MANAGING a small fleet can be pretty complex for any small business or SME firm. It comes with many challenges and risks, which if left unaddressed could affect the profitability of the business.
Successful management of a company car fleet requires following a series of tasks and responsibilities which are often neglected or overlooked due to the pressure of work.
Here, Paul Hollick, chairman of the Institute of Car Fleet Management, offers his top tips on how to successfully manage a small fleet. Following these simple steps can assist you in ensuring your company car fleet, whether it is big or small, is running smoothly.
1 – Clarity of Purpose
Be sure that the rationale behind operating the fleet and the purpose to which vehicles or groups of vehicles will be put is clearly understood.
2 – Develop the policy
Establish and confirm the structure of the scheme; how the vehicles will be provided, ranging from fully expensed company cars right through to:
- Business use of a privately owned car;
- Vehicle/ tax bands to reflect employee status;
- Extent of permitted driver choice; and
- The replacement life and mileage.
3 – Establish processes
Develop processes to support the policy and deliver the required outcomes. These will include arrangements for company car drivers to access servicing and maintenance facilities, a method for obtaining fuel costs, appropriate reporting processes for the driver as well as arrangements for managing driver choice.
Ensure the routines for gathering key elements of information are robust and reliable.
4 – Vehicle selection
Qualify vehicles for selection on the basis of
a) Being able to fulfil the commercial requirement;
b) Car running cost data (called whole life costs in industry jargon) which should include the following:
- Non-recoverable VAT;
- The impact of any differential writing down allowances and restricted vehicle rentals;
- Service, maintenance and repairs;
- Replacement vehicles; and
Carefully consider how the entitlement or allowance will be maintained over the longer term.
5 – Communicate
Make sure that your company car drivers, and any line managers or other interested parties, are fully briefed about the part they are required to play in ensuring that the requirements are fulfilled and precisely what actions they must take.
6 – Establish measurements
Identify a series of agreed measurements, which will allow the performance of the company car fleet to be accurately monitored.
These might include the number of vehicles in each employee grade, mileage and fuel costs and could be available at company, cost centre or individual vehicle levels.
7 – Interpret and contextualise
Regularly review available information to identify those issues which require attention and management focus.
This may be achieved by looking for individual or groups of vehicles which are inconsistent with the norm in an area of measurement, comparison between two similar user groups or even comparison against an internal standard or an external benchmark.
It is right and proper to take the nature of vehicle deployment into consideration, for example users whose duty cycle sees them being able to travel significant distances at a consistent speed will deliver better fuel consumption than the user who spends a deal of time on heavily congested roads. However, don’t accept that every variance is rooted in a unique operating situation!
8 – Manage performance
Focus on improving performance, prioritising those areas where the payback is most significant either in terms of compliance with legal or organisation cultural demands or in terms of cost saving.
There are benefits to be had in dealing with performance improvement in a measured manner, for example addressing the handful of the worst cases on a routine and regular basis.
Remember that managing the company car driver’s performance is often a matter for the line manager and it will often be necessary to work in concert to secure the best outcome.
9 – Maintain policy, processes and procedures
Update the policy and the things you do to reflect the evolution in what the organisation requires, developments in support facilities available from the fleet marketplace and changes in legislation, including company car taxation. Particularly, however, react to what is actually happening in your own fleet.
10 – Deliver continuous improvement
Deliver value to your business through a continuous improvement approach.
Careful analysis of information will almost always identify another area of your company car management that requires your focus.
However, it’s also important to continue analysing your current measurements to ensure aspects of your fleet that you have addressed do not slip back to old standards.
Want to find out more about the Institute of Car Fleet Management?
Click here to visit the icfm site