The challenges managers of large corporate fleets will face in 2017 may look similar to those that presented themselves in 2016, but this dedicated group of professionals will again be up to the challenge.
As part of the annual re-set to a new calendar year, we polled several leading fleet managers to get their take on the top pain points they must diagnose in the year ahead.
They told us the top challenges would again include getting senior management's buy-in for fleet initiatives, reducing costs that have already been reduced, reorganizing fleet management in a decentralized organization, vehicle availability from OEMs and upfitters, and implementing a telematics program that fits the fleet's needs.
Reorganizing Fleet Management
Creating a single point within an organization for control and management of fleet assets and services can bring plenty of challenges around locating and creating an inventory of vehicles from the field. Such an initiative can result in greater clarity around utilization and help a fleet manager identify inefficiencies.
"We have been very decentralized, and we're working to consolidate fleet under one roof so that will be my primary focus for the year," said Keri Moran, fleet administrator for J.R. Simplot Co. "With this will be not just inventory reporting capability, but also spending consolidation to get a better idea of opportunities for cost savings."
Under the current system, multiple departments get involved depending on ownership of the vehicle, including the legal department, fixed assets, treasury, tax, and regional field offices. Centralized fleet management should also allow field workers focused on serving customers rather than tracking down titles, conducting transfers and licensing vehicles.
Getting Senior Management's Buy-In
Senior executives focus their energy on initiatives they believe make an organization run more efficiently, but they often present blind spots about vehicle management. They often don't understand the order-to-delivery process and timing for deliveries and upfitting of vehicles, said one fleet manager who asked to remain nameless.
Senior executives often push for cost savings by curtailing vehicle ordering – a move than can create the opposite effect, by increasing the cost of maintaining aging vehicles. Fleet managers often need a greater understanding that they are a subject matter expert, the fleet manager said.
Reducing Already-Reduced Costs
Top-down cost-reduction initiatives in corporate America often challenge fleet managers to further reduce costs. A fleet manager may have already researched competitive alternatives and found the fleet already has the best available option, said Julie Bromley, manager of shared services of the mechanical group of Reedy Industries.
"Lately, this proved true for how we manage our fuel costs, which is a more significant portion of overall fleet expense than ever before," Bromley said. "So, where do I look for significant savings? How do I find a unique, yet viable approach to cost control? Which aspects of fleet management are most open to tweaking in order to save dollars?"
Communicating this challenge to a senior executive without a deeper understanding of fleet management is yet another challenge, Bromley said.
Another fleet manager said the trend of moving fleet management under procurement oversight can create more of a push for year-over-year cost reductions that can be difficult to meet.
Fleet managers will also be challenged by the availability of vehicles whether from recall repairs or upfitting timetables. The increase in the number of recalls for all brands can create delays in vehicle deliveries.
Fleet managers must also contend with upfitter schedules, which can take vehicles out of service for prolonged periods. Upfitters can use bailment pools to keep a stock of more common set-ups on hand, but the pools can often not have enough stock for larger fleet orders.
"One challenge that we always encounter is available vehicles with the upfitters," said Thomas Armstrong, director of fleet with ThyssenKrupp Elevator. "Either they do not inventory enough or from what I hear the OEMs limit their allotments."
The Telematics Fire Hose
Telematics offerings in fleet vehicles provide a data stream often referred to as a fire hose, because of the robust data around routing, driver behavior, and location-based information. Some telematics vendors have been known to provide too much data and fleet managers say more customization is needed so the data stream fits the fleet's needs.
"There is always the ongoing challenge of what telematics company or product is out there that can deliver what you need as a company," Armstrong said.