Remarketing

Good Fleet Management Leads to Good Remarketing

The Minnesota Department of Natural Resources’ revised remarketing plan has already led to positive results — an auction at a new location this year drew 600 bidders and brought in $715,000 in sales.

October 2011, Government Fleet - Feature

by Daryl Lubinsky

The Minnesota DNR's auction in New Ulm drew 600 bidders.
The Minnesota DNR's auction in New Ulm drew 600 bidders.

At a Glance

The Minnesota Department of Natural Resources' revised remarketing plan focuses on:

  • Preventive maintenance.
  • Identifying defects before a sale.
  • Improving standards of new equipment purchased.

Fleet department managers and staff at the Minnesota Department of Natural Resources (DNR) used to think of remarketing vehicles and equipment as an unpleasant chore. That was 10 years ago.

"It was more of a nuisance," said Dave Schiller, CAFM, fleet, safety, and materials manager for the department. "At that time, I think we just as soon someone else did it."

It's easy to see why. Early remarketing efforts were a struggle for the department, and the auctions didn't bring in much money at first. A bigger problem was that a couple of department workers suffered injuries while working at the auctions. Sometimes employees would try to move equipment themselves rather than use a forklift or other piece of equipment to help, and that resulted in back injuries and slips and falls.

But rather than focusing on ways to improve the vehicle remarketing process specifically, the department began working on improving its overall fleet management processes. The department decided to improve its fleet by focusing on lifecycle management, setting standards for the items it was purchasing, and working on safe driving to reduce its insurance costs and accident damage. Those efforts have led to the department selling higher-­quality vehicles. Better fleet management led to better equipment remarketing results.

"The standards have gotten us to a point where we're able to buy better units at lower cost because of the volume we're doing now with buying light equipment every year," said Schiller, who has worked in the department for 35 years, 11 in his current position. "It also helps with the resale because we don't have the oddball stuff we used to have. I think that's increased the value of the items to the public."

Focus on Fleet Management

The Minnesota DNR manages about 5 million acres of land in Minnesota, including resources such as parks, forests, prairies, and lakes.

Several years ago, the department hired a consultant to analyze its fleet of vehicles and equipment. The fleet includes about 5,000 vehicles and pieces of equipment, including about 1,800 road vehicles from various manufacturers, Class 1-8. About 1,300 of those are pickup trucks. The fleet includes about 1,700 off-road pieces of equipment, including about 400 snowmobiles and 500 ATVs, along with dozers, tractors, firefighting vehicles, backhoes, excavators, and trailers.

With the consultant's help, the department developed a list of about 40 areas of the fleet program for potential improvement, and one of those was the remarketing program. The department put together a plan to improve the program, focusing on several main areas. The primary focus was on preventive maintenance, and the second to identify all defects in the equipment before the sale. Improving the standards of new equipment purchased was the third area, which Schiller said helped limit the "oddball stuff that surprises our resale customers."

Lifecycle management was the fourth area of focus, which Schiller said helped the department "focus on maximizing economic life - rather than equipment life - so the stuff we're selling has been relatively freshly used, as opposed to something that's been sitting around for a while as a spare and deteriorating. We don't subscribe to the 'drive-til-dead' approach, and we're able to avoid a lot of the problems associated with that."

The department worked to improve its overall equipment remarketing process. In describing the process, Schiller explained that the department manages the fleet from four regional offices in Minnesota: Bemidji, Grand Rapids, New Ulm, and the central office in St. Paul.

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