Fleet Insights: The Power of Strategy (Pt. 2)

Fleet Insights : The Power of Strategy (Pt. 2)
Chris Hill is President of C. Hill Management.

It’s time to put practical “tactics” to work for you. 

My article in the previous issue of  concluded that a “focus and manage” strategy is a popular choice for many fleet strategic plans. Here are some tactics that make this strategy successful.

Remember, “tactics” are the “how to do it” things to reach your objective of enabling peak performance in delivering the organization’s product.

Management functions
Tactics are grouped in five principal management functions: Finance, Information Technology, Operations, Human Resources and Marketing. Most organizations have C-suite positions for each function. Start with Finance because this includes the fundamental decision for fleet management, which is deciding who truly controls fleet expenses.

Can the fleet manager really do anything about diesel fuel prices, or can the fleet manager really produce a 20 percent reduction in fleet cost? Where is control and accountability for fleet expenses placed in the organization? Is the budget in the right place, that is, with the end users? Is each transaction, such as an engine repair or a fuel purchase, billed to the client that uses the vehicle? Tactics: create user budget lines for fleet expenses and see how that changes behaviour.

The main driver of fleet expenses
The principal driver of fleet cost is the number of units in service. If public works does residential waste collection, the number of trucks needed to get the job is not decided by the fleet manager. The fleet manager is an expert on fleet management, not waste collection.

Any attempt to reduce costs by reducing trucks in service will be met with fierce resistance by the operations manager. So the fleet manager’s ability to control the main driver of fleet expenses, the number of units in service, is effectively zero.

Then why is the fleet manager accountable for fleet expenses, when the control is with the users? Put the budget where the control is—with the users.

Manage the data
The next management function is Information Technology. This is important because of the role it plays in managing the budget. Tactics: the system can be simple, using Excel spreadsheets to record data and create measurements, or expensive and state-of-the-art. Many asset and work management software programs are marketed specifically for fleet management.

The third management function is Operations. If you have an in-house garage, you know that shop hours can be a contentious issue. Conflict over when to service a vehicle that seems to be running normally is likely if both the users and the garage operate on a single day-time shift. Tactics: if the user needs vehicles only on a day shift, consider providing service in the afternoons and evenings.

Manage the people
The fourth management function is Human Resources. If the goal is to build a high-performance service operation, the fleet manager has to create a high quality of life at work for employees. Tactics include having good labour relations with all employees, handling grievances fairly and honouring collective agreements, and keeping technicians at the top of their game with regular training.

Marketing and Communications is the fifth management function. Fleet managers are vulnerable to outsourcing attacks, unreasonable user expectations and management neglect, to mention a few reasons to be concerned with marketing.

Tactics include creating a Fleet Strategic Plan and sharing it widely within the organization. This demonstrates the ability for critical thinking and improves fleet management’s credibility and understanding of its role in organizational success.

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