Fleet operations often work along imaginary lines that separate city, county, and state entities. But combining resources can help agencies take advantage of economies of scale. Photo: Getty Images
8 Ways to Improve Efficiency by Working With Neighboring Fleets
For many fleets, especially government fleets, unconventional thinking has been the source of many great innovations for which creative fleet managers often fail to receive credit.
In my 25-year government career, I was frustrated that local governments operating within the same geographic area as county, federal, and state agencies repeated and duplicated the same functions, often when they were located just a short distance apart. Because they are separate governments, imaginary lines seemed to prevent cooperation and collaboration.
How much sense does it really make for multiple public entities located in close proximity to one another to operate procurement departments, fleet garages, IT services, and other similar and duplicate functions when these same functions could be consolidated for the benefit of the taxpayers?
Here are some examples of outside-the-box thinking that have worked for government fleets and that could and should be considered more broadly to break down silos and eliminate the duplication of effort that occurs routinely in local government.
Insourcing Fleet Services
While I worked for Polk County, Fla., in 1998, our fleet team pioneered the insourcing of several local city fleet service functions precisely because those cities were ill-equipped to perform these services well. Instead of a criticism, this is a compliment that these cities recognized the technology involved in vehicle care had advanced faster than their resources. The revenue earned from insourcing allowed our team to adjust our salary ranges and add tooling and diagnostic resources that otherwise would have been denied due to the lack of funding. These resources were shared among all garages, benefiting everyone.
Even if your local fleet entities prefer to remain separate, as technology advances, there are opportunities to share resources and expertise. As fleets cope with managing advances in technology, they are also coping with a technician shortage. Is it truly a stretch to urge local government fleets to consider partnering with their neighbors to exploit each entity’s strengths? For instance, if one fleet has a particular skill its neighbor lacks, could this fleet share that skill with the neighboring fleet rather than outsourcing it to a commercial vendor at a higher cost? This principle extends to the sharing of diagnostic resources and tooling.
Not everyone can afford Ford’s Integrated Diagnostic System (IDS) or the annual subscription to the INSITE engine diagnostics software, but perhaps agencies could collaborate by sharing the acquisition costs and use of these expensive but necessary shop tools. We are all working on the same or very similar equipment; it would seem pooling our knowledge and resources would result in greater efficiency and lower costs.
Shared Procurement Efforts
Local governments excel as “copycats.” They always want to know what or how their neighbors are buying so they too can benefit from the same process. Is it a radical idea, instead of piggybacking on a procurement process already executed, that local governments combine their needs in advance to leverage economies of scale by buying in bulk? It makes more sense to combine the procurement of a few dump trucks to that of multiple trucks, even if the specs differ, to make the transaction more attractive to the marketplace. The larger the buy, the greater the opportunity to leverage warranty terms, parts pricing and terms, and option pricing to the benefit of all buyers.
Shared Fueling Infrastructures
When I was a fleet manager, my team sold more fuel to outside agencies and municipalities than our fleet consumed. The profit earned from fuel sales funded fuel island maintenance, additional fuel site construction, and compliance-related improvements. The operating cost of our network of 11 fuel sites was completely funded by outside fuel sales rather than by local tax revenue. With a little effort, local governments can combine their fueling infrastructures, expanding fuel availability. It may even become a profit center.
Combining Parts Contracting
Government fleets often utilize the same batteries, filters, belts, supplies, chemicals, nuts and bolts, etc. By combining these elements into master parts agreements locally, fleets can achieve beneficial terms, conditions, and pricing that would not have been available separately.
Shared Telematics Contracting
Fleets, private and public alike, recognize the efficiency gained from the use of on-board telematics technology. Fleets have recognized the benefits achieved in driver accountability and improved behavior, fuel savings, safety, and routing efficiency through the use of telematics devices. But many local governments have not yet embraced this technology, primarily due to funding limitations. Here again, they may be able to leverage economies of scale by partnering with a neighboring fleet that uses these tools.
Pooling High-Cost Assets
Many government fleets operate high-cost assets that feature low utilization but mission-critical purposes manifested at infrequent intervals. The establishment of a heavy-equipment motor pool can become both a revenue source and a means to elevate equipment utilization that ensures the equipment is available when needed and earns revenue when it isn’t needed, increasing overall value to the operation. By pooling our fleet’s heavy equipment, the fleet I led implemented a strategy that mandated retiring heavy equipment with low utilization while, at the same time, providing a needed resource for smaller cities that may have been unable to afford, or rent, certain heavy equipment types. If pooling seems too complicated, local governments can certainly share heavy equipment to prevent duplication of asset types held by both.
Collaborative Technician Training
Training is an ongoing and constant challenge for everyone in our business. By pooling funding and resources, entities can source quality training at reduced rates by sharing the expenses. Quality training, provided on a regular basis, can become a valuable element of your technician retention strategy.
There is a lot of noise in our industry about the technician shortage, which is definitely real. However, the true challenge lies not in a shortage but instead in how you can retain your present staff. Technician retention should be treated as a strategic imperative for any fleet as the first line of defense against the technician shortage. This same collaboration strategy can be extended to support, encourage, incentivize, and foster technician training with a local public school or community college technical training program.
These are just a few reminders of the areas where some government fleets have excelled by implementing practices that should become more widely practiced if government fleets would only think outside their silos.
Yes, these initiatives require effort. They are often hard work. I have personally attended city commission meetings where the issue of outsourcing their fleet operation to the county was being considered, and their questions for me were sometimes thoughtful and sometimes confrontational. In spite of personal bias or some misplaced fears, no one can argue against the facts that fleet costs are escalating, duplication of effort is hard to justify, and that economies of scale can both mitigate cost creep and increase leverage strength for better contract and service language for the buyers.
Should we continue to do business as we always have, or is there a better mousetrap?
by Bob Stanton
I´m a Fleet Management expert, and the manager of Advanced Fleet Management Consulting, that provides Fleet Management Consultancy Services.