The vehicle fleet, historically a convenience, has become a key contributor to a company’s cost base. No longer hidden among various accounting expenses, the fleet budget has been identified and is usually well monitored. As a result, international fleet management has become a central subject. It attracts skilled people, innovative suppliers and creates new concepts.

To reach a superior level of maturity, international fleet management needs to develop long term visions and strategies, as opposed to a mid-term opportunistic management style. Many companies already have reached that stage, where fleet management is the mirror of the highest corporate values driven by a long term target and is also compliant to the company’s annual objectives.
In support of this culture, the international fleet manager’s mission is to look for optimisation tracks, for quick wins and best practices. A successful fleet strategy depends on the coordination of these actions.

Based on many years experience working with international companies, Arval Consulting came to identify
4 possible fleet strategic targets:

• Cost optimisation. This is the most common target, especially since the beginning of the current financial crisis. But cost optimisation doesn’t automatically mean cost reduction. The fleet costs must be consistent with the actual mobility needs. A too radical cost reduction policy (typically more than 10% of the fleet TCO) can affect the company’s operational business and be counter productive. In order to design a consistent cost optimisation strategy, reasonable targets must be set. To optimise the costs many options are available, not just the single topic of vehicle selection.
• HR performance. The vehicles are not only a cost for the company but are also often a motivation tool as well. A Company Car Policy is an agreement between the driver and the company so could be considered as a strong HR management tool. The possible targets of such a management tool might include: driver retention, equity between driver categories or business units, transparency of the drivers’ rules and responsibilities and compliance with legal considerations.
• Environment and CSR. Thanks to the increasing sense of responsibility of the international companies, but also to the EU-supported CO2 taxes all across Europe, environmental issues now are almost systematically considered by the fleet managers. However, beyond the standard CO2 reduction plan (up to one tonne CO2 saved per car per annum) reduction, a more ambitious strategy would include the polluting emissions, as well as the safety norms.
• Operational efficiency. Although this strategy often overlaps with the cost-optimisation ambitions, operational efficiency can be a strategic target on its own. The purpose is to be able to monitor and drive, from a central point of command, the whole international fleet, and simultaneously, to ensure the efficiency of the daily management at vehicle level. A 35% reduction of the time spent on operational management through process optimisation is an example target. Many progressive steps are necessary to achieve this goal, covering the operational, tactical and strategic levels of fleet management. This ultimate stage is where operational lease delivers its whole benefits.

Whatever your current optimisation initiatives, they will naturally fall into one of these 4 strategic targets. To design a fleet strategy can actually give a structure to your optimisation actions.

Can a fleet strategy include the 4 targets at once? In theory there is no reason to not include all 4 targets, but we recommend focusing on a priority target and considering the others as secondary objectives. It is well known that a single target has more chance to be achieved that several equal targets. Moreover some contradiction might appear between two targets, for instance when acting simultaneously on cost optimisation and HR performance.
To set a fleet strategy requires project management skills. Targets, timeline, milestones, resources have to be identified upfront.

Arval Consulting’s role, together with IBO, is not only to deliver spot optimisations on your fleet, but also to bring an expert support to build a consistent and effective fleet strategy.
With an 8 years experience, Arval Consulting is an international pole of 8 dedicated experts. Over more than 250 missions, they have generated savings of more than 50 millions euro and 15,000 tons CO2, with a customer satisfaction of 94%.

For more information, contact arval.consulting@arval.com