Implementing an Asset Simplification Strategy

Photo: Getty Images/ welcomia

If you want to get immediate pushback from field operations, telegraph the suggestion that you are considering standardization of equipment and assets that are used in the field. In the context of fleet management, standardization refers to the process of setting common standards and specs for fleet assets. However, a better strategy would be to approach the opportunity as a simplification initiative aimed at minimizing unnecessary diversity of products.

“When talking about standardization, fleet managers are using the wrong term. I truly believe the correct term is simplification,” said Jonathan Kamanns, fleet program manager for CTE. “When you simplify an asset, it is more than semantics. It is identifying those functions that the assets have to perform and seeing how you can find commonality among the equipment and assets you are spec’ing. When you instead talk about simplification and its value to the business, you don’t get the same pushback from operators, it changes the discussion.” 

A specification simplification strategy identifies the most common vehicle specs that can meet the requirements of the widest range of fleet applications required by the company. The idea is to identify core specifications for specific fleet applications, while still allowing for minor variations based on the specific needs of each business unit, location, geographic terrain, and customer needs. 

Simplifying a fleet by narrowing the number of chassis, bodies, equipment, and major components will reduce fleet diversity and eliminate or minimize many of the problems created by a diverse asset base. Sometimes it is best to launch these initiatives in stages. Consider simplification of one segment of the fleet at a time. Simplification should be determined by demonstrable lifecycle cost saving. 

Most complex fleets are comprised of diverse asset types based on the specialized functions they must perform. Also, many of these assets have long service lives and can become obsolescent with changing customer needs, evolving business strategies, and even ongoing OEM technological and safety evolutions. Even when standardization is based on same make and model of vehicle, over the years, you will end up with numerous variations as newer models are acquired. It is expensive to run a diverse fleet and simplification can produce significant cost savings and productivity improvements. 

Conversely, if not done properly, standardization can increase costs. There is also a risk of simplifying your fleet around a “lemon.” Plus, there is a risk to “putting all your eggs in one basket,” which could result in excessive downtime if there is a model-wide service issue that results in a lengthy factory recall.

Reframe the Discussion

Depending on how you frame a simplification initiative will determine whether or not it will be a successful program. Simplification increases operational efficiency as end-users become accustomed to the controls, displays, and operation of less diverse units.

Eliminating asset variability allows greater flexibility in making employee assignments without a loss of productivity or the increased safety risk of end-users switching between dissimilar units. The most critical aspect is to achieve “buy-in” at the local level by the end-user operators. If you begin a standardization or simplification initiative at the management level, the initiative invariably results in end-user pushback. You need to pay attention and consider the downstream effect on end-users. 

This is especially true when you manage a decentralized fleet, where each field location orders vehicles on its own terms, using its own specs, and from its preferred providers. A decentralized fleet structure is probably one of the biggest “minefields” that can derail spec simplification. Your discussions need to first start with the end-users who are operating the vehicles and equipment. It is critical to get feedback and buy-in from the actual end-users.

“Take the time to better understand the challenges of internal stakeholders,” said Kamanns. “Specifically seek out those stakeholders who aren’t easily convinced and often take the approach that their needs aren’t like everyone else’s needs. Use this feedback to design spec simplification that solves those challenges.”

Spec Simplification Advantages

One end-result to simplifying specifications will be simplified factory ordering. When there are diverse specs, it creates the opportunity for mistakes to occur during the asset acquisition process. In addition, there is increased buying power if a fleet can bring more orders to one vehicle manufacturer and upfitter. It increases the company’s leverage to negotiate greater incentives.  

In addition, by focusing on core specifications, it will provide the flexibility to shift assets across the organization. Developing common specs expands a fleet’s opportunities to move resources around the business as needs might dictate and provides more flexibility in terms of asset redeployment.

If you operate an in-house maintenance facility, then there are additional benefits of asset simplification. An ongoing problem for fleets operating in-house maintenance operations is finding qualified technicians. Spec simplification will help expand your talent pool because there will be less need for technician specializations. By focusing on core specifications, it will create maintenance efficiencies. 

The complexity of vehicle systems is increasing with the proliferation of electronic sensors and controls, emissions technology, and advanced driver-assistance safety (ADAS) components. This steep learning curve for new technicians can be reduced by narrowing the diversity of systems that need to be maintained.

The key to reducing asset variability is to involve user groups early on and to gain their buy-in by framing the asset simplification discussion as ways to enhance user productivity and safety, and creating cost efficiencies that contribute to P&L objectives. 

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Upfit Simplification: Avoid Building a Mobile “Swiss Army Knife”

The cornerstone of spec’ing a productive upfit is to fully understand the application. Fleet managers need to develop an in-depth knowledge of the requirements of field personnel to properly spec vehicles to fulfill the intended fleet application. This requires including the end-users who will actually be using the equipment in the upfit planning process. It’s not just the fleet manager who has to fully understand the vehicle application, but also management must have the same expectations of the final product. Upfitting is complicated and there are many opportunities to make mistakes, sometimes very expensive ones. 

During the planning process, fleet managers need to analyze whether they are “building” a truck to accomplish one task or several. A good rule of thumb is to find a balance that will keep the upfit process as simple as possible, while spec’ing the capability to fulfill the intended fleet application.

Ask a lot of questions to determine vehicle or upfit deficiencies. Is the powertrain right for the application? Is the gross vehicle weight adequate for the payload carried? Is gross combination weight rating high enough if the vehicle will tow a trailer? What are common maintenance problems? Is there sufficient tool storage? Are drivers having trouble with ingress and egress? Are there problems with loading height? Is there limited visibility when backing? 

Vehicle and upfit specifications should be defined by the fleet application and mission requirements. It is important to design a truck that will accommodate operational requirements rather than trying to make your operation conform to the truck. A common mistake when upfitting a truck is that key information is not included in the specs, such as turning radius requirements. It’s crucial to be familiar with the location where a truck will be used.

Minimize the complexity of the upfit. Strive to standardize your upfit packages as much as possible. Avoid the temptation to build a “mobile Swiss Army knife” by over-engineering or over-upfitting a chassis and auxiliary equipment. Invariably, over-engineering will result in upfit complexity and premature wear-and-tear because often the vehicle is overworked. 

Proper planning will substantially increase the likelihood that a vehicle will be properly engineered to successfully perform the intended operation. However, you should not only plan for today’s needs, but also take into consideration tomorrow’s needs. When you spec truck assets today, many of these vehicles will be in service for 10 to 15 years or longer. While an asset is adequate for today’s business, will this still be true 10 to 15 years from now?

About the author
Mike Antich

Mike Antich

Former Editor and Associate Publisher

Mike Antich covered fleet management and remarketing for more than 20 years and was inducted into the Fleet Hall of Fame in 2010 and the Global Fleet of Hal in 2022. He also won the Industry Icon Award, presented jointly by the IARA and NAAA industry associations.

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