No fleet manager can create a fleet policy without first understanding the company’s strategy and objectives. According to LeasePlan head of consultancy services Hein du Plessis, the two go hand-in-hand.
“You need to have buy in from stakeholders and that means you have to understand what they want to achieve,” he said. “HR has a different view from finance, and they both have a different view from the fleet manager.”
The fleet policy needs to balance the needs of the three Ps: people, profits and planet. This requires the business objectives to be laid over the fleet strategy in a ‘triple bottom line approach’.
First fleet managers must understand the business strategy; then understand what changes they have to make to fit in with the strategy; then understand where the business sits within its competitive market.
“In 95% of cases the fleet policy has no relation to the business objectives – it doesn’t deliver the strategy,” du Plessis said.
“The role of fleet is to assist the company to be the best in its sector. It’s easier to present a business case to senior management if you have benchmarked your fleet against other businesses in your sector, understanding where you are versus where they are.”
Benchmarking might include vehicle type, allowances or fuel efficiency depending on business priorities, but du Plessis advises that the comparison takes place against at least five companies. The leasing provider should be able to provide the data.
Sandra Clews, fleet manager at Diversey, went through this process with LeasePlan. It takes around six weeks to create the basic business case.
“We have reduced our risk through drive training, behavioural training and eco training,” she said.
“It has brought us closer to the business to understand the strategy and whether we were doing the right thing.
“The company was pushing me for savings so it was easy for me to get the stakeholders to come along to meetings. I sold it to them by saying ‘if you want us to do this, you have to be here to play a role’.”
Clews described the process as being “like a healthcheck”. One of the outputs was to switch uelcard provider after almost 20 years with the same supplier.
Du Plessis added: “The fleet manager’s role is to bring people together to create the strategy; it’s not for them to ensure people comply with the strategy – that’s up to line managers.”
LeasePlan has identified four key areas where cost savings can most easily be made after analysing its customer data: funding, wholelife cost, cash allowances and fuel reimbursement.
It claims that while finance and maintenance appear to account for around 55% of fleet cost from a procurement perspective, analysing the total cost of ownership reveals that they actually account for less than 30%. Instead, fuel – both car and cash allowance (often not measured) – is the single biggest fleet cost, account for around 32% on average.
Immediate savings can be made by making just the simplest of changes. For example, LeasePlan says one fleet customer cut its fuel bill by 12% just by introducing driver league tables that were circulated to staff and departments. It took no other action, yet fuel efficiency rocketed.
However, different sectors of industry will have different areas where they can find savings. Job-need fleets such as those in the construction and transport sectors rely heavily on having the right vehicles and minimising off-road time.
Therefore, technical interventions, such as black boxes that plan ahead for servicing and maintenance, can have a big impact on reducing downtime by minimising unscheduled repairs.
In IT and communications, meanwhile, cost of fuel is the biggest opportunity to make savings. Du Plessis advises benchmarking average mpg against other fleets in the same sector.
“In the last year we have potentially saved clients £25 million,” he said.