Controlling National Account Costs at the Driver Level

When it comes to controlling vehicles maintenance expense, your drivers are your first line of defense. They are responsible for servicing vehicles, complying with scheduled preventive maintenance, ensuring vehicles are taken to a dealership if the service work is covered under warranty, and using their best discretion for authorizing non-scheduled maintenance.

However, it is up to you to ensure that drivers are properly "educated" to make the right decisions concerning the maintenance of their assigned vehicles.

One way is to place in every vehicles' glove compartment a driver packet containing information on preventive maintenance requirements, manufacturer warranty coverage, and other necessary information to properly operate a vehicle.

Sometimes, educating drivers involves simply communicating common sense.

"We instruct out drivers to develop a rapport with one store and build upon it," says Bob Wagner, manager of fleet administration for Eaton Crop. in Cleveland, OH. "If you find a store that is good, us it. If you have a problem with a tore, don't go there any more."

In addition, Wagner mails to his drivers periodic "bulletins" on sales that national accounts may have on specific services or parts to help control maintenance expenses such as tire or oil change specials.

Limit Driver Spending Authority

Most fleets place a limit on the amount of money a driver is authorized to spend at a national account. This dollar limit, on average, has been increasing with inflation and vendor cost increases.

"Where you peg that driver spending limit is critical to determining the type of control you want on your fleet," says Wagner. "If you put a $50 limit on your drivers, you are ensuring that no additional work other than PM can be done without authorization." Wagner has assigned a $20 cap on the amount of money his drivers are authorized to spend on non-preventive maintenance work.

Another fleet, Tektronix, an electronics firm in Beaverton, OR, also maintains a $200 authorization limit for drivers.

"We make our drivers more responsible for their actions and expenses by giving them greater authority to have service work performed," says Johnnie Schmauder, fleet operations manager for Tektronix. If maintenance work will cost more than $200, then drivers are required to call the Tektronix fleet department for authorization to ensure that the work is necessary and that it is not covered under warranty.

"If there is 20 percent of the brake pad left on a car that has 50,000 miles, we will probably dispose of the car before it needs new brakes. In this instance, we wouldn't authorize the work," says Schmauder.

Tektronix's philosophy is to push cost-saving responsibility down to the driver level. When new employees are hired who will be assigned a company car, their regional manager will review with them the company's preventive maintenance schedule. Each vehicle also has a Tektronix's driver's manual placed in the glove compartment.

The 3M Co. in St. Paul, MN, on the other hand, has a more stringent authorization limit, allowing drivers to spend no more than $25. Any work costing more than $25 requires authorization from a 3M fleet maintenance analyst who accesses a computerized database to review the maintenance history of the vehicle prior to authorization.

"Not only does the fleet maintenance analyst know what work has been done on a car, but also whether it is scheduled for sale," says Dick Martinson, manager of fleet administration for 3M. "We want to avoid cars being over-maintained or reconditioned prior to sale."

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Another advantage to maintaining a stringent authorization limit is that 3M can more easily identify abusive drivers based on the type and frequency of required vehicle maintenance.

How to Select a National Account Vendor

The 3M Co. uses five criteria for selecting a national account vendor, says Martinson.

These criteria are:

1. Selecting a vendor that has broad multi-state coverage. This is crucial for a nationally-dispersed fleet.  
2. Central control of stores and franchisees by the headquarters company. "You need strong central control, because if it is not there, frequently franchisees will not honor a central contract," says Martinson.
3. A consolidated monthly billing capability.
4. A vendor with strong account representation. "We want an account rep who is willing to work with us in solving problems by coming up with innovative ideas to produce a higher level of customer satisfaction," says Martinson.
5. Volume discounts.

Establishing Service Expectations For National Accounts

Each November, 3M Co. will meet with its national account vendors and develop a list of "service expectations" which are agreed to by both parties, documented, and signed.

"These service expectations become our targets for the following year," says Martinson.

One example of a service expectation is ensuring that a national account performs only authorized work. "We provide each national account with our criteria on the type of work we authorize. For instance, we will only allow air filter replacements every 30,000 miles. This then becomes a criterion we use to monitor national accounts to avoid unauthorized work," explains Martinson.

Surveying Driver Satisfaction With National Accounts

Each year, 3M nails a survey to its drivers to gauge whether nation accounts have been meeting their service expectations.

"For instance, we ask our drivers whether the location of the facility was good? Was the attitude friendly?" says Martinson. If unfavorable comments are received regarding a particular vendor, they are brought up during the next meeting with the account representative.

"With these driver surveys, we have the ability of pinpointing problems with specific stores. We share this information with our account rep," says Martinson. Furthermore, Martinson says this is the reason for desiring a strong account representative, so these problems can be resolved as they are identified.

Restructuring PM Intervals to Control Costs

Although preventive maintenance is crucial to preserving your company's investment in a vehicle, conversely, these same vehicles should not be over-maintained.

For instance, Eaton has increased its oil change intervals to 5,000 miles from 3,000 miles. "I got concurrence from the auto manufacturers that they will honor vehicle warranties at 5,000-mile oil change intervals," says Wagner.

On the other hand, Eaton recommends rotating tires every 5,000 miles instead of the recommended 7,500 miles. "By doing this, we find that we don't have to replace the original set of tires for a vehicle's service life," says Wagner.

Wagner says he reviews Eaton's preventive maintenance schedule with factory representatives prior to instituting changes.