Measure first, then manage

Measure first, then manage

Rising fuel costs, budget cuts, the ebb and flow of freight, and any number of other outside influences continue to put downward pressure on fleet budgets. Yes, the economy is recovering, but the Great Recession will likely leave a lasting impact on the way business in general, and fleets in particular, conduct their operations.

ashley.jpgLong gone are the days when a middle manager could ask for a new piece of equipment and, trusting his loyal lieutenant, the president or CEO would simply answer, “Sure, go ahead and buy it.” Nowadays, that same request likely must be made along with cost-benefit analysis and return on investment timeframe. Then, maybe, it will be approved, if other value can be demonstrated as well.

So how does a manager work around this? Software packages, of course. There are a multitude of fleet management packages on the market today. All can help a manager justify and show how an idea can not only save a fleet money, but generate it as well.

Businesses are analyzing expenses like never before. Managers need to be prepared to defend those costs and show what they are doing to keep them in line.

Ashley Sowerby, managing director of Chevin Fleet Solutions, believes, like many others, that “you can’t manage a fleet that you can’t measure.” That’s also a theme that the National Private Truck Council believes heavily in. NPTC’s Private Fleet Benchmarking Study is just one of the tools it has available to assist private fleets in determining their value to the organization as a whole.

But this practice needs to go far beyond private fleets. Even for-hire fleets and government fleets have been changed by the recession. Blank checks are nowhere to be found.

“This year will throw the spotlight onto operating efficiencies and fleet utilization,” Sowerby said. “With public sector budget cuts and the effect this will have on the private and international aid sectors, it will be vital to return maximum value for money from the organizations’ assets. In order to achieve these goals, process and administrative overhead will have to be streamlined or potentially eliminated. Of course, in order to save, organizations sometimes need to spend first, and we’re already seeing a significant investment approach to cost control. The old adage ‘you can’t manage what you can’t measure’ is truer now than ever before.”

As fleets look to optimize resources more than ever before, money will become available for the latest equipment and tools that will make managing and running fleets more efficient than ever. That money, though, will come with a price tag. Having a good fleet management system in place – and using it properly - will help any manager justify the expense.

“While we’re not expecting a complete culture change towards unreserved capital investment in 2011, we believe that with increased confidence in the market, organizations will be continually spending to save, and investing in high-quality, specifically designed fleet management information systems to improve operational efficiencies and drive long-term return on investment,” Sowerby said.