Abstract
This case study examines how Penske Truck Leasing leveraged Simio simulation software to solve complex capacity planning challenges associated with significant fleet growth. Facing the addition of 500 vehicles over five years to an already space-constrained facility, Penske’s Operational Excellence team developed a comprehensive simulation model to identify capacity constraints and evaluate potential solutions. The model analyzed multiple capacity dimensions including parking space, service bays, technician staffing, and support resources. Through simulation, Penske identified specific capacity ceilings, determined optimal timing for implementing various solutions, and provided facility managers with a data-driven roadmap for supporting growth while maintaining operational efficiency. This approach enabled Penske to make informed decisions about resource allocation, facility modifications, and staffing adjustments without the risks associated with real-world implementation. The case study demonstrates how simulation technology can transform complex operational planning challenges into strategic advantages through virtual testing and data-driven decision making.
Introduction
Company Background
Penske Truck Leasing operates as part of Penske Transportation Solutions, managing a fleet of more than 439,000 vehicles across the United States, Canada, and Mexico. The company’s operations span multiple service areas including truck rental, leasing, maintenance services, and used vehicle sales. This extensive operation is supported by nearly 1,000 service facilities and approximately 22,000 employees, with roughly half being technicians who perform critical maintenance functions.
Maintenance represents a core component of Penske’s business model, with services ranging from preventative maintenance and state inspections to complex mechanical, electrical, and body repairs. The company’s ability to efficiently maintain this massive fleet directly impacts customer satisfaction, operational costs, and overall business performance.
The Challenge
In 2020, Penske’s Operational Excellence department—an internal consulting group specializing in Six Sigma, Lean methodologies, and process improvement—identified a significant challenge facing one of their facility managers. The manager needed to accommodate 500 additional vehicles over a five-year period (100 vehicles annually) while already operating at what appeared to be maximum capacity.
As Morgan Swink from Penske’s Operational Excellence team explained: “Our growth plan includes 500 vehicles over the next five years, but I feel like I’m already out of space. What do I do?”
This growth plan created a complex planning challenge that extended beyond simple space calculations. The facility manager needed to understand:
- Which capacity constraints would be encountered first during the growth period
- What specific solutions should be implemented to address each constraint
- When each solution should be implemented to support sustainable growth
- How to balance cost, timing, safety, and customer satisfaction in the implementation plan
Traditional analytical methods proved insufficient for modeling these complex, interrelated factors across a multi-year planning horizon.
Problem Statement
Capacity Constraints Analysis
The capacity challenge extended far beyond simple space limitations. As Swink noted, “Capacity in its simplest form is pretty straightforward. It’s the number of workspaces you have multiplied by how many people and hours you have to operate them, divided by the throughput time of the unit moving through the system.” However, the reality at Penske was far more complex.
Adding 500 vehicles created cascading pressures across multiple dimensions:
- Physical Space Constraints:
- Limited parking space for additional vehicles
- Insufficient service bays to handle increased maintenance volume
- Restricted yard space for vehicle movement and staging
- Resource Requirements:
- Increased demand for parts, tires, fluids, and other consumables
- Additional storage space needed for inventory
- More tools and equipment required for maintenance
- Staffing Implications:
- Need for additional technicians to handle increased workload
- Support facilities (break rooms, bathrooms, locker rooms) for expanded staff
- Management capacity to oversee larger operations
- Operational Complexity:
- Different vehicle types required vastly different maintenance frequencies
- Local delivery trucks might need service once annually
- Long-haul tractors could require maintenance up to 15 times per year
- Varying service durations based on vehicle type and maintenance needs
The facility manager faced difficult decisions about how to address these constraints. Options included expanding physical facilities, adding shifts, implementing mobile maintenance, restructuring technician roles, or some combination of these approaches. Each option carried different costs, implementation timelines, and operational impacts.
Solution Approaches
Penske identified several potential approaches to address capacity constraints:
- Workspace Expansion Options:
- Adding new bays within existing buildings
- Creating external service areas with aprons and canopies
- Building entirely new facilities
- Implementing mobile maintenance units for off-site service
- Resource and Working Hours Optimization:
- Hiring additional technicians
- Adding second, third, or weekend shifts
- Creating specialized technician roles (triage, diagnostic, quick service)
- Optimizing scheduling to balance workload
- Throughput Time Reduction:
- Implementing lean process improvements
- Enhancing visual management and inventory systems
- Leveraging technology for more efficient maintenance
The challenge was determining which of these “switches” to flip and when to flip them over the five-year growth period. The facility manager needed a comprehensive plan that outlined specific actions for each year based on anticipated capacity constraints.