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.
The FleetPros Blog is written and moderated by the Business Manager with contributions from the membership and Business Services Team.