It was a great honor to be named one of three finalists for NAFA’s Excellence in Fleet Award at the 2013 I&E. Let’s talk about your fleet career and how you joined Ingersoll Rand.
I started off at Wyeth Pharmaceuticals, creating their driver risk management program. We primarily had sales drivers on the road but we didn’t have a very good safety program in place to provide them the knowledge and tools to do their jobs safely. That was my initial introduction into Fleet. At that time, Chuck Woolard and Jack O’Donnell managed Fleet Services for Wyeth. Collectively, they shared their experiences and wisdom, which ultimately prepared me for the move to the fleet manager role. That was the first chance I had to essentially put my mark on a pharmaceutical fleet.
The biggest opportunity for us at that time – in about 2005 – was fuel economy and right-sizing vehicles relative to the role of the pharmaceutical sales rep. A number of changes had occurred; reps were carrying far less equipment and the role was more technology driven.
Wyeth was eventually acquired by Pfizer Pharmaceuticals; at that time I transitioned the fleet for about a year and then moved to the bio-pharmaceutical company Cephalon. I was the fleet manager with Cephalon for approximately two years – until they were acquired by Teva Pharmaceuticals. I was offered an opportunity to stay on with Teva but decided that I desired a bigger challenge, preferably outside of pharmaceuticals.
Fleet is a fairly small community. It is tight knit and the people in fleet recognize those who are good at what they do, and you can rely on them to help you out. I leveraged this and put the word on the street that I was looking for another opportunity. I wanted to know where the biggest opportunity was for me to learn something new and expand my knowledge of fleet. Consistently I heard, “Just don’t go to Ingersoll Rand, it is decentralized and disorganized”. For me that was an enormous challenge, but I had to balance that with relocating my family from the Philadelphia area to Charlotte, North Carolina. Fortunately, the decision to join Ingersoll Rand has gone exceedingly well.
The Ingersoll Rand fleet is service-oriented. It is primarily made up of HVAC commercial and Industrial Technologies technicians. We also have the security technologies group, golf carts and transportation refrigeration within that as well. Our vehicles range from sedans through heavy truck. It’s a very different fleet element than where I came from.
What kind of research did you have to do and where did you take that?
Walking into an organization, you really want to take the temperature before you can begin to even consider what it is you are going to focus on. With regard to the talent that was there, although they had not been in fleet for very long, they knew a lot more about the organization and how it operated than I did. I had a chance to meet with the team in an effort to gain an understanding of how they see fleet and what some of the challenges are that they see in day-to-day operations.
Talk about this decentralized fleet. What was that like?
Decentralization works in some organizations. I am a fan of and a promoter of a centralized fleet. If nothing more than from the leverage opportunity for negotiations with manufacturers, upfitters, suppliers, and then honing in on what that actual tool is for the job. When a fleet is decentralized most of the decisions are made locally on-ground without a whole lot of understanding relative to what the effect is on the entire organization. From a cost perspective, if a manager has ten or eleven vehicles, they will typically have three spare vehicles that sit within that office. That’s OK locally until you look at fifty offices with three spares at each office. You very quickly realize that you have more vehicles than you could possibly use in any given year no matter what the circumstances.
The cultural change to centralization begins with the understanding of the fleet total cost of ownership concept, which is not how cheap you can get the vehicle in the door on the front end; it is truly the lifecycle cost of that vehicle. That is acquisition, collision, maintenance, fuel economy, warranty, and especially the resale value of that vehicle and what market it’s being sold in.
In a decentralized fleet where this is more a foreign concept, typically it is living out the life of the lease and hanging onto the vehicle until it is dead. So, when a vehicle leaves the fleet it ends up getting towed across the auction block and you barely get any value from the sale.
Understanding that this is how our fleet was run, understanding that we didn’t have the internal systems to support a centralized model, that truly began the goal up-front of determining how we get this accomplished. That involved getting the HRI system set up, sharing information with our third parties, and cleaning up our data so that we can collect the information necessary to go back out to the business and show them how they are spending their fleet money holistically.
Tell us about what the next phase of the process and how much you had to deal with.
