Since its founding in 1944, Parsons Corp. has established a strong presence in the global construction industry. The engineering and construction firm generated revenues exceeding $3.6 billion in 2007 and is 100-percent owned by the Employee Stock Ownership Trust.
Parsons business units include Commercial Technology, Construction, Infrastructure & Technology, Transportation, and Water & Infrastructure. The company seeks to conquer the toughest logistical challenges and deliver landmark design-build projects across the globe. Its mission to "deliver innovative solutions" strongly relies on the ability to plan, design, construct, and operate diverse facilities and infrastructure systems.
With more than 11,500 employees located worldwide, Parsons teams with an increasingly diverse group of global customers and stakeholders to provide dependable services. The company's core values include "safety, quality, integrity, diversity, innovation, and sustainability." Success is measured one project at a time by exceeding expectations and satisfying customers.
Parsons business goals encompass leading its industry in safety, continuously enhancing the company's value, maintaining sustainable growth, growing consolidated net operating income and sales at least 10 percent annually, and maintaining a strong balance sheet. The company assesses its success through nine performance measures, including:
- Safety record.
- Quality audit results.
- Customer satisfaction.
- Annual sales, backlog, and earnings growth.
- Net profit and new profit margin.
- Cash flow and working capital.
- Backlog conversion.
- Share price.
- Employee engagement.
'Smart' Approach Helps Fleet Yield Significant Savings
To meet its business goals, Parsons relies heavily on a fleet of more than 1,300 owned and leased vehicle and heavy equipment assets, as well as numerous lighter-duty construction support equipment. Maintaining an efficient and cost-effective fleet is a cornerstone of the company's continued success.
"In the past two and a half years, our organization has evolved from a general contractor mentality with limited controls and a 'get the iron in the dirt' regardless of the cost approach to an economically focused, 'smart' decision approach," said Robert Andrade, vice president, asset equipment management.
This refocused effort has already resulted in increased efficiency, cost ownership visibility, and customer satisfaction. In fact, significant progress has been made in the company's procurement program.
Implementation of tighter centralized procurement controls, engaging vendor competition, buyer accountability, and cradle-to-grave management of the procurement function has yielded significant savings in a short period of time.[PAGEBREAK]
Benchmarking Helps Fleet Team Set Policy and Analyze Results
Parsons' global fleet department, based in Sumner, Wash., and comprising about 10 fleet professionals, utilizes benchmarking to help set, analyze, and revisit fleet policy.
"Benchmarking is an ongoing happening within the organization as we model our processes after the successful processes of our peers," said Theresa F. Anderson, corporate equipment manager. "Today's ever-changing fleet environment requires that our processes are fluid and are revisited and adapted to meet those changes as well as those of our customers."
During the past few years, substantial progress has been made in process identification, evaluation, comparison, and implementation to facilitate efficient, cost-effective fleet management across all aspects of Parsons' fleet operation.
"We strive to improve ourselves and engage new ideas and concepts," Anderson said. "If we don't stay engaged with our fleet groups, we won't continually enhance their capabilities."
One of the fleet department's most telling policy implementations to date has been the addition of a Corporate Vehicle Safety Program.
"Safety is our number one core value," Andrade said. "And our increased emphasis upon vehicle safety has significantly reduced lost time and resources related to physically unsafe vehicle assets."
Parsons now has centralized visibility of unsafe assets and can act quickly and efficiently to correct the unsafe condition using its many national maintenance accounts. Another course of action includes eliminating the unsafe asset from the fleet entirely if certain ownership metrics are not met.
The Corporate Vehicle Safety Program implementation has produced a safer, modern, fuel-efficient, and more dependable vehicle fleet. In addition, more time on the job for drivers has yielded increased productivity.
"An added benefit has been prohibition of the use of cell phones while operating motor vehicles or equipment," Anderson said. "This has reduced equipment and employee downtime related to accidents resulting from the distraction of wireless device use."
Periodic Reviews Help Fleet Head in the Right Direction
Because construction fleets have been historically weak in tracking and benchmarking cost of ownership, Parsons makes sure to perform cost analysis on a monthly, quarterly, and annual basis. If the analysis reveals the company no longer utilizes a specific asset, that asset is retired.
"To be competitive in the marketplace, we must know what our true costs are. We are always looking at our costs, fleet replacement cycle, sustainability, etc.," Andrade said. "Companies that outsource their fleets have a hard time getting a handle on true operating costs."
The Parsons fleet team works closely with senior management on policy and budgetary issues on a daily basis, with "hot" issues discussed weekly. Defined reviews take place quarterly and include a review of operations and costs, ROI, policy analysis, and staff reviews.
"We make business decisions based on what those reviews tell us," Andrade said. "We benchmark quarterly and do a thorough look at our measures, along with forecasted trends."
Parsons' business plan is based on a four-year lookout, but must remain flexible as a result of dramatic year-to-year fleet changes.
