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Encroachment Blurs Traditional Fleet Responsibilities at Multinational Fleets

January 19, 2016, by Mike Antich - Also by this author

At one time, the scope of fleet management’s responsibilities was crystal clear, especially if your fleet was domiciled in Europe, Australia, or North America. However, over time these departmental demarcation lines have slowly shifted, and the operational boundaries separating them have become fuzzy.

In addition to regional fleet demands, nowadays, at multinational companies, there are too many other departments involved in fleet asset management, often with contradictory goals.

Sourcing wants to lower costs. HR, sales, and employees themselves, want nicer, more expensive vehicles, rationalizing that such vehicle selections will increase employee morale and productivity, while arguing higher residuals will lower total cost of ownership. Depending on the fleet region, service operations want bigger service vehicles with ever-more auxiliary equipment, without which they allegedly are unable to adequately fulfill their fleet mission. Corporate sustainability initiatives, and local taxation regimes, require increased fuel economy to lower CO2 emissions. Along with these demands, senior management, at the same time, demands lower fixed and operating costs.

Contradictory Demands with Conflicting Goals

You just can’t accomplish all these divergent corporate goals. In fact, some goals are contradictory, in conflict with other goals. Such is the life of today’s fleet professional, regardless of what region of the world you call home.

As fleet professionals at multinational corporations have assumed additional responsibilities, many have been reassigned, reporting to other departments, and/or have had their staffs reduced. This evolution of the fleet professional’s role has given rise to other corporate entities encroaching into areas traditionally the domain of traditional fleet management.

Nowadays, fleet management is, in reality, a collaboration with sourcing; legal; HR; finance; sales; service; and environmental, health & safety (EHS), often requiring approvals or buy-in from each of these individual departmental operations. As a result, what were, in the past, straightforward fleet decisions, now require inordinate interdepartmental discussions over a dizzying array of time zones. Today, it seems fleet decisions can no longer be completed in a timely manner. Compounding this inertia is that fleet professionals are often tugged in opposite directions and sometimes given contradictory demands from different departments, not to mention, from regional operations to satisfy their vehicle preferences and service demands.

Crosscurrent of HR, Sourcing & Sustainability

Globally, over the past several decades, three powerful corporate crosscurrents – sourcing, HR, and sustainability – have intersected at the fleet operations of multinational corporations. For example, corporate procurement departments have increasingly become very influential in vendor selection, contract negotiations, service level agreements, and ongoing supplier management; more so in certain regions, but this is a global trend. As more fleet managers now report to procurement or sourcing, they often interact with decision-makers who have little or no fleet background, with their sole focus being cost reduction. In addition, this lack of subject-level expertise has unfortunately resulted in many fleet managers reporting to supervisors who have minimal interest in fleet management.

Another department with a growing influence on sustainability and fleet safety is the EHS department. EHS is responsible for employee safety issues elsewhere in the company, such as the factory floor and workstation ergonomics; why not fleet vehicles?

Many interdepartmental conflicts that intersect at fleet are typically driven by the challenge of balancing HR/driver requirements versus finance/procurement requirements, which are often at odds with one another, with the gains in one area negatively impacting the other. And, the hard reality is not all department managers are team players and, as a result, there are the inevitable interdepartmental (and personal) conflicts.

Cultivating Regional Relationships

Since fleet managers’ primary objective is to manage the fleet in a way that supports the objectives of regional or country operations and their user groups, it requires a management mindset to view all work from the internal customers’ cultural perspective.

At many multinational corporations, fleet operations plays a pivotal role since it is the intersection of many major corporate functions, such as HR, sales, procurement, risk management, legal, sustainability, finance, and administrative services.

The reality is that interdepartmental friction at multinational corporations is an unfortunate fact of corporate life, especially those involving “territorial” issues, which are typically not open to compromise.

Despite this inherent friction, a global or regional fleet manager must establish and retain a relationship with individual country fleet operations to ascertain their interests, keep them informed, and get their buy-in when establishing global or regional fleet policies.

This is easier said than done, but it can be accomplished.

Let me know what you think.

[email protected]

Comments

  1. 1. Tim King [ January 25, 2016 @ 07:40PM ]

    Excellent article. Definitely increasing challenges to fleets and their parent organization. This trend illustrates added importance in effectively partnering with customers, and pricing the fleet services effectively. Only accurate pricing and holding stakeholders accountable will allow effective management of total fleet costs.

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Author Bio

Mike Antich

Editor and Associate Publisher

Mike has covered fleet management and remarketing for more than 20 years and entered the Fleet Hall of Fame in 2010.

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