Understanding Fleet Best Practices
Peel an onion. Do you start with cutting it in half or with removing the outer layer? Just as there are many ways to peel an onion, there are variations in how organizations acquire, operate, and remarket their fleet vehicles. To ensure competitiveness, most organizations are interested in exploring the most effective and efficient ways of operating. One way to achieve this is through the identification of best practices — techniques or methodologies that, through experience and research, have proven to reliably lead to a desired, optimal result.
Establishing what is a best fleet practice can be a challenge for organizations. Many turn to the NAFA Fleet Management Association whose Certified Automotive Fleet Manager (CAFM) and Certified Automotive Fleet Specialist (CAFS) programs are the industry standards.
These certification programs provide procedures, processes, and best practices to follow in a vast array of fleet subject areas.
In certain subjects, NAFA’s professional designations offer specific benchmarks that fleets can use to gauge their performance relative to other fleets.
In addition, the opportunity to network with other fleet managers provides a venue to share information and identify potential best practices. Exchanging information and experiences is an integral aspect of the NAFA community, evident by the Association’s online membership networking database and e-communities available at www.nafa.org.
Defining Fleet Best Practices
What are these best practices or the most important things in determining efficient and effective fleet operations?
The top 10 things that come to mind are:
➊ There is a formal approval process for vehicle acquisition and a selector list to guide purchases. Measures are taken to ensure the fleet is rightsized.
➋ The organization defines vehicle lifecycles by vehicle class.
➌ The organization values safety and has a low crash frequency rate (CFR).
➍ The organization has a reasonable interpretation of “preventable crashes” and tracks this information.
➎ The organization calculates its technician and facility requirements by
using vehicle equivalency units (VEUs).
➏ There is a fleet information management System (FIMS) in place tracking key performance indicators (KPIs).
➐ The organization tracks costs and allocates those costs to the appropriate customers.
➑ The organization has a policy framework that includes thorough policy
guidance and drivers’ agreements.
➒ The organization selects and exploits appropriate remarketing strategies.
➓ The organization uses lifecycle cost analysis (LCA) methodology to
calculate the right time to remarket the asset.
Integrating these and other best practices into a fleet operation is a daunting challenge. Organizations need to take the generic statements and customize them for their specific needs, often by creating measurable standards or benchmarks.
For example, one best practice is to have a management emphasis on safety with a low CFR. According to NETS 2011 industry benchmark for crash frequency, the CFR standard is 7.38 crashes per million miles (CPMM). In response, an organization may want to pursue a more aggressive standard and seek to keep its crash rate under 5 CPMM — the NETS’ standard gives an industry-accepted starting point.
In terms of the best practice of defining lifecycles by vehicle class, the industry benchmarks provided by NAFA are three to four years for sedans, five to seven years for light-duty trucks, and seven to 10 years for heavy-duty trucks. Again, these generic standards need to be customized for the industry sector and operating environment of the particular organization.
Creating a Framework
For organizations that want to improve their fleet operations but simply don’t know how, best practices can be a great starting point. The following steps can guide those organizations to create a best practice framework:
- Select the areas you want to measure and improve. This might be all 10 of the best practices previously identified or you might want to concentrate on a specific concern like fleet safety.
- Research industry standards or benchmarks in this subject area. Use NAFA Reference Guides (www.nafa.org/store) and networking links as well as their partners to identify what the current standards are.
- Customize the benchmark for the fleet’s own circumstances. Consider the
- industry segment and any factors that would influence the ability to meet or exceed industry standards.
- Measure the fleet’s performance and make improvements as needed.
Keep in mind, a best practice will not be useful until a measurable benchmark is created, customized for the fleet’s specific needs, and measured against its own performance.
P.S.: Most chefs would tell you that peeling an onion should start with cutting the stem end almost through, but leaving a piece of skin to commence the peeling.
About the Author
Lt. Col. (ret.) Katherine Vigneau, CAFM, spent almost 27 years in the Canadian Army, working in transportation and logistics. She retired in 2010 to start KMVS Fleet+ Consulting, specializing in fleet management education and training. Vigneau is a former NAFA trustee and currently serves as NAFA’s professional development strategist.