Fleet Simplification is the Antidote to Asset Variability

Most complex fleets are comprised of diverse asset types based on the specialized functions they must perform and, due to their higher acquisition costs, tend to have longer service lives. One consequence to the longer service lives is that it make them vulnerable to obsolescence as customer needs change, business strategies evolve, or ongoing OEM and aftermarket technological enhancements and safety evolutions.

One strategy to address this asset variability is to focus on standardizing asset specifications. In fleet management, standardization refers to the process of setting common standards and specs for fleet assets to minimize asset variability. But this is easier said than done, even when standardization is based on same make and model of vehicle, over the subsequent years, you will end up with numerous variations as newer models are acquired.

The end-result is that it is expensive to operate a diverse fleet but asset simplification, as a mitigation strategy, can produce significant cost savings and productivity improvements. Fleet simplification identifies those functions that the assets have to perform and finds a commonality among the equipment and assets being spec’ed. Simplification increases operational efficiency as end-users become accustomed to the controls, displays, and operation of less diverse units.

Sourcing Constraints Complicate Simplification

While today’s sourcing environment complicates asset simplification strategies, by narrowing the number of chassis, bodies, equipment, and major components it will reduce fleet diversity and eliminate or minimize many of the problems created by a diverse asset base. But there are dangers to standardization. If not done properly, standardization can increase costs. For instance, there is 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.

But it seems like the benefits outweigh the negatives. 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. By focusing on core specifications, it will provide the flexibility to shift assets across the organization. Developing common specs expands a fleet’s opportunities for 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. Asset 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 systems (ADAS) components. This steep learning curve for new technicians can be reduced by narrowing the diversity of systems that need to be maintained.

Minefields in Asset Simplification

An asset 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 focus 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 end-user needs.

But in the real-world, a decentralized fleet structure is probably one of the biggest “minefields” that can derail an  asset simplification initiative. In a decentralized fleet, often each field location orders vehicles on its own terms, using its own specs, and from their preferred providers.

Since fled operations are often resistant to standardization of equipment and assets, it is critical to get “buy-in” at the local level with the end-user operators. It is important to consider the “downstream effects” on end-users and the best way to do so is by talking with them. In the final analysis, 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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