Article

Fleets Downsize to Streamline Cost

Across the country, municipal fleets are trimming their vehicles and their staffs to meet increasingly tight budgets. While this may seem a hardship to some, others take this as a cue to operate more efficiently.

September 1999, Automotive Fleet - Feature

by John Moore

 

 

In a world of shrinking budgets and growing responsibilities, municipal fleet managers are often faced with the difficult task of downsizing their fleets. Though it may seem like a hardship, downsizing can turn out to be a blessing in disguise, allowing fleets to streamline their operation for maximum efficiency.

Downsizing doesn't mean that services need to be restricted or eliminated. By using vehicle resources more efficiently, fleet can improve service and save money. Riley Harrison, fleet manager for the city of Philadelphia, has had exactly those results.

"Through normal attrition and normal increase in vehicle availability, we were able to reduce the fleet from approximately 6,500 pieces of equipment and vehicles down to approximately 5,800," Harrison said. "I don't know if I would call it downsizing; I would call it 'rightsizing' the fleet. It's not just taking a 'meat axe' approach to vehicle management, just whacking vehicles out of the fleet. It's a combination of looking at the service provided by the departments and looking at the technology of the vehicle; you can get more for less that way".

 

Downsizing Allows Fleets to Control Spending 
  • Eliminating under-utilized vehicles and equipment increases a fleet's efficiency and reduces maintenance costs.
  • Costs-utilized equipment is usually determined with a fleet size and composition study.
  • Following recommended replacement cycles can help fleet managers downsize their fleets more effectively.
  • Downsizing is a useful efficiency strategy for fleets of all sizes and applications.
 

    The first step in downsizing is to determine which vehicles and equipment are under-utilized. This is generally accomplished with a fleet size and composition study, which can be done in-house or by an outside consulting firm. For smaller fleets, an in-house study may be appropriate and more cost-effective, but for larger fleets, sometimes use of an outside source is preferable.

    "It's pretty hard for a fleet manager to go through a fleet size and composition study on his or her own because of the perceived lack of objectivity, and because it puts the fleet manager in the difficult position of potentially regulating or passing judgment on his customers' behavior," said Paul Lauria, vice president and national director, Fleet Management Consulting Services, for DMG Maximus in Rockville, MD.

     

    Consulting Companies Offer Objectivity, Experience

    "The advantages of using an outside company are the objectivity, the fact that it gives the fleet manager protective cover, and that it doesn't put him in the position of telling his customers what to do," Lauria said. "Another advantage to hiring an outside company that's done a number of these studies is that it will have tried-and-true methodologies that can be applied to this particular question; you're not reinventing the wheel, You have established data gathering procedures, survey forms, and screening techniques that were developed over the course of doing many of these studies."

     

    Minneapolis Fleet Study Leads to Increased Funding

    The city of Minneapolis took the approach of using DMG Maximus, an outside consulting firm. This firm has done fleet studies for many of the nation's largest cities, including Los Angeles, San Diego, Washington, DC, and Houston.

    "The point of the study was to look at the fleet operation to see if it was achieving its objectives of client services, quality, and efficiency," said Chip Taggart, chief operating officer, DMG Maximus. The company examined the entire operation and made a number of recommendations, which included investment in a new maintenance facility, investment in a new information system, and renewing the fleet, devoting more money to fleet replacement, which was going to make it possible to reduce fleet size. In conjunction with that, the company suggested putting in a new rate structure for charging customers back for the services provided. Another point was to build a new central fleet maintenance facility, which was going to create efficiencies in the provision of maintenance repair services, making it possible to reduce staff levels. The third point was to close several small and relatively inefficient satellite operations and consolidate the provision of services in the new central maintenance facility.

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