FSG chairman Geoffrey Bray offers an action plan for the year ahead to deliver fleet efficiencies.

 

"Cost management should remain the focus across business for 2010, but too many companies continue to leave themselves open to unnecessary financial expenditure.

  1. Cash opt-out schemes - many organisations are continuing to run company car cash alternative schemes along pre-recession lines. Cash opt-out schemes should undergo a top-to-bottom review particularly in relation to the amount of money paid to staff and the viability of employees remaining outside of a company car scheme. Given the wide range of low-emission cars available today, it is likely that many people and their employers would be financially better off opting back into a company car.
  2. Reducing business mileage - we are encouraging our own staff to cut down on business miles by utilising services such as web exchange and video conferencing. Clocking up business miles is one of the priorities for cash opt out drivers as they look to gain maximum financial dividends. However, such a strategy runs contrary to corporate cost management programme. Businesses should fix financial targets and then monitor progress on a regular basis.
  3. Focus on the fleet ‘Holy Trinity’ - cost savings, environmental efficiencies and occupational road risk management delivering health and safety legislation compliance are mutually inclusive and part of the same virtuous circle. A ‘green’, safe fleet will deliver cost savings to all businesses. However, too often companies pigeonhole each issue and do not make the link.
  4. Fleet funding reviews - when reviewing funding strategies use independent advisers and clearly identify the aim of the process. Too often fleet decision-makers seek the views of organisations with a vested interest in the outcome of the review process. Obtaining independent quality advice and being absolutely clear on the targets to be achieved are essential if cost-saving objectives are to be achieved.
  5. Tender competency - when going out to tender, companies must be explicit about their specific requirements. The competency of many people completing tender documents is not at the level it should be. This is because, in some cases, they are not fleet professionals. The fleet industry is full of intangible costs as a result of incompetence and often that is caused by poor tender procedures because an organisation is not clear about what it is trying to achieve. We have rejected some tenders because of the vagueness of the proposed aims. Apart from being clear on the objectives, fleet decision-makers should specify correctly what is required from potential suppliers and identify companies that can deliver.
  6. KPIs key to winning financial battle - establishing key performance indicators (KPIs) on a monthly basis to monitor total cost of vehicle ownership data is crucial if cost savings are to be achieved. Fleets must look at every facet of vehicle costs and then budget for achievable reductions and measure and monitor progress frequently.
  7. Employ fleet professionals - crucial to establishing and monitoring realistic KPIs is the employment of fleet experts. Fleet operations can drain a lot of money out of businesses and too many companies do not employ a fleet professional. A fleet expert will deliver significant financial savings by working hand-in-hand with key suppliers.
  8. Drivers crucial to strategy success - the biggest cost in terms of fleet operations is the driver, who has direct control over fuel usage, vehicle wear and tear, SMR costs and accident bills. As a result, Mr Bray says: Drivers are key to businesses achieving the fundamental aim of cost reduction. Therefore, fleet chiefs should explain their strategy to drivers and identify the role they can play in delivering savings, which could ultimately be the difference to them being in or out of work.
  9. Communication – board-level communication to all drivers, company car and van drivers as well as ‘grey’ fleet drivers is vital. Clear and succinct communication on all revisions to fleet policy is crucial to getting staff on-side in terms of strategy success and, simultaneously, eliminating rumour and speculation.