10 Essential Rules for a Global Fleet Policy
An integrated global fleet policy is a guiding principle founded on a corporation’s strategic objectives and mission statement. The policy adapts, aligns, harmonizes, or standardizes all aspects of the fleet operation to support these strategic goals.
A unified fleet can provide a competitive advantage by making employees and assets more productive, in turn, allowing a company to serve its customers better. And a unified global fleet policy serves as a tool to control disparate operational fleets that lacked sufficient high-level leadership or direction.
Multinational companies increasingly view establishing a global fleet policy as the fastest way to get where they want to go. The following 10 rules offer a basic guideline to start the process.
Benchmarking, a critical success factor, begins with your company’s strategic objectives.
Involve all relevant departments. Human Resources, Purchasing, Sales, and Finance all have input and expectations to consider and results to benchmark. The fleet policy bridges the gap between each area’s expectations.
The same consideration holds true with national fleet operations. National uniqueness, traditions, and expectations must be taken into account. The complexities of different methods of acquisition, taxation, and other regulations cannot be ignored.
Build a unified policy, not an imposed single solution. “Unified” connotes consideration of differences that can lead to multiple solutions. But, a singularity of purpose remains; namely, what’s best for your company.
While much of benchmarking is qualitative, a thorough global quantitative benchmarking effort ensures an accurate baseline of your company’s existing costs, vehicles, contract terms, and services in each country. Examine the most attractive financing methods and total cost of ownership in each national operation. With this information, define clear and deliverable objectives. Measuring the entire multinational organization and establishing benchmarks provides a realistic perspective for developing a global fleet policy.
Your plan is essentially a blueprint formalized in writing with a clear mandate of support from senior management. Create well-defined objectives and supportive strategies adaptable to different countries, universally measurable, and wholeheartedly endorsed by everyone involved.
Goals should include creating economies of scale, standardizing processes, identifying optimal methods for each fleet function throughout the process chain, identifying issues, taking advantage of synergies, and establishing effective service-level agreements.
The goal is delivering the lowest cost without sacrificing performance and user satisfaction.
With benchmark data, strategies, and objectives in hand, negotiate internationally. Leverage total fleet volume with all suppliers and manufacturers to obtain bigger rebates.
Manufacturer selection must accommodate the uniqueness, professional demands, and cultural values of each country. Proceed cautiously when supplanting an in-country manufacturer with a “foreign” brand. Substantiate the decision and monitor price differences and variations in standard equipment from country-to-country.
In determining the best financial approach, consider vehicle location and application, in-country best practices, individual nations’ business maturity, and tax issues.
A global fleet policy covers contract components, including international and local issues, funding, acquisition, insurance, fuel and maintenance, details of negotiated discounts, global rebates and domestic incentives, itemized pricing (including discounts), and make-and-model availability.
Include a job/position-based vehicle selector list or establish a budget/benchmark per country.
Detail fleet management provider services — are they standalone, bundled, or a combination? Define customary services and determine current trends.
Retain control even if the entire program is outsourced. When multi-sourcing, collect all fleet information for centralized reporting.
Emphasize ongoing market analysis to optimize resales. Detail customary lease terms, minimum terms and number of vehicles per contract, individual/consumer leases, and similar information.
Indicate in the policy if outright purchasing is preferred when available. Also, outline the advantages and disadvantages of long-term rentals.
Address the impact of current developments in regional and country-specific regulations and issues, such as trade agreements, tax law, emissions standards, etc.
In fact, the best global programs are those flexible enough to take into account trends, developments, synergies, and differences on various levels. They are customized regionally and locally to meet the needs of end users, leverage the capabilities of suppliers, and accommodate legal, financial, and cultural differences, etc., without violating the core program.
These should be simple, easy-to-follow guides that address key points of the corporate policy statement.
The guide should lay out the rules and regulations, policies, and practices for: brand and model availability and selection, optional equipment, car usage, allowances, maintenance and repair, fuel cards, mobile phones, accidents, fines, foreign use of the company car, insurance, private use taxation, end of eligibility, withdrawal, contract termination, and lease/rental termination, and any other policy.
Use guides and handbooks to sell the program’s value to the company and drivers. Emphasize fleet policy’s relation to corporate goals to encourage employee adherence.
Establish a multi-disciplinary central steering committee to help the global manager and key players remain focused on developing and sustaining a global policy that works locally throughout the company and around the world.
