By: Shawna Laird-Brush and Bob Laird, Business Services
Are you thinking of becoming a Fleet Manager? Are you sure?
Just kidding. Moving into a management position requires more than just developing your leadership skills. So what do you need to know about Fleet Management? To put it as simply as possible: something about everything.
Don’t panic! We’re here to help break that down and give you some insight into the basics of fleet management. Fleet management includes aspects of accounting, procurement, maintenance, personnel, inventory management, legal, risk management, and corporate operations/administration. We’re going to look at the top five categories of the basics here.
Cost of Capital: The actual cost of rolling stock versus the capital available.
Cost of Operations: First, you have your Personnel costs which include actual salaries as well as all benefits and corporate costs of your employees. Next is your Vehicle Asset Costs such as fuel, maintenance, and depreciation. The third main area is Plant and Supporting Asset costs. This includes repair facilities, location, layout, support equipment, and tools.
Cost of Maintenance: We mentioned this above, but now we’re going to break it down into three categories. Program costs include Preventive Maintenance (PM), make-ready and retrofit, green initiatives, and disposal programs to name a few. You also have Unavoidable and Unplanned costs which are natural disasters and accident repairs. Finally, there are Direct v. Indirect costs. This is the actual cost of following program procedures versus the failure to adhere to procedure.
Performance: You will need to be aware of how your equipment and personnel are performing. You can use tools and reports provided by your fleet management software (FMS).
Productivity: Again, utilizing your tools and reports, analyze the productivity of your operations. This can include Work Assignments, Repair Times, In-house v. Outsourced repairs, equipment utilization, and downtime.
Actual v. Planned: You will need to regularly audit your expenditures of time and money – what was actually spent versus what you budgeted to spend.
Procedural Effectiveness: Auditing isn’t always about numbers. Review and update your procedures to remain relevant making sure to include new technologies and safety programs.
Capital Purchase v. Lease v. Rental: Learn to identify your initial outlay, operational need, and availability to determine the best method of acquisition of an asset. You should also learn how to create vehicle specifications to acquire the right piece of equipment to best satisfy operational needs and be effective and efficient.
Inventory and Supplies: Knowing which parts to keep in stock for needed repairs versus which can be obtained “just in time” is important for warehouse procurement.
Vendor Reliability: When awarding a contract, lowest bid is not always best. Research the vendor submitting the bid for quality and reliability.
Equipment Disposal: The return on your investment is tantamount. Knowing whether direct sales or auctions for specific equipment types can boost the return.
Scheduling: Understand the different types of maintenance and how they should be scheduled. Preventive maintenance are planned minimum maintenance at scheduled intervals. Predictive maintenance is planned rehabilitation to avoid future major repairs. Then you have unscheduled repairs which are breakdowns and drop in maintenance.
In-House v. Out-source: Determine which repairs are best done in house or sent to an outside vendor by looking at hours of equipment and personnel availability as well as vendor turnaround times.
Personnel Relations: Understand the laws and the policies of your organization for recruitment, hiring and corrective actions. Also know the best ways to motivate your employees.
Administrative Services: Review and refine your organizational structure and paper flow for a more efficient operation. This area could also include insurance, registration, and, in some instances, billing, revenue, and taxes.
Training and Education: Identify and fund the best training opportunities for your staff – from technicians to management. Also make sure that your safety programs and training are current and followed.
Policies and Procedures: You will need to review and update your policies and procedures at least annually and have ensure that they cover, not only your normal operations, but also emergency and contingency plans.
Above all else, you, the Fleet Manager, must be capable of conveying your message to all levels of the organization. This includes, but is not limited to, your superiors, your peers in other departments, and to all the personnel that supports you and the fleet operation.
Still want to be a Fleet Manager? Great! Get started today! You can look for a mentor in your own organization as well as in a network of fleet managers available to you. Join a fleet industry association, such as FleetPros, and expand your network through meetings, educational sessions, and industry conferences. Once you become a Fleet Manager and find you need some help, look to your peers, consulting firms, or online forums.
Is there something you feel we missed? Comment below with your own insights into The Basics of Fleet Management.
By: Shawna Laird, Business Manager
Strategy is defined as a long-term plan of action to achieve a particular goal. Strategy is about choices and recognizing that those choices can affect your outcome. By creating an effective strategy in producing a Business Plan, unfavorable results can be reduced or avoided. All Business Plans should be three dimensional and include: 1. Business Plan; 2. Fleet Program Plans; and 3. Customer Service Agreements.
Let’s take a look at the different components of a Business Plan.
Executive Summary: The Executive Summary should be one to two pages long and include your Mission and Vision statements. Be sure to introduce your fleet organization. Describe the programs and services that your organization provides in supporting the using departments. Brag on the organization! Show your accomplishments and how those accomplishments were achieved.
