Tackling Global Fleet Management Issues

Global fleet management can challenge even the most experienced manager. Flexibility and rapid adaptability (pivoting) are key skills according to a recent panel of three experienced global fleet managers. Presented here are highlights of their discourse. 

Panel members included:

● Joe Lukas, global director, fleet operations, Sherwin-Williams
● Mark Peabody, manager, global fleet, 3M 
● John Dmochowsky, former global fleet manager, founder of JC Global Fleet Consultants
● Mike Antich, a 20-plus year industry veteran and editor of Automotive Fleet, served as panel moderator.  

 

Data Reporting

 

 

Antich: Global fleet management is a complicated area because of the many contradictions in areas you, as the global fleet managers, must address. One such area is compliance: with safety policy, with global fleet policy and so on. The fundamental aspect of compliance is a good global reporting system to secure the data. You can’t manage that internationally—in our case from the U.S.— without a good global system.

The challenge is the lack of uniformity in original equipment manufacturer (OEM) and fleet management company (FMC) platforms A truly global, multinational organization most likely uses multiple FMCs. Each of these companies uses different fleet management platforms, each with variances. 

How do you achieve commonality among your regional fleets when they all use different types of systems? What are the common data elements that must be collected from all regions? You can’t collect everything and retain commonality. Certain common data points, however, are critical. 

Lukacs: It’s not an easy question, but I’ll give it a good stab. 

The common data elements must be make, model, serial number, VIN, mileage, fuel economy, lease terms – whether it’s open-end or closed-end leasing, because that will give you the balance of when you can dispose of the vehicle. That’s what Sherwin-Williams focuses on. Those elements are commonly available. It’s a matter of bringing it in-house.

You don’t have one system; you usually have to do something home-grown. And that home-grown information will come in and be used for a corporate social responsibility report or replacement analysis or for a determination of vehicle type or costs. 

Some FMCs have platforms on which they can ingest some data from other FMCs, but we go in-house.

For an example, I’m sure everyone else on this panel today is aware of the OEMs’ difficulties in getting parts; they simply are not availability. Especially in Latin America and even in the United States. 

If we focus on Latin America, for example, you must be able to pivot quickly to other OEMs. You need relationships with all OEMs, not just Ford or General Motors or Stellantis. You have to be able to understand their situation and be willing to have the conversations with them. 

Antich: what does 3M do for data collection?

Peabody: Data is so critical to doing our job. We have a few—I would say “bucketed”—approaches to this area. Here’s what we’ve done over the last three years: One, I conduct an annual census. I create a template; it goes out to area leaders. Area leaders cascade it to the country leaders. Country leaders get it, and they fill it out and send it back. The data is compiled, and we have a data point, a snapshot in time of the last several years. 

At the same time, similar to that census process, we also have a spending review process in every country. Eighty countries must fill out not only what they will spend in the next year in leasing and numbers of vehicles they have, but also report on the fleet operation’s market-alignment. 

Using a market-align tool, like a Mercer Willis or Ellis, Tellers Watson, the results indicate whether—and this gets back to compliance—are we offering market-aligned vehicles, a 3M practice? If they’re not, fleet leaders must have an action plan for how they actually become market aligned.

That’s the internal side, and it’s a little easier to control. However, we don’t get into the details that we need to. We then step over to the portals. The global portals at the FMC, and their data is in there. We create algorithms to bring this data together, which covers about 75 percent of our fleet today, a good visibility to have. 

Just getting an accurate, active vehicle count is a huge challenge. At any given time, we have sold vehicles; we have vehicles on order. You need to filter and algorithm the data, each one separately in a different way. 

These are big challenges. The deals may be little, but you will find, when you start getting there, the devil is in the details. 

Antich: I know of one multinational financial company that discovered during a census of its global fleet, that, to their surprise, they had a 1,000-vehicle fleet in Poland. Unbeknownst to the parent company, the country manager was creating and acquiring those vehicles as part of a recruitment/compensation program. When you’re looking to doing these censuses, sometimes it’s in the local manager’s interest or their self-perceived interest to shelter you from knowing that information. That is a key thing that you need to get across. Have you encountered that, Joe and John?

Dmochowsky: We’re talking about global reporting. These are the KPIs (key performance indicators) I wanted to implement, to start off with baby steps. 

