Fleet management is both an art and a science. It’s an art because it demands that fleet management professionals establish good interpersonal relationships to get work done effectively. It’s a science because it relies heavily on data and compliance.
So ask yourself, do you have standards set up for the major metrics that drive your fleet performance best practices?
Here are some key metrics to consider:
- Identify preventive vehicle maintenance
- Set up data-driven vehicle replacement cycles
- Align vehicle purchases with your company objectives
- Have proof of compliance to regulatory guidelines at the ready
- Institute company-wide safety protocols
- Maintain up-to-date information systems
- Establish training programs for all fleet personnel
If you tackle these areas and achieve excellence, you will cut your fleet management costs dramatically.
Keep your current fleet fully functioning with preventive maintenance
By instituting best practices in preventive maintenance, you can keep big repairs at bay and when those can't be avoided, a maintenance program makes sure the repairs are done correctly and charged fairly. In properly managing the assets you currently use, your fleet will be regularly monitored and maintained in order to not only remain safe but to be more cost-effective.
Good maintenance programs also include protocols for emergency roadside assistance, scheduled maintenance, vendor vetting programs, rental vehicle management, warranty disputes, and billing mistakes.
Fleet management that’s data-driven: vehicle replacement cycles.
Do you replace a vehicle when you get tired of hearing complaints? When you’ve gotten your third maintenance bill that’s more than the book value of the vehicle? When your principals want a new car? Consider instituting best fleet management practices to calculate your vehicle replacement cycles a bit more scientifically. Your metrics should include data on:
- Maintenance
- Fuel efficiency
- Overhead and vehicle preparation costs
- Resale value
- Depreciation
Tracking these for each of your vehicles gives you statistical milestones so that you can have data-driven conversations about vehicle replacement. Quantifying the metrics around a vehicle’s falling depreciation and resale value combined with climbing maintenance costs makes replacement conversations easier to have. Adding compelling data and insights to your best practices puts you in the driver's seat for vehicle replacement conversations.
Good fleet management aligns vehicle purchases with company objectives.
Fleet management best practices align the fleet expenses and benefits with the current company's financial objectives. If cash flow is tight, consider leasing, or better yet, a purchase leaseback program to generate instant cash.
Is your goal to improve your company’s EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization)? Maybe you need to free up cash to invest back into your business or reduce your out-of-pocket expense for your growing fleet. When fleet is a top 4 expense implementing a strategic funding strategy is key to aligning to your business goals. Consider these tips:
- Match lease terms to actual driving habits while also forecasting vehicles to be replaced in the near future.
- Determine what manufacturers and specific products achieve lower variable costs with a higher resale.
- Increase cash flow and reduce total monthly spend by implementing a “matched depreciation” spend environment.
Have proof of compliance to regulatory guidelines at the ready
Have you found yourself scrambling every time a government agency asks you to provide proof of compliance? Avoid fines and save yourself any unnecessary embarrassment by having all of your licenses, certifications, driver's logs, vehicle registrations, and insurance policies filed in one place, both in hard copy and electronically.
Instituting company-wide safety protocols protects your drivers and your bottom line.
It's one thing to have a clear set of standards and policies but they'll do you no good if they are not shared with your entire fleet. Every position held within your fleet, from the bottom to the top, needs to be made aware of, and held accountable to, your company's standards and policies.
This not only ensures the health and safety of your fleet but also that of everyone that works for you. Keep everyone accountable and institute best practices by distributing the standards electronically, posting them to communal areas, and making sure hard copies are available.
Keep your information systems modernized to remain effective
Your IT department can't be expected to monitor and install programs to track of all of your fleet's needs if the software and hardware they are working off of was installed before back-up cameras. Make sure your technology team knows they can and should stay up-to-date with the latest installs, equipment, and devices to keep your fleet running straight ahead into the future.
Make training programs mandatory for all fleet personnel
Just as you would hold all fleet personnel accountable for safety protocols, be sure to keep their training up-to-date as well. Training can mean anything from starting a new driver to continuing education and from adding on a new set of skills to certificate programs. Investing in your employees not only shows them you are invested in their growth but it's also good for your business best practices and will keep driving your fleet into the future. A safety and accident management program should include a driver training curriculum.
While every company's fleet is different, what they all have in common is the desire to run efficiently, keep costs down, and retain employees. By instituting these best practices or tweaking them to fit your own business model, you'll soon be well on your way to achieving a well-run fleet.
