Ed Bobit: Future Role of Fleet Management

Here are same key excerpts from my remarks at the recent NAFA Annual Conference in Houston.

For 29 years Automotive Fleet has been championing the strength, dignity, and vital role of fleet managers and their quest for truly professional fleet management. The fleet management field includes over 3,000 full-time fleet managers and more than 12.000 part-time managers who perform this function in addition to other assignments.

The real question may be, "Who can do what best; and be cost-effective? Moving the traditional fleet management function outside the company is really delegating the "responsibility" to a third party who is at a disadvantage in not being a part of a firm' s corporate culture, its strategic objectives, nor can provide the same degree of involvement as a hands-on fleet manager.

Leasing originally emerged as a source for funding vehicles and assets. Since that time, and balanced between need and opportunity, the country's leading lessors have now-developed a myriad of outside services. Today's question is not "lease vs. own," but rather who should be managing what and how? Who can do the best job when taking into consideration the operational, financial, organizational, and behavioral factors involved in managing the company fleet?

The use of leasing to fund vehicles has been perceived as "losing power" and "shifting control" of fleet costs and management. This is especially so if lessor "management contracts" are employed for the purchase and disposal (P&D) functions. Today, we need to perceive the lessor as a welcomed partner which is the role of any vital supplier. We in the publishing business never give a second thought to engaging printers and few publishers actually operate printing presses. It is the responsibility and opportunity of business management to evaluate any inside support function for value when comparing an outside source.

Fleet management involves key functions which begin with vehicle ordering and end when the last accounting entry is made. Some would argue that there is no such thing as "total fleet management" unless the lessor or service company actually "moves in" with the company and has a representative on site, i.e., a "Rent-A-Fleet-Manager" or "Fleet Temp." The key issue may be "attention to detail"; here is where money is saved, economies produced, and drivers made productive.

Many argue that lessors cannot possibly substitute that function which requires a fleet manager who has developed an intensive knowledge of how their company operates, what its priorities are, how one department interacts with another, and, most especially, how their decisions or recommendations impact their company's overall mission, in addition to understanding and implementing cost/benefit relationships between the company and driver through the establishment of strategic policies. Lastly, fleet managers also should be willing to challenge all suppliers to develop programs which are designed to meet the needs of their company's productivity requirements. Some current fleet managers may measure up to meet this job description. Those who do not are sure to be threatened by what may be called substitute administration or management from the outside.

We are too familiar with the displacement of the fleet manager function, as we know it, at Solo Cup, Canteen, Colgate, Honeywell, Kodak, Avon, and other companies. Interestingly, lessors did not cause all these moves; it came from company vigilance in most cases. As one of the aforementioned company execs stated. "We've got 8,000 cars and a 21-person fleet department; we just made it a two-person department." If the fleet managers "goes," then the function or responsibility should go "up" the company organization chart; but can senior management really keep a handle on it all?

The truly professional manager of a company-owned fleet is not so easily threatened. The leased fleet manager must innovate and find cost-savings and relate those successes to executive management. Maintaining intelligent control will force the fleet manager function up, not out. The fleet manager has the opportunity to play this vital role even with the stronger influence of fleet lessors.