Be careful what you ask for!

Hello Fleet Professionals!

We were promised change last year, weren't we? Well it's here and there's more to come - whether we like it or not!

I read with great interest Mike Antich's recent Market Trends blog on dual sourcing. He made some very good points and it really took me back to the days of multiple sources for everything. In the 80's that's one of the reasons we used multiple sources for vehicles, lessors and the ancillary services that were available at that time. And that was long before we all had computers on our desks or even our own fax machines!

Back in those days I was a fleet manager and everything was done manually. As mentioned above, there were no computers. There was one fax machine for the entire office. If you had a fax to send it had better be important. We used telex machines to manage our global fleet, an IBM Selectric typewriter for just about everything and an essential tool we called a telephone. We had those on our desks and we used them! Not only did we answer them when they rang but if we missed the call (and got a message from the reception/switchboard - no VM in those days) we actually called people back! But I digress and telephone etiquette is a topic for another blog.

Sole sourcing was a great idea as long as everything runs the way it is supposed to run. That's just not so anymore. I've spoken with many fleet mangers all over the country who have yet to order even one vehicle for the 2009 model year. Why not? In some cases the manufacturers slowed or shut down production because of excess inventory. Then came the financial crisis. Now maybe we could get production but no one would write a lease! If we weren't sole sourcing on those two fronts our opportunities to avoid the disruptions in our fleets certainly would have improved. However there are other effects to this trend. Your maintenance costs will rise, replacement rental costs rise and your fuel expense rises as your fleets fuel efficiency decreases. Those factors will directly effect your driver's productivity. Regardless of whether you are managing a sales or a service fleet, your drivers need their tools to sell or service your company's products. When their productivity goes down (remember they are in the shop waiting for their rental car), your company profits will drop. Oh it's a vicious cycle isn't it?

Now since we're going old school in this blog, how about unbundling? Anybody remember what that is? I know. Some will say it's more work, and you know what? It might be, but it doesn't have to be. There was a time we worked with service providers that were the best in their field. We had two lessors, contracts with at least two different vehicle manufacturers, worked with an independent maintenance company and remarketed our used vehicles ourselves (full disclosure - I am a remarketer!). There weren't any national fuel card companies back then (even WEX was just getting started) and the idea of accident management was in it's infancy. Did I mention we didn't have computers?

So what's the bottom line? Fleet management is a lot of work. Whether we are in the 80's and working with calculators and graph paper or in the 21st century and working with the latest technology it's still alot of work. Our employers pay us to be the experts and develop the best systems to minimize fleet expensive and increase the company's sales/service force productivity. There may have been a time when sole sourcing and bundling worked, but times have changed. It's time to dust off a few of the tricks we used when the lack of technology required us to to be innovative.

Twenty-five years ago I started reading this little magazine called Automotive Fleet. Back then I always turned to the closing editorial and read it first. From that editorial I learned alot about the fleet business - the importance of the relationships with not only my fellow fleet managers, but with all industry vendors. I learned about the importance of depreciation and why it's so important to be a hands on remarketer as a fleet manager. It's still the first thing I read when the magazine comes in. Thanks Ed! You're a terrific teacher. Maybe it's time to dust off some of those old pieces for our latest generation of fleet managers.

Keep your chin up! And do let me know what you think!