The growing community of Government Fleet Public Sector Fleet Manager of the Year award winners is building a treasury of industry expertise, best practices, and front-line skills and insights. These recognized leaders were nominated by industry peers and selected through a rigorous qualification process (See "Recognizing Public Sector Fleet Management Leadership" on the last page).
In the spirit of the industry's hallmark generosity in knowledge and experience sharing, four Public Sector Fleet Managers of the Year offer their personal recommendations and advice to help industry colleagues overcome the particular challenges government fleet operations face today.
2006: John McCorkhill, CFM, CAFM, CEM, CPFP, fleet director, City of Lynchburg, Va.
A nearly 30-year management veteran, McCorkhill joined the City of Lynchburg fleet department in 1999. He directs operations for a more than 700-unit fleet. Fleet customers include most city departments, such as public works, police and fire, assessor's office, social services, parks and recreation, and the sheriff's office, as well as the City airport and city utilities. When serving as City of Indianapolis fleet manager in the early '90s, McCorkhill led a successful effort to forestall a privatization of the City's fleet operations.
By John McCorkhill
'Believe Me, It's All About Relationships'
One can be the most technically savvy person in the universe or the Donald Trump of the fleet management world, but if you lack the talent of building interpersonal relationships, your success will be very limited.
I recommend spending considerable time each week honing relationship skills with the boss, employees, customers, and vendors. Know your employees well, and if possible, personally meet with each at least once a year even if they're not a direct report. Get personal with each employee because folks like to talk about their spouses, hobbies, kids, the home run they hit in softball the other night.
Foster the same relationship with customers. "Don't make it a business-only relationship when it comes to conversing with suppliers. Take a moment to chat when they drop off a vehicle and show a genuine interest in what they tell you. Send birthday cards if you know their birthdays, a get-well card if they are sick, a sympathy card if they lose a loved one.
Vendors can make or break you when you need a special price, quick delivery, hard to find part, etc. I personally spend as much time conversing with dealers as with customers.
Remember, it's not all about the paperwork and business meetings that take so much of our time each working day. It's people who make things happen, and it's your job to make sure you have the best employees, customers, and vendors possible. You'll accomplish much more if all work with you as a friend rather than as a tool.
Don't Wait for the Wolf to Show Up at Your Door
Three of the seven seats on our common council were up for grabs at our recent May 4 election. Eight candidates vied for the positions with three running as a package group with a privatization platform. Invariably, fleet maintenance is a municipal function that falls under the privatization microscope.
The week after the election, one successful pro-outsourcing candidate contacted our City Manager asking, "Has the City ever done a study to see if we should contract out fleet maintenance?"
Our fleet management team has always tried to stay ahead of the curve by diligently studying costs and efficiencies, and outsourcing those functions in which we compete poorly. We contract total management of our parts operation, oil changes, all small apparatus repairs, body work, towing, etc. Fuel requirements are competitively bid and contracted out.
Within a half-hour of the new Councilman's inquiry, we were able to prepare a report that demonstrated 77 percent of our budget is already outsourced, leaving just 23 percent up for grabs. I've heard nothing further since the report was published and hopefully the new Councilman is happy with our answer.
The bottom line is to be proactive by constantly studying costs, contract out when it makes sense, and keep excellent records that allow quick demonstration of the extent of outsourcing already taking place in your operation.[PAGEBREAK]
2010: John Alley, CAFM, deputy director, City of San Diego Fleet Services Division.
Led by Alley, the City of San Diego's Fleet Services Division's 240-member fleet team manages and services more than 4,000 vehicles. In addition, the division's organization includes parts operations and acquisition, fuel, upfitting, disposal office, safety, IT, training, and rental support functions. In the City's recent business process reengineering (BPR) program, Alley directed a dramatic restructuring of the City's fleet operations. The restructuring included consolidating three separate fleet organizations under one Fleet Services operation, producing gains in standardization and productivity, policies and procedures development, and annual cost savings of $3.5 million.
The organizational initiatives also extended the internal service fund to all non-general fund and general fund department vehicle replacements and produced $11 million in FY 2010-11 cost savings from inventory reduction measures.
By John Alley
Consortium Buying Power Offers Savings
When purchasing vehicles, telematics, parts, lubricants, fuel, or anything else for which you have a common need with others in your geographic area, consider utilizing a joint RFP. Purchasing with large numbers not only saves money, but could save time and staff hours.
Examining Fleet Operations in Detail
No matter what you call it, you need to examine how you do business from the bottom up through such processes as Business Process Reengineering, Process Improvement, or Total Quality Management.
