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Archives of Business Research – Vol. 11, No. 8

Publication Date: August 25, 2023

DOI:10.14738/abr.118.15222.

Giglio, J. M., & Friar, J. H. (2023). Required Data for Effective Life-Cycle Management for Transportation Agencies. Archives of

Business Research, 11(8). 32-47.

Services for Science and Education – United Kingdom

Required Data for Effective Life-Cycle Management for

Transportation Agencies

Joseph M. Giglio

Northeastern University

John H. Friar

Northeastern University

ABSTRACT

Fleet management is the application of processes and systems that ensure

equipment is maintained in a state of good repair and reliability, as well as at high

availability and at minimum life-cycle costs. One way of doing so is by implementing

a methodology known as life-cycle management. A challenge for introducing life- cycle management is identifying what data are needed because collecting, storing,

and maintaining the data is expensive. In this paper, we create a comprehensive list

of the data an agency could collect in introducing a life-cycle management program.

This paper relies on the detailed analysis of a State Department of Transportation

as to what it would take to manage the entire life cycle of their mechanical and fleet

management services. The paper covers types of data, management reporting

frameworks and strategies, and reports. The findings and recommendations

resulting from the study are intended to help managers of public agency fleets

evaluate available strategies for improving the cost efficiency and service

effectiveness of fleet maintenance and management practices within their own

organizations.

Keywords: Life-cycle asset management, public sector, fleet management, data

INTRODUCTION

Fleet management is the application of processes and systems that ensure equipment is

maintained in a state of good repair and reliability, as well as at high availability and at

minimum life-cycle costs. One way of doing so is by implementing a methodology known as life- cycle management [3]. This affects all phases of the equipment life cycle, including

procurement, maintenance, usage, and retirement and replacement.

Many state agencies lack the information, reporting, processes, and systems that enable their

managers to cost-effectively manage a fleet. These weaknesses affect each phase of the

equipment life cycle:

• Procurement. Agencies need processes and resources for developing specifications in

support of fleet standardization and procurement; a lack of strategic sourcing

processes limits efforts to achieve lower costs for parts, supplies and vehicles.

• Usage. Agencies need actionable usage reports to maximize fleet utilization analysis

and potential for fleet rightsizing.

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Giglio, J. M., & Friar, J. H. (2023). Required Data for Effective Life-Cycle Management for Transportation Agencies. Archives of Business Research,

11(8). 32-47.

URL: http://dx.doi.org/10.14738/abr.118.15222

• Maintenance. A focus on maintaining vehicles regardless of age, usage, or cost history

results in acceptable service levels, but at increasing costs due to a rapidly obsolescing

fleet.

• Retirement and Replacement. A unified fleet retirement and replacement program

reduces fleet preservation costs while unmasking looming fleet replacement

requirements.

A well-maintained infrastructure has been shown to be crucial for supporting an economy by

attracting private investment. Investing in public infrastructure maintains the quality of

services these assets support, which in turn bolsters the public’s support for such projects.

A challenge for introducing life-cycle management is identifying what data are needed because

collecting, storing, and maintaining the data is expensive [5]. In this paper, we create a

comprehensive list of the data an agency could collect in introducing a life-cycle management

program. This paper relies on the detailed analysis of a State Department of Transportation

(SDOT) as to what it would take to manage the entire life cycle of their mechanical and fleet

management services. The findings and recommendations resulting from the study are

intended to help managers of public agency fleets evaluate available strategies for improving

the cost efficiency and service effectiveness of fleet maintenance and management practices

within their own organizations. The results also provide a basis for assessing the cumulative

cost savings of combining various strategies and how these savings might compare to overall

operating cost totals.

The paper starts with an overview of life-cycle management and then discusses the data that

an agency should consider. Once an agency has the data, then several possible processes to

manage over the life cycle are considered.

WHAT IS LIFE-CYCLE MANAGEMENT?

There are four distinct phases of owning and using equipment that constitute an asset’s life

cycle: procurement; usage; maintenance; and retirement/replacement. In practice, and in the

literature, these phases are distinct and are managed independently of each other. Typically,

there are departments or groups in charge of each of these activities. A procurement

department will find the best suppliers at the right price to deliver quality products [1].

Operations oversees the usage of these assets as it seeks to meet departmental objectives [6].

A maintenance department or team will establish goals for upkeep. From a budgeting

perspective, maintenance is usually grouped together with operations, and is known as O&M.

Retirement or replacement of assets happens when they become too expensive to maintain or

completely break down. This decision is usually the purview of the finance department during

the annual budgeting process, with input from the maintenance department [4].

There are essentially two categories of infrastructure spending, the first being capital spending,

which is represented by the initial outlay to develop and construct an asset as well as the

allocation for certain major repairs and replacements that emerge over a life cycle. The second,

less glamorous category is O&M. To develop a comprehensive transportation financing

strategy, however, it is instructive to break down these two categories into four very distinct

types of spending, as follows: