The Evolution of the In-House Fleet Manager Role
Do fleet managers believe their successors will have different responsibilities than today? Will analytics and increased complexity attract a new breed of manager requiring new skillsets? Six fleet managers share their opinions.
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Company culture plays a large role in determining who manages the fleet. Is the company inclined to outsource non-core functions, or does it believe fleet is best managed in-house? The conventional wisdom is that fleet manager responsibilities will evolve into a more elevated position.
Since fleet management requires working with cross-functional groups, managing millions of dollars of corporate assets, collaborating in complex technology initiatives, and is a key influencer of employee productivity, it is crucial to have a strong in-house fleet manager to coordinate and manage these activities. Or, is it?
To get an insider's perspective, AF assembled six fleet managers and asked their opinions about the future of the fleet manager position. Participating in the group discussion was:
- Steve Anderson, CAFM, fleet manager for Sentry Insurance
- Sheri Bonsall, assistant vice president, manager, employee mobility management for Chubb
- John Dmochowsky, senior fleet manager for Mondelez International
- Anthony Foster, fleet manager corporate procurement for Pioneer Natural Resources USA, Inc.
- Erin Gilchrist, fleet manager for Safelite Group
- Abe Stephenson, fleet and administration manager for DISH In-Home Services
AF: Will the fleet manager of 10-15 years from now have different responsibilities than you do now? How do you foresee the fleet manager role evolving?
Foster: I believe there will always be a fleet manager, but, maybe, new fleet technology will require a different skill set, requiring people to get recruited from other departments to manage the fleet.
Stephenson: Currently, fleet management involves understanding the finance and the economics of fleet. Tomorrow, there will be more technology involving fleet vehicles, alternative fuels, fleet data, and analytics. In the future, you might have someone who comes into fleet with an information systems or IT background.
Dmochowsky: I foresee the position being filled with a person very much aware of other cross-functional groups within the corporate culture. The fleet manager position gives you an opportunity to touch all of the cross-functional groups internally, such as legal, HR, risk management, operational groups, and sales. Some future young employee, who is aware of the core competencies required for that position, will take a liking to fleet because of the exposure to cross-functional groups.
I also foresee growing importance for other core competencies that lean toward analytics and finance. There is a certain group of individuals who will gravitate toward that position.
Bonsall: The fleet manager position is going to involve much more analytics, requiring someone who can make decisions based on the data, but who is also an effective communicator. They must be able to effectively communicate to upper management within the company.
Anderson: I agree. In the future, making decisions based on data will be critical. As younger drivers enter fleet, finding ways to appeal to this group through the use of mobile apps and other technology is also important. When you look at the changes made in technology over the past 10 years, it's pretty incredible. I'm sure in 10 years we'll be laughing about technology we see as cutting edge today.
The fleet management role will probably evolve in every way already mentioned, but I think technology and the fleet manager's ability to use it to make informed decisions, and implementing new technologies to improve the driver experience and compliance is vital. Just being a "car guy" is not enough anymore.
AF: The VP of operations touches all individual user departments. Can fleet operations be an adjunct responsibility for a senior level manager?
Dmochowsky: Fleet management requires a certain level of subject-matter expertise that can't be found if you manage the fleet on a part-time basis. Let's look at the recent shortage of vehicles in the wholesale used-vehicle market. During this period, there was a window of opportunity to generate resale gains. Most managers, managing fleet on a part-time basis, were probably unaware of the used-vehicle shortage and would have missed this window of opportunity. We took advantage of this opportunities and the amount of gains by doing an accelerated replacement was tremendous.
Gilchrist: As a fleet grows, it becomes more critical to have a subject-matter expert on hand, handling the day-to-day activities. One responsibility is to reduce the fleet spend per mobile customer served. This is a metric where we've made significant progress. Fleet spends a lot of money, but we are also saving the company a lot of money. As our spend increases with the number of vehicles that we need, there needs to be a liaison between purchasing, operations, legal, and risk management. But, it also goes beyond this.
There are many organizations operating in a global marketplace. For example, Safelite's parent company Belron operates in 35 countries and I often find myself consulting with my partners in Canada. I have monthly calls with people from other countries and we discuss everything fleet, ranging from technology, to telematics, to working on global purchasing agreements.
Much has been written about the value of the fleet manager. But, how do you share your value, and what's your value to your organization?
AF: To play devil's advocate, if you say you have to show your value, doesn't that imply that people don't see your value? Who are you trying to show value to?
Bonsall: I believe that management does see a lot of value in the fleet manager. Fleet is a tool to operate our business at the lowest possible cost. I certainly see someone managing our fleet in 10-15 years. I've seen a lot of change in the industry evolving from more of a hands-on approach, managing lots of moving pieces, to very high-level management. Because the job combines data and analytics, it provides value to the organization. Whether that's generating revenue, cost avoidance, or hard-dollar savings, fleet is definitely valued because it is the tool we use to mobilize people who perform extremely important work at Chubb, while keeping safety at the top of the list.
Stephenson: The complexity of the fleet manager's job is continuing to skyrocket. Although fleet still isn't going to be a core competency of most companies, there will always be a need for somebody to manage these assets. Fleet will play a bigger role in the P&L, and you are going to need a subject-matter expert in the company. This will be a higher level expertise because of the job's growing complexity.
