Consolidation of fleet services for 14 independent operating companies of Siemens USA in Iselin, NJ, into a Shared Services organization in fiscal-year 2000 improved center-of-expertise and economy-of-scale (negotiating leverage), resulting in $520,000 annual recurring savings to Siemens. Prior to 1999, these 14 Siemens operating companies had separate fleets, and varied (if not minimal) buying leverage.
These operating companies included businesses such as Siemens Westinghouse, Siemens Automotive, Siemens Information Communications, EPCOS Inc., and Siemens Medical.
The first actual fleet consolidation was with the Siemens Energy & Automotion group in Alpharetta, GA, which had 800 vehicles leased through Southgate Leasing in Milwaukee. In 1999, the fleet department became one of the founding members of Siemens Shared Services, LLC. In this new capacity, the fleet department sells its services to the other Siemens operating companies. There is no mandate, and companies are not forced to participate.
"Prior to this consolidation effort, our fleet consisted of 1,800 Siemens Medical vehicles," said Jim McCarthy, director of vehicle management service for Siemens Shared Services. "Right now we have in excess of 4,000 vehicles from 14 Siemens operating companies. Needless to say, this provides tremendous leverage for us in negotiating rebates with the manufacturers, or funding and service fees with the leasing companies," said McCarthy.
In order to remain competitive, McCarthy says that his department provides several value-added, revenue-generating programs to its client base. These programs include a personal-use reconciliation program and a full-service safety and training program. Additionally, an Executive Insurance Program is offered, in which the fleet department acts as a brokerage for expatriates and long-term delegates here from other countries who can't get insurance because they don't have any driving record in the United States.
This program currently has more than 700 participants from 26 separate Siemens operating companies. "We handle all of the program's administration (policies, procedures, database management, etc.), and do all of the billing, collections and financial reconciliations, " McCarthy said. McCarthy and a staff of four serve as full-service fleet managers for their specific Siemens "accounts." "We feel that it is extremely important to incorporate an account management strategy as opposed to a 'pool' or 'staff' strategy. We want our clients to recognize that there is one go-to person responsible and accountable for all of their fleet needs, problems, or issues," McCarthy said.
"Our managers work to become an integral part of their client's team. They have in-depth knowledge of their specific fleets, and are often invited to speak at sales and/or service functions."
McCarthy's department has also had to manage fleet growth associated with numerous Siemens' acquisitions. This has provided additional opportunities and challenges in dealing with several leasing companies. In fact, including the recent Siemens Medical acquisition of Acuson in San Jose, CA, McCarthy's department is now working on a daily basis with six leasing companies: GE, PHH, ARI, Wheels, CitiCapital Fleet, and Southgate.
The goal is to consolidate most of the vehicles through Siemens' primary leasing company, Wheels.
And the challenge doesn't stop with the leasing companies. For example, recently Siemens acquired Moore Process Automation Solutions, which is now Siemens Moore. "They had 140 cars, which we're now responsible for," McCarthy said. "They didn't have a dedicated fleet manager, nor did they have any real policy, procedure or program, and for the most part their drivers negotiated their own leases. Hence, retail purchases with no economies-of-scale, no fleet incentives, no manufacturer rebates and, for the most part, no control. We are working to get those leases terminated and switching them over to our vehicle management program."
"A shared service approach just makes sense," McCarthy said. "Additionally, it makes the department extremely challenging and somewhat unique because we're managing fleets for 14 different companies. We are not a Siemens fleet, but rather we manage 14 Siemens fleets under one umbrella."
As the consolidation was taking place, the department realized that with 4,000 drivers and 14 separate operating companies, it needed a better way of communicating with drivers. In July 2000, the department unveiled an interactive intranet site that can be accessed by any Siemens employee from any Siemens company or affiliate. Among the many site capabilities is an interactive ordering module in which drivers can access company-specific selectors and policies, receive electronic approvals, and e-mail the order for submission electronically. "We were able to cut 13.5 days from our order cycle because it's all done electronically through the Web site," McCarthy said. "Needless to say, this is extremely important as we are always dealing with delivery delays from the manufacturer, and this is just one small way we can help minimize the effects of these delays."