Sample Value Generation Letter
Dear (Maintenance Manager):
We have been working with the XYZ Transportation staff in our role as your lubricants supplier. Super Supplier Inc. would like to report the savings and revenue contribution we’ve been able to provide your operation.
We discussed extending your oil drain intervals when using a premium product like Super Engine Oil 15W-40. Using oil analysis, we were able to extend your oil drain intervals from 20,000 miles to 30,000 miles. As a result, this contributed to XYZ Transportation saving $45,071.10 annually and increased revenue of $30,466.80 annually.
We appreciate the opportunity to work with (Name of an employee who you would like to give recognition) who has been instrumental in achieving these savings.
As your lubricants supplier we believe it is our role to continue to add value to your operation.
Thanks again for your continued support of Super Supplier Inc.lubricants. We appreciate your business.
Annual Savings Calculations
5,000 miles/week x 52= 260,000 miles/year/truck
Oil change time= 2 hours
Labor rate= $57/hour
Filter cost= $25
Oil cost= approx $7
Truck Revenue/hour= 60 miles/hour x 1.30/mile (approximate industry figure)=$78/hour
|Annual Costs with 20M mile oil change||Annual Costs with 30M mile oil change|
|Oil change time/tractor||2 hours||2 hours|
|No. of oil changes/tractor||260M /20M=13||260M/30M= 8.66|
|Labor costs /tractor||13 x 2 hours x $57=$1482||8.66 x 2 hours x $57=$987.24|
|Filter costs/tractor||13 x $25= $325||8.66 x $25= $216.50|
|Oil cost/tractor||13 x $7/gallon x 14 gal=$1274||8.66 x $7 x 14 gal =$848.68|
|Total cost||$3054/tractor x 45 tractors=$137,430
|$2052.42/tractors x 45 tractors=$92,358.9|
|Productivity impact20M mile changes||Productivity impact30M mile changes|
|Productivity loss||2 hrs. x 13 changes = 26 hours||2 hrs. x 8.66 changes= 17.32|
|Productivity gains||0 hours||26 hours – 17.32 hours=8.68 hours|
|Approximate Revenue Gain/truck||0||8.68 hours x $78=$677.04|
|Fleet Revenue Gains||0||$677.04 x 45 tractors =$30,466.80|