear Mr. O'Leary:
EXECUTIVE SUMMARY
Transportation Consultants, Inc. (TCI) is pleased to submit for your review this proposal to
assist you in reviewing fleet operations in Salina. Based on our discussions, it is our
understanding that you desire outside assistance to assess the operation, chart a fleet
management program, identify improvement opportunities, and provide an implementation
plan for changes. A competitive assessment is the overriding objective in this assignment.
You will find that our firm and the individuals we will commit to the assignment in the
City have extensive, similar experience in public settings. More specifically, we believe
you will find that our team is uniquely qualified for the following five reasons:
1. Extensive Public Sector Experience. This assignment will be directed by Stephen
W. Burnett, TCI Senior Vice President and Director of our Public Sector Fleet
Practice. You will note in a subsequent section that we are committing Mr. Burnett to
100% effort on this assignment. You will also note that his consulting experience
includes fleet assignments with public sector entities such as St. Louis, MO; Houston,
TX; Atlanta, GA; Wilmington, DE; Los Angeles, CA; Dallas, TX; Concord, N.H.;
Jackson County, OR; Sedgwick County, TX; Martin County, FL; State of Texas;
Little Rock, AR; Ventura County, CA; Seattle & King County, WA; Kansas City,
MO: and many additional (100) cities, counties, districts and authorities. He knows
and appreciates the special needs and demands of a diverse public sector fleet, as well
as the uniqueness of the support systems with respect to procurement, disposal,
acquisition, and maintenance management.
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Mr. Shawn O'Leary
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April 24, 2001
2. Applicable Private Sector Experience. Upon review, you will find that TCI has an
extensive private sector background, which offers very comparable and transferable
experience to the assignment in Salina. For a number of clients (N ew York Times,
Walmart, Anheuser Busch, Coca-Cola, ConEd, and others), we have analyzed similar
issues that you are setting forth for us. In fact, we have recently conducted a number
of similar studies (Decatur, GA, Shreveport, Little Rock, Sedgwick County, State of
Texas, Martin County, FL, etc.) in some of the same issues (work process, resource
allocation, service improvement, etc.) that you enumerated to us in our conversation.
3. Wide Range of Fleet Management Expertise. As noted in our response, you will
find that we have accumulated similar, applicable experience in areas such as work
process, cost effectiveness, benchmarking, procurement, consolidation, ISF studies,
resource allocation analysis and the like. We fully expect them to apply this
experience and expertise to the situation in Salina.
4. Extensive Recent Experience. As you will see in the attachment, Mr. Burnett is
completing or has recently completed fleet management reviews in Nashville, TN;
Seattle, WA; Fort Worth, TX; Delray Beach, FL; Ventura County, CA; Sedgwick
County, KS; Little Rock, AR; Shreveport, LA; State of Texas and Decatur, GA
(references attached).
5. Cost accounting emphasis. Mr. Burnett has an extensive cost accounting
background which he will apply fully in Salina. He has prepared and/or directed
dozens of indirect cost studies and cost of service analyses.
Transportation Consultants, Inc. will commit its resources to complete this assignment in
a timely, professional manner. No exceptions are taken with the items enumerated in the
Request For Proposal.
We look forward to completing this assignment for the City of Salina. Please call
Stephen W. Burnett at (404) 250-0100 in the event you have questions or comments.
Sincerely,
Sf{ (Jj)~
Stephen W. Burnett
Senior Vice President
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City of Salina
TABLE OF CONTENTS
Part Page
I. Organization..................................................................................................... 4
II. System Concept and Solution ..........................................................................5
III. Work Program.................................................................................................. 6
IV. Project Structure............................................................................................. 12
Transportation Consultants, Inc.
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City of Salina
I. ORGANIZATION
Transportation Consultants, Inc. is a consulting firm specializing in the areas of
transportation, distribution, information systems, and logistics management. We assist
our clients both domestically and internationally, in saving substantial sums on their fleet
operations, distribution networks, warehousing, and routing delivery systems. Tel
provides both long and short term solutions to our client's toughest logistical challenges
and then manages these changes.