Fleet is an unusual job in that we've got customers internally, but we're also customers externally to our vendors. The job is becoming more enriching and more complex, and, as a result, companies are going to be even more aware of the need for the fleet position and the value it provides.
Anderson: I have a little different take on the future of fleet management. I think fleet will become more of a core function for an organization requiring a fleet certification designation or finance background.
The volatility fleet has been exposed to over the past five years in regard to fuel prices, resale markets, manufacturer restructuring, bonus depreciation, and fluctuating interest rates requires a fleet manager who can make insightful recommendations to minimize exposure, or seize on opportunities to capitalize on industry developments. I don't see fleet as a revenue-generating unit (RGU), but, if managed correctly, it clearly provides cost avoidance for the company.
Gilchrist: Fleet managers play a multifaceted role. If you look at customization within the interiors of Safelite trucks, and on the exterior, you will see that everything is branded. At many organizations, the fleet vehicle is the face of the company. When you are the face of the organization, you have to think about everything from marketing to ergonomics.
At one level, the fleet manager position is very strategic, while, at another level, the day-to-day activities are absolutely necessary for our company to conduct its business.
Most senior managers and suppliers don't know our business. I spend a lot of my time educating our suppliers on my business strategies and fleet initiatives. I need them to understand our culture. They need this knowledge to be creative and think outside-of-the-box to help us achieve goals that lower our cost of ownership. The fleet manager is the link, or liaison, who makes this possible.
Anderson: Fleet offers multiple added values at many different facets beyond just purchasing. You are managing fuel costs, minimizing maintenance expenses, and remarketing vehicles for the highest possible resale value. Fleet managers look at the total lifecycle cost of the asset.
AF: What impact will outsourcing of fleet administrative responsibilities have on the role of the future fleet manager?
Gilchrist: As our responsibilities grow, I see us outsourcing more; however, there will continue to be a critical need to have a fleet manager. We will have to do things differently and grow our department, and, as a result, I foresee our roles changing.
Bonsall: Outsourcing hasn't really impacted me from a procurement standpoint; but I see it in happening in many organizations. When you try to rightsize to the need, you're trying to reduce redundant processes. Managers who tend to resist change and don't embrace new methods and technology need to be open to and accepting of change. This isn't exclusive to fleet; I see that in all of the sectors I manage.
Foster: When you're talking about outsourcing, every company discovers it has multiple people doing similar things; however, there is only one fleet manager at most companies. Fleet management will also be needed because it requires a unique set of skills.
Bonsall: I agree. There is one "me" in our entire company. We have many people with similar duties in the core competency of the organization, but, I am the only person in the entire company with no peers.
Dmochowsky: If we were quiet and stayed in our little group environment, I could easily see another division coming up and sweeping fleet away as its responsibility.
AF: In the future, where will the new fleet managers come from within your organization?
Gilchrist: I think it's a business savvy outside-of-the-box thinker who replaces me. It will be a very cross-functional person, who is both a creative and strategic thinker. Not that I'm going anywhere, but I am always thinking about it, always evaluating who am I looking to hire to be that next fleet professional.
Foster: Fleet is a challenging profession because most of us have "fallen" into that role. Some people have described it as the "red-headed stepchild" — no one else wanted the position, so we took it. But, when you think about it, we have more influence on our mobile assets than somebody who is a CPA. We're not just reporting numbers, we're driving those numbers.
Anderson: I agree that having a finance background is a good start, but, ideally, they need to be a responsible and logical business person who works well with both internal and external customers and partners. As someone already pointed out, having the skill to effectively communicate with various departments within the organization is very important, as is the desire to provide superior customer service to our core customers — the drivers.
AF: We've discussed in detail the role of the fleet manager, but what do you see as the future of the fleet management profession?
Foster: To me, this is the best time to get into fleet management. Our department is looked upon as a revenue-generating unit. Fleet is a key component dealing with technology, telematics, sustainability, logistics, and safety. The role of fleet is going to expand into different facets.
The oil and gas industry is booming, so there is no way we can get rid of vehicles. Our employees have to go out to remote locations and do something physical. On top of that, the oil and gas industry is very fragmented. Many people don't realize that.
I used to work for Chesapeake Energy and, although it is a huge company, they only accounted for 10 percent of the natural gas in the entire U.S. There are literally thousands of other mom-and-pop oil and gas businesses, so there will be growth at these companies. The U.S. is on track to be energy independent by 2020, which means someone has got to build the pipelines to transport this fuel. In addition, there is a larger trend for more manufacturing that was previously outsourced off-shore to come back to the U.S. All of these trends, and others, will add to the complexity of fleet management and the fleet market will increase in size.
Stephenson: I'm wondering more and more these days about the future of legislative impacts on fleet management. I look at the CAFE standards with which the OEMs will have to comply, and I think about the impact on fleet buyers, the people and companies who really drive the end result of this next evolution of vehicles that will be put on road. Will companies with fleets be assessed taxes, penalties, or some type of charge related to their carbon footprint or consumption of fuel? How will different vehicle and fuel choices in the marketplace be incorporated and measured as part of this? This would certainly change the visibility of fleet management in all companies and the requirements of the job.