What a Company Split Means for Fleet Managers
(L-R) Patrick Santiago, North America sourcing manager, corporate services; Nayda Berrios, associate director, global sourcing corporate services; John Dmochowsky, senior sales fleet manager; and Matthew Eckard - CVP, U.S. sales strategy & operations for Mondelez International work toward creating and maintaining a best-in-class fleet operation.
In late 2012, Kraft officially split into two publicly traded companies: Kraft Foods Group and Mondelēz International. Kraft Foods took brands such as Kraft, JELL-O, Maxwell House, Oscar Mayer, and Planters, while Mondelēz International held onto global snack brands such as Cadbury, Jacobs, LU, Milka, Nabisco, Oreo, Tang, and Trident.
The split meant the fleet faced the same fate: it would be divided between the two companies. But, it wasn’t as simple as divvying up vehicles; it meant creating a duplicate support infrastructure to manage the two fleets.
“At the time of the split, we had to separate our fleet to meet the needs of both companies. On paper it starts to look like a monumental task,” said John Dmochowsky, CAFM, national fleet manager at Mondelēz International. “Luckily, I had some prior experiences with acquisitions, which helped shape a game plan. And, thanks to an outstanding team, we were able to navigate the split seamlessly without any disruptions.”
Today, Mondelēz International operates 13,000 vehicles around the globe, 3,200 of which operate in the U.S., and has achieved several successes since the 2012 split.
Achieving a Successful Split
In anticipation of the split, Dmochowsky and his team began preplanning in August 2011. The division of the fleet was concluded at the end of 2012, around the same time the split between Kraft Foods and Mondelēz International became official.
The planning process included the creation of a detailed plan that covered all fleet functions, in which each fleet activity had an associated project deliverable date. During the transition period, the team developed and maintained a 120-point project log that covered a number of processes, including contract validation, motor vehicle record checks, driver safety, maintenance, accident services, registration renewals, fuel, personal mileage, insurance cards, remarketing, financial reporting/scorecards, and electronic billing.
With so much to accomplish, it’s no surprise one of the biggest challenges along the way was managing the workload.
“The team was essentially juggling normal responsibilities with a parallel path on the transition plans,” said Matthew Eckard, CVP, U.S. sales strategy & operations at Mondelēz International. “This continued for an extended period of time, so making sure the team was holding up was important.”
But, while the constraints placed on the staff were a challenge, Dmochowsky said the team’s persistence and passion were key to carrying the project through to completion.
“I surrounded myself with great people who had the same passion that I had regarding the success of this initiative,” he said. “My team members, Karla Sebastiani and Peggy McGrath, the entire GE Capital Fleet Services team, and all the internal stakeholders I worked with made this initiative a success and one I’m very proud to have led. In all, it went quite smoothly and goes to show that good preparation pays a strong ROI!”
It’s been more than two years since Mondelēz International became its own company with its own fleet, and it’s thriving. As past fleet industry benchmarking studies have shown, Mondelēz International is one of the nation’s most well-run fleets, representing best-in-class fleet management, according to Dmochowsky. The company has demonstrated “Best in Class” results — which represents the top 25th-percentile of benchmarking fleets — in all four major spend categories and has strong overall cost-per-mile results.
As the company looked at benchmarking the performance of its reborn fleet, the Mondelēz International team worked with its fleet management partners to learn what the 20 largest fleets in the U.S. were doing right, focusing in particular on depreciation, fuel, maintenance, and accidents.
Then, it turned its focus inward.
“We use a monthly dashboard report to measure all the fixed and variable costs by category type. This is done with sales leadership and finance to ensure we are on track with our annual goals,” Dmochowsky said. “Additionally, the team hosts a ‘hot topics’ call every other week with our partners to review anything surprising or areas that need quick attention. This maintains a healthy ongoing dialogue and ensures that challenges are addressed together quickly.”
The company’s latest benchmarking results show the fleet is continuing to perform at a high level; the fleet has also succeeded in reducing accidents. Dmochowsky considers these the fleet’s greatest accomplishments. But, when it comes to what he’s most proud of, it’s the people, whom he credits for the fleet’s success.
“I’m fortunate to be the steward of such a great team,” he said. “I have the privilege of working with an excellent team both here at Mondelēz International and with our partners.”
Even though the fleet has many achievements to be proud of, Eckard keeps his eye trained on continuous improvement.
“We still have a number of goals for the fleet: continuing to improve the safety of our fleet, being best in class in benchmarking studies, and delivering our cost goals for the company,” he said.
