Small Fleet Sees Advantage in Full-Time Administrator

Full-time fleet administrators in fleets of less than 250 vehicles seem to be the exception rather than the rule in the industry. A recent NAFA survey showed that in fleets with between 25 and 100 units, of the 39 company-owned fleets responding, only 13 (one third) have full-time administrators.

Many larger companies have recognized the cost advantages in a conscious fleet management effort. In most case, these fleet programs, especially for those fleets owned by the company, require a fill-time administrator. As the cost advantages become apparent, the idea of employing a full-time administrator begins to filter down to the smaller fleets. In addition to the giants of the fleet industry, there are many small fleets that can benefit from fleet expertise. In fact, the survey mentioned earlier had the greatest number of responses from the 101 to 250 unit range.

One such fleet is operated by Home Federal Savings and Loan, headquartered in San Diego, California. With 65 branches statewide, the company has seen its fleet grow from just under one hundred vehicles to 165 in about a year. Although 165 units may not seem like a large fleet when compared to a fleet of 1,000 or more, it should be noted that fleet size and cost are proportional to the size of the business served by the vehicles. Cost savings under careful administration of a small fleet may not be as substantial as the savings realized in a large fleet, but they are substantial in relation to the business itself. In addition, the same principles used by the large fleet to save a dollar may be used by a small fleet to save a dime. Whether a fleet expands from 50 to 100 units or from 500 to 1,000, costs double.

Home Federal Savings, until three years ago, leased vehicles to meet fleet requirements. The company began to purchase rather than lease and moved fleet operations out of the mail department, setting them up as a separate department with a full-time fleet administrator.

According to Virgil Robinson, the present auto services manager, final decisions are left up to a management committee comprised of the company's top executives. "I make the recommendations," Robinson said, "but the committee has the final say" on such topics as model acquisition and company car policy.

Since assuming his duties a year and a half ago, Robinson has been putting together company car policies and compiling vehicle operating expense data.

"The biggest challenge is determining the company's car policy and communicating that information to the drivers," Robinson said. "Once that is accomplished, everyone can move forward in the same direction." Part of that communication to the drivers is a company car manual, now issued with each unit. Robinson recently won approval for the manual, which he compiled after learning through experience the need for written policy. Before the book was compiled, drivers would call fleet operations whenever a minor problem arose. "Without a manual, the drivers didn't know what to do, so they called us." Robinson found more and more of his time being taken up dealing with these calls rather than concentrating on overall management of the fleet.

Since implementation of the manual, Robinson now has more time to work on an overall policy for cycling the fleet and timing acquisition and disposal cycles. Presently, "Home Federal doesn't have any particular new-car buying time," Robinson said.

At the present time, there are four types of fleet cars at Home Federal. Economy models, such as Novas, Datsuns and Honda Civics are assigned to appraisers, construction site inspectors and the general automotive pool. The Novas are equipped with six-cylinder engines, AM radio, automatic transmissions, power steering and power brakes. The Datsun B210s and Hondas have four-cylinder engines and four-speed manual transmissions.

The next type of car is assigned to vice presidents. These models are Chevrolet Impalas, Caprices and, if the driver pays the difference, Monte Carlos. Senior vice presidents are eligible for a Mercury Marquis or Buick Electra, and the final category are the top executives who drive Lincolns or Cadillacs.

"We had 17 vice presidents named this past June," Robinson said, and that presents a problem. These new vice presidents are eligible for a more prestigious fleet car even though the unit may not be ready for disposal. Cars used by the vice presidents and those in higher positions are retired from service after three years or 50,000 miles, while pool vehicles are kept for three and a half years of 63,000 miles. When a situation such as the 17 new vice presidents arises, Robinson rotates the cars back into the general pool, where they remain until they can be reassigned or retired from service. But this results in his pool becoming larger than it needs to be. Robinson feels there must be a better way and, as a result, is collecting information to formulate a new cycling policy.

Once a vehicle is ready for disposal, the driver has an option to buy the vehicle. If he chooses not to purchase the car, it is offered for sale to other employees. With 65 branches, Robinson said he's had no problem in finding buyers for the fleet cars.

Another area in which Robinson has been working is the compilation of vehicle operating expenses. As is the case with many other small companies that maintain a company-owned fleet, Robinson finds that cost-per-mile figures, which are so important to larger fleet operations, are sometimes lost in the shuffle. Robinson's predecessor did not keep accurate records, so Robinson is now collecting data and has begun to see a true picture of the company's fleet operating costs. However, a total picture will not materialize until an entire three-year cycle has been completed under Robinson's cost accounting system. Presently he has been able to come up with operating cost figures for at least one year. Having a fleet the size of Home Federal's allow Robinson to record all data by hand.

Much of the data used to compute operating expenses is obtained from credit card bills. Each driver is assigned six major oil credit cards. As the bills come in, fuel, oil and other expenses are recorded. Once a month, the driver is required to file a condition report which includes the vehicle's odometer reading. The odometer reading, combined with the gas bills, allows Robinson to compute the car's fuel economy.

The condition report is required during the first week of each month. "I only list six items, as well as the condition of the car's body. The trick to a good response is to keep the list simple, otherwise I lose them," he said.

In addition to the major oil company credit cards, drivers are issued credit cards for Sears and Montgomery Ward auto service centers. Home Federal also participates in Firestone's national account program.

When repair or maintenance work is to be done on cars assigned to branches outside the San Diego area, a work order from is sent out from fleet operations detailing the type of work to be done. The driver takes the order form and his car to the nearest Sears or Montgomery Ward auto service center. The order form acts both as authorization and purchase order for the work to be done.

Locally, cars are either picked up by auto service center employees or dropped off at Home Federal's parking deck and a replacement car is assigned from the pool to the driver.

Robinson feels that he has better control of maintenance operations through the work order form and the fact that 65-percent of the cars are located in the San Diego area. "We are able to scrutinize these local cars as they come through our office on their way to be repaired or serviced," Robinson said.

The size of the fleet also allows Robinson to plot all cars on a large wall display. Each car is listed by the driver's name and the tag is color-coded to represent make and model. As the monthly reports come in, the cars are move along the board at 1,000 mile increments. Preventative maintenance, such as oil changes, is pegged at various intervals. The color of peg determines the type of maintenance required at that interval. Once the car bumps one of these pegs, the fleet department automatically sends a work order out to the driver to have the vehicle serviced.

Although have a small fleet may have its advantages from the standpoint of familiarity with every unit and its driver, trying to find a fleet deal for a small volume is difficult.

"Right now, I'm buying my vehicles at $50 over factory invoice,. I've shopped around and several dealers have told me their price was $50 over rock-bottom factory invoice, but each has given me a different price on the same model. It makes you wonder," he said.

Despite their size, smaller fleets require the same professionalism and expertise as the giants. As automotive costs continue to climb, a full-time fleet administrator will become more important to the smaller fleets.