Looking for ways to prop up sagging product margins? One rather obvious way is to lower equipment costs. Last year, managers of Farmers Elevator Company in western Iowa turned this simple dollars-and-cents equation into an employee accountability program.

The co-op's plan is designed to help drivers understand the correlation between timely maintenance, equipment longevity and the company's bottom line. “Our long-term goal is to lower operating costs by 10%. To do that we need to nail down an exact cost per mile for each truck or other rolling stock,” reports Wes Keodam, location manger at Alvord, IA, and supervisor of the accountability program for the co-op's eight area operations.

The first step is a bumper-to-bumper inspection of each vehicle by Doug Wilkens, the co-op's chief mechanic. During the past year, Wilkins has gone through about 30 of the company's fertilizer tenders and feed trucks. He's equipped to handle small or big jobs, including transmission and engine replacement, in an old company warehouse converted into a modern shop. “We look first at the simpler things like the electrical system, air, hoses, brakes, springs and ball joints. But I often spend up to three days inspecting and repairing a truck if we find major problems,” Wilkins says.

To track exact mileage histories, Wilkins also installs a hub meter, costing about $40, on each truck he inspects. “Electronic pedometers can easily be off by as much as 15%,” he says.

When a truck goes back into service, a three-ring binder goes with it. The binder contains a summary of repairs made, as well daily inspection and repair logs. “Now it's up to the drivers to take over the program,” Koedam says. “We ask them to log data that go beyond DOT requirements. Our goal is to get them to see how their accountability contributes directly to company profits.”

Logging all minor repairs, such as tire replacement, headlamp replacement and oil changes, is the driver's responsibility. Whenever a driver thinks a major repair is needed, he or she notes it on log sheets. Drivers submit their log sheets each week to location managers, who then schedule the work.

At the end of the season, the inspection/repair sequence is repeated. “We're just getting into that second cycle, but we expect to see real savings start to show up,” Koedam says. “In the past we ran some of our trucks until they were in pretty bad shape. The new program will definitely extend their years of service.

“We realize it will be a continual learning and educational process for the drivers,” Koedam continues. “We've scheduled winter meetings with drivers to highlight what we're learning from the inspections and logging to reinforce the importance of their extra efforts.”

The next step is to expand the inspection program to all floaters, sprayers and company pickups. “It's also helped us weed out excess equipment we picked up through mergers with other co-ops,” Koedam explains. “We get a chance to really evaluate vehicle condition and decide to have them repaired or send them down the road.”

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