Global fleet management has been critical for over three decades as the number of multinational organizations has swelled since the 1990s. With that growth, the fleet manager role is steadily evolving to tackle the challenges of global fleets.
In a recent panel discussion webinar, “Global Fleet Policy: Perception vs Reality,” three experienced global fleet managers shared their perspectives with moderator Mike Antich, editor of Automotive Fleet.
Panel members include:
● Joe Lukacs, six-year industry veteran and global director, fleet operations, managing 10,0000-vehicle fleet for Sherwin-Williams, specialty retailer of paint and painting supplies.
● Mark Peabody, 23-year industry veteran and manager of a 12,000-unit fleet for 3M, a multinational corporation operating in the fields of industry, worker safety, U.S. health care and consumer goods.
● John Dmochowsky, president of JC Fleet Consulting, with more than 20 years fleet experience, and former manager of a 10,000-plus vehicle global fleet.
The following are the highlights of their discussion topics, including the global fleet manager’s function and issues of safety, policy harmonization, and standardization.
Antich: What is the global fleet manager role today? What is that role’s function and how is it evolving into the future?
Lukacs: The role of global fleet manager is all-encompassing: a liaison between sales, operations and finance; traffic cop; ambassador or executor of the policy; and salesman at all levels of the organization. It’s an ever-evolving role and easier said than done.
Peabody: I believe we—me and our global fleet team—add value to the corporation through global fleet governance.
Reading through company files from long ago, there have been attempts to establish that governance, and I would say, looking at what we’ve done the last few years, our accomplishments have come entirely because of the structure that’s in place to allows for that governance to happen.
Dmochowsky: I am totally in line with what Joe and Mark have said.
All those segments of the global landscape that Joe and Mark mentioned are important. What’s really evolving is that we’ll continue to do those types of things, but now we have the mobility entering our industry. It’s accelerating, even though we’ve had some setbacks with COVID. I see a transition from a global fleet director to a global mobility director because it really adds value to that department, and I’m all for it. I think this is good news for the fleet manager.
Antich: In the global fleet area, you hear a saying, “You need to think global but act local.” There’s a lot of truth in axiom, and it’s really stood the test of time.
With that as a foundation, what do you consider as best practices global fleet managers must implement to harmonize global fleet policies and reporting structure while at the same time being sensitive to local operating needs? What are the challenges to harmonization?
Peabody: The challenges to harmonization are really in the uniqueness in each region and at the country level. We’ve broken out for our structure in areas: the U.S. and Canada (USAC); Latin America; Europe, the Middle East and Africa (EMEA); and Asia Pacific (APAC). In those areas, we have regions, but they don’t make a difference for fleet. Policy issues go from the area level right to the country level. That’s how our fleet management companies (FMC) operate, that’s how we operate; that’s how the original equipment manufacturers (OEM) operate as well. Our challenge is how do we roll out policy and govern at that local level?
I’ll give you an example from last year. We created our first-ever global fleet policy. We took three months to put it together, gathering as many inputs as we could, knowing that we might have challenges when we roll it out.
We had some very hard-and-fast rules in the policy, and we had some very strong guidelines.
We rolled the policy out, and we gave all the countries six months to align. USAC was fine, Latin America was fine, APAC was fine, but EMEA was a no-go. Legal concerns arose: “Hey, we have contractual obligations. We can’t prevent the family’s kids from driving the vehicle.” But that is one of our policy “must-haves.” We’re working through that complication, and it’s going to take some time.
It’s one of the fun parts of this job. You go after one area, and you try to do something. You make a little improvement, but you learn a lot in the process. Then you go after it again. We’re going to get there, but it’ going to take a little longer than we had hoped.
Antich: Doesn’t that imply a need for flexibility in a global fleet policy; it can’t be rigid and must take into account these other areas?
Lukacs: From my experience, a best practice is to be mindful of the markets in the countries and how culture comes into play. And to understand operational fleet differences such as: open-end/close-end leasing, miles versus kilometers, currency conversions, etc.
The biggest challenges are always either the culture or the perception of a company vehicle’s use or value.
Here in the U.S., a company vehicle is a tool of the job. In other countries, many of these reps rely on this vehicle as a source of mobility for their families. How do you take that into account?
We at Sherwin-Williams put a global fleet policy into effect a few years ago. Similar to Mark’s experience, it’s still evolving. When you go country by country and actually focus on enforcement of the policy, you face more challenges. It always boils down to, again, either the culture or the perception of how the vehicle should be used.