Number one. For the globe, I’ll need to know how many car-eligible positions we have, by region and area. Number two. I’ve gathered that data, and now I’m going to set a KPI of car-eligible position totals, especially during vehicle-ordering periods. Number three. I set a goal, what the cap is. 

Track the accurate data coming from the system. If you’re transitioning to a new FMC or OEM, you might have different contract terms. I want to track how fast we’re moving into those new players: from the legacy player to the new player. 

You do not want to run into a volume shortfall, especially if there’s an opportunity to enhance total cost of ownership—not increase it but decrease it. 

Those controls must be put into place. Control the number vehicles that move to your new players. 

And last, but not least, is safety. Control the safety.

To summarize, the KPIs have to be simple; importantly, they have to be linked to something. The car-eligible positions you have a control over and can monitor. Bring in your strategic partners. 

Antich: I like the idea of the car-eligible positions because that establishes a benchmark. 

Mark, you mentioned market alignment. What exactly do you mean by market alignment in your different regions?

Peabody: Outside the United States and Canada, we mostly have benefit vehicles, based on job grade. Somebody who is a low-level job grade probably isn’t getting the highest-end Mercedes available. That’s what the market alignment is.

 

Mobility Management

Antich: John, you see a transitioning from global fleet management to global mobility management. In certain parts of the world, particularly in the European fleet market, mobility management has a strong focus. What are the current trends in mobility management and, in particular, multimodel transportation from a global perspective?

Dmochowsky: When I look at mobility, I bring in digitalization and what’s happening today on the fleet manager’s desk. What are they working on? Obviously, the fleet professional does a good job spec’ing vehicles and being market aligned. They know what’s on the market. There are plenty of resources to find that out. 

However, it’s also important to have connectivity to the Human Resources (HR) team player. The HR player is involved with transporting one person from point A to point B. And that is the area of mobility. 

To see if mobility works, we take a snapshot of what’s available in the market. Take the United Kingdom for example. I have a lot of car-eligible people I’ve tracked who have the option to take a car or an allowance. An allowance may work better for employees who must pay parking fees in an urban setting. A mobility approach would probably be a better fit for those folks’ needs in the city. 
The issue is also connected with the telematics system for those countries that allow telematics. 

Mobility is an opportunity to add value to an existing fleet department. The more value a department has, the more benefit for individual growth, to take on more roles and develop new skills.

 

Sustainability

Antich: Another key corporate objective is sustainability. Most corporations have some sustainability requirements, goals or targets they want to achieve. What do you see as the current trends in sustainability from a global fleet management perspective?

Peabody: It’s a great time to ask that question. Our company, 3M, made its public commitment just recently. We will be carbon neutral by 2050. And we’ll be 50% carbon neutral by 2030, based on the 2019 baseline. Then 80% by 2040 and completely carbon neutral in 2050. We’re going to do it through innovation and technology. 

Now, as the fleet manager, I’m going to align to that. And not only am I going to align to that, I’m also going to beat it. But I can’t do it through innovation and technology. I’ve got to do it through adopting existing infrastructure and existing product availability. 

We’re road-mapping that process with our team. This is one of the beauties of being part of a global fleet team. It is ever evolving, and the subjects we get involved in are so deep. 
One of the questions we asked, “What if we switched the whole fleet to electric cars next month?” 

Well, it might look good, but guess what? We’re not going to net zero CO2, because quite a few of those cars are actually going to be driven by coal power, which is CO2-emitting. In a discussion this morning, we asked, “Maybe we need to have each country have each country give us, similar to our census, a transition plan for the next 20 years? What do they think is reasonable?” 

For example, we have one person in the UK who said there’s no way he can charge a vehicle. Even if he had a car, he couldn’t and he doesn’t see that happening in the next five years. We want to have a meaningful impact on the world through CO2 reduction. And to do that, we have to look beyond just the car. But I do think that’s our direct influence —going to electric or potentially fuel cells. 

Antich: Much of the sustainability issue is governed by the type of assets available in your market. It’s a common complaint among American fleet managers who work for European-headquartered corporations. They may have very aggressive sustainability objectives fleet managers probably could meet in a stretch goal in a European market. 

Here in the U.S. market, however, those goals would just be totally out of reach, especially if, say, many of your vehicles are pickup trucks, crossovers or even compact SUVs. That is one of the limiting factors. How do you address that, Joe? Sherwin-Williams is a U.S.-based company.

