Fleet News

Fleet Europe Forum: proof of value for money 'critical'

THE ‘trust me’-style of fleet management that has been common throughout the industry is dead, an international industry expert has warned, because senior managers are demanding hard proof that in-house fleet departments offer value for money.

Only detailed facts and figures are enough for modern senior managers to believe that a fleet is being run as efficiently as it could be, according to Paul Lauria, president of international fleet consultancy Mercury Associates.

He told the Fleet Europe Forum, held in Prague: ‘The purpose of a fleet management department is to provide vehicles that are suitable, available, reliable, safe, legal, economical and environmentally sound, but it must also be able to demonstrate to management and fleet users that the vehicles it provides have these qualities.

‘Fleet managers, if they are going to be effective, can’t work in a vacuum. There are a lot of inter-dependencies between fleet management and other business processes.

‘A good fleet manager knows what customers need and expect and knows the politics of the corporation, something an outsourced provider would not understand. This is where fleet managers provide a lot of value.

‘At the end of the day, the fleet manager has to ensure customer needs are being met and we find that fleet managers assume people know these interests are being served. But you can’t assume that, you need to prove it.

‘The trust me approach to fleet management does not work anymore. Management expects hard numbers and fleet managers who can’t provide these are vulnerable.’

Being able to present a strong case to management can also help in achieving better vehicle running costs, as organisations often fail to replace vehicles at the best time because of a lack of willingness to commit funds and a lack of understanding of wholelife costs among management, he said.

Therefore, core fleet management roles should include monitoring and measuring fleet performance and producing information.

This might include detailed advice on the impact of expanding replacement cycles.

Research by Lauria revealed maintenance costs increased steadily with vehicles’ age, but which also showed that predicting what those costs would be became much harder as the miles passed.

So while most vehicles in a benchmark group were costing about $1,000 over 60,000 miles, if replacement cycles expanded to 110,000 miles, costs ranged from $1,200 to $5,600.

Lauria, a fleet consultant for 22 years whose firm has 100 clients, ranging from the Walt Disney Corporation to NASA, said: ‘Timely replacement is important.’

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