By Janice Sutton
Kathe Carter is Chief Operating Officer of Mercury Associates, an independent consultancy with a staff of fleet management experts who have an enviable wealth of hands-on management experience and an array of sophisticated analytic tools. We talkeed with Kathe about some of the more pressing issues confronting fleet managers, one of which is to confidently prove the high value of their fleet operation to senior management.
She says, “If fleets are to control cost and quality, they must look at how they are doing business, regardless of whether they are insourcing or outsourcing the services, and be able to document in concrete ways that the fleet is providing best value services in terms of cost and quality. To do so, fleets need processes to secure information on service delivery requirements that speak to their company needs.”
Kathe, Mercury has a unique view into the state of the industry. What are some of the current trends that you are seeing?
There is certainly a lot of talk about big data and there is no doubt that the newer technologies will provide more detailed data in real time.
From our standpoint, the underlying issue really is what are fleets going to do with the data. Specifically, how will the data be analyzed and what is the path to turn the analysis into actions that will positively impact fleet and company operations?
At Mercury, we strongly support data-based decision making and using data for predictive purposes. With the depth and scope of data available, its analysis requires a level of statistical sophistication that doesn’t necessarily exist in every fleet organization.
Further, this type of analytic expertise is one of the top skills that is going to be demanded across all industries in the next five to ten years, so it is going to be tough to secure it.
A second area that appears to be trending is outsourcing of in-house maintenance services. The ability to secure trained mechanics and keep them technically up to date is becoming more and more difficult, especially for small operations. As a result, fleets are moving to outsourcing maintenance services.
A third ongoing trend relates to changes in organizational size and structure; with fewer and fewer fleet staff, there is by necessity more outsourcing. Initially we saw this in the more traditional services, like fuel and maintenance.
Now we see a growing need for professional and administrative services as well. For example, companies offer administrative services in areas such as insurance and reimbursement and professional and analysis services related to all aspects of fleet management.
There is not necessarily a daily need for sophisticated analyses or for various fleet management functions such as replacement planning, or process review. Fleets can augment their staff with the specific skills and tools required for such functions as they are needed.
Knowing where those resources are, developing positive relationships with the suppliers of these services, and effectively managing them are skills that future fleet managers need to excel in.
Just as the automotive industry as a whole is transforming, the scope of fleet management is also changing. What are some of the challenges facing fleet managers?
Changes in the industry resulting from mergers, acquisitions, different directions, and new service offerings are a topic of conversation. Much of the discussion currently is about the unknowns and working through the changes.
None of these types of changes happen simply or seamlessly so fleet managers are having to manage changes in the supplier process, practice, staffing, etc. They are concerned about getting through the process, its impact on their daily operation and having the service and quality levels they need to operate effectively.
Fleet managers are being asked by upper management to show how the fleet operation is bringing high quality services and value to the table.
If fleets are to control cost and quality, they must look at how they are doing business, regardless of whether they are insourcing or outsourcing the services, and be able to document in concrete ways that the fleet is providing best value services in terms of cost and quality. To do so, fleets need processes to secure information on service delivery requirements that speak to their company needs.
Next, they need strong evaluation and analytical tools that ensure fair and through comparison of methods of providing the service, including comparing various vendors and the extent to which they can meet the company’s need for quality service delivery.
We work with a lot of clients to provide the framework, analytic tools and expert analysis required for evaluating and/or securing services.
Tell us more about Mercury’s consultative process.
Recently, we were asked to assist with securing leasing, maintenance, fuel, and related services for a large corporate fleet.
The greatest value comes in engaging us in the entire process. Generally, this begins with identifying key service needs, developing requests for proposal questions and evaluation methodology, and detailing a comparison on the true total cost of the proposed contract.
Sometimes in selecting vendors fleet operations will look at only the price of the services or leave out key cost elements. We utilize a methodology that begins with a focus on a supplier meeting the company’s core needs with a high level of quality.
A second element evaluates the total cost of a proposed contract by applying service prices to expected activity over the course of the contract.
A third element considers impact on the company’s internal operation time and the impact of changing vendors.
With years of analyzing many fleet operations, is there a specific area where you most typically find the potential for cost savings?
There is often a great potential for savings in the cost of the vehicle itself. It is impacted by a variety of elements such as cost of vehicle, financing, replacement policy and sales return. Effectively managing each element brings the greatest result in terms of both cost control and service delivery.
What are some of the factors that differentiate Mercury from its competitors?
I believe Mercury is uniquely positioned to meet the needs of fleets both now and into the future. We are the largest fleet management consulting firm in North America. We certainly do international work as well, much of which is focused on fleet management training.
Mercury is differentiated by several things. First is the depth and breadth of our experience. Our staff is a mixture of fleet management professionals, people like me and others that actually worked in fleet, along with technical, analytic and IT experts. This allows us to bring to the table a set of skills that meet the specific needs of the client engagement.
The size of our company enables us to offer a wide variety of fleet experience that includes both the private and public sectors and the full scope of fleet assets. In short, we do not come to the table with a one-dimensional view of the fleet business.
Our mix of field and consulting experience enables us to not just listen but understand the client’s issues and provide detailed recommendations that we know are realistic and actionable.
Another element we bring to the table is strong analytics. Big data may be a new focus for some, but data analytics have been core to the Mercury approach since inception of the company.
In addition to our staff expertise, we have developed a number of proprietary tools that assist in data analytics. With our staff’s practical fleet experience, we understand the data and are able to move from analysis to recommendations for practical, actionable steps to improve the management of the fleet.
Further, our data expertise goes beyond analytics. Mercury offers a host of technology related services including application development, fleet system assessments, specification development, fleet system implementation and integration, functional fit-gap analysis, and cloud computing (enterprise hosting services).
Our specialized approach includes in-depth experience in various fleet systems and the technical expertise required to maximize the value the systems offer. Combined with our consulting expertise, our technology base uniquely positions us to navigate the business intelligence landscape and produce actionable results.
Equally important elements are our flexibility and independence. Whether it’s a single engagement to address a current need, periodic reviews and analysis, weekly management of key elements, or daily assignments, Mercury can provide fleets what they need – when they need it.
We do not sell supplier products or services, our focus is on the company we are engaged by and we are dedicated to providing objective, unbiased service, advice and technical guidance.