Lukacs: From Sherwin’s perspective, we’ve kind of jumped in pretty abruptly here, and I tell you why. 

When you start talking about EVs and CO2 emissions and carbon, it depends on the point from which you’re measuring the carbon. Are you measuring from the vehicle or from upstream, the battery production and so on? That’s a debate for another one of your columns, Mike. 

We’re piloting EVs from a final-mile perspective, and from the salesperson’s perspective. We’re not there yet from the over-the-road perspective, but everything is positive right now. 

However, the infrastructure itself will be the challenge:
● One, how are these vehicles adopted into the global fleet policy? 
● Two, how do you charge these vehicles: at employees’ homes or at charging stations? How do you identify the charger locations?
● Three, how do you pay for the chargers? And how do you reimburse employees for the electricity? 

And so on. From our perspective, we’ve been fortunate enough to have some great partners—installation companies, charging companies, OEMs—to really get this project off and running. 
Will the EV phenomenon be the end-all big deal? As Mark said for 3M, we’ll see. 

As a manufacturing company, we can go after lot of low-hanging fruit from a carbon-emissions perspective. Electric vehicles are kind of the “icing on the cake,” but you’ve got to be cognizant of ROI and TCO. Right now, those numbers are not there. 

Dmochowsky: The only thing I would add is that there are countries faster to a sustainability goal than others. That’s what I would focus on. Because sustainability is very important to the driving community. 

We talk about safety and getting employees safely home to their families. But we also want them to breathe fresh air. We want the climate to more manageable. So, how do we provide a solution?

For example, let’s take region fleet managers in the UK Spain and Italy. The sustainability goals in those three countries are different. I will use my monthly calls to the group of regional managers to promote sustainability KPI. It’s a simple KPI: “What are your plans to get to a certain carbon footprint at this date?” Every time we meet, we talk about that. 

Most importantly, however, is appointing an ambassador in those countries to be your eyes and ears. I start with the developed counties and accelerate the test. Where initially I might have piloted 20 vehicles, I maybe go to 50 and see how it works. Time will tell. 

This electrification journey is just in the beginning. I’m going to go first with the quicker countries while staying focused on other countries as well. 

 

Shared Services

Antich: A big issue going on for a while at major corporations with multiple business units is the concept of shared services. Is there a place for a global shared services in a global fleet environment? Is that a pipe dream or something feasible? 

Peabody: For sure, 3M has gone that direction, no question about it. It’s finding the right things to hand to the service center that they can manage well. And so far for fleet, we’re not there. 

Lukacs: We look at it a little differently. We call shared services “centers of excellences.” From a corporate perspective, I would say yes. We have an HR shared services; we have a financial shared services. My team is the shared services or center for excellences for fleet. So from a standardization perspective, Sherwin-Williams does adopt that. 

Antich: A real challenge is to stay current with everything going on out there in all the different areas of fleet. In your case as global fleet managers, to stay current not only in your own market, but also with what’s happening in Latin America, Europe, the Middle East, Africa, Australia, Asia, etc. What suggestions do you have for global fleet managers, people who have regional responsibilities or those aspiring to move up to your area? How do you stay current with today’s events and developments? What sort of advice would you give on how they can stay current in a multifaceted area such as global fleet management?

Lukacs: You know, Mike, I would say, subscribe to Automotive Fleet. 

Dmochowsky: I’m a big supporter of conferences. You’re going to come across subjects that you’re dealing with and hopefully you will get, number one, a second opinion, and number two, a solution to bring back home with you. 

I really believe global fleet conferences do that. I also believe when you travel to the countries, become familiar with the fleet associations in that country. 

You’ll want to assign a region ambassador for what’s trending in the industry there. Perhaps give this person a development goal. At the end of the quarter, they may present this trending information to senior governance. Implement goals that develop your team as individuals, both professionally and personally.

Get your team out on stage. Get buy-in with your stakeholders and go to these conferences. What a testimonial to a team working well together: seeing them live on stage sharing their stories. 

Antich: It gets back to that old saying, “You don’t know what you don’t know.” When interacting with individuals new to you at conferences, often you learn things you might not normally know if you’re just within your own fleet ecosystem.