Navigating Lesser-Mentioned Challenges as a New Fleet Manager

As fleet managers, we often find ourselves becoming the go-to person for all things related to the fleet, even matters beyond our direct control. This can be particularly challenging for newer fleet managers as fleet services are intertwined with every department.

Conversations about the fleet can pop up anywhere, whether we're discussing finance planning or construction projects. Fleet managers must possess a wealth of knowledge about various topics to confidently engage in day-to-day meetings. Because of this, it's important to be aware of certain aspects that are likely to emerge during the initial years of a fleet management role.

Defending Fleet Chargeback Systems

If you're utilizing a chargeback system, great news! Your department is likely on the right track. Accurately billing customers for asset upkeep is a significant responsibility for fleet managers.

However, chargeback systems can become a bit complex, especially for smaller to medium-sized fleets. Unlike larger fleets, smaller ones may struggle with precise billing for services due to unique challenges. Tracking usage and costs for items like chemicals and floor soap in small departments can prove difficult, and managing training budgets can be a daunting task.

However, there are excellent resources and best practices available to help you overcome these challenges. The key lies in fostering transparency in your chargeback system and confidently defending it when discussing this with stakeholders.

One of the reasons explaining chargebacks to customers can be tricky is that preconceived notions often come into play. Your customers likely manage their vehicles, so they understand what it's like to get an oil change and how much it costs. Additionally, some stakeholders may have experience with farm machines, construction assets, or other types of equipment in their personal lives.

It's only natural for them to draw comparisons between their experiences in a for-profit shop and the fleet maintenance services you provide. After all, on the surface, it mightseem similar – vehicles on lifts, hammers in motion, and the sound of impact wrenches in the air.

What lies beneath the surface is an entirely different world of accounting, recordkeeping, and productivity measurements. Drawing from my 20 years of experience working with fleets across all levels of government, I can attest that one of the most delicate conversations a fleet manager can have is defending the chargeback system.

The money being charged usually comes from the customer's budget, which can sometimes lead to territorial disputes. If you're a newer fleet manager, it’s likely the chargeback system was already in place when you arrived, so you may find yourself defending some design flaws or application deficiencies inherited from the past.

The story of the $20,000 oil change comes to mind. Early in my career, it was an innocent enough mistake — a technician forgot to clock off the job, resulting in an open ticket that was closed "en masse" at the end of the month. The result? A twenty-odd-thousand dollar charge for a routine oil change billed to a customer.

Thankfully, the issue was quickly resolved, and it brought some much-needed levity to the conversation at the supervisor's meeting. While that situation was lighthearted, real tension can arise when legitimate chargeback amounts seem unreasonable due to the nature of chargeback rules.

Some seemingly simple repairs can take longer, road calls can stretch on throughout the day, and computer diagnoses are becoming increasingly time-consuming. Customers may indeed have valid concerns about billing. So, let's focus on offering support and insights to effectively communicate the labor rate and chargeback, to foster a stronger understanding among all stakeholders.

First and foremost, let's acknowledge that there is no one-size-fits-all approach to fully burdening your labor rate or administering a fleet chargeback system. I've come across fleets with different rates for different customers or types of work, and more than one agency even applies highly inaccurate chargebacks based on a percentage of the customer's assets in the fleet.

As we journey toward a sound chargeback system, questions will inevitably arise. We may know that an effective chargeback system requires a fully-burdened labor rate, but what does that mean? The term "fully-burdened labor rate" is likely familiar, but its definition can vary depending on your organization's structure. Of course, labor, parts, supplies, and various line items contribute to calculating the labor rate. However, do we genuinely know the shop's cost per labor hour? The pursuit of a more accurate labor rate is ongoing, even among the most experienced and capable fleet managers. It's a goal that is continually being refined.

Ask some questions and have ready answers for your next chargeback conversation:

• Do you know how the labor rate was derived?
• Is it current or outdated?
• Who reviews it and how often?
• Who has oversight of the labor rate? The accounting office? Perhaps there is a committee or working group involved?
• Do you know what is and, more importantly, what is not included in the labor rate? (building maintenance gets omitted on occasion)
• Are there features of your facility that only one customer uses and are they charged appropriately for it or do all customers pay?
• Are parts markups doing the job they were intended to do? (usually, pay for shrinkage and obsolescence)

Brand Bias of Customers — It Has its Place…Sometimes

As a newer fleet manager overseeing a small to medium-sized fleet, you may often find yourself tasked with specifying equipment for customers. Unlike larger fleets that have dedicated departments for this, your role may require you to handle such requests directly.

Often, these requests come with a predisposition towards a specific brand. While you must always follow rules such as agency contracts, bid processes, and RFP conformity, there are numerous other factors to consider. When a department head requests a particular brand of equipment, even if another brand offers better value, it can lead to a challenging discussion.

As a fleet manager, it is crucial to carefully assess such requests and weigh various factors before making a decision. While your ultimate goal is to ensure the fleet operates efficiently and cost-effectively, you must also recognize that sometimes the department's brand preference may be valid and worth considering.

