How would you characterize your job? Are you more of a “fireman,” spending your days putting out one fire after another? Or, do you devote the time to truly manage your fleet? Most of us will say we do both, but the reality is that there are only so many hours in the day. Putting out fires is a fact of life for all fleet managers, but it onsumes a tremendous amount of time and decreases the time we can invest in managing the fleet from a strategic level.
At the most fundamental level, we have to ask ourselves: Are we tactical or strategic managers? This is at the core of our identity as fleet managers. Are you managing the fleet from a tactical level by putting out day-to-day fires so the fleet runs smoothly; or, are you managing the fleet from a strategic level focused on achieving specific long-term objectives using metrics to benchmark actual (not presumed) progress? Strategic fleet management requires you be goal-oriented in all aspects of fleet operations, especially driver productivity and safety, and to strive to reduce not only hard costs, but also soft costs, such as downtime and fleet-induced impediments to employee productivity.
Rising Above Day-to-Day Work
The bottom line is that being a tactical fleet manager is a dead-end job, since these responsibilities and functions can be easily outsourced. However, the in-house corporate fleet management function is destined to gain even greater importance. Why? At many companies, fleet is one of the top five asset values on a corporate balance sheet. The dollar value of corporate vehicle asset will further increase, especially in anticipation of acquisition price increases driven by CAFE mandates, the ongoing trend to add vehicle content and safety equipment, along with annual inflationary price increases. Today, and more so in the future, a substantial amount of corporate capital will be tied up in these vehicle assets, which are crucial to maintaining (and expanding) a company’s core business. I strongly believe all managers overseeing the in-house fleet function need a strategic management focus to be successful. Ultimately, the “procurement or strategic sourcing model” of fleet management will be proven to be inadequate and supplanted by a technology-driven approach to manage from a more all-encompassing strategic level.
The challenge for today's fleet managers is to continue to find ways to add value to their company and the bottom line. There continues to be extreme pressure placed on fleet managers by senior management to control (read, lower) fleet costs. Fleet managers are increasingly being asked to measure, report, and justify fleet costs. For example, fleet managers are constantly being asked to identify ways to reduce fleet cost without negatively impacting company driver morale and productivity. However, balancing the HR/driver requirements versus the finance/procurement requirements is a key dilemma, since they are often at odds with one another. Ultimately, fleet managers must serve the drivers, their primary internal customers. To do so, they must constantly work to develop a cooperative, working relationship with all internal corporate functions associated with fleet. The successful fleet manager will develop the skill set needed to be an effective and persuasive corporate intermediary. Fleet managers need to balance these internal (often conflicting) relationships to implement programs that both meet corporate demands and keep drivers happy.
Embracing Strategic Fleet Management
Many companies recognize the strategic aspect of fleet management and view vehicle acquisition, replacement planning, funding alternatives, and sourcing alliances with manufacturers and suppliers as high-level strategic corporate decisions.
As a consequence, a strategic fleet manager spends his or her day focused on fleet policy development, safety program initiatives, vehicle selector creation based on exhaustive lifecycle cost analyses, implementation of a corporate sustainability program, and the establishment of metrics to manage fleet suppliers.
It is critical that fleet managers rise above the level of simply managing day-to-day work. Their understanding of the company’s business must transcend fleet management, which, in turn, will eventually cause senior management to recognize the fleet manager as the in-house expert on all matters dealing with fleet management. (Now, here’s my message to senior management: The fleet manager must have your full backing and support when fleet decisions are implemented, otherwise these initiatives will never attain their full potential – this has been proven time and again.)
As the fleet manager, it is your job to present the “fleet” perspective to the strategic sourcing group since you are the most qualified person in the organization to understand the fleet consequences of ill-informed sourcing decisions. If you work within procurement, you need to develop a broad understanding of how procurement and supplier selection decisions impact the corporation as a whole. This knowledge will allow you to be proactive, anticipate changes in the corporate ecosystem, and implement fleet programs that contribute to the achievement of overall company goals. For example, some companies focus on cash flow, while others zero-in on employee retention, hiring, productivity, and satisfaction. Each of these corporate objectives dictates different policies and programs. Your job, as fleet manager, is to conceptualize and develop innovative and cost-effective ways to support these objectives.
Again, which are you? A fireman or a manager focused on strategic fleet management?
If the former, it’s never too late to change.
Let me know what you think.
Originally posted on Automotive Fleet