FLEET MANAGEMENT DRIVING AMERICA S BUSINESS PRODUCTIVITY

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1 SPECIAL ADVERTISING SECTION // LOGISTICS OUTSOURCING FLEET MANAGEMENT DRIVING AMERICA S BUSINESS PRODUCTIVITY Clockwise, from top left: A Ryder maintenance facility; ARI experts perform a site inspection; a Nissan NV High Roof cargo van; a Ryder heavy-duty tractor trailer BY MICHAEL RONEY very day more than 12 million fleet vehicles, from heavy-duty trucks to vans and commercial autos, take to America s roads, moving the goods that are the lifeblood of our nation s economy. Effectively managing one of these fleets can streamline operations and make any company more efficient and profitable. However, successful fleet management requires orchestrating hundreds of individual variables: specifying, acquiring and maintaining the vehicles; finding skilled drivers and technicians; coordinating efficient delivery routes and schedules; dealing with volatile economic conditions and rising fuel prices; and working with limited capital all while keeping up with evolving technologies and government regulations, minimizing financial exposure, maximizing flexibility and generally doing more with less. A tall order? Without a doubt especially when fleet management may be outside a company s core competencies or assigned to an in-house executive with diverse responsibilities. Fortunately, there s an entire industry focused exclusively on getting the job done. Taking a Strategic Approach Today s leading fleet providers have become adept at custom solutions that cater to a company s immediate needs and strategic goals. Offerings range from something as basic as renting a truck for a day to a full turnkey solution that can include paying an outside company to handle all of the speccing, financing and purchase of vehicles, ongoing maintenance, and even recruiting, training and managing professional drivers.

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3 ADVERTISEMENT 3 // LOGISTICS OUTSOURCING ARI s Technology Advisory team proactively tests equipment and vets vendors for clients telematics needs. The expertise that an outsourced fleet management provider can bring can help companies in dealing with each of these issues, explains Robert Sanchez, President and COO, Ryder System, Inc., which manages a fleet of more than 180,000 vehicles for more than 14,000 customers from small local companies to large multinational corporations. For example, take fuel: We ve got folks who have expertise in specifying a vehicle to maximize fuel efficiency for the particular application that fleet manager may be running. Trying to do that on your own, without the expertise that we ve gained from working with truck manufacturers and operating one of the largest, most diverse fleets in North America, can be challenging, notes Sanchez. Fleet managers have to balance the total cost of operation (TCO) story with the size of the vehicle that can help them get the job done, whether it is a truck, van or sedan, says Joe Castelli, Vice President Commercial Vehicles and Fleet, Nissan North America, Inc. They also have to consider new technology options, such as lane-departure warning systems and around-view monitors about 100 different variables when considering the best vehicle that will work for them. Castelli notes that Nissan has a spec for each fleet that allows the company to bundle popular option items for vehicle purchases, simplifying the ordering task for the fleet manager while boosting residual and resale value. We look to partner with our customers and figure out where their initial pain points are. Maybe maintenance costs are out of control and they don t know what to do. We ll start with that. By doing this understanding our customers businesses and the challenges they are facing, and providing solutions that meet those challenges we ve grown our business, notes Carl A. Ortell, President of ARI Automotive Resources International, whose customers include FedEx, BNSF Railway, ExxonMobil, United Technologies (UTC) and the Federal Government of Canada. We managed 50,000 vehicles in 1986, and we re about to cross the 900,000-vehicle threshold later this year, says Ortell. We believe that outsourcing is really the best way to go today and in the future if you want to drive down your total cost of operating a fleet. This custom fleet management approach has become very efficient, as evidenced by ARI s successful 2010 implementation of UTC s entire North American fleet in just 30 days. ARI not only completed the project in record time, it also doubled initial cost-saving projections and earned UTC s prestigious Supplier Gold award faster than any other UTC supplier in history. The award is given to less than 1% of the company s 50,000 providers and recognizes best-in-class quality, delivery and customer service. Boosting Value With Technology Technology plays an increasingly important role in fleet management. In fact, telematics the generation and transmission of remote location and measurement data from vehicles may be the greatest single trend in fleet management today, simplifying operations, improving reliability, minimizing downtime, and reducing fleet-related risks and business interruption. Telematics-based software systems such as Ryder s RydeSmart provide real-time monitoring and reporting of fleet location, mileage, compliance and performance data. Such information can also be integrated into a larger framework, such as ARI s web-based insights system, which allows for realtime management of the supply chain, maintenance and inventory control. You can track a vehicle s location at any given time, explains Ryder s Sanchez. You can see if a driver is doing hard stops, accelerating inappropriately or speeding. You also can follow routing and know exactly when a delivery is being made at a customer site. We re also able to monitor what s going on with the engine in real time. The technology is evolving to where if there s going to be some type of failure, we can see it and proactively address it, avoiding an unexpected breakdown. These are all exciting benefits that can help improve the efficiency of a fleet. This telematic data augments realtime information from a myriad of additional sources: parts dealers, firms that enhance vehicles, repair shops, gas stations and other input points. This data allows for exploration and diagnosis, and can be used to help support critical decisions. The fleet management team, controller, CFO, risk manager, logistics manager and anyone else can access it simultaneously and can customize their screens for the information most important to them, with actionable alerts on hundreds of different key performance indicators, fuel spend and other variables, Ortell explains. ARI has implemented SAP s HANA platform, an in-memory software application that will slash processing time, allow real-time data analysis at unparalleled

