The opportunity cost when a vehicle is stopped for repairs.
It is the cost per day, for example,
of not doing business because a vehicle is down.
It is not rare that a truck brings in more than $1000
per day in revenue. Down one day, down a $ 1000.
It goes fast.
The cost of managing multiple suppliers.
A dealer, a tire vendor, a road service, towing provider, suspension repair service, a
jockey service to shuttle trucks to and from the shops, etc. for each, you have to contact
for each, you have to contact them, organise each intervention, emit a purchase order, follow-up, receive an invoice, sometimes call back to question the invoice, approve it, send it to another department for treatment, enter the data in the accounting software, get the invoice approved, answer questions that will pop up and prepare payment.
You see the scenario, these are all actions and time spent on non-core business operations and
are very costly to the company as they add up.
There is the cost of delivering and picking up vehicles
going to the shop.
Here we are not just talking about the driver’s salary. You also have to consider that when the driver is taking time to
go to the shop, he or she is not serving your customers, again creating
a lost opportunity to generate revenue and customer service.
Another hidden cost is the cost of having vehicles that are not well adapted
to your operation.
Sometimes, managers neglect this very important aspect and the consequences can be important and will be so for the lifetime of the equipment.
For example, a manager buys a truck off a dealer lot at a very good price and also gets a really good interest rate to finance it. He is really proud of the low monthly payment.
However, the truck is not suited to the company’s operations (wrong engine, transmission, differential ratio and aerodynamics for the application)
and consumes $ 1500 more of fuel per month than if
he had opted for a purpose built truck.