By Mark Boada, Executive Editor
When you hear talk about right-sizing a fleet, is the first thing that comes to mind getting rid of vehicles? Often, the prompt for right-sizing is either a directive from senior management in order to cut overhead expenses, a merger or employee layoffs.
But if as a fleet manager, what if you’re not met with one of these challenges? Does that mean your fleet, as it’s currently configured and deployed, is “right” for your organization? Quite possibly not. While saving money is usually one of the outcomes of a right-sizing analysis, there are other measures that determine whether your fleet is well-designed.
That point was driven home last week by Ed Smith, CEO of Agile Fleet, who was the lead speaker at a webinar hosted by the National Conference of State Fleet Administrators titled, “Right-Sizing the Right Way: Achieving the Right-Sized Fleet for Your Organization.” Smith’s company specializes in conducting right-sizing analyses and providing software, hardware and services for car-sharing and right-sizing.
“Lots of times we get calls from people who say, ‘Hey, I need to right-size,’ or ‘I’ve been told to look at utilization,’ and a lot of times we’re not exactly sure what that means to them,” Smith told the audience. “And what we’ve come to find in our organization is that there’s a negative connotation about the word right-sizing that often suggests reducing staff.”
The right vehicle types, locations and availability
According to Smith, though, the right way to assess whether a fleet is properly configured is to determine how efficient it is at meeting an organization’s needs.
“We’ve come to realize is that in fleet there are a couple of different components of fleet utilization context that serve fleets well. And so, we define right-sizing as a pro-active, strategic plan to have not only the right quantity of vehicles – that’s what most people think of – but also the right type, at the right locations and available at the right time. You’d be surprised how much these play into the number of vehicles you need in order to do your job.”
Smith said the right place to start right-sizing is to count the number of vehicles a fleet has. “[That] might seem obvious, but a lot of fleets don’t know how many vehicles they have, how many of each type they have and they don’t know where they’re located. ”
Besides possibly having the wrong number of vehicles, Smith said a fleet is less efficient and less cost-effective when the right kind of vehicle isn’t available at a convenient location when it’s needed. “So, if every time I need a vehicle I have to come the day before to pick it up and return it the next day, or go 45 minutes to somebody else’s lot, that’s not an efficient way to do business.
“That doesn’t mean, for example, that I have to have a bridge inspection truck at every one of my locations if I only need it one or two weekends a year –I can maybe lease one, get one from another location or pick it up on those times.
“And as for having the right type or class of vehicle: if I’m in a university setting and people come to use a vehicle out of my motor pool and all I’ve got is a very large van or a small pickup truck, that might not the drivers’ needs.”
Smith said this can be the result of university motor pools having limited hours of operation, which leads to drivers picking up vehicles long before they need them and returning them long after they’re done using them. During that time, then, those vehicles are unavailable to others who need them.
“So, clearly, quantity is on everybody’s mind, but making sure we’ve got the right mix and class of vehicles at the right location at the right time is really important.”
Consider allowing use of non-fleet vehicles
Since even the most efficient fleets can’t always meet every driver’s need of the moment, Smith said they should consider occasionally allowing the use of vehicles from outside the fleet. These include short-term leases, rentals, or using ride-sharing services or personally owned vehicles to meet periods of peak demand. In these cases, Smith cautioned that fleet policies need to be amended to permit such uses, and that when fleets allow the use of personal vehicles, they should require drivers to provide documented proof that a more appropriate, cost-effective fleet vehicle wasn’t available
Smith said right-sizing should be based on a careful study of a fleet’s usage of each and all of its vehicles. Possible metrics include mileage per year, fuel purchases, number of days per week, month and year each vehicle is used, and the number of times driver requests for a vehicle weren’t met.
Analysis of those numbers can reveal that certain vehicles are relatively under-used – like older, high-mileage pickup trucks, hybrid sedans or small SUVs, as some Agile studies have revealed – or that some vehicles ought to be shifted to different locations.
Of course, that analysis might also show that a fleet ought to merge sub-fleet pools, which can enable a fleet to reduce its vehicle fleet without reducing driver satisfaction. Smith cited an example of a municipal fleet of that was able to reduce its fleet size from 80 to 19 vehicles without turning down driver requests, while saving the fleet an average of $200,000 a year in depreciation and operating expenses.