Committee members should represent relevant departments and the fleet management process chain, including suppliers, corporate staff, and national/regional fleet managers, outside consultants, and end users. Clearly define and communicate committee members’ roles and responsibilities, performance expectations, and working relationships.
Implementation procedures should be agreed upon at the local level, simplified and “harmonized” to align with the global policy.
Central to successful implementation, supplier agreement documents must be reviewed, written or rewritten, and enforced with a focus on improving your company’s total cost of fleet ownership.
Spell out specific implementation strategies in a timeline — from rollout onwards. With a phased-in approach, progress can be monitored and unexpected issues can be corrected. The implementation plan is a living document, capable of adapting to change.
To achieve ready policy acceptance and adherence, your communication process must be continuous, and communication channels should two-way.
Define the target audiences — key management, implementers such as national fleet managers, suppliers, and drivers.
Specify the communications tools you plan to employ — internal announcements, update procedures, promotion of program value, implementation milestones, and other successes. Consider non-traditional approaches to ensure comprehension, including Web sites for drivers and administrators, electronic push announcements, Web conferences,online surveying, and special events.
Create a communications strategy timeline — from rollout onward. The first major communication is informing fleet contacts and country fleet managers of the policy and what they must do for a successful local implementation.
Distribute a comprehensive implementation guide that outlines the process step by step.
Once the program is launched, communication should be ongoing, not only to discuss fleet business, but also to share implementation updates, innovative ideas, and local program successes.
Actively pursue feedback systems that permit you to keep your finger on the pulse of the program.
A dedicated internal fleet manager, a support staff of professional corporate and country managers, and proven suppliers are mainstay components of a successful international program.
In recent years, the supplier’s role has grown into a partner relationship. Managing a fleet today is about much more than simply buying a commodity.
A fleet management partner is expected to add strategic value to your operations. Global fleet suppliers must have “best-in-class” capabilities in each local market. In choosing a fleet management partner, look for proven capabilities in singlesource vehicle management solutions, consultative services, ongoing performance analyses and reporting, process chain evaluation, market change analyses and proactive continuous cost improvement recommendations and, finally, the ability to prove the value the would-be partner brings to the relationship.
In a global fleet partnership, these capabilities are tailored to client needs at the global and local levels. It’s definitely NOT a one-size-fits-all approach.
A single-source fleet management firm provides the entire range of services across international time zones and language barriers, handles the logistics of large numbers of people and organizations, and accommodates requirements in many different countries.
In today’s non-stop global business environment, technology is more important than ever as a policy enabler. Companies collect, generate, and organize more information than ever.
In managing a vehicle fleet, this information has no value unless it gets to the right people at the right time in the right form. When it does, it plays a vital strategic role by laying the foundation for intelligent decision-making and timely response to market conditions.
Your fleet partner can provide the IT tools necessary to collect, assemble, and analyze information relevant to your particular fleet and business — from vehicle selector and inventory analyses to maintenance costs and fuel usage trends.
Used this way, technology serves as a valuable tool to better understand costs, create efficiency gains, and improve the overall performance of a global policy.
Once implemented, a global fleet policy can be improved, refined, and enhanced by utilizing innovative industry best practices and continuous improvement solutions. However, the written policy statement — and the people who implement it — must be flexible enough to accommodate these upgrades.
Adopt those best practices — economic, safety, or environmental — that relate to and measurably impact your company’s strategic goals.
Outsourced partners can be resources, too. They can help identify and develop best business models, re-engineering strategies, and other practices for streamlining your day-to-day business and internal policies, procedures, and processes.
The starting point for a unified global policy is established baselines. To come full circle, the 10th and final step is to return to the baseline and measure performance against benchmark criteria. This evaluation serves as a barometer to compare and measure performance against goals over time.
At the highest strategic level, success is stated, measured, and quantified in terms of improvement that results directly from your global policy, and improvement that directly impacts your total cost of fleet ownership.
Benchmarking includes such factors as savings achieved, user satisfaction delivered, productivity improved, safety and compliance upgraded, data management streamlined, and similar standards.
The process should be repeated at regular intervals until a fully established, working global policy is in place. Continuing the exercise helps sustain your program’s success.
EDITOR’S NOTE: The 2017 Global Fleet Conference will feature in-depth discussions through case studies and networking opportunities about the harmonizing global fleet policy between different regions. Visit www.globalfleetconference.com