If you cannot depict what you do using a flow chart for each function or process in your organization, take the time to map it out. There are always areas for improvement to save time, save costs, or improve the value of your customer service. Don't overlook grassroots suggestions from staff, technicians, and customers for improvements in your organization. Develop and implement a process to discover those suggestions and invest the time and effort to explore their possibilities.
Eliminate 'Fleet Creep'
No matter how hard you try, your fleet size will grow over time. Occasionally, a step back to reassess your fleet's size, composition, and purpose is necessary. Customers will always say they need the biggest, most costly, and newest the industry offers.
At a minimum, fleet utilization reports should be run once a year. Whatever criterion used, make it realistic and consistent year-to-year. A suggestion is to use 5,000 miles or 500 operating hours. You will be surprised at customers' narrative justifications to retain vehicles that fall below this annual use.
Build trust with customers and educate them on total lifecycle costs. If necessary, use the power of your chief executive to enforce minimum vehicle use. The amount of achievable savings will be surprising.
Control Personnel, Fuel & Parts Costs
Conduct a vehicle equivalency study at least every two years. Personnel expenses are a fleet's highest cost. Make sure you have the right classifications, in the right numbers, at the right locations. Don't hesitate to move, add or delete, or reclassify personnel.
Next, look at fuel expenses:
- Create a policy to purchase fuel-efficient vehicles.
- Automate your fuel delivery system.
- Watch outside fuel costs.
- Consider stabilizing annual fuel costs through fuel futures.
- Use unleaded regular fuel, except in those rare situations that require premium fuel (e.g., police motorcycles).
- Monitor fuel deliveries.
Finally, consider your parts operations. Next to staff and fuel, parts are a fleet's next largest expense. Consortium buying and long-term contracts are just two methods to save costs. A final option is to consider outsourcing your parts operations or establishing a "one-vendor source" to save on administrative and invoice processing expenses.
Consider an Internal Service / Revolving Fund
Strongly consider running your fleet operations using an internal service/revolving fund. Fleet managers with general fund customers who rely on legislative bodies to fund vehicle replacements will never catch up. Even if adequate replacement fees are not captured in the first year to cover the expense of replacing vehicles over mileage, hours, and age parameters, implement the fund and look at short-term lease purchasing to get through the first 3-7 years after inception. Plenty of professionals who have gone through internal service/revolving funds successfully can assist you in getting one started.
Mine Routine Costs: Printers vs. Copiers
Something so minor and routine, it loses visibility. How much does it cost your fleet to operate the individual printers and fax machines on the supervisor's desk, compared to networking geographical copiers with the capability of printing, copying, faxing, and scanning for one location or floor? Consider different types and quantities of printer replacement cartridges, compared to the all-included standard costs offered by leasing your copier machines.[PAGEBREAK]
2009: Doug Weichman, CAFM, fleet management division director, Palm Beach County, Fla.
Weichman, a 31-year industry veteran, directs a fleet operation of more than 4,000 units. A graduate of Ferris State University with a bachelor's degree in automotive and heavy equipment technology, Weichman has been a NAFA Fleet Management Association (NAFA) member since 1987. He is NAFA's senior vice president, in line to assume the president's position in 2011.
Weichman is a Florida Association of Governmental Fleet Administrators member and was a Governor of Florida appointee to Clean Cities. He also teaches fleet maintenance management at the University of Wisconsin and worked on the development of several NAFA educational products. Weichman established the first NAFA Green Fleet Award in 2008 and is a member of NAFA's carbon footprint calculator project.
By Doug Weichman
Establish a Fleet Replacement Policy
Establish a fully funded fleet replacement policy fund that considers an asset's future replacement cost when setting up the funding model or formula. The fund must be controlled by fleet to establish proper vehicle purchases and correct lifecycles related to lifecycle cost principles. Although fleet must control the fund, departments or agencies must be partners on fund decision-making. Establish policy and procedures related to this support by hierarchy.
Monitor asset utilization regularly. If asset utilization falls below established benchmarks, examine solutions, which can include sharing underutilized assets between multiple users or considering rental or short lease and remarketing the asset. Proceeds of resale may cover the cost of a rental for even an extended time and in the long run, be more cost-effective.
Use sedans to transport employees for work-related activities. Create pools for higher utilization and look at mileage reimbursement breakeven points for employees to use personal vehicles rather than agency-supplied sedans.
Match High-Quality Asset Specs to Function
Buy high-quality assets and establish specifications that match assets' intended uses. In tough economic times, this best practice may provide wiggle room in stretching lifecycles. The golden rule in stretching lifecycle: it is a short-term solution that normally raises costs in the future. The only way to really save is to eliminate the assets, especially if they are underutilized.