Data-Driven Fleet Management
One contributor to the fleet’s success is its willingness to embrace technology. Dmochowsky said integrity of data is critical to managing the fleet, and the team relies on daily electronic file transfers to keep both its database up-to-date and the processes that rely on that data running smoothly.
“Throughout my career of running a large fleet I have learned — sometimes the hard way — that it is critical to have access to all the knowledge and information of what is actually happening in a fleet,” Dmochowsky said. “I refer to a quote by Basil S. Walsh: ‘If you don’t know where you are going, how can you expect to get there?’ Whether it is data from fuel cards, maintenance reports, or telematics, our ability to analyze the performance and key trends in the fleet continues to get better every year. Cars and trucks today have such sophisticated computers on board. The trick is to bridge the gap between what a car can monitor and getting it compiled in a way that is meaningful as a fleet manager.”
The next step in the fleet’s use of technology is taking place in the coming months: a 100-vehicle telematics pilot. Mondelēz International hopes to increase fuel savings, enrich its maintenance program, and enhance its safety and accident management initiatives with the use of telematics devices.
“Telematics are nicely aligned to our goals on driver safety and reducing our carbon footprint,” Eckard said. “We want to make sure we are doing everything we can to keep our drivers safe and reduce fuel consumption of our vehicles.”
Sending Employees Home Safely
With a highly mobile workforce of sales people, safety is another area on which the fleet team places great importance. Not only has it created a safer work environment for Mondelēz International employees, but it has also paid off in dollars: total accident costs for 2014 were 22 percent less than the prior year.
“Safety is job No. 1,” Dmochowsky said. “Our sales professionals are on the road five days a week for Mondelēz International, and sending them home safe to their loved ones and family is important.”
Each year, Mondelēz International hosts a Fleet Safety Summit, bringing together leaders and fleet users to advance the company’s safety goals. “This has been important to keep safety top of mind and to ensure our safety plans are relevant to our users,” Eckard said. “Coming out of our Safety Summits, we’ve taken a few notable steps over the years. These include moving to Web-based video training that is more accessible and easy to follow for our employees, and adding backup cameras or sensors to our cars.”
Results show the Safety Summits work: After the company’s first summit, incidents per mile decreased by seven percent in six months.
Managing a Global Fleet
The 13,000 vehicles Mondelēz International operates are spread across more than 30 countries — and each arm of the fleet comes with different expectations from consumers and customers. The trick to managing a global fleet is thinking local.
“At Mondelēz International, we are focused on meeting our local business needs when it comes to providing the right tool for the job. For us it all starts there — add in the global networks and collaboration model, and it all comes together,” Eckard said. “Even if you get organized globally in a multinational company, meeting the local needs is primary. The collaboration between the company’s fleet management team, procurement, and the suppliers remains quite local. Safety and environmental considerations also remains a huge driver of choices.”
Although meeting local needs is valuable, Eckard, Dmochowsky, and team still strive to find synergies across the global fleet. They say the three key steps are getting a policy in place, developing a demand management process, and partnering with the right suppliers to drive innovation.
“Supplier partnership is so essential in finding synergies. The suppliers know the business and can help bring the cross-country and cross-regional synergy ideas. If you have developed the right internal forum for discussion, the ‘lift and shift’ starts to happen,” Eckard said. “At the end of the day, it comes down to making choices and ensuring you benchmark externally. Ensuring that you have a collaborative process to pick the right tool for the trade is essential.”
To find and maintain beneficial supplier partnerships, the Mondelēz International fleet team works closely with the company’s procurement team.
“The partnership with procurement is critical to help understand the marketplace, and to help create the right internal and external supplier management processes,” Dmochowsky said. “Cross-functional collaboration is a key to success and bringing procurement’s functional excellence ensures our foundational elements, like best total cost of ownership, market insights, and benchmarking, are in place to help foster a great supplier relationship.”
A Bright Future for Fleet Ahead
Even though the Mondelēz International fleet is already performing at a high level, the team still sets its sights on achieving more.
“In the future, I see more vehicle technology that will make all vehicles safer. Electric vehicles are representing an increasing share of the market. And, a new group of corporate and public fleet professionals will continue to bring new ideas to the industry,” Eckard said.
What does Dmochowsky see for the fleet in five years?
“In five years I see the company continuing to invest in the people and resources required to maintain this fleet as a best-in-class fleet,” he said. “I see this today with the investment in the CAFM certification program, the testing of telematics, and the investment in vehicle safety options that keep our drivers safe.”