As the responsibility for fleet operations reacts to the involvement of sourcing, finance, and accounting, fleet managers are increasingly challenged to find ways to reduce costs and increase efficiency to achieve organizational objectives. Traditional fleet management practices must be supplemented with a comprehensive understanding of fleet operations, precise analysis, and insight into how fleet behaviors and prevailing trends impact the balance sheet. According to Donlen Corporation, fleet managers should invest their time in making decisions and managing their businesses, instead of gathering and interpreting data. Donlen takes its analytical approach to new levels by providing solutions to clients through its Strategic Consulting Services team.
Leveraging industry experience and Strategic Consulting Services’ analytical expertise, Donlen collaborates with clients to develop strategic acquisition and remarketing plans, effectively manage fuel and maintenance expenses, optimize lifecycle planning, and manage fleet’s environmental impact. The process is a partnership between the company and its customers, not only to set strategies, but to manage them on an ongoing basis. According to Donlen, the foundation of the process can be summed up into three words: model, measure, and manage.
Understanding Cost Factors
Evan McKerns, strategic consulting leader at Donlen, presented the goals driving the team’s mission and the consulting process:
“We focus on building and strengthening client relationships through analytical insight and creative solutions to fleet issues. By tracking and monitoring fleet performance, Strategic Consulting provides assistance to clients so they can better understand how their fleet behaviors and policies impact costs.”
The first step in developing an effective management strategy is to fully rationalize how all the pieces of fleet operations fit together. Donlen leverages a number of proprietary tools in FleetWeb to create comprehensive models, drawing on real-time data to put these pieces together. The core of this modeling stage is Donlen’s Vehicle Optimization Model. Donlen Strategic Consultants create side-by-side graphical comparisons to illustrate the impacts of lease terms, mileages, depreciation rates, new-vehicle pricing, incentives, residual projections, fuel and maintenance costs as well as the environmental impact. All fixed and variable costs are evaluated.
The Vehicle Optimization Model is a powerful and objective tool, utilizing internal and external data sources, including guidebook residuals, Donlen’s National Auction Index for real-time resale performance, and U.S. Environmental Protection Agency performance statistics.
“We are color blind at Donlen. Our goal is to provide as much objective data to drive the right solutions that meet the individual customer needs,” said Dan Hannan, senior vice president of Strategic Consulting Services at Donlen.
While modeling costs is vital, other factors, such as environmental impact, are demanding higher degrees of attention. Through Donlen’s GreenKey environmental program, strategic consulting and FleetWeb provide tools to measure the impacts of vehicle selection and operation on the environment. As Brenda Davis, fleet commodity manager for Baker Hughes put it: “Understanding and communicating the impact of our fleet’s carbon output is a growing challenge, and Donlen’s GreenKey tools enabled me to provide information to senior leadership to serve as a baseline for coming years.”
Donlen Strategic Consulting Services’ Fleet Optimization Scorecard gives financial decision-makers actionable information by synthesizing all available data into a concise, easily digestible format. Donlen consultants meet with clients quarterly to review a comprehensive analysis of the major fleet cost centers, monitor behavior and performance, provide benchmarking, and identify and understand trends impacting fleet operations.
As Keith Smith, director of office and facility procurement for Houghton Mifflin Harcourt Publishing Co., explains, the right tools make all the difference.
“One of the main elements of information garnered through Donlen is the full page Overview of Fuel and Maintenance Expenses, which provides a detailed data and graphic view of quarter-to-quarter comparison for year-over-year realized expense,” said Smith. “I find the graph-oriented format of the data a key resource in our fleet decision making. Over a two-year period, this format will become the snapshot of the major driving forces associated with operating the fleet at a quick-glance reference.”
For Smith, that package is a roadmap to solutions that will be key for Houghton Mifflin Harcourt Co.’s continued success in operating its fleet.
Managing the Process
“Strategic consulting is not an event, but a living, breathing process,” said Hannan. A central element of Donlen Strategic Consulting Services is constant engagement and follow-up with customers. Donlen’s consultants meet with clients quarterly to formally review data and discuss trends and performance against peer benchmark groups and historical results. Together, consultants and customers work to uncover areas of opportunity, establish operational targets, and develop plans to drive change.
Kevin Wolf of Home Team Pest Defense said, “The consulting process provides me with a powerful tool that can be used within my own organization to communicate opportunities and progress. In addition, the data creates opportunities for me to apply benchmarks against my various branch locations to drive competitive behavior change.”
Currently, Donlen is also developing additional technology to add to its suite of proprietary tools. Donlen Corporation is based in Northbrook, Illinois.
Originally posted on Automotive Fleet