Promote Employee Morale, Motivation & Professionalism
Encourage and support certifications such as ASE, (Blue Seal status) and NAFA Fleet Management Association's Certified Automotive Fleet Manager (CAFM) for management. If possible, monetarily reward employees who achieve certification.
Have "kudos" programs, even if they are simple, printed certifications for employees who are high performers or go above and beyond expected performance. A simple thing such as distributing birthday cards to employees goes a long way to help build good working relationships and environments. Employee recognition ceremonies or luncheons clearly communicate to employees their worth to the organization and appreciation for their dedication in doing more with less.
Consider Downsizing Assets
Evaluate downsizing assets. For example, a meter reader can do the job using a compact pickup more efficiently than operating a ½-ton pickup for the same application.
One point of caution is operating an asset beyond its gross vehicle weight rating (GVWR). In the end, this practice will end up more costly. Fleet managers must know the asset's utilization when considering downsizing.
Extend Tire Life
Establish tire programs to help extend tire life and reduce tire operating costs. These programs can include such elements as recaps for large truck tires; nitrogen fills; purchase of low rolling-resistance tires on new assets, especially on med/heavy duty trucks and when replacing tires; and proper alignment, rotation, and balancing built into the preventive maintenance program.
Saving More on Printer/Copier Costs
One small, but easy way to trim administrative costs - when using networking graphical printers, is simply set equipment properties to use less ink, e.g., the fast draft and black-cartridge-only settings.
Track Fuel Use & Produce Exception Reports
Monitor fuel use and do exception reporting to address and correct anomalies. Take action when problems are detected. Establish idling procedures to help reduce vehicle operating and fuel cost, as well as cut vehicle emissions. Negotiate competitive fuel purchasing contracts and review contract and methods of purchasing fuel annually. In Palm Beach County, establishing a Tier 1 fuel contract purchased directly from the fuel supplier, rather than a wholesaler or bulk deliverer, allows us better pricing.[PAGEBREAK]
2005: John Hunt, CPFP, fleet manager, City of Fresno, Calif.; now fleet manager, City of Portland, Ore.
When named the first Government Fleet Public Sector Fleet Manager of the Year, Hunt was managing the City of Fresno's 1,800-unit fleet. He had joined the City in 1987 as a heavy equipment mechanic, working on refuse trucks. Using the City's tuition reimbursement fund, Hunt attended California State University Fresno and moved into fleet administration in 1991, becoming the permanent fleet manager in 2002. At the time of his Government Fleet award, his fleet management philosophy, "Run it like you own it," described his challenge to the Fresno fleet operation "to be consistently competitive with the private sector," said Hunt. In November 2005, Hunt accepted the fleet manager post at the City of Portland. He and his 77-member fleet staff manage 2,827 vehicles and pieces of equipment for the Pacific Northwest city of just over 580,000 residents.
By John Hunt
Accepting Today's Economic Realities
As any fleet manager would tell you, a magic solution would be nice to meet today's challenges. In this tough economy, budgets are increasingly stretched to lengths never before experienced. With significant budget cuts every year, areas to trim further costs grow ever more elusive. As fleet managers, we must be proactive in our approach to clearly communicate the value and scope of our services, and be creative in finding cost savings that do not affect service quality.
Still, it costs money to operate and maintain unique heavy equipment, police cars, dump trucks, and asphalt grinders, while maintaining service levels taxpayers expect. We can't lose sight of that reality. But there are always ways to look for opportunities to cut a penny here, a penny there - and those small amounts can add up to significant total savings.
Collaborate with Customer to Support Long-Term Goals
Strive to go beyond serving basic customer needs; keep in mind the big picture and collaborate to best serve the organization as a whole. Visit directly with customers to understand their perspective and seek creative ways to find mutually beneficial solutions for greater dividends. Understand each customer has different tasks to perform, distinctly different workloads.
Interview customers to uncover as much as possible about their operations — what business are they in or would like to be in — to determine how your team can best support their long-term goals. Close listening and creative collaboration will identify new options to meet those needs.
In the City of Portland, we work with all departments, large and small. When we sit down to talk with each department, it's more than discussing how many sedans and pickups they need. It's about what they would like to be in five years or more, and how CityFleet can help them reach their goals. For example, the Portland Police Bureau used leased vehicles in undercover operations. We explored with them the option of buying vehicles and rotating the units in service. A supply of undercover vehicles would be available, but at a lower cost, saving the Bureau $300,000.
We helped the Bureau of Transportation's Street Maintenance Group purchase an asphalt grinder and identified equipment that would suit their needs while further lowering costs. By loaning them $500,000, we helped them get crews to work immediately on needed road repairs. Working with other customers, we examined mobility needs to promote use of the City motor pool.