Dmochowsky: I look at the global strategy and its challenges, and the term “flexibility” is essential. Flexibility will allow you to get what you’re really after.
Let’s take Asia Pacific, for example. We understand how large it is, its different cultures and languages. The key component echoes Mike’s adage: “Think global but act local.” When I say, “Act local,” for instance, I might want to put an Asian Pacific fleet with an OEM that I had a global contract with, but for some reason that OEM isn’t there.
I would like to add one more element to the discussion of policy harmonization: policy compliance—the need for safety training.
Still another relevant issue is cultivating a mindset of continuous improvement. It’s part of taking spend or going after the low-hanging fruit, but also involves driving out the complexity in a particular country, whether it’s a manual process or whatever.
Antich: You definitely need harmonization of fleet policies; they can’t be diametrically opposed. You muist try to bring them in as close in alignment as possible.
Another area that often makes global policy harmonization difficult is a diversity in vehicle assets worldwide. Certain assets are available in one market that may not be available in another. Standardization is something that we all try to strive for in terms of assets, but is standardization even feasible in a multiregional operating environment?
Lukacs: One first and foremost approach is to be open to working with all OEMs. Consolidating globally into one manufacturer or one FMC is just not possible in today’s landscape. You may go with a U.S. located fleet management company; often times they have partners around the world. But when you start talking about countries where fleet management companies don’t exist, then you have to look to rental companies for long-term rentals.
I’ll give you a perfect example of standardization.
When we moved into Latin America and South America, one of the first things we standardized—something we may take for granted in the U.S. —is an anti-lock braking system (ABS) and airbags. Putting these safety features into these vehicles, in both manual and automatic transmissions, was a huge culture shift in Latin America, but very positive. Once you have the positivity, it’s a lot more palatable to enforce the global fleet policy and get the buy-in.
Dmochowsky: What comes to mind when I look at the global footprint of the strategic partners, whether the FMC or OEM strategic partnerships, is that global footprint is growing by those industry players, whether through an alliance or acquisition. That growth adds opportunities for standardization with leasing and services. But the piece in those countries where we don’t have that partnership, it’s still important for me and the driver to get a vehicle that’s on the forefront of safety technology. If I have to go with a local player to get those safety features, there is no an issue whatsoever.
Antich: Safety technology is not uniform across the world. We have advanced safety systems in vehicles that We could establish as standard, but they don’t exist elsewhere in the world. Let’s say you have drivers in Malaysia, would they have the same safety features there? Maybe or maybe not. There’s no consistency. How do you deal with that? Do you make some drivers safer than others? Or do you go to the lowest common denominator?
Peabody: We’re probably a little behind where some others are because we have stated in our global policy, “You need to minimize the number of vehicles you offer in the country.” That’s in the policy because we have countries where the practice is, “You can choose anything within this budget range.”
In Europe, we have more than 2,000 different configurations of vehicles right now.
So, first step—and this how we operate, too, all of us, in steps—is the local country: “You need to pick the models and minimize how many you offer.” We did that in the U.S. last year, leading the way.
We are working on what this matrix will look like for us. I suspect we’re going to identify the safety features and right sustainability that must be part of the matrix. We’ll give guidance; and it won’t be, “You must have only this,” but it will be guidance that our teams will follow.
Antich: It strikes me that it can’t be by fiat: “This is what it’s going to be.” I sense from all of you this process must be incremental, evolutionary, involving everybody’s opinion and input.
Lukacs: When we first took over the fleet in Latin America, you’re right, there was a manufacturer there that had a vehicle with absolutely none of these qualifications.
Dealing with some of the hurdles, you start to see some of the things we take for granted, that simply don’t exist elsewhere. Take lane-keeping assist, for example. It’s readily available, even on the commercial side, in the U.S. However, it doesn’t exist in Latin America or Mexico. Much of that situation is determined by what locals say: “Our roads are so small; our people can’t get up to speed. The traffic volume dictates whether some safety features may or may not be needed.”
From Sherwin-William’s perspective, our goal is to have the driver come home the same way they left: in one piece. Like Mark, when we go into a country, we have levels or selectors. We’ve been through the pain and we understand what it takes. It’s not easy. Because sometimes you must have that buy-in with safety. Safety must be higher on the scale you use.
