In Memoriam: Coach's

The Many 'Hats' Worn by Fleet Managers: Are You Also an Accountant and Detective?

Your key corporate responsibility is your competency to view, analyze, evaluate, and report on industry forces that affect the fleet operation.

October 31, 2012

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Would you ever dream of a household not reviewing its monthly credit card statement? How about ignoring the recordings of your deposits and expenses paid out of your personal checking account? On your big shopping day at the grocery store, do you simply assume all the charges are correct?

I’m not suggesting that all fleet managers suddenly drop everything and become Sherlock Holmes or a Philip Marlowe gumshoe, but we do need to focus on total integrity in the workplace. It’s not good business to make a major purchase or sign a contract and then “pray” you get what you pay for.

Since the early ’90s, there’s been a tsunami force to outsource all kinds of administrative functions. There has also been a growing dependency on third-party data to influence purchasing decisions. These sea-change factors aren’t necessarily bad, since, in many cases, they are economically attractive.

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However, this shift of expertise to outsourcers also calls for a new vigilance by fleet managers, from self-analysis and evaluation to outsource monitoring.

The man who is too old to learn was probably always too old to learn.
-Henry S. Haskins

Whoever cares to learn will always find a teacher. 
-German Proverb

There are no easy methods of learning difficult things; the method is to close your door, give out that you are not at home, and work.
-Joseph de Maistre

Never learn to do anything: if you don’t learn, you’ll always find someone else to do 
it for you. 
-Mark Twain

For commercial fleet managers, it might do well for you to study the NAFA Fleet Management Association’s recent research study. While it’s a relatively small group queried (less than 100 corporate fleets responding), the results are fairly compelling.

Interestingly, 58.9 percent lease some or most of their vehicles among the corporate responders. While this indicates a direct relationship with a lessor, there are undoubtedly many more who may not lease, but contract for administrative services with a fleet management company (FMC).

In either case, it’s important to note that vehicle negotiations for purchases are made directly with the manufacturers (while FMCs and dealers are also involved in administrating the deliveries).

The startling results from this study (corporate fleets only) was that 61.8 percent do not have a program in place to measure the performance of their OEMs.

I’m not done yet. Unbelievably, only slightly more than half (52.8 percent) of the corporate fleets that lease have a program in place to measure the performance of their FMCs.

Keep in mind that these are NAFA members responding. These are members who have ready exposure to education; individual face-to-face meetings with OEMs and FMCs; access to all online news, developments, websites, and industry media (like us); plus a networking paradise.

Those are revealing and incredible numbers and a possible indictment of our industry. It’s insane! What am I missing here?

No one is going to admit (to their boss or fellow fleet managers) that they don’t keep an eagle eye on billing statements, incentives, or warranty reimbursements, but I certainly will challenge anyone making such a claim who does not have a program established (and followed) internally.

So, to the other 11,700-plus commercial fleet managers out there reading this message, please consider creating a measurement program for your outsourcers. Practice your program. Let your boss know it’s in place. Know in your heart that you are both a sometime-accountant and also a gumshoe, even though it’s not in your job title. You’ll do fine.

Comments

  1. 1. William Forsythe [ November 02, 2012 @ 11:33AM ]

    Ed,

    Frankly, I am shocked that it is that high (52.8 percent) of corporate fleets measuring the performance of their FMCs. Account managers, executives, and sales associates of FMC’s have become more lobbyists than strategic partners. When this takes place, it leads to the relationship becoming more important than the services provided.

    Failing to audit the monthly bills could be so costly that it defeats the purpose of outsourcing completely. One of the biggest Red flags that Fleet Managers need to reexamine is the “miscellaneous” category. Often ignored, this has become a dumping ground for additional charges Managers have become to accept as another fee. Ask to have these charges detailed so you can match up against the MLA. Do not wait until your company’s auditor is asking the question “what’s this?” Being proactive may not only save your department money but keep your fleet in demand as opposed of allowance/reimbursement programs.

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Author Bio

Ed Bobit

Editor & Publisher

With more than 50 years in the fleet industry, Ed Bobit, Automotive Fleet editor and publisher, reflects on issues affecting today’s fleets. Drawing insight from his own experiences in the field, Ed offers a perspective similar to that of a sports coach guiding his players.

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