"Some years we may need a lot of cars, other years, we may need cranes," Anderson said. "This activity swing requires senior management to stay merged with their groups so they know when and what to dispose of."[PAGEBREAK]
Fleet Structure Sets Parsons Apart from the Competition
The Parsons fleet differs from peers because of its diversity. Parsons can put any vehicle or equipment unit on the ground to support any vertical or horizontal construction endeavor undertaken by its four global business units currently operating in 27 countries worldwide.
These projects require anything from Class 1-8 trucks and general administrative vehicles to a broad range of "yellow iron" machines, paving equipment, and cranes.
Additionally, Parsons has the internal capability to maintain all assets under its control through state-of-the-art equipment, a mobile technician pool with more than 200 years combined experience, and an aggressive training program.
The company also acts as a specialty niche lessor, a reputation Parsons developed over the past few years. Because specialty construction equipment is not widely available in the marketplace and is expensive to own, Parsons has been known to rent its equipment to competitors for months at a time to fill their short-term needs.
"Because keeping functions in-house is a main focus for us, we've become a commercial lessor," Andrade said. "Our competitors know to come to us for specialty items because we own the majority of our fleet. We don't need to market our specialty vehicles. People know they are here and come to us directly."
Cost Reduction Initiatives Boost Fleet Effectiveness
In an ongoing effort to minimize costs while maximizing its fleet effectiveness, Parsons' fleet team has implemented key policies during the past few years, including a lease management program.
"In the past, we've gone to outsourced leased vehicles, but because we have different subsidiaries, it got out of control quickly," Anderson said. "That's when we realized we had too many vehicles in too many locations. And, we didn't know where those vehicles were or more importantly, how they were being used."
Utilizing the lease management program resulted in centralized control of a once burgeoning and out-of-control program. Steps have been taken to reign in the number of lessors available to Parsons, which simultaneously increased its ability to manage those lessors and provide the company with customer leverage to achieve maximum customer satisfaction.
Because Parsons has moved to a mostly owned fleet as a result of the "pendulum swing" in the economy, the company is also able to keep cash flow in check.
"Lean times have led to where we are now. Owning our fleet allows us to tighten up in a lot of areas, and our cost analysis says that owning is more beneficial to us," Andrade said. "We also found that outsourcing didn't provide management the level of control to really get a handle on all operating costs."[PAGEBREAK]
Best Practices Focus on People, Processes, Alliances, & 'Green'
Other best practices within Parsons includes a global talent initiative (GTI), green thinking where possible, warranty and supply chain management, strategic alliance formation, and utilization of available technology.
Talent Growth Program. The company's GTI program recognizes that individual professional growth, retention, and redeployment are critical to the organization's succession. The initiative was launched to better define and strengthen employee/supervisor relationships, improve communication, and help employees develop a sense of connection to Parsons.
"We realize that the satisfaction of our customers all over the world hinges on our more than 11,000 employees," Andrade said.
This philosophy allows employees to build and grow their careers at Parsons while engaged in their everyday tasks.
"Our business flourishes because our people do," Anderson said.
Sustainability & Alternative Fuels. Parsons continues to push for sustainability wherever possible. As such, the fleet team is testing hybrid vehicles in several regions, including Nevada, Illinois, New York, California, and other states.
The fleet team uses California as a benchmark due to the stringent environmental mandates in the West Coast state.
"If we're ahead of the game in California, we'll be fine in our fleets in the rest of the states," Anderson said.
However, Parsons faces roadblocks in its rollout of hybrids, including insufficient production of the vehicles, inadequate fueling infrastructure — especially overseas — and a much higher up-front acquisition cost.
Fleet is also looking to utilize biodegradable oils and lubes at some construction projects to create a greener construction fleet.
Strategic Alliances. Parsons continually seeks strategic alliances outside of the company. In addition to strong international accounts with vendors, fleet receives constant sales and product support across the globe.
"This increases our ability to perform rapid asset deployments and quality product support with minimal downtime," said Anderson
Utilization of Telematics. The fleet team's initiative to control fuel costs includes utilization of telematics and fuel tracking.
"We're currently in the testing and assessment stage," Anderson said. "But, we believe that if you're not doing telematics in some form and you're not managing your fuel costs, you can't know what your true fuel burn is."
The telematics pilot includes more than 50 vehicles and will roll out to another 100 vehicles this year.
"We fully believe through the use of telematics that fleet will enhance its fuel management and PM scheduling," Anderson said.[PAGEBREAK]
Outlook Positive for Parsons' Global Fleet
Moving into the future, Andrade and Anderson will continue to measure fleet risk management and liability.
"We'll continuously look for and design ways to make our work more efficient," Anderson said.
"Sustainability and EPA emissions compliance efforts are driving our more intensive global fleet asset management. Many fleets are behind in their promulgated due diligence due to down-sizing and outsourcing," said Anderson. "With all the new regulations imminently on the horizon, the time is now to refocus on fleet assets compliance issues before the regulations show up at your door. An in-house program is imperative at this time in this current lean economy." ■