The next phase of the process for me was to ensure I had the right people resources. The two employees in fleet didn’t have a lot of fleet experience, but were certainly dedicated to the organization, and had made it known that they were on board for what was about to come. I met with each of them individually and let them know what the next two years was going to bring and the amount of work required to get us to the level of compliance and maturity expected of a typical fleet; letting them know that I was behind them in everything that we were about to endure. I was clear up-front that we were going to face some very tough challenges.
The end result of our discussions was buy-in by the team. Understandably so, since a lot of what they did day-to-day was just putting out fires. They really wanted to get beyond that but to date didn’t have the leadership to provide the vision of what good fleet management practices were.
After meeting with the team, I approached my leadership team identifying some initial figures of excessive fleet spend due to poor processes and decision making. We were fortunate to have some data and examples where parts of the organization were spending more money in maintenance on a vehicle than they actually paid for the vehicle initially. We then combined this information with the actual salvage and auction values of the vehicles that we were towing across the auction block vs. the same vehicles driving across the auction block. Collectively, the opportunities were roughly in that 2 million dollar annual figure.
This initial analysis provided the approval for Project Agile, which within our organization is essentially identifying areas within the business where we can improve processes, reduce costs and improve productivity. The approval provided the opportunity to present to the CEO and his leadership team and provide them with the same level of information. I fielded about 20 or 25 solid questions from the leadership team and was ultimately granted the resources to move forward with the Fleet Agile Project and was able to hire a fleet data analyst to pull our internal and external systems together to support our move to centralization.
You had to crunch a lot of numbers. How did you centralize the fleet and what were you looking at?
Initially, we were focused on the asset information. At the time we couldn’t even tie our assets directly to our driver base and then to our financial systems. What we could tie it into was what we were spending per asset and per mile. Working from the basics, we collected cost of acquisition by asset, collision costs, maintenance spend, fuel spend, and then their resale figures. Although the initial set of data used was minimal, it was enough to get us started.
However, we needed to make the data actionable; where we needed to get to was to identify how to tie in an asset to an individual employee. Tying the asset to an individual employee then ties the employee into a manager, which ties the employee and the asset into a cost center, which allows us to track historically the cost center spend of a vehicle and/or employee. From a billing perspective, it then allows us to recreate the bill so it includes the cost inter-company data so that even at the end result, instead of everything coming from a large pot of cash, it actually truly gets down to the cost-center spend per asset. What we found was not monumentally earth shattering but certainly shed some light on our inefficiencies. We had areas of our business that were paying for assets that were transferred to them from another part of the business. It was the HVAC business paying for the Golf Cart assets; the Security business paying for the HVAC businesses assets, etc., because there wasn’t a consistent way to tie in the internal and external systems.
To make all this work consistently, the fleet data analyst with her experience and expertise with the internal HR data systems was able to identify a unique identifier that would be utilized throughout all of our internal and external systems and then feed that information on a nightly basis to our fleet suppliers. Even internally we were able to leverage the tie-in for our Learning Management System for improvements in driver tax compliance, identifying drivers requiring reporting for personal-use, what assets they are assigned to and the taxable benefit associated with each one of those.
All of this has only been the beginning of a more tremendous opportunity. The groundwork that has been completed to-date is really just scratching the surface but now puts fleet in a position to provide complete clarity around processes, compliance, spend. and productivity.
BIO
Jonathan started in Fleet as the Fleet Safety Specialist with Wyeth Pharmaceuticals, was promoted to Fleet & Safety Manager at Wyeth/Pfizer, transitioned to Fleet & Safety Manager at Cephalon/Teva, and relocated to Charlotte, NC to become the Fleet Manager for Ingersoll Rand. Jonathan is passionate about and committed to improving compliance and strategically advancing Fleet Operations.
Jonathan has been an active member of the Fleet Community, previously leading the Philadelphia Chapter of NAFA, participating as a member of NAFA’s Corporate Fleet Advisory Council, the DriverCare users group for CEI, Customer Advisory Board for GE Fleet, and a member of AFLA. Jonathan’s focus over the last 18-months has been on improving all aspects of Fleet Management and Compliance for Ingersoll Rand and its businesses.