CityFleet works with customers to identify what we can do as a city to be more efficient and design innovative ways to improve efficiency and provide greater value to taxpayers.
Recognize & Communicate Value Fleet Provides
We're big on delivering value and know it is important to tell our story to help customers better understand the value fleet brings to their operations. Customers look at our rates, and yes, we're lower than commercial competitors. But reviewing overall service, there's much more included in our service. For example, customers tend to consider the charge rate as the cost for labor and parts to simply repair a vehicle. However, we also perform cost analysis, PM compliance, performance, maintenance tasks, and MPG, idle time, utilization, fuel consumption, and replacement analysis reports. These services are included in our rate at no additional cost.
Now Time to Hone Fleet Management Fundamentals
In this tough economy, it is time to hone the fundamentals of good fleet management. Examine the basic elements of managing your fleet: analyzing utilization, establishing sound replacement lifecycles, staffing, parts, fuel, and consistent PM programs. What best practices determine the cost-effectiveness of owning a vehicle versus providing service differently, e.g., through a motor pool while turning in underutilized vehicles?
Look at the economic lifecycle of units by class and ensure you're not extending vehicles beyond that lifecyle. At some point, it will cost more to maintain an old piece of equipment, rather than spending the funds to replace it. Changing the Transportation Department equipment replacement lifecycles improved availability and lowered its costs by $2 million. A balanced replacement schedule is key to keeping everything moving forward — fewer breakdowns due to ancient equipment, better fuel use, and few dollars wasted on bandage repair measures.
Implementing best-practice replacement policies impacts staffing. Older vehicles require more shop work, more technicians, support staff, and parts. Younger vehicles require fewer staff. The bottom line is, determine proper staffing levels for PM, repair, parts, supervisory, management, and administration to make sure you have accurate numbers to defend your budget and your fleet's future direction.
Parts should be available when techs come to the parts counter. We operate an in-house parts department with a fill rate goal of 80 percent or better. To ensure that availability, a new reporting system checks inventory movement and tracks parts history and obsolescence. Regular cycle counts are also done to confirm accurate inventory.
Managing budgets today requires rolling up your sleeves and diving deep into the details where pennies and nickels can be saved. Over the years, CityFleet — in addition to implementing City Council-driven cuts — has proactively been reducing the budget to run lean and mean.
Changes in shop operations to pull repairs back in-house saved $600,000 previously spent on commercial repairs. Streamlining workflow reduced overtime by 64 percent. Changing fuel blends and types with tighter fuel management reduced fuel costs by $2.1 million. Right-sizing trimmed the fleet by 146 units, saving $3 million. Auction sales returned $1 million to the fleet replacement fund. Vehicle rotation and operational change reduced the Police Bureau's budget by $100,000. In the parts department, bar-coding parts produced better inventory management. Marketing analysis and volume purchasing with a contract reduced overall parts costs by $300,000.
Even seemingly minor steps can total significant savings. CityFleet saved $4,200 annually by cleaning big truck air filters, rather than buying new ones. Storing scrap metal in a big bin and taking it to the metal recyclers brought in another $4,000.[PAGEBREAK]
Recognizing Public Sector Fleet Management Leadership
Established in 2005, the Public Sector Fleet Manager of the Year award recognizes industry excellence. The award is presented by Government Fleet magazine, and since its inception, has been sponsored by Automotive Resources International (ARI) and co-sponsored by Fleet Counselor Services.
Nominated by industry peers through an online process, award candidates complete a short essay questionnaire based on nine fleet management principles. An independent panel of fleet professionals, appointed by Government Fleet, qualify and assign a numerical score to each nominee to determine the winner, based on the highest cumulative score of all nine categories.
Candidates are evaluated on the following principles:
- Business plan development.
- Computer systems and technology utilization.
- Productivity initiatives.
- Policies and procedures development and implementation.
- Preventive maintenance programs.
- Utilization management.
- Vehicle acquisition and replacement programs.
- Customer service and downtime initiatives.
- Fuel management program.
- Previous calendar-year accomplishments.
GF Public Sector Fleet Managers of the Year 2005-2010
2005: John Hunt, CPFP, City of Fresno, Calif., now with the City of Portland, Ore.
2006: John McCorkhill, CFM, CAFM, CEM, CPFP, fleet director, City of Lynchburg, Va.
2007: John Clements, fleet operations manager, County of San Diego, retired.
2008: Windell Mitchell, fleet manager, King County, Wash., retired.
2009: Doug Weichman, CAFM, director, fleet management division, Palm Beach County, Fla.
2010: John Alley, CAFM, deputy director, fleet services division, City of San Diego.