The new Leading Fleets awards represent the best in the public fleet industry, and the awards program recognizes high-performing operations in the areas of fleet leadership, competitiveness and efficiency, planning for the future, and overcoming challenges.
While there were 50 Leading Fleets, judges named the City of Mesa, Ariz., Fleet Services Department the No. 1 overall fleet. Pete Scarafiotti, CAFM, CEM, CPFP, fleet director and automotive engineer, City of Mesa Fleet Services Department, accepted the award during The Honors Celebration at the Government Fleet Expo & Conference (GFX).
"It's a humbling experience when you consider the great effort made by my colleagues in the competition. I know many of these fleets and their dedication and innovation within the industry," he said. "It is very gratifying to know that we are heading in the right direction; this industry award validates that our mission, goals, and direction are spot on."
The fleet approaches fleet management from all directions — taking challenges head on, dedicating itself to superb customer service, focusing on cutting costs, being an active participant in the community, and developing its own staff. Behind it all? Innovation. It continually seeks out new ways to improve its operation and actively embrace change.
"We are dedicated to innovation, looking within the organization to find all areas of opportunity, and then formulating action plans and goals to complete them," Scarafiotti said. "We have a culture that does not fear taking risks; we often branch out into untested waters to see if a new program or approach is both doable and rewarding for our customers. With fear of failure removed, we have become more emboldened to try new approaches. This might seem a bit risky, but we measure the risk, monitor our progress along the way, and know when to back out or move forward."
Like other fleets during 2008, the recession hit the City of Mesa hard. The city manager challenged each department to cut costs, and fleet decided to do so by reducing its size by 250 units. When planning this, Scarafiotti and his team aimed to see how they could make the most of the change.
"When we hit the bottom of the recession and reduced the fleet by 250 units, we had the foresight to look at using the reduction vehicles to replace vehicles that were soon scheduled for replacement; hence, we replaced vehicles that would have been purchased new with used vehicles that still had a number of years of life left to them," he said.
Fleet staff also placed low-utilized reduction vehicles into the daily rental pool to allow them to gain more utilization. And finally, staff took the residual units and sold them for badly needed revenue. "We learned hard lessons from the recession but at the same time used initiative and good business practices to morph the department into a more competitive operation," Scarafiotti said.
With operational and capital funding remaining as challenges, the fleet was again challenged with becoming a leaner operation. In the last year, the city reduced its fleet by 150 vehicles and identified another 200 potential low performers in the areas of cost and utilization.
Fleet staff also paired a number of other strategies with right-sizing. As the fleet reduced the number of units, it right-sized staff as well. It also partnered with other government fleets to assume their work, allowing the Mesa fleet to spread its costs over more units and thus reduce costs for internal customer departments.
Likewise, management took a close look at what work the internal operation could perform most efficiently, then moved other jobs to vendors that offered a cost advantage. And finally, by leveraging a third shift, it increased efficiency by providing more available labor hours during a 24-hour cycle, reducing a need for spare vehicles and equipment.
Catering to Customers
The City of Mesa's focus on operating a leaner, more efficient fleet didn't distract it from another important goal —providing superb service to customers.
"Customers seem to have two major concerns: cost and how long it will take to complete a repair," Scarafiotti said. To address both concerns, the fleet consistently benchmarks its performance to the private sector and publishes its statistics monthly so customers can follow its performance. To create better visibility into repair status, the fleet also provides an online utility that lets user departments see the progress of its repairs daily, and in a real-time environment.[PAGEBREAK]
The fleet also invites its customers in for open dialogue about the department's performance. Each month, Scarafiotti and his team meet with a representative group of customers to go over performance statistics and discuss any challenges encountered over the past month. Then, twice a year, the city's Performance Excellence Team meets with fleet customers to evaluate Fleet Services. Fleet management is not present, so customers are free to express their concerns. From there, a score card is developed, as are action plans to address any negative comments.
"We realize that all of our efforts build to one overall goal of customer satisfaction," Scarafiotti said. "This feedback methodology has greatly increased the relevance of our program. In the past we used forms left in the vehicle, and we would be lucky to get 2% of them returned."