Furthermore, we integrate the areas of finance, human resources, and management
information systems with the distribution process. We advise our clients on cost saving
strategies and then assist in the implementation of the programs that we recommend.
Results follow immediately.
Since our inception in Atlanta, Georgia in 1981 (we are incorporated in Georgia), we
have realized that even the largest entities seldom have a full time staff with expertise in
all aspects of distribution and transportation. Our mission is to fill this void for our
clients by examining each and every aspect of the transportation process. From
purchasing to maintenance to distribution to finance, every element of the process is
scrutinized, then polished while we remain diligently cognizant of our client's existing
operational and servicing requirements.
The firm has rapidly grown to a position of national prominence in the field of logistics
management consulting. Presently, we maintain field offices in New York, Philadelphia,
Columbus, OH, Los Angeles and Portland. Each is staffed with seasoned professionals
ready to serve organizations such as Salina.
Our Atlanta office located at 8302 Dunwoody Place, Suite 352, Atlanta, GA 30350 will
be the performing office.
Transportation Consultants, Inc.
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City of Salina
II. SYSTEM CONCEPT AND SOLUTION
The City of Salina has a significant stake in fleet operations as evidenced by a large
budget and a large complement of vehicles (220 currently).
The City has implemented a number of positive changes recently; new fleet leadership,
new software, and the like. The operation appears to be lean (5 staff) to support the 220
vehicles supported out of the operation. It is clear that Salina desires this assessment to
make certain that the Internal Service Fund is structured correctly and managed
appropriately and that the City has a solid grip on the operation. You are looking to us to
provide any recommended midcourse corrections to enable the operation to excel.
Several questions need to be answered in this competitive assessment:
· Are we (Salina) getting good value for our maintenance dollar?
· How do we stack up against similarly sized cities in terms of cost per unit?
Performance measures? Staffing ratios? Best practices?
· How, precisely, can the quality of services be improved?
· How do our costs and performance measures compare?
· Are we assigning the correct mix of work to outside vendors on a rational basis?
Should more or less of the functions be outsourced?
· What measures can we institute to be more competitive? More value-driven?
· Is our replacement program on solid ground?
· What are the merits and use of centralized fleet management practices versus our
service center concept?
· How can our processes be improved? Customer Service? Information?
· In summary, what can we do to convince taxpayers and elected officials that fleet
support is the "best that it can be"?
Transportation Consultants, Inc.
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City of Salina
III. WORK PROGRAM
A. ANALYSIS PHASE
Detailed Work Steps Follow:
RESEARCH/DATA COLLECTION
The one week analysis phase of work is directed toward starting the project efficiently and
effectively, finalizing and detailing the plan of work, and defining the current operations and
accompanying strengths and weaknesses in the vehicle maintenance area. The various tasks will
include data review, initial interviews with managers and users, observation and other activities
designed to document existing programs and highlight possible immediate enhancements.
STEP 1 - Project Start-Up
We will plan a meeting early in the project to enable the consultants to:
· Refine and review project objectives, scope, task schedules and the like.
· Allow all stakeholders to offer insights and guidance to the consultants at project initiation.
· Re-review other project "ground rules" and logistics.
STEP 2 - Operations Review/Observations
During the first day of the engagement, the fleet management team will initiate reviews of
operations to familiarize themselves with current operations. Areas to be included will be:
· Shop and departmental organization.
· Shop procedures and work order control.
· Repair and maintenance operations.
· Staffing/Resource allocation.
. Historical performance.
STEP 3 - Documentation of Users Viewpoint
We will spend part of our time in Step 3 surveying principal users of the fleet operation in
order to gauge the level and adequacy of "customer service". Typically, we are able to
identify symptoms or problematic situations during this process. We will gauge the level of
user responsibility at this point as well. This step will be particularly important as we
establish a base level of comparison for future organizational and maintenance alternatives.
Transportation Consultants, Inc.
