May 10, 2012
BEST PRACTICES: EXECUTIVE SUMMARY
In this, the final installment of CAF’s Best Practices series, we put it all together and review a broad range of fleet policy best practices and how they apply to your vehicle operations.
CAF’s best practices series, has examined fleet management operating policy, fuel management, driver behaviour, vehicle selection and accident management. In this concluding wind-up we look again at key aspects and connect them in an overview.
For fleet operators a comprehensive vehicle cycling policy is important. Managing the cost of vehicle maintenance versus resale value and capital costs is a major fleet management task. A variety of factors are considered when determining a ‘best’ time to cycle vehicles. One factor is that timing of the the sale; spring or fall. Since most OEMs release new vehicles at those times, new car as well as resale markets can be strong. Another determining factor is depreciation.
Today, replacement decisions are increasingly influenced on a longer life calculation for most vehicles than was the case in the (relatively recent) past. Consequently ‘stretched’ vehicle maintenance practice is now standard for higher kilometer readings. Added to this, recent economic uncertainties have, on average, kept vehicles in longer service.
With no control over fuel prices at the pumps, fleet managers constantly strive to identify and implement fuel management policies that not only increase vehicle efficiency but also reduce the volume of fuel. One broadly used method of controlling fuel spending is the fuel card through which all fuel related expenses can be tracked as well as setting daily and monthly transaction and/or dollar caps. Lessor sponsored fuel management programs are generally available and feature fuel cards that track and record detailed information. Most fleets today attempt to decrease fuel consumption by selecting vehicles featuring more fuel-efficient technologies. In addition, more rigid ‘right-sizing’ to reduce fleet size, is broadly in play.
An important, indeed in the opinion of many the critical element in reducing overall vehicle operation cost, is a well-defined, understood and accepted driver policy. Clearly articulated logical and reasonable rules and guidelines can minimize if not entirely eliminate potential and costly problems. However, a well-defined safety policy is not by itself sufficient. Proactive monitoring and enforcement of the policy once it is established and understood set is, if anything more important. Not only will such actions reduce costs their practice helps protect drivers, vehicles and the organization itself.
Many fleet management experts agree that a periodic review of driver abstracts will help identify high-risk drivers and reduce risk. A detailed, strictly applied policy for drivers covering regarding seat belt use, speeding, and ‘aggressive’ driving to mention a few examples, evenly enforced.
When the vehicle selection process works smoothly, it’s because a detailed blueprint has been carefully established and it’s from this blueprint that right vehicles for the application can be confidently chosen. The mix of vehicles must objectively reflect the day-to-day fleet needs including the appropriate number of vehicles needed to achieve the organization’s objectives cost-effectively.
The term ‘right-sizing’ summarizes the elements organizations must consider when deciding which vehicles are on the selector and which will form the fleet. When the vehicles that come closest to reflecting the needs of the organization, have been fairly determined, other factors can come into play. These may include: the size and inclusiveness of fleet incentives, specific fuel efficiency of the chosen vehicle, depreciation, projected resale value, and anticipated maintenance costs.
When an accident occurs, a critical step to controlling the always associated costs is to have a policy is in place that clearly defines what steps the vehicle driver must (usually immediately) take. A thoughtfully crafted accident management program is designed to deal with consequences of accidents in the simplest way possible. It is of utmost importance that fleet operators have clear and concise knowledge about vehicles in the fleet and drivers. It is this knowledge that will allow the fleet to manage inevitable accident related costs and circumstances.