Fleet also provides another unique service to customers: publishing local labor rates. "This makes us very aware of our internal costs and the need to drive down overhead and increase the direct side of the financial cost equation," Scarafiotti explained.
But Fleet Services doesn't only focus on the numbers — it also make an effort to demonstrate what its customers are getting for their money. Fleet staff educate customers on the knowledge and certifications required of the staff — especially compared to smaller establishments in the area.
Fleet also requires employees to have police background checks, so customers know their personal equipment left in fleet units is in good hands. And a custom report generator lets clients see their costs and even compare those costs and completion times to local vendors. "This has become a powerful tool," Scarafiotti commented.
Always keeping its customers in mind — and its cost consciousness — the Fleet Services Department has initiated several cost saving measures. In fact, it anticipates the cost saving programs will save the fleet $550,000 this year alone.
"The largest savings has come from our warranty program; we are compensated by the vendors and we pass this revenue directly back to our clients," Scarafiotti said. "Our customer departments get a report every Friday stating the revenue booked to their account; this has really helped our relationship with the clients, and they now see us as a potential revenue stream as opposed to simply a cost of operation."
Contributing to the Community
Cost saving initiatives aren't the only programs Fleet Services has pioneered. In partnership with the local community, Fleet Services helped develop the "Buy Mesa" program to keep local dollars within the community and boost tax dollars recovered from local businesses. Purchases from local Mesa vendors total 21% of Fleet Services' budget, as compared to the city average of 13% — and the fleet plans to increase this percentage.
"Obviously local businesses pay sales taxes and that's important to all of us, but in the case of Mesa, sales tax is vital since we assess no property tax. That's right — we are the 38th largest city in America with a population of 500,000 and an operational area of 138 square miles, and we must survive off sales tax revenue along with special state-shared revenues, etc.," Scarafiotti said. "In that environment and our current depressed economy, we felt we needed to reach out to our local suppliers and incentivize them to compete for both capital and maintenance and operations (M&O) contracts."
As a result, Fleet Services allowed local businesses to reduce their city tax percentage by 1.75% in bid scoring, which in many cases allowed local businesses to be more competitive and helped keep dollars in the community. Fleet has also partnered with outside businesses to locate within Mesa to take advantage of selling to a large fleet. This has resulted in the relocation of two major retailers to Mesa, Scarafiotti said.
A Passion for Developing Staff
With successful initiatives aimed at their customers and outside of their organization, Fleet Services hasn't forgotten the core of its operation: the employees.
Recognizing the need for competent technicians, Fleet Services instituted an overhaul of its job classifications to create a clear career path from entry level to master technician. Each step has National Institute for Automotive Service Excellence (ASE) requirements and other required competencies tailored to each role. An employee mentoring program also helps develop technicians, and employees who serve as mentors receive special pay as an incentive. The program has paid off — the workforce has earned more than 300 ASE certifications and employs more than 25 master-rated technicians.
"The area closest to my heart is our employee mentoring program," Scarafiotti said. "I'm very proud of the personal investment we have made in our employees, and I feel that due to our superior training environment, we will have the technical base we require for the foreseeable future."
Leading Into the Future
Like a true leading fleet, the City of Mesa Fleet Services Department is already planning a number of initiatives that will improve its operation and those around it.
The department is currently looking at partnering more with the private sector for compressed natural gas (CNG) infrastructure as an alternative to investing in aging city-owned fueling sites. It is also considering providing fuel to other agencies, then using the revenue to cover the cost of the infrastructure partnering venture.
A partnership with OEMs on a hydrogen vehicle program is also on the table. And by next year, the department plans to have completed the Green Fleet Certification from the Government Fleet Management Alliance.
For now, Fleet Services is enjoying its new title of No. 1 Leading Fleet. Scarafiotti said many will share in the excitement of winning the award. "Our mayor, council, and city manager will appreciate the independent assessment results; my customers will rest assured we are providing the best for the buck and that we have our eye on the ball; the taxpayer will appreciate the continued cost reductions and high level of service; and most importantly, our employees will be proud of their contribution to our industry and the acknowledgement that their peers have provided to us," he said.