Managing the Financial Side of Commercial Fleets

How to Master-Plan and Set Goals

March 2018, by Tim C. King

Photo courtesy of Getty Images.
Photo courtesy of Getty Images.

Everyone understands how planning relates to success, and this is certainly true for fleet managers. However, how much effort do fleets typically devote to planning? And, not just on specific projects, but a fleet’s overall plan, objectives, and direction.

This ultimately determines how successfully fleet managers meet their customers’ expectations.

How many fleets have taken the time to develop a formal master planning document? What are the consequences of failing this? And, more importantly, what are the opportunities?

Many fleets may think they’re fine without a master plan. For those with only general directions such as reducing costs and improving services, a plan probably seems superfluous and without added value. What more could a fleet need?

Limited success is certainly possible without a formal plan, but excellence will elude these fleets. And, with this is the constant struggle and frustration of trying to meet increasing customer expectations.

There’s a better way. Just like other endeavors, excellence requires more than just typical efforts.

A Comprehensive Plan Brings Opportunities

For those wanting more, a comprehensive plan offers a multitude of opportunities. And, this isn’t just what results from the planning, but also the inherent learning involved with the development process.

The planning process begins with identifying and formalizing goals. For some leaders, this may prompt a further review of customer service fundamentals so as to ensure effective goals.

This leads to identifying the multitude of required fleet management tools, capabilities, and related performance measures. Some of these may be new; adding to requirements simply not previously existing.

And, while identifying some of these necessities can be simple, others can entail long-term efforts to finalize.

The second role of a plan is to ensure continuity. With the time involved and inevitable personnel changes, a required direction and focus must be maintained throughout. Without a formal planning document, this focus can be lost.

The third essential key of creating a master plan comes from the process of developing it. With the review and associated study of all of the planning components and requirements, fleets can learn during the process. This further enhances the plan and their understanding of customer service.

There are many reasons why this practice is not common among fleets, one such being that all fleet leaders can relate to the day-to-day demands which often dominate the management focus.

Another related issue involves the overriding role of technology, change, and the requisite constant focus, which is also inherent to all fleets.

With limited resources, both of these distract from other background requirements typically associated with providing customer service.

Turning to accepted best practices, seeking other professional advice, and historic evidence for guidance works, but it overlooks many of the new opportunities available, and thus, it can substantially limit success.

Fleets seeking to excel must simply reach out beyond their comfort zone, and do things differently. This can be quite challenging; that’s another reason it’s so uncommon for fleets to establish a master plan. Creating a fleet master plan can avoid, or at least mitigate, many of these issues. With the learning and development involved in a comprehensive plan, typical fleets will find opportunities to improve their services, support, and success.

Master Planning Helps Goal-Setting

The primary objective of a fleet master plan is to know where it’s going. What are the opportunities? What are the goals? How are they going to be achieved?

Even if the leader knows the answers to these; does everyone else in the fleet know or share them? And, what happens if the leaders leave? Will these goals simply be forgotten?

Second, without a formal plan; a fleet is probably based upon the aforementioned:

  • Commonly-accepted assumptions.
  • What other fleets are doing.
  • What’s been done in the past. 

The former of these is often based on misperceptions, and viewing what others are doing and what’s been done in the past as panacea typically doesn’t produce optimum success. All of these often are inherent constraints to success.

This is because not everyone shares the same views on certain ideas. Therefore, underlying assumptions may be flawed and the resultant directions can overlook basic requirements.

Supporting Fleet Customers

What fleets do is simple: They support the vehicle and equipment needs of their customers. How to achieve this successfully, though, is not simple at all.

It’s critical to realize that fleets inherently have a lot of customers, and often many are overlooked.

Fleet customers include the managers and supervisors operating the equipment; the executive leaders and owners of the organization; the drivers and operators; all the ancillary support groups requiring associated services or information, and finally; the external regulators involved with the fleet.

Why are all of these groups customers? It’s simply because they all can determine a fleet’s success.

Fall short of any of their expectations and the fleet’s success will be limited. Fail many and it can expect change correcting the situation; your customers decide how effective your fleet is based upon their point of view or perspective.

This is the principle of perception as reality.

Because of this, your success is not based solely on actual service performance; there are additional elements that need to be managed to optimize success.

This presents both opportunities and potential threats to fleets. The opportunity is to enhance your success by managing perception with a strategic marketing plan; do not to leave this to chance. Failing this can result in two adverse outcomes. The first jeopardizes a fleet’s success with unseen, overlooked, and unmanaged influences. And, second, it provides the opportunity for any competition to manage your customers’ perception — to your fleet’s detriment.