Fleet Overview: Showcase your organization. Explain the purpose of your organization and the diversity of the equipment that composes the fleet. Highlight the benefits of your organization and define the services provided. Acknowledge your customers, both internal and external. Go crazy and use charts and graphs that are easy to understand and still make the point.
Marketing and Organizational Analysis: Define your customer needs. Show that your organization understands their needs and explain how your organization can and does meet those demands. Publish a SWOT (Strength, Weakness, Opportunities, and Threats) Analysis. Get your staff and user departments involved by asking them to participate in the SWOT Analysis before publication. Work your strengths and hire to fill areas of weakness. If you cannot hire, then create a plan to promote or train staff to fill those weak areas.
Teamwork and Organization: Accentuate your team. List your awards and certifications. Emphasize the expertise of your staff by detailing their accomplishments and certifications. Stress the experience you have in your organization (number of years, diversity of skills, etc.) Your team is central to the success of your organization and your Business Plan.
Financial Outlook: You’ve all heard “run it like a business.” Create your budget at the program level. Include a Profit & Loss statement and analyze current market trends. Underscore your organization’s commitment to reduce costs by explaining programs that will be implemented to save money.
Appendix A: Fleet Program Plans: Plan by program. Include the goals, tasks, measurements, procedures, processes, roles, responsibilities, and reports. Clearly state the goals and objectives of the organization. Use visual work flow charts to highlight your tasks and processes. Charts can be easier to read and understand and can lead to better comprehension of how the organization works. Define the roles and responsibilities of your staff and explain their part in the overall success of the organization. Outline the reports you will use and how you will analyze the performance of the organization. Include sample reports or dashboards.
Appendix B: Customer Service Agreement: Partner with your customers and define both your organization’s and the customer’s expectations. Explain your organization’s processes and the costs and benefits of the services and programs.
Update your Business Plan annually and publish it. Have it available to your staff and user departments both in print and electronically. Upload it to your intranet. Schedule meetings, at your facility, with upper management, city council, county commissioners, or your board of directors to review your Business Plan, especially if new people are elected or hired. Ask for feedback from the readers. You never know what ideas and programs may come from those comments.
By: Shawna Laird, Business Manager & Business Services Team
Roller coasters – you either like them or you don’t. They can give you a thrill or a scare, depending on whether you are going up, or coming down. It appears that as in the past several years our fleet budgets will take a ride on the fuel cost roller coaster, again. Energy price forecasts are highly uncertain and the prices are on the accent on this roller coaster. The cost per gallon at the pump includes taxes and fees. With the recent changes to the tax breaks, the consumer will see this roller coaster continue to climb. Although most government entities are exempt from taxes, there are fees per gallon that are passed on to the customer.
Taming this roller coaster will require more than one rider. Before we start on the ride, we need to recognize what factors on this ride, are controllable and by whom. Some factors the fleet manager has no control over. Massive storms and unusual weather can definitely impact the ride, tossing the budgets to and fro. Fleet budgets will be impacted by these factors. Government mandates also make the ride more of a scare than that of a thrill. Although we can reduce the carbon footprint for our fleets, that does not equate to lower cost of ownership or cost per mile. Be sure to monitor the total costs not just the fuel cost per gallon. Fleet managers can’t control the cost per barrel of crude oil, but they can partner with their purchasing group or co-ops to ensure a better price per gallon, and purchase more cost efficient vehicles during the replacement cycles. The driver/operators can’t control the need for the fuel, but they can help to conserve the amount necessary to get their jobs and tasks done. Management can help reduce on site meetings and encourage ride sharing.
Many fleet agencies have implemented service level agreements for maintenance and rental of the vehicles and equipment. Enhance your service level agreements to include fueling profiles and expectations in your end user service agreements. Include vehicle sizing, accurate usage reporting, tire pressure monitoring, PM compliance, and promotion of alternative transportation methods in your profile and service agreement.
Create an internal fuel conservation monthly campaign. Set goals, track the progress and put a value on it. Share the information with your staff, your management, and your customers. Work with your management to encourage participation at all levels within your organization. Challenge the end users and give them recognition.
Ride the fuel cost roller coaster and when you make it to the bottom in one piece; get ready to go again.
By: Shawna Laird, Business Manager & Business Services Team
In the last several years, Utilization Management and Shared Resources have been ‘in the news, on the horizon, and adopted in budget goals and fleet business plans. In 2012, we are challenged at looking deeper – into the small “stuff” and the specialty equipment.
We all recognize that every fleet has a substantial investment in vehicle and equipment assets that their customers need for the delivery of service; and we know the goal of a Utilization Management Program is to balance under and over utilized vehicles and equipment for a more efficient and cost effective use of the fleet assets. We have traditionally overlooked a large category of fleet assets, the small and specialty assets, and we all have plenty of them. Often times, we have one for every service center or for every crew throughout the agency jurisdiction.
We are targeting specialized and small equipment that may or may not have meters on them, but are included on your fleet asset list. Small and specialized equipment is often overlooked or put on the back burner for utilization management programs and planning. It is time to track the ‘use’ of this type of asset and record use patterns. Need vs. convenience?
