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Changingfaces 

In line with our cover story of the modern fleet manager, Dave Scott, our technical correspondent and a man who gets around the industry a lot as a trainer, outlines his views of what is required from the 'new era' fleet manager of today. There's so much more to it than meets the eye.


If I was tasked to write a job advertisement for a fleet manager, it would be as appears in the accompanying block headed 'Fleet Manager Wanted'.

Read the 'advertisement' and you will soon see why fleet outsourcing is a growing phenomenon. It's very seldom, if ever, that one sees a fleet management job advertised in the above terms. It's either couched in vague general management terminology or the job is segmented into components that scatter the vital feature of consolidating a wide vehicle information spectrum into a meaningful picture. One thing hasn't changed - understanding that there is a great difference between fleet management and transport management.

IT - the only control key
FleetWatch Fleet Management supplement dated Nov/Dec 1999 carried the following comment: "Fleet management is driven by Information Technology (IT) - software is becoming the driving force of any business and even more so in transport. The transport manager leans towards diesel and how it is used, while the fleet manager is primarily concerned with the meaning of the information that flows from the many incidents that make up transport operations. An item much overlooked is how transport IT will seamlessly fit in with the IT systems of the business. Most IT systems grow like the tax act in organisations, lacking in standardisation, capacity and real usefulness to the users - the transport division is usually the last section to benefit from powerful IT software." Nothing has changed. Seven years later this remains valid.
Regardless of fleet size, computer literacy is no longer an option - it takes precedence over automotive technical knowledge. And what really counts is the ability to set realistic benchmarks, derived from information relating to specific operational conditions. 
A fleet manager has the gift of demanding the right information extracted from data resulting in knowledge that confers insight and understanding. It is at this level that forecasting occurs. You can't drive a fleet into the future by examining the rear view mirror. It's anticipation that allows business to survive when the margins are so thin:

• What's the impact on our business model when fuel reaches R7 and then R8 per litre?

• We are only a few years away from a total traffic gridlock in certain areas of the country - the infrastructure has not kept pace with urbanisation. How will the fleet operate in these conditions? What will be the impact on utilisation and operating costs? 

• We all acknowledge that the qualified driver pool is rapidly diminishing. How will we keep the wheels turning by 2008?
  Only powerful IT software can handle the mass of variables associated with fleet efficiency and decision-making. 

Don't focus on the fleet - focus on desired outputs
It's now regarded as a win-win for everyone involved and represents real out-of the fleet-box thinking. Its primary focus is fleet capacity utilisation in a partnership approach. The Clover/Flexifleet Contract is a unique South African case study.

When national dairy product supplier Clover announced a logistical alliance, estimated at R2,2 billion over 10 years, with Imperial Group's FlexiFleet in September 2003, it was regarded with a degree of scepticism. Within six months the contract achieved critical mass to prove its viability for all parties. Now two-and-a-half years old, alliance partners describe it as a steadily improving relationship where operational issues have settled down. At the same time, the contract has imported beneficial discipline into Clover's procurement and distribution operations. The contract rolled out with the milk procurement and logistics fleets as initial priority followed by the passenger fleet.

Clover's CEO, Johann Vorster sums up the business: "Clover is an FMCG company focusing on premium dairy and other branded products and aims to sell at least one of its products to each and every point of sale in Southern Africa on a consistent and regular basis." Vorster adds further that "90% of Clover's business resembles CPiX and there is a constant need to cap distribution costs. The primary goal is to extract a 24-hour asset capacity utilisation expressed in m3 and litres. Clover sought after m3 and litre capacity, not vehicle ownership." 

Here - in random order - are 13 measurable gains that Clover and FlexiFleet achieved:

• A 12% overall fuel consumption reduction as measured within predetermined study group areas.

• Route time improvements ranging from a minimum of 5% up to 10% - the knock-on effect is improved product quality for Clover in managing time for perishable commodities.

• An investment of R300-million in fleet renewal - 400 units in the national fleet of 970 have been replaced with consequent improvements in reduced downtime and maintenance costs.

• A 1,2 million kilometre reduction in fleet distance covered over 18 months - despite an increase in delivery points.

• A reduction of 104 standby vehicles - over-night servicing has contributed to removing the need for standby vehicles.