Antich: John brought up a good point. Important with policy harmonization is policy compliance. That’s a challenge for global fleet management since you have so many different management structures to contend with. how do you or have you tracked compliance with global fleet policy?
Dmochowsky: One factor in safety compliances in a global environment is a common definition of all the regions. The panel touched on that. They all want their drivers to come home safely to their families. That upholds a strong safety culture.
In dealing with compliance, you want to ensure, as organization or as a department of a multinational company, that you give drivers all the tools required for them to return home safely to their families.
Those tools involve across-the-board training. Such training in some countries might be driver assessment. Or you might have an assessment tool based on telematics data. The proof is in the details concerning bad behavior.
At the end of the day, what really needs to happen is communication and training that is tracked. And you have to go for 100% compliance. You will train after an incident, you will train on boarding, and provide basic training, but that piece is critical. We want to make sure we have done everything possibly to protect employees, including implementing safety technology.
I look at the panel members here, and they are part of multinational fleets. They and other global fleet managers have a voice, whether on an OEM or FMC advisory board. Please utilize your voice because you will help address some of these country differences. And maybe lane-keeping assist will be available in countries where years before it wasn’t.
Antich: Another factor sometimes encountered in asset standardization, is economic nationalism, where the population has particular preferences on makes and models. Someone in France might not want to drive an Italian vehicle.
How do you deal with that? As a global fleet manager, do you push the issue or do you leave it up to the individual regions to make those ultimate decisions?
Lukacs: I’m passionate about this topic also, especially when concerning Europe and even Latin America and South America. You must appreciate the culture, understand what the vehicle represents, recognize what the badge represents. You must be willing to work with the company culture or the culture of population and be cognizant of what they are trying to accomplish.
You put the selector together: lower-level Mercedes versus a higher-level Mercedes when Mercedes is a country standard. Or a BMW or Audi in Europe, where they are standard vehicles. These vehicles don’t have the same “panache”—I’m taking a word here from my grandparents—as it does here in the United States. That’s the standard in Europe, and, again, you have to be cognizant of the culture and the country you’re operating in to identify the selector.
Sharing Key Lessons
Antich: Sensitivity, flexibility and recognition of differences, preferences and biases are definitely a reality in the global fleet manager’s skill set.
Lukacs: And you must realize that when you address the global piece here in the United States, where we are based. You also have to sell that reality to the leadership team, to the executives, explaining how these cultural perceptions are commonplace in Europe; they don’t have the same meaning as in the United States. Everything should be easier than it is. Perception versus reality.
Antich: Looking back over your careers as global fleet managers, what key lessons have you learned that helped make you a better global fleet manager?
Dmochowsky: I learned from the folks and diversity with which I had the privilege and opportunity to work. I grew professionally. I grew with a better understanding of the market.
I also grew on a personal side regarding cultures. We have so much in common than differences with all the cultures I worked with. I grew as a person, and I became better because of it.
The future of our fleet ecosystem appears increasing more and more as if multinational companies are moving to a global platform or a global strategy. The benefits you can get from doing that, not only from a total cost of ownership, but also a personal level, are tremendous.
Peabody: Our fleet organizational structure was put in place by a predecessor of mine. To have that governance structure in place was a gift. I just got to take the baton and run with it.
The learnings along the way that have made me a better fleet manager, have come entirely through benchmarking with other companies.
In the last month, I’ve done few cold calls, talking to other fleet managers at other companies. I realized those calls are some of the most energizing conversations. We discuss what are they doing, bounce off ideas, share mutual concerns.
It’s the beauty of global fleet management. We’re not competitors with each other. We’re all here to make our fleets better and, especially when talking about sustainability, we’re doing the right thing for the world, and we want to do it in a good way.
So, networking and in-face industry conferences are absolutely the best way to make those fleet connections, hands down.
Lukacs: You need to maintain positive relationships throughout all organizations, whether OEMs, NAFA, AFLA, or global.
You must also build a good team and trust that team. Be open-minded to other culture and new technologies. And as Mark said, the networking piece is critical because you’re really trying to understand and make the global perception better.
And be able to pivot. You must be able to pivot, because one day, you’ll be doing one thing, and something else will hit you in the face. And you’ve got to pivot very quickly, whether that’s in one country or another, to be able to make those rapid unexpected, unplanned changes.
Antich: It gets back to flexibility and another word for flexibility is pivoting. These are the realities for today’s global fleet managers.