Remaining mindful of the aforementioned rules, the fleet manager should conduct a comprehensive evaluation of reasonably available brands. This evaluation should include comparisons of performance, reliability, maintenance costs, and overall value.

Making an informed decision based on objective data and historical records, rather than subjective preferences, is essential. Presenting the advantages of the recommended brand with clear data can often help sway the department head toward a more logical choice.

In cases where the requested brand may not offer the best value, but the department head raises valid concerns about potential disruptions or additional costs associated with adopting a new brand, open communication becomes paramount.

Engaging in a constructive conversation with the department head, understanding their perspective, and addressing their concerns early on are crucial steps before making a recommendation that may influence higher governing bodies.

Once a consensus on asset recommendation is reached, how can fleet managers support their data in these conversations? I have always found that technicians have valuable insights into the features and attributes of the assets they work on. The nuances, such as the size of the bucket on a backhoe or the turn radius of a garbage truck, can be quite complex.

Organizing a collaborative meeting or a vendor demonstration that involves fleet department technicians, operators, and the concerned department head can be highly beneficial. This forum allows technicians to voice their opinions and concerns while presenting the department head with the reasoning behind the recommended brand.

Encouraging an open dialogue fosters a sense of teamwork and shared responsibility for making the best decision. In many cases, technicians and operators tend to take ownership of the decision, and this sense of ownership can yield excellent outcomes for the fleet.

Ultimately, fleet managers must strike a balance between providing the best value for the organization and addressing the genuine concerns raised by department heads. There are situations where a specific brand request may be valid due to factors like training costs, integration challenges, or specific operational needs. However, it is essential to base such decisions on well-informed assessments and transparent discussions involving all stakeholders.

By fostering a collaborative and data-driven approach, fleet managers can effectively navigate these situations, leading to a well-functioning fleet that optimally serves the organization's goals.

Customers Performing Minor Repairs — Red Flags! Lots and Lots of Red Flags!

Allowing employees from customer departments to handle small maintenance tasks on fleet vehicles might have been seen as a cost-effective and efficient solution. After all, fleet technicians are often swamped with complicated diagnoses and labor-intensive repairs.

The customer's department head or foreman might have thought it was a great way to keep their staff occupied on a rainy day. Upper management and elected officials may have even praised the idea, viewing it as a productive use of labor. After all, who knows the assets' specific needs better than those who use them daily?

However, as time goes on, this well-intentioned decision can lead to a myriad of issues, including liability concerns and a negative reflection on the fleet department's competence and oversight.

While I don't believe fleet managers should create a fiefdom in which no one else can provide input, it is undoubtedly clear that fleet maintenance, no matter how mundane, is the responsibility of the fleet department. One of the most significant concerns when employees from customer departments undertake their own maintenance is liability.

Without the specialized knowledge and training possessed by fleet technicians, there is an increased risk of improper repairs, incompatible fluids, inadequate maintenance, or even safety hazards. In the event of an accident or failure due to subpar maintenance, the entire agency is exposed to financial and legal risk.

Fleet managers likely have systems in place to ensure qualified technicians handle repairs, making the fleet department ultimately responsible for the overall safety and reliability of asset maintenance. Ignoring the potential legal and financial liability can have severe consequences for both the organization and the reputation of the fleet management team.

Allowing employees from customer departments to perform maintenance simply demolishes the lines of accountability. When specialized fleet technicians are in charge of maintenance, there is a clear chain of command and established protocols for quality assurance.

However, when individuals outside the fleet department take on maintenance tasks, it becomes challenging to monitor and enforce standardized procedures. This lack of oversight can lead to inconsistent practices and jeopardize the overall performance and longevity of the assets.

Proper record-keeping is essential for preventive maintenance scheduling, warranty tracking, and ensuring compliance with regulations. Yet, having multiple individuals involved in vehicle maintenance can make it difficult to maintain straightforward records, such as parts used and labor hours tracking maintenance history effectively.

Without a centralized system managed by the fleet department, essential data can become corrupted, sometimes irredeemably corrupted, causing significant issues in the long run.

To address this issue, the fleet department must establish clear guidelines and policies regarding maintenance responsibilities. While occasional minor tasks, such as refilling fluids, might be suitable for customer department employees, significant repairs and maintenance should be exclusively handled by qualified fleet technicians.

The fleet department must communicate the reasons behind these guidelines to customer departments, emphasizing the importance of safety, efficiency, and compliance.

My recommendation is: Don't fall for it. The initial idea of having employees from customer departments conduct their own vehicle maintenance, no matter how low the skill level requirement, might have seemed attractive, but the potential consequences cannot be ignored.

Liability risks, accountability challenges, and record-keeping issues can severely impact the fleet department's reputation and overall performance. To ensure the organization's fleet operates safely and efficiently, it is essential to clarify and enforce the proper roles and responsibilities, leaving critical maintenance tasks to trained fleet technicians.

