Think You Run a Cost-Effective Fleet Operation? Prove It

With budget dollars scarce for the foreseeable future, fleet managers must be good business managers. The need to cultivate business skills will only grow stronger in the future. At the fundamental level, fleet managers manage assets, but, over the years, the job function has morphed into the business of also managing services. Historically, the evolution from "asset manager" to "service manager" has represented a fundamental change in the concept of fleet management at public sector fleets. The ability to "turn a wrench" is being overshadowed by the need to develop financial spreadsheets and understand the fiscal impact of fleet.

Today, there is more emphasis on financial management than ever before and it is further changing the nature of public sector fleet management. When fleet managers operate in an environment of internal service funds and chargeback systems, there is increased scrutiny of fleet managers by fleet user organizations, who pay close attention to the costs of the fleet resources and services utilized. These users often want to know why their internal charges are what they are and how they compare with costs charged by external service providers. With fewer dollars, fleet managers must be more inventive and creative in finding ways to get the job done. This is easier said than done, but dwindling resources cannot be an excuse for degradation in fleet services.

Show Me the Metrics

You may think you manage a well-run fleet, but how do you really know unless you have objective data to prove it?

Metrics is the process of developing objective sets of data to measure how your fleet is doing relative to goals. However, selecting the right metrics to monitor and identify the underlying root causes of poor performance in your fleet may not be as easy as you think. You could measure anything and everything; but, if you are tracking metrics just to maintain data, you are measuring the wrong things. To be truly effective, the metrics you develop and track need to be part of the everyday management of the fleet.

First and foremost, a good metric is measurable. The most powerful metrics are those that directly measure desired business outcomes, such as cost reduction, performance improvement, user department policy compliance, or anything that has numbers associated with it or that can be quantified. When determining the metrics to use, ask yourself: Does your fleet operation run within the parameters of a well-defined budget? Are your systems and software providing you with useful information on a real-time basis? How granular is the monitoring of your customer service process? Do you employ fleet metrics to monitor vehicle utilization, downtime, scheduled PM compliance by user departments, technician overtime costs, or fuel efficiency by vehicle and user departments?

Whichever metric you choose to monitor, what really counts is actually using the data. With this data in hand, you can compare current fleet performance against historical data to set achievable performance goals. Analysis of fleet metrics will identify inefficiencies and allow you to focus on these specific areas. Whether your initiatives are successful in rectifying these inefficiencies will be borne out in subsequent metrics. It is important to realize that only by putting this data into practice can you develop performance metrics to optimize fleet resources. Fleet managers who use this approach will tell you it works and once you get it going, it becomes a part of your daily routine. But, don't get stuck in your ways. Discard metrics you are not using on a day-to-day basis. Focus attention on areas that make a difference in daily fleet operation. Good metrics evolve, and, by continually measuring the same metrics, you may be missing opportunities to improve.

It is also important to have an open-book policy and share data with management, internal customers, and taxpayers. From the perspective of management and user departments, this will validate the fact that you are achieving optimum fleet performance or highlight fleet inefficiencies, which management may not know.

"Failure to provide full disclosure on inefficient or wasteful fleet practices places the managerial and financial responsibilities squarely on the fleet manager's shoulders versus on agency directors who should be accountable for their business practices," said Clay Chandler, executive director, Fleet Management Office for the State of West Virginia.

Management by Objective

When you start measuring fleet performance, set realistic goals for improvement. When you achieve your goals, raise the bar and keep measuring. Maintaining an efficient fleet is not a goal, but a journey. You need to keep feeding the metrics back into your processes to continually improve your fleet's performance. Metrics can modify behavior. Push your metrics to your internal customers and management to show them how they can contribute to improving fleet efficiency and become more cost-effective.

When you know your "numbers," you substantially increase the likelihood of successfully presenting the fleet position to the user departments, policy makers, and politicians. In addition, these metrics will help educate user departments that are having a financially adverse impact on fleet operations, and bring these inefficient practices to the attention of management in a non-accusatory format.

Although the following statement can be viewed as a cliché, you are what you measure. But in every cliché there is a kernel of truth. As one fleet manager told me long ago: "If someone tells you that they run a well-managed fleet, ask them to show you the metrics." What are your metrics?

It's a new world and the status quo no longer works.

Let me know what you think.

mike.antich@bobit.com