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City of Salina
STEP 4 - Data Collection
After the initial reviews of actual operations, and following initial user feedback, our
consultants will begin to assess the level and responsiveness of equipment operations. In
large part, we will depend on the existing work order system and vehicle records and
interviews to provide any data needs at this stage.
When we review the operations of the fleet, we will consider:
· Turnaround time.
. Backlog
./ By class of repair (per APWA standards).
./ By major vehicle class.
· Re-work or comeback level.
· Compliance with the PM schedule and relationships of scheduled to unscheduled repairs.
. Downtime of fleet.
· Equipment utilization/fleet sizing/take home issues.
· Productivity rates/employee utilization.
· Cost per unit comparisons
· Equipment trends as to fleet size and class composition.
· Parts level and usage.
. Internal Control issues.
· Asset profiles (age, use, mileage).
We will be able to determine the "appropriateness" of the quality and quantity of vehicle
repair services. We will also review the following finance-related issues:
· Vehicle rental rates (and structure)
. Fund Management
· Fund flow schematics
· Dollar trends in budget
· Unit costs in various categories for comparison against comparable operations.
· Use of blanket P.O.'s and the purchasing parameters.
Transportation Consultants, Inc.
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City of Salina
STEP 5 - Assessment of Management Processes
During this step, TCIjleet management consultants will briejly review the variousjleet
management processes and practices in use. Included here, will be a review of
· Accident Management
· Current policies in place to prolong vehicle life, to include a review of the current
Preventive Maintenance Program, including the program definition, the level of
operator abuse of vehicles, and how this is prevented and/or curtailed.
. Personnel and training practices.
· The "make or buy" decision process on the contracting out of services; we will look
at the current and historical ratio of the type of services contracted out as opposed to
those performed in-house.
· The purchasing process (assets, parts, vendor services)
· Opportunities to "streamline" administration and to facilitate the decision making
required of management.
· Replacement policy and practice will be reviewed to ascertain its timeliness,
methodology completeness, and conformance with industry guidelines.
STEP 6 - Resource Assessment (staffing)
We will compile the authorized, filled and vacant position as of the payroll date closest
to our start. We will pay specific attention to the mechanic positions to test:
· Assignment patterns (which mechanics are assigned to which repair activities).
· Current vehicle to mechanic ratios. (both traditional and contemporary methods)
· The number of mechanics required to staff on-going operations.
· Degree of training accorded to incumbents.
. Supervisory levels.
· Any outsourcing arrangements.
TCI consultants will use this and other data to assess the adequacy of current staffing
and training programs, any incentives and the resource allocation process. We will pay
particular attention to mechanic staffing patterns, job assignments, minimum
qualifications and tie-ins to ASE certifications.
Transportation Consultants, Inc.
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City of Salina
STEP 7 - Facility and Equipment
As a part of our assignment, TCI consultants will briefly review fixed and moveable assets - building
and equipment - employed in the repair process. The existingfacility will be reviewed to identifY:
· Work-space layout to improve efficiency and safety.
· Adequacy of size and design, given historical and projected fleet size trends.
· The degree to which layout, equipment and tools aid or hinder the repair process.
STEP 8 - Fleet Financing / Fleet Information (area of emphasis)
The TCI team will review the current financial and information frameworks to assess:
· Efficacy of chargeback methodology and rental rates in an Internal Service Fund.
· Adequacy of the replacement funding process and the ways to finance fleet purchases.
· Flow of payment processes and funds management.
· The rationale behind the organizational structure and application of indirect cost
allocation methods, including opportunities for improvement.
· Overall utilization and assessment of the fleet information system.
· Recommended methodology for a revised chargeback calculation to include a program that
recognizes City objectives, customer desires and generally accepted cost accounting practices.
STEP 9 - Parts Operation
At this point, the TCI fleet management team will briefly assess the store's situation.
Depending on data availability during this step, we will review:
· The adequacy of the stockage mix and level (items, dollars and line items).
· Physical layout alternatives.
· The overall balance between parts retrieved from stock as opposed to those purchased
through blanket purchase orders "on the street".
