September 11, 2020
A growing fleet business can spark a key question for business owners: When is it time to shift from handling fleet management yourself to hiring a dedicated fleet manager?
As a guiding principle, a business owner should bring on a dedicated fleet manager when it’s no longer possible to for the owner (or other employee who has been managing the fleet) to maintain an acceptable standard of fleet management along with his or her other company duties. Failing to meet an acceptable standard of optimized fleet management will cost your business money in lost efficiencies and increased expenses.
This juggling act starts to fail at around 24 vehicles. To decide if it’s time for you to hire a fleet manager, evaluate your business against the fleet management standards below.
For most businesses, fleet management becomes a full-time job at a dozen vehicles or so. Keep in mind that here, we’re talking about just managing the day-to-day tasks of logistics and vehicle readiness. Optimizing your fleet, or making sure you are running the fleet as efficiently and effectively as possible from both an operational and a financial standpoint, is another matter.
As a fleet grows in size, your ability to meet the ideal standard for optimized fleet management will decline, and fleet costs will rise. At that point, the cost of bringing on a dedicated fleet manager will likely be mitigated by how much money your business saves, thanks to proper fleet management.
Below are ideal fleet management standards that you should be adhering to. If you can’t meet these standards because you’re spending so much time handling other aspects of your business, consider hiring a fleet manager:
· Maintenance and repair cost comparisons. As your fleet grows or ages, conduct regular analyses to ensure you are optimizing maintenance costs. Spending time confirming that you’re working with the most cost-effective auto shop, dealership, or in-house mechanic. Make sure you’re getting the best deals and taking advantage of available promotions and pricing programs. Many fleet fuel card programs offer maintenance programs with discount and/or negotiable pricing.
· Procurement and supplies cost management. Monitor options for buying vehicle materials in bulk from different vendors to find the best volume discounts. Large purchases should involve thorough bargain hunting and price negotiating to ensure lower costs.
· Maintenance quality control. Monitor every repair or maintenance project to ensure quality and minimize turnaround time. Not only do you want favorable pricing; you also need to vet your maintenance provider to make sure you have the most reliable and capable mechanics working on your vehicles. Again, a fleet card can help. Programs like the Fuelman® fuel card include not only maintenance discounts, but also access to ASE-certified technicians and complimentary service schedule monitoring, plus vehicle maintenance and repair expense tracking. Routine maintenance shows the best return when it happens on a strict schedule.
· Vehicle registration and inspection management. Closely manage deadlines, annual inspections, and registration renewals. A fleet manager can prevent lapses that result in fines or tickets.
· Evaluation of new technology and trends. Stay abreast and take advantage of superior products and services as they become available, from fuel cards to electronic toll payment solutions. And don’t forget about vehicle enhancements and upgrades that can make driving safer and more pleasant for your operators. Don’t let technology or processes to become outdated.
· Strategic and long-term fleet planning. Make sure your fleet should has the right composition for the demands of your business. For example, have you evaluated your fleet’s composition recently to ensure you’re keeping pace with your business’s demand and the most efficient cars available? What are your business goals, and how will you meet them? Such planning takes time, and takes focus away from daily fleet management.
· Monitor driver performance. Actively monitor and evaluate your drivers to identify weaknesses. Address issues immediately to avoid costly mistakes, including accidents. Identify drivers who could improve their productivity or efficiency, and create a plan to work with them to do so.
If you can’t meet these standards of fleet management and optimization, consider adding a fleet manager to your business.
A fleet manager typically has the following roles and responsibilities:
· Manages the fleet vehicles. The fleet manager is charged with making sure the company has the right number and mix for the needs of the business, and that vehicles are road-ready. The fleet manager must not only ensure regular maintenance, but develop and execute contingency plans for unexpected downtime due to accidents and repairs.
· Chooses and manages fuel purchasing and payment programs. The fleet manager researches and chooses the fleet card or other program so streamline operations, avoid misuse and fraud, and ensure drivers have access to fuel and maintenance work wherever they are.
· Monitors performance and optimizes fleet. The fleet manager tracks and monitors fuel and maintenance spend, cost per mile, driver performance, and so on. Logistics planning is another key task – it’s up to the fleet manager to make sure vehicles are deployed and drivers scheduled and routed in the most efficient manner.
· Manages drivers. A pivotal role, and one that is often neglected in the absence of a dedicated fleet manager, is driver management. A good fleet manager has the people skills to interface directly with drivers, providing training and coaching, making sure they have the latest safety training and equipment, ensuring compliance with regulations and documentation requirements, and solving on-the-road problems.
· Monitors asset performance and specifies for replacement. Depending on the size and type of business, the fleet manager may have responsibility for managing construction equipment, deciding when to replace vehicles, purchasing and disposing of vehicles, and so on.
Hiring a fleet manager will increase your payroll, but consider the revenue that can be generated from improved business operations, not to mention your ability to direct your attention to managing and growing the business.
What would you be able to accomplish if you didn’t have to spend time managing your fleet? You could keep better tabs on business expansion opportunities, evaluate your own product or service pricing relative to the latest industry norms, develop plans for growing your business, or strengthen your employee pipeline. If you aren’t able to dedicate your time to these tasks, you’re likely missing out on growth opportunities.
Of course, a fleet manager isn’t free, but it could be more cost-effective than you realize. Honestly evaluating how optimized your fleet management practices are currently, and how much of your time is spent on fleet management tasks compared to business owner duties, could offer clear direction about whether to hire a fleet manager.