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Understanding levels of service and service level agreements

By intouch * posted 17-10-2017 08:51

  
By Ross Moody, FLEET Director

An aim of asset management planning for fleet is to align resource allocation on providing, operating and maintaining fleet assets in line with the needs of the customer in terms of reliability and safety considerations. This is termed 'level of service'.


What is the customer’s expectation for a fleet asset? An example in fleet is the customer does not want the machine/vehicle to break down on the job.

illustration-of-handshake-511922700_1027x1027.jpegIn terms of providing a reliable service, it is important to know when it is appropriate to carry out maintenance or replace a machine before it gets to the point of failure and potentially causing major operational problems.

Understanding levels of service is important for the lifecycle management of fleet assets as with other assets. They will determine what type of assets will be provided, how often they will be maintained, when assets will be rehabilitated or replaced and how the assets will be disposed.

Levels of service define the asset’s performance targets in relation to reliability, quantity, quality, responsiveness, safety, capacity, environmental impacts, comfort, cost/affordability and legislative compliance.

Drivers affecting levels of service

The factors affecting levels of service can broadly be broken into four categories:

1)    Function – what is the item going to be used for?

2)    Customer requirements. These are the expectations of the customers.

3)    Strategic and corporate goals. The lifecycle management of fleet assets should be consistent with the organisations goals and values.

4)    Legislative requirements. These are the objectives/standards that must be met, set by state, federal or international bodies, to ensure the safety of the user and general public.

In this article, our focus is on customer requirements.

Customer requirements/expectations

Users of fleet are seeking safe, reliable, available and economical fleet assets. The owners of the fleet have an additional requirement of environmental considerations line with corporate policy commitments and this will impact on purchases of new and replacement plant and vehicles.

Customers rely on fleet management to plan and budget for plant replacement, research available options to meet operational needs, prepare specifications, procure plant & vehicles, undertake preventative maintenance, plan scheduled and non-scheduled servicing and respond to ad hoc customer service requests.

Involving relevant staff is particularly important in the purchase of replacement and new plant to ensure the suitability of the plant required and ownership of the decision by the customer. This is also a risk management strategy.

Service level agreements

Customer requirements should be detailed in a service level agreement (SLA) to be agreed between fleet and their customer. Nowhere are there more appropriate circumstances for the application of an SLA than in the provision of plant and vehicle maintenance and repairs where performance is critical in maintaining high utilisation for plant and vehicles and reducing costs.

Note: Prior to preparing an SLA between fleet management and its customers, fleet management must have an SLA with the mechanical service provider on servicing schedules and response times for breakdowns.

The agreement between fleet management and its customers needs to be based on a common understanding of relationships, responsibilities, performance measurement and the process for resolving disputes. The agreement provides clear definitions of responsibility and guidelines to follow when performance requirements are not met.

The SLA aims to create a partnership between the parties focusing on agreed actions to deliver the required level of service to operational departments. Having an SLA will increase accountability and improve customer service and service delivery.

The table below provides an example of the requirements placed on fleet management and a customer in order to meet the customer’s desired levels of service.

 
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