· The frequency of stock-out situations.
· Fueling procedures and the related option to upgrade fuel control, dispensing and billing.
· The range of obsolete parts existing in the parts inventory.
· Observations on other related warehouse stockage, staffing, and procurement procedures.
· Vendor procedures and inventory turns.
· Alternative policies and practices that could better support the repair operation.
Transportation Consultants, Inc.
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City of Salina
STEP 10 - Maintenance Management
We will conduct a review of shop operations in this task. Issues to be addressed here
include:
Costing - Using available data, we will review the cost of operations for various fleet
service functions to arrive at an estimated unit cost for each.
Service Delivery - Tied into user feedback in Step 3 as well as an analysis of the work
flow and procedures.
Work Order/Shop Control- In this area, we will address the degree of tightness with
which work is assigned and controlled within the shop. This includes a review of current
quality assurance procedures and the adequacy of record keeping methods in place,
including automation. Quality control will be addressed here as well.
Repair Order Procedures - By examining the methods of data capture, we will be able
to determine the effectiveness ofthe current system. First, we will review how the repair
order enters the information system. Next, we will evaluate how the mechanic receives
his or her instructions, whether verbally or in writing. This will include the type of
vehicle repair history provided to the mechanic at the time of repair. We will be able to
gauge the "smoothness" of this process. Customers will be surveyed as well.
Preventive Maintenance - We will examine current procedures and checklists and
document opportunities for improvement, to include completeness, timeliness, conformity,
and compliance measurements with schedules.
Shop Scheduling - A fair and equitable priority system is necessary in order to keep user
departments satisfied. If a priority system has been established, we will examine its
structure and use, and determine how the backlog is managed and controlled.
Again, TCI consultants will evaluate operations against other best practice situations.
Transportation Consultants, Inc.
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City of Salina
STEP 11 - Competitive Assessment
We will review current and possible metric possibilities by compiling/sampling internal
measures such as:
. Downtime
. Turnaround Time
. Reworks
. Key Ratios
· Staffing Norms
· Other, including thoughput, unit costs, billing rates, etc.
It is here that we will begin the process of comparing Salina's production and unit cost
achievement against other, comparable operations.
TCI has worked with a number of clients on competitive assessments. We have taken the
most meaningful and measurable productivity indicators and compared them against
suitable benchmark partners elsewhere. We will also investigate the possibility in STEP
11 of tying the City into a database for ongoing comparability.
RECOMMENDATIONS
STEP 12 - Formalization of Findings and Recommendations
The Fleet Management Team will conclude our one week work effort and formalize the findings,
recommendations and study steps in a letter report in order to detail the steps necessary to
transform the operation into a competitive quality-oriented entity. Typically, we outline the report:
· Current support program and identified enhancement.
· Data analysis support schedules.
· Nature of recommendations.
· Whether the recommendation is short or long term in nature.
· The steps or action required to implement the change.
· The expected benefits that could result from further study or implementation of the
recommended change.
· Innovative steps to propel the organization to the next level.
Note: At the conclusion of our on site work, we will plan to present an oral briefing to City
officials on our findings and recommendations. Our brief letter report will follow shortly.
Transportation Consultants, Inc.
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City of Salina
IV. PROJECT STRUCTURE
TIMING
We plan to conduct this engagement sometime in late spring or summer at a mutually
convenient time. We anticipate being on site from mid-day on a Monday to mid-day on a
Thursday. We will reserve that Friday for home office data analysis and report
preparation. As mentioned earlier, 40 hours are plannedfor this review.
PROFESSIONAL FEES
Our fees are based on time actually spent on the assignment, billed at standard TCI
professional rates. Approximately 40 hours are budgetedfor assignment. Expenses are
additional and billed at cost.
Therefore, fees would be as follows:
Fees
$6,000
Expenses I (approximately 15%)
1,500
Total (Not to Exceed)
$7,500
I Air, lodging, auto rental, meals, office supplies, parking, telephone
Transportation Consultants, Inc.
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