• Access to the right vehicles and efficiencies. 

• 16 more workshop facilities that conduct almost 60% of their business for work outside of the Clover contract compared to previous activity that was 99% for Clover - workshops are more economically viable. Workshops are seen as profit rather than cost centres!

• Establishment of five panel/body shops that are also a service provider to the rest of the Imperial FlexiFleet operations.

• Manufacturing operations - tanker/trailers - has seen an increase of 600% in output.

• New patents have been developed and are in the process of being registered.

• Imperial FlexiFleet has to be very focused in terms of the vehicle product they support - they have become more selective in terms of vehicle selection.

• Driver training is a key issue and on-board computers are used more effectively.

• Clover's brand image has improved through the vehicle fleet - Clover management regard trucks as their most important mobile brand image at present.

Still partners and going strong, from left: Johann Vorster, CEO of Clover; John Loxton, director Imperial FlexiFleet; and Manie Roode, executive, shareholder affairs and strategy of Clover

Clearly fleet management is not a Clover core competency. It's this very aspect that distinguishes the Clover/FlexiFleet contract from an outsource deal. 

• Clover still has direct control over drivers, fuel usage, route planning, milk procurement and all administration including IT and HR functions. 

• FlexiFleet has taken over all risks associated with running a national fleet - procurement, disposal, depreciation, and replacement while providing efficient operational support such as workshop and body repair services.

Imperial FlexiFleet Director, John Loxton summarises: "The contract would have not achieved successful implementation if it had not been driven from the top and has proved itself in increased fleet utilisation and operating cost reduction figures. This is a partnership and an alliance that works between two South African industrial giants operating in different fields to their mutual benefit. The partnership model cannot foresee all eventualities and the contract will be evaluated as it matures."

Everyone complains bitterly over 'thin margins' in a low inflation economy, but few are prepared to tackle the mobility of people, goods and services in a scientific manner. At present massive cash flow and consumer demand hide fleet inefficiencies - don't wait for the downturn or fuel at R8/litre.

Fleet Manager Wanted We seek a mature, strategically-driven person to assume leadership and public image of a large 300 vehicle fleet asset base that is made up of cars, light and heavy commercial vehicles and forklift trucks.  The company is environmentally conscious and expects the fleet manager to lead the fleet in terms of road safety and responsible environment practices.   The successful applicant will be computer literate, analytical and able to handle/consolidate the vast information flows that this fleet creates through telematics, vehicle tracking and on-board computer technologies. Interfacing with the company's IT division will be an important strategic and operational feature of the job. A key aspect of the task is to present sound recommendations and decisions resulting from information at hand.  It will be a decided advantage for the applicant to possess good negotiating skills for various existing and future outsourced contracts, as well as contractual relationships with a number of suppliers of essential services and products used in the fleet.  It is essential to have intimate knowledge of South Africa's First World Road Traffic Act and related Regulations and as the company's proxy, will interface with our legal advisors and appear in court actions  The fleet manager has full support of the company's HR division. However, people skills will play a deciding factor in candidate selection.  The fleet manager is responsible for operational administration of the entire fleet division, including financing, purchasing, disposal, maintenance, insurance, accident & loss control, fuel consumption, tyre usage, car allowance schemes and vehicle replacement policies.  An essential skill will be to oversee the company's vehicle selection procedures and policies in view of the endless options now available on the SA market. This requires a high level of automotive engineering literacy.  The fleet manager is expected to review and create sound operating policies and see to the application of discipline within those policies.

 

Fleet Management versus  Transport Management • Strategy = What = future thinking is a key fleet manager’s function. • Operations = How = current thinking is a vital transport management role.  • Fleet management is strategic in nature – policy orientation, trend analysis, technology forecasts, asset planning for future use and scenarios, benchmarking and exception reports, legal issues, image & environmental issues.  • Transport management is operational – fix it, measure it, control it, discipline it, sample test, attention to the detail.  • Most fleets are run with operational competency – few with strategic competency.  • Operationally incompetent management is costly in terms of both fixed and variable fleet expenses – the kiss of death.  • Raising maximum efficiency/effectiveness and productivity from fleet assets requires both strategic and operational competency.  • Fleet and transport managers tend to be over-ruled by marketing and financial managers to the detriment of the fleet