The Fleet Manager as a strategic partner in value creation for the enterprise

Transcription

1 The Fleet Manager as a strategic partner in value creation for the enterprise Prof. Angelo Paletta Department of Management Alma Mater Studiorum - Unibo

2 Summary The fleet manager is traditionally considered a cost centre, but he can become a veritable investment centre for the company, taking part of the managerial function and building a sustainable competitive advantages. The cross-functional management makes this figure a strategic partner for CEOs, CFOs, purchasing managers and human resource development, assuming a central position in the strategies of Corporate Social Responsibility (CSR). Like other managerial figures, the fleet manager is a manager of fundamental corporate assets, both tangible and intangible. Its strategic role in the business model of the enterprise is not only connected with financial capital invested in the company fleet s car park and its management. The fleet manager helps to build the company s intellectual capital through the alignment of human capital strategies, the effectiveness and efficiency of business processes, the development of company s relational and organizational capital.

3 The main challenges for the fleet manager Uncertainty in the general economic conditions Continued pressure on cost reduction/cost containment Restriction on capital expenditures and pressure on replacement car service Residual Value Volatility Increase of fuel prices and car ownership costs Commitment to sustainability Internationalization of fleet strategies From fleet management to mobility management aziendale

4 Uncertainty in the general economic conditions Centro Studi Auto Aziendali, Report January 2012 Vehicle market: from (2010); (2011); (outlook 2012)[- 11%; -6%] Company car market 2011: + 5,32% + 3,37% vehicle registrations in enterprises + 7,59% rental car (short term and long term) Total vehicle registrations (2012): from to ; -3,67% - 4% ( ) purchases - 3,25% ( ) rental

5 Cost Containment What the company will do in case of crisis Cosal azienda in the next nel 12 months? Modify the typology (54%) Decrease the number (24%) Change the supplier (14%) Decrease the benefits for managers/employees (6%) Decrease/remove the owned cars (6%) No measure (37%) Cost reduction strategies: Fleet resizing vs. Operating efficiency Ownership/Rental? cr Centro Studi Auto Aziendali, Report April 2011

6 Deferment of replacement car Capital expenditures, inadequate business liquidity and restrictions on debt Long term rental/full leasing Increase of time in service for the company cars 2010: Average age 42 months, km : Average age 44 months, km : Average stock, km Implications: Maintenance and spare-part costs; Residual value Residual values declined, on average, 20 percent or more in Europe, varying by country. The State of Global Fleet Management, Automotive Fleet, 2012 Strategic partnership between enterprise and charterer Partnership strategica tra impresa e noleggiatore Centro Studi Auto Aziendali, Report April 2011

7 Green fleet and sustainability In Europe and in the world the CO2 reduction has become a key factor in the company s fleet car park acquisition decisions. ALD Automotive, 2010: an average vehicle in the fleet had emissions of 131 grams, compared to 160 in Some countries have rethought the structure of taxation to promote EVs (Denmark, UK) The point of view of the Italian fleet managers: Only electric or hybrid vehicle (0,75%) vs. diesel (89%) Warning on CO2 emissions Smaller cars/less powerful engines 73% don t have a sustainability project! Main selection criteria: economic (with an eye to safety, environment, brand) Fleet eye Industry review - Quarter Four 2011 Centro studi auto aziendali

8 Internationalization Fleet Management is becoming more and more international for many companies Centralization of global procurement, as a result of globalization and economic crisis. Combination of country-based cultural specificity with standardization

9 From Fleet Management to Mobility Management The first trend is the concept of total cost of mobility (TCM). This involves all aspects of mobility ranging from fleet vehicles, travel management, conference calls, and short-distance mobility, Pascal Serres, deputy CEO of ALD International

10 What do we know about fleet managers? The Top 50 Traits of a Great Fleet Manager WHAT TRAITS AND SKILL SETS ARE NECESSARY TO BECOME A GREAT FLEET MANAGER? April 2012, Automotive Fleet - Cover Story

11 Top traits Jugglers Understands Company Goals, Products, and Services Goal-Oriented Metrics-Oriented Business Acumen Focused on the Internal Customer Accountability Adaptable to Change

12 How it is changing the role of fleet manager? Three main responsible profiles of company fleet s car park Administrator Manager Strategic Partner

13 Fleet administrator He s within the procurement function The Fleet Administrator may be the fleet management consultant, and he can provide support on purchasing, administration and general services. Interface functions between the supply of services related to long term rental and the expectations of the company Focusing on administrative aspects

14 Fleet administrator 1. Selection and Negotiation. Locate the more convenient or more efficient charterer, considering price/quality ratio of the services offered by him. 2. Fleet vehicle monitoring. Constantly monitor the mileage of each vehicle and compare it with contractualized mileage to minimize downtime and excessmileage penalties. 3. Examination of invoices. Check the correct charging for goods or services offered by the charterer, even using third-party suppliers. 4. Reporting. Receive reports in different types from the charterers, and reorganize them to give customers a single documents format that facilitates checks and comparisons. 5. Controversy. In case of contractual breaches by the side of the charterer, he settles disputes so as to prevent disagreements. 6. Communication. Communicate with all the areas of the company involved in the car park management. 7. Company Policy. Support the company in the study of methods and criteria useful to the good functioning of the fleet.

15 Fleet manager The company entrusts authority and responsibility to a specialized function of the fleet management Fleet manager manages its own budget with defined objectives to be achieved The main responsibility of the Fleet manager is to define the governance of the fleet: Car policy: set of rules, procedures and practices that discipline the company car use (who has the right; request; car list; private use; regime for taxing fringe benefit; fines; allowances ) Choice of governance models for different fleet management activities: hierarchy vs market vs hybrid forms Focusing on economic aspects: fleet manager = cost centre The Total Cost of Ownership (TCO) is at the core of the managerial philosophy of the fleet manager

16 In Their Own Words: Fleet Managers Speak (Truthfully) Everyone drives a vehicle and thus thinks they know your business. They lack a true knowledge of how difficult it is to effectively manage large-scale vehicle systems. We spend an inordinate amount of time trying to educate someone who thinks they know enough. They don t consider us professionals in the same regard as an engineer or lawyer. We re just another administrator to manage assets Although fleet is the second largest expense in our company (second only to payroll), they see it as a necessary evil, the redheaded stepchild. Because it not part of our core business, it doesn t get the attention/respect needed to properly manage the process. Quite honestly, you [AF] ask me my opinion far more than anyone from my senior management team. They only look at the bottom line, never the value-add we bring to corporate strategy and business operations. Automative Fleet, 2008

17 Strategic Partner Although the fleet manager is not part of the executive committee of the company, he has the full respect The fleet manager is a strategic partner of CEO, CFO, human resource managers; he s in constant contact with drivers and operational managers: Fleet is obviously asset management, but it is also a customer-service job The fleet manager helps to build the company s intellectual capital through the alignment of human capital strategies, the effectiveness and efficiency of business processes, the development of company s relational and organizational capital.

18 Thanks for your attention!