Understanding Lifecycling: The Case for Strategic Asset Depreciation in Public Fleets

In a public fleet, it is vital to comprehend the concept of lifecycling and acknowledge that we can't simply hold onto old faithful equipment indefinitely. Lifecycling refers to the strategic practice of considering the relationship between asset depreciation and the increasing maintenance costs over time.

To ensure a financially responsible approach in government fleets, it is crucial to buy assets with a clear date in mind for surplus disposal. The decision to invest in new assets for a government fleet is often met with the question of whether it is worth the expense. However, a broader perspective reveals that an asset's true cost extends far beyond the initial purchase price.

As equipment ages, it experiences natural wear and tear, leading to higher maintenance and repair costs. These mounting expenses, coupled with reduced efficiency and increased downtime, can significantly impact the fleet's overall operational budget.

By employing the practice of lifecycling, fleet managers can make informed decisions about when to retire assets and invest in replacements. This strategy involves calculating the optimal time to sell or dispose of an asset while it still retains some residual value.

In doing so, the fleet can avoid reaching a stage where the maintenance costs outweigh the asset's worth. This not only ensures cost-effective operations but also minimizes the risk of potential breakdowns that could disrupt crucial services.

Strategic asset depreciation is not about disposing of equipment prematurely. Instead, it is a well-considered approach that maximizes the value of each asset over its operational lifespan.

When planning to purchase a new asset, fleet managers should determine a realistic timeframe for its usefulness and establish a target date for surplus disposal. This practice enables the fleet to operate with up-to-date and reliable equipment while mitigating the impact of increasing maintenance costs as assets age.

Moreover, by budgeting for asset replacements, public fleets can avoid sudden financial strains when faced with urgent replacements due to unexpected failures. A well-thought-out lifecycling approach ensures that funds are available at the right time to invest in newer, more efficient, and technologically advanced assets.

The financial benefits of strategic asset depreciation are not limited to cost savings alone. Modern assets often come equipped with innovative features that enhance operational efficiency, safety, and environmental sustainability.

Upgrading to newer models can result in improved fuel efficiency, reduced emissions, and enhanced performance, positively contributing to the fleet's overall mission and environmental impact.

In addition to cost and performance considerations, adopting a lifecycling approach demonstrates responsible stewardship of public resources. Taxpayers expect government entities to manage their funds efficiently and sustainably. Making the case for buying assets with a specific surplus date in mind ensures that taxpayer dollars are utilized wisely, optimizing the fleet's performance while maintaining fiscal responsibility.

In conclusion, understanding lifecycling and adopting the financial practice of buying assets with a surplus date in mind is essential for public fleets. This strategic approach enables fleet managers to make well-informed decisions, balancing the initial purchase costs with long-term maintenance expenses. By embracing lifecycling, public fleets can operate efficiently, maintain high levels of service, and demonstrate responsible fiscal management to the communities they serve.

City Garage "Custom Shop" — Navigating Upfits with Tact and Compassion in Government Fleets

In a government fleet, we often encounter "upfit" requests, where assets are customized for specific tasks. As fleet managers, it's important to understand whether the customer genuinely requires these modifications or is simply drawn to the latest trends.

Sometimes, such requests may lead to extensive changes that could potentially diminish the asset's value over time. To navigate these situations effectively, it's essential to handle discussions with department heads thoughtfully and compassionately.

To begin, thoroughly comprehending the purpose and benefits of the requested modifications is crucial. Engaging in open and transparent communication with the department head, it's important to empathetically listen to their needs and objectives, building a strong foundation of trust and collaboration. Once the purpose behind the upfit request is clear, assessing its practicality and potential impact on the asset's functionality and future resale value is prudent.

When the proposed upfit genuinely improves productivity, exploring various options that align with budgetary constraints and operational requirements in collaboration with the department head can be beneficial. 

However, if the request appears excessive or could jeopardize the asset's value, it's best to approach the situation diplomatically. Rather than outright refusal, suggesting alternative solutions that meet their needs while minimizing potential downsides can be a wise move. For instance, proposing modifications that are easily reversible or don't affect the asset's core functions may be a suitable compromise.

In some cases, the department head's request may be driven more by following trends than actual necessity. In such instances, fostering teamwork and collaboration becomes essential. Engaging in an open conversation about the long-term implications of extensive upfits can prevent potential issues in the future. By highlighting how these changes could impact the asset's resale value and overall fleet efficiency, fleet managers can help department heads make decisions that align with the organization's strategic goals and financial considerations.

Dealing with upfit requests can be challenging, but taking a compassionate and collaborative approach allows for striking a balance between enhancing productivity and preserving the asset's value. Effective fleet management involves finding solutions that work for all parties involved and contribute positively to the organization's success.

Final Thoughts on Approaching Fleet Management

If you are a newer fleet manager you may find yourself within the walls of long-established realms where previous fleet managers feared to tread. Within these walls, a friendly and factual approach can have a significant effect on not only fleet assets management but the perception of the department overall. It may help to remember that these aforementioned realms are a place of community not a battlefield for competition.