How does your organization measure up?
People often ask me for a list of foolproof best practices for fleet operations. New fleet managers want to know where or how to start. Experienced fleet managers want to see how they compare to industry standards.
There is no comprehensive list, but I worked with NAFA Fleet Management Association a few years back to develop a collection of principles. We call them the “eleven essentials” and I would not go so far as to say that these are a definitive list of best practices. I would say, however, that if you are doing these things, you are doing a lot right.
I spoke about these essentials at the Assetworks Academy in March and again at the Institute of Supply Management annual conference in May. The positive reception and insightful feedback convinced me that these essentials really resonate with fleet managers who are trying to make sure they are doing the right things and doing things right.
Many of you have your own lists of what these Essentials are, and I really want to know what you think–is something missing? Should something here not be on the list?
So, how many of the following are you doing well?
- The organization has a robust policy framework (Fleet Management Manual, Driver Handbook and Service Level Agreements) covering appropriate topics.
- A Fleet Management Information System tracks Key Performance Indicators that contribute to organizational goals.
- Vehicles are selected using a formal process that considers, as a minimum, lifecycle costs, safety and the environment.
- The organization uses the Recommended Automotive Classification of Expenses (RACE) system along with Total Cost of Ownership methodology to measure all costs of fleet operations.
- The organization uses lifecycle spreadsheets and defines and observes optimal vehicle lifecycles.
- The organization has a comprehensive safety policy, which includes classifying crashes into preventable and nonpreventable categories and tracking Crash Frequency Rates (CFR).
- Vehicle Equivalency Units are used to calculate productivity and compare maintenance performance.
- The organization is proactive in the selection of remarketing methods and tracks results.
- The organization considers alternatives to fleet ownership and conducts regular reviews to ensure the fleet is right-sized.
- Key personnel are certified by industry associations, ensuring they are qualified for the jobs they perform.
- The organization sets goals for fuel and emissions reductions in accordance with NAFA’s Sustainable Accreditation Program.
It is important to consider not only how these essentials currently apply to your organization, but also how external influences, or disruptors, will cause them to change in the next few years.
Three of the main disruptors for fleet are the succession to Generation Y and the generation that follows them (Generation Z, iGeneration, Gen Net, or whatever they end up being called), the push for sustainability, and the growth of the sharing economy. These essentials have been relevant for decades, but will they remain so in the future?
Only time will tell, but it is quite possible that these essentials increase in relevance in a future world of sustainable cloud transportation run by a generation that is far more tech-savvy and environmentally conscious than the Boomers or Xers.
Having a set of guiding principles to rely on through the turmoil of significant change may be useful and even comforting.
My next articles will offer further thoughts on the disruptors facing fleets in the near future, and ways to roll with the disruptors. In the meantime, I welcome your comments on the essentials–are they relevant now and how will they change?