Make it an objective in 2013 to begin accurate tracking of the use of these units throughout your agency. Look at alternative technologies for tracking use, such as Automated Vehicle Location (AVL), Global Positioning Systems (GPS) and Automated Pooling Systems (APS). These are available to track the actual use of the equipment. This technology tracks the number of times the equipment/vehicle is operated rather than the number of engine hours or miles driven or even days in use. In small and specialized equipment the number of times the unit is used is a better measure of the use than hours or miles driven.
Once you have data on the actual ‘use’ of the small assets divide them into three categories: Retain, Consider for Shared Resources, and Reduce Fleet.
Once you have identified units that could be better utilized in a shared environment between operating customers, consider consolidating these units into a central rental center where the equipment can be reserved when truly needed and shared between customers in the agency.
In many cases it may be more fiscally responsible to rent the types of equipment that have been identified as underutilized from commercial sources. Be sure to have contracts in place for commercial rentals. Utilization balancing reduces fleet costs by balancing usage of all units within a specified class and within an annual time frame across the entire agency. Be sure to update your Utilization Policy to include these assets.
By: Shawna Laird, Business Manager
Predictive Maintenance is a flexible program designed to prolong vehicle life and predict failures. It is scheduled based on time, fuel consumption, or usage, costs associated with repairs, and breakdown analyses.
There is a distinction between predictive and preventive maintenance.
PREDICTIVE MAINTENANCE is basing the repair activity on the condition of the equipment. Maintenance intervals are set to prevent a failure based on some form of historical data.
PREVENTIVE MAINTENANCE is based on a routine event or inspection. Regularly scheduled maintenance is at a pre-set interval; typically set by the equipment manufacturer or government regulations.
The prescription for predictive maintenance needs to be custom tailored to each fleet, each class of equipment, and each year, make, and model. It is best to start with recommended guidelines and enhance them based on variable factors, such as usage, age, and environment.
Symptoms of a fleet in need of a predictive maintenance program can include, but are not limited to, high volume of “come back” visits and the age of the equipment has exceeded its predicted life cycle.
In crafting an effective treatment plan, you need to determine intervals for component replacement. This requires good electronic record keeping and analytic trend analysis. Predictive maintenance involves replacing components shortly before they fail.
Oil sampling is an important element of predictive maintenance for engines, transmissions, hydraulics, and differentials. Oil analysis results show trends that indicate the appropriate intervals for oil changes. Diagnostic output files (such as those available through on-board computers) may present you the opportunity to take prompt action regarding maintenance problems that are not readily apparent. Equipment downtime should be prioritized, scheduled, and conveniently resolved around both technician availability and production.
The most available source of data for diagnosis is found in your own database. In mining the data, keep in mind that you are looking for failures. Some of your existing reports which can be used to begin the search are:
There is no known generic available.
CAUTION: THIS IS A LIFE SAVING MEDICATION. TAKE SEVERAL TIMES DAILY!
Acts like an antioxidant. Used in combating high costs, answering inquiries from upper management, creating billing documents, providing an immediate means for tracking and retrieving maintenance and service histories, helps avoid infectious problems, and is easily tolerated.
This can be used to create a detailed plan for fighting specific ailments. This prescription can be applied at any time. It has been known to make things easier and smoother.
Real time information can extend the life of the vehicle and handles scheduling of checkups in a timely manner.
CAUTION: DO NOT STOP TAKING THIS MEDICINE. Stopping this medicine suddenly may cause serious side effects, such as: higher costs, longer recovery time, road calls, missed performance measures, and unhappy customers.
HOW TO USE THIS MEDICINE: You may schedule the dosage in any combination of the following or choose the one that works best for you, based on the history of previous complaints and ailments.
Dosage: (Usage) Every XXX Miles or every XXX Hours
Dosage: (Consumption) Fuel quantity
Dosage: Predetermine the tasks necessary based on failure statistics
ADDITIONAL DOSAGE INFORMATION:
Dosage: Performance Measures
Dosage: Shop work flow for PM scheduling and repairs found during the PM services
Dosage: Schedule the vehicle during it’s off peak hours and have quality “Dr.s” available to perform the service
As problems are resolved, the number of major failures decreases, turning your maintenance program from reactive to proactive. Predictive (proactive) maintenance creates more reliable equipment requiring fewer personnel to maintain it. You will be able to identify equipment problems, diminish large scale repairs, and create economical scheduling of maintenance. Results also include increased operational uptime, improved equipment reliability, and a reduction in operational and labor costs.
Fleets that take a proactive approach to predictive maintenance recognize that addressing smaller events often prevent larger and more costly events from occurring in the future. Equipment and critical asset life is preserved, maintenance costs are reduced and reliability programs improve.
The FleetPros Blog is written and moderated by the Business Manager with contributions from the membership and Business Services Team.