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5 ADVERTISEMENT 5 // LOGISTICS OUTSOURCING speeds, and substantially broaden the scope of fleet reporting. What used to take a week like a multiyear maintenance spend analysis now takes seconds, says Ortell. You can get data 3,600 times faster than you could before, which is revolutionary for making good decisions that reduce the TCO. Technology indeed is running very fast, and Nissan is one of the leaders in different offerings and creative ideas that we can present to the fleet managers whom we talk to on a daily basis, says Castelli. For example, our target is to be the leading global manufacturer of electric vehicles. The Nissan Leaf electric vehicle has done very well, and at the Detroit Auto Show we introduced a small electric commercial van concept, the env200, which already is being tested with some fleets in Europe and Asia. We want to present customers with sound choices and a high value proposition that makes sense to them for their fleets. Meeting the Challenges The way in which a company manages its fleet impacts its overall business strategy and its success going forward, with dependability, predictability and efficient use of capital looming large. TCO is a bottom-line consideration for fleet operations. Managing that properly means not only keeping an eye on the cost of the line item, but also on its volatility. You re going to have periods where you might have a major repair that could be a surprise and adversely impact you. A full-service lease contract solution helps insulate you from those unexpected costs, notes Sanchez. Our fuel economy and residual values are quite strong, which is going to be meaningful to a fleet manager looking at the TCO story, says Castelli. We also have some very innovative options for the fleet customer, whether they re around-the-vehicle systems, electric vehicles, backup collision support or rearview monitors. The customer realizes that these options help protect their drivers as well as their companies. Overall, in a business environment rife with change and risk, perhaps the most critical advice offered by fleet managers across the board is to partner with The cabin area of a Nissan NV cargo van The way in which a company manages its fleet impacts its overall business strategy and its success going forward, with dependability, predictability and efficient use of capital looming large. world-class providers that can align their products and services with your company s strategy. Make sure to spec new vehicles strategically, as every decision made at that point impacts the entire life cycle of the fleet. That s the time to not only consider use, maintenance and fuel, but also how added equipment impacts load characteristics, driver training, ease of use and more. You have to make sure you re doing everything correctly from the way you re speccing the vehicle to the way you re financing it, the way you re hiring the best drivers and technicians, and the way you re handling the maintenance long term, Sanchez advises. Each of these components, done right, can really give you the overall optimal solution for what s best for your company. Ultimately, fleet managers do a phenomenal job at orchestrating very complex operations in different locations, Castelli explains. They can continue to rely on their vehicle OEMs for the latest data and introduction options, as well as new developments that will help them get their jobs done a lot easier. We re happy to be able to provide customers with choice and innovation. Web Directory ARI Nissan Commercial and Fleet Vehicles com/fleet/ Ryder System, Inc.

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