Managing Assets or Managing Services?

I wholeheartedly agree that we all need to change our asset-oriented mindset to a customer service mindset. Nowadays, a fleet manager’s core mission is to provide superior customer service, in addition to maximizing vehicle utilization, leveraging vehicle procurement dollars, and complying with federal and state environmental and safety regulations. Over the past 20 years, the implementation of user chargeback systems has caused a transformation in fleet management responsibilities. A chargeback system requires a fleet manager to “sell” his or her services to internal customer groups. Charging fleet customers for services requires fleet managers to increase attention to service quality and cost. Historically, fleet managers managed assets, and they still do, but increasingly, they are in the business of delivering services. The evolution from asset manager to service manager is a funda-mental change in the concept of fleet management at public sector fleets, but many of us still view ourselves as asset managers.

Conflict of Customer Service & Cost Control

Fleet managers are concerned with controlling costs and charges to customers. At the same time, the fleet manager is looking to maintain service levels and/or enhance customer services. The two objectives are often in conflict with one another. One consequence of chargeback systems is the increased scrutiny of fleet managers by the internal customer organizations, who are paying greater attention to the costs of the fleet assets and services they utilize. These customers want to know why their internal charges are what they are and how they compare with costs charged by external service providers. Customers are becoming more demanding and their expectations for service levels are increasing. The challenge is to balance the needs of your customers against the cost of services. Today, the added dilemma facing fleet manager is balancing the vehicle requirement of customers in an environment of fewer budgetary resources. Fleet Operations is constantly under pressure to reduce vehicle rental rates and to minimize the cost of providing fleet services. At the same time, fleet customers are requesting, in some cases, larger or more expensive vehicles to meet their operating environment needs. The $64,000 question is how do you maintain current service delivery levels to your fleet customer departments and agencies, while cutting costs or keeping cost increases to a minimum?

Root Cause of Privatization Initiatives

In today’s environment, every fleet manager needs to understand the factors that may prompt a privatization initiative or an external audit. Although the primary reasons to investigate privatization are to cut costs and improve efficiency, these initiatives are usually first triggered by complaints from internal customer groups of poor customer service. Fleet management organizations that are well-run, that provide high-quality services at a competitive cost, that have satisfied customers, and are understood and valued by their management, are rarely targeted for outsourcing. Fleet operations that are not customer-driven are usually the ones in the cross-hairs of privatization advocates. Your real goal is to make your customers’ operations more productive. Fleet managers who focus on meeting their customers’ needs will have powerful allies during a managed competition.

Focusing on Customers

In the final analysis, a fleet manager’s focus must be on the customer. Think about it. Without internal fleet customer groups there would be no need for fleet managers such as yourself.

Let me know what you think. mike.antich@bobit.com