The ideal situation to be in is where everyone’s expectations are exceeded, for the customer and fleet.

Combined, these create challenges for many fleets, but managing them is quite possible once identified and facilitated by a plan.

The Triple Strategy

An effective master plan will incorporate the previously addressed principles to optimize success. This is leveraged through an approach called the “Triple Strategy.”

The first element of this is to maximize service performance by considering both low costs and high quality. All fleets are familiar with this.

Associated with these two components is a misperception that limits success: low costs and high quality is impossible; it’s one or the other, but not both.

For fleets relying solely on process improvement, this can lead to this conclusion, unless the fleet considers a redesign of processes. This often enables otherwise overlooked opportunities to lower costs while improving service quality.

The second element in the Triple Strategy we’ve already identified: the need for a strategic marketing plan. This adds managing customer perception, in addition to service performance.

And similarly, the final element identifies the goal to achieve win-win results with customers. It further clarifies that success is based upon your customers, not fleet. With their success; the fleet’s success will follow.

This supports the added insight that the triple strategy is based upon being totally customer-driven. In other words, it’s all about your customers.

Reviewing 7 Best Practices

  1. Asset Management
  2. Service Management
  3. Customer Experience Management
  4. Relationships and Behavior
  5. Information and Communications
  6. Teamwork
  7. Total Fleet Costs

There are seven best practices that can be used to support the aforementioned triple strategy.

The first is asset management, which provides a necessary platform for discovering low costs and high quality, with the vehicles, equipment, and associated services support.

One component of this is utilizing a lowest-life-cost approach with all aspects of the fleet procurements. Another involves eliminating non-value added functions associated with both common budgeting and purchasing processes.

The second best practice looks at service management. This simply involves basing all service decisions on customer requirements — not what’s convenient or seemingly beneficial to the fleet.

These first two best practices are a fundamental foundation for success. Without these, fleets can’t optimize their customer services to ensure superior service performance.

The next three best practices focus on optimizing customer perception. These three practices include: customer experience management, understanding relationships and behavior, and solidifying information and communications. These are necessary so as to avoid the hazard of just leaving their respective components to chance, which is typically the default mode for some fleets.

Managing customer perception offers substantial benefits at relatively little cost. Managing the customer experience can be viewed as housekeeping. It’s ensuring your fleet puts its best foot forward by 1) introducing your services, 2) ensuring user-friendly services, 3) optimizing appearances, and 4) professionalism.

The sixth and seventh best practices incorporate all three elements of the triple strategy.

The sixth best practice applies the concept of teamwork with two aspects of fleet. First, it entails the fleet teaming with customers. Secondly, it incorporates teamwork within the fleet group – using it to accomplish all internal support functions.

Often misunderstood, this is an excellent example of process redesign where lower costs and exceptional service quality are combined to significantly enhance service performance, customer perception, which results in unanticipated win-win results for customers and fleet alike. Teamwork epitomizes the potential of change incorporating process redesign.

And the seventh and final best practice addresses the common overall organization’s executive and owner expectations of managing the total fleet cost.

This best practice replaces reliance on counter-productive fleet imposed policies to manage overall costs — specifically those managed by the fleet’s operating groups.

It enhances this requirement in two ways. First, it provides customers with both effective pricing and internal equipment benchmarking information to facilitate customers’ fleet decision-making to reduce their own fleet expenses themselves. And, secondly it further facilitates fleet partnering and working cooperatively with customers.

Challenges: Implementing the Plan

These seven best practices are uncommon and founded on unconventional concepts. For some fleets, this might raise concerns with risks.

For others, even though they may embrace the directions, they also recognize the inherent difficulty with many of the best practice requirements.

This is valid. But, it also reinforces the importance of having a formal master planning document. First, there’s value in identifying directions that offer greater success — particularly for both customers and fleet. Second, with this knowledge, it offers opportunities to create a plan to achieve the associated requirements. And third, despite the difficulties involved, working toward these objectives is ultimately positive.

The alternative is to discount them, and forgo the associated opportunities.

Still another obstacle can be the impression that this is all just based upon theory. That it’s “not real” for their fleet situation.

This entire process may not be easy, but excellence never is. 

About the Author: Tim King retired in 2008 following a 30-year career with what is now NVEnergy, an electric utility based in Las Vegas. He is the author of Fleet Services: Managing to Redefine Success.

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