How to Evaluate Life-Cycle Costs


Chapter 3 -
Types of vehicle specifications

Preparing appropriate specifications before making a purchase is critical to ensure that the vehicle will meet your expectations for efficient operations over its life with low maintenance costs. You’ll also realize maximum vehicle use and timely retirement of the replaced vehicle.

There are two approaches to preparing vehicle specifications: technical specifications and functional specifications.
Technical specifications quantify an item to the most exacting detail and affect vehicle design. The responsibility for liability lies directly with the vehicle-specification writers and their companies.

Suppose that you specify that the hydraulic line will have a 3/8-inch inside diameter, be made of stainless steel and carry a 1,000-psi pressure rating. The input line will be 4 feet long, painted green, with no more than two 90-degree bends. In this case, you accept the liability by specifying pressure, size and routing.

Functional specifications, on the other hand, define a task. Perhaps you need a unit capable of pulling 80,000-pound loads from Los Angeles to Omaha, Neb. In this case, the manufacturer determines the components needed and assumes the liability.
The benefit of the technical-specification process is that you can solicit bids with the simple goal of accepting the lowest one, because the manufacturer must comply with the technically-specified components.

With a functional specification, you need to consider other factors when you evaluate the bid. Technical requirements must be met, and you should measure over- and underspecified components to verify compliance. Credit should be given for overspecified components and deductions made for underspecified items.

Evaluate the quality and reliability of each bidder’s response to ensure that the designs are made to last with minimal maintenance. Will one unit cost more to maintain over its lifetime than another because of the design and component life cycle? If so, add this factor into the bid evaluation by using your own historical maintenance data to project the future cost of that model’s maintenance. A third evaluation is price. Give more credit to the low bid in the evaluation.

Be aware of hidden costs.
Suppose that Vendor A requires an inspection of Item 1 three times per year because of its design and assembly. This inspection costs an additional $500 per year in maintenance compared with units from Vendors B, C, D and E, which require only an annual inspection of Item 1.

Sample tractor specifications

A functional specification should note components by brand name, with the added phrase “or equivalent.” Following are sample tractor specifications:

  • International 9900ix conventional cab, three-axle 6 x 4, 120-inch wheelbase tractor with 72-in. sleeper with high-level driver environment module, or equivalent.
  • Caterpillar C-16, 575 horsepower at 2,100 revolutions per minute, Kysor fan drive with nylon fan and 1,150-square-inch radiator, 1,030-square-inch air cooler, Jacobs 340A engine compression brake, and Phillips engine block heater, or equivalent.
  • Transmission module with a 15.5-inch, two-plate Eaton Solo self-adjusting clutch rated at 2,050-foot-pounds. RTLO-18918B Fuller 18-speed transmission, or equivalent.
  • Air suspension with Meritor FF981/FF986 12,000-pound front axle and International 40,000-pound rear axle with 52-inch spacing, or equivalent.
  • Air brake system module with Bendix antilock braking and automatic traction control, Bendix AD-9 air dryer, Bendix TU-FLO 750 air compressor, Meritor rear axle antilock braking with two additional 30-inch parking brake chambers and rear air brake dust shield, or equivalent.
  • Electrical module with Delco 33-SI alternator with 12 volts and 135 amps, four Fleetrite, 12-volt maintenance-free batteries and starting motor, and Truck-Lite super 40 lights with power module, or equivalent.
  • Cab interior module with National Cush-N-Aire II MDL-195 driver’s seat and National 197 passenger seat, air line fan in sleeper, 30-inch upper bunk with foam mattress, cabinet package, TV antenna, windshield privacy curtain, thermos holder and storage bin, thermostat temperature control, or equivalent.
  • Chassis module with steel frame, two front hooks, dual tail pipes and “ss” quarter fends and black mud flaps, air slide fifth wheel. 
  • 24.5-inch disc front wheels and Goodyear 11R24.5 tires.

Other spec’ing considerations
When buying trucks for a new operation, it is important to define the requirements as precisely as possible. Questions to consider include:

  • Where will the vehicle operate — city, suburb or Interstate?
  • On what terrain will it travel — flat, hilly, mountainous or a combination?
  • What speeds will the vehicle attain?

If you are adding vehicles or replacing existing ones, existing vehicle specifications can be revealing. Identify the weak points of the current fleet.

Avoid spec’ing models with components that have been problems in the past. If the vehicles have a history of engine failures, frequent clutch replacement, broken suspensions, shortened tire life, frame failures, U-joint and driveline wear, accelerated brake-lining wear or electrical-system complaints, the old specifications may be the problem. Keep in mind, however, that drivers can be a contributing factor.

Often, you can uncover problems with equipment or components and identify solutions by talking with drivers and mechanics. The comments of those who work with the equipment daily can help, provided that you also watch the bottom line.
To prevent mistakes, before you assemble the vehicle specification, review the historical information for your existing vehicles to identify areas of high or frequent maintenance cost. Consumables and components that need improvement or replacement will come to light in the review. New components may be required — perhaps at a higher initial cost, but with a lower cost over the life of the vehicle.

Suppose that your shop replaces 400-amp cold-cranking batteries and 70-amp alternators every two years. Perhaps the lighting and accessories need a 75-amp peak and 65-amp average, overworking the system and causing premature failure. Consider specifying and ordering a higher-capacity battery (800 amps or more) and a 90-amp output alternator.

Overspecification is undesirable, not only because expenses increase, but also because the horsepower consumed by the engine reduces efficiency and fuel mileage. A manufacturer’s projected fuel use suggests that for each 20 units of horsepower needed to power accessories, one additional gallon of fuel per hour is used — reducing fuel economy by 15 percent.

New electrical controls for diesel efficiency cause parasitic drag when the unit is shut down. This amperage is drawn from the battery, reducing the battery’s storage capacity. Consider this amperage drain in the battery component specifications.

If 91.25 amps generally are needed from the alternator, a 125-amp alternator would be a better choice than a 75-amp or 90-amp unit, which would be underpowered. Battery cold-cranking capacity should be more than 800 amp-hours to provide the reserve necessary in this application. Anything less is likely to fail.

Road calls are another red flag. It is more expensive to fix a vehicle on the road, and such breakdowns can affect your on-time rating. When selecting new vehicles and components, be sure to gather road-call data to avoid potential problems with your new vehicles.

In Summary
There are two ways to specify vehicles: technical, which quantifies an item to exacting detail, and functional, which defines a task. With a technical specification, the responsibility for liability lies directly with the vehicle-specification writers and their companies. With a functional specification, the manufacturer determines the components required to meet your needs and assumes the liability. Before you assemble the vehicle specification, review the historical information for your existing vehicles to identify areas of high or frequent maintenance cost. To prevent future problems, avoid spec’ing that particular vehicle or component this time around.