Copyright © 2013 Mercury Associates, Inc. All rights reserved Basic Fleet Management for Property Managers Gary Hatfield Vice President Mercury Associates NPMA Asset Management Strategies in a Changing World July 29, 2013
Dec 24, 2015
Copyright © 2013 Mercury Associates, Inc.All rights reserved
Basic Fleet Management for
Property ManagersGary Hatfield
Vice President Mercury Associates
NPMA
Asset Management Strategies in a Changing World
July 29, 2013
Copyright © 2013 Mercury Associates, Inc.All rights reserved
Personal Property and Fleet Overlap
• Motor vehicles are a form of personal property
• Fleet has its own, specialized terminology
• Data requirements and management metrics are unique
• Other differences?
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Basics of Fleet Costs: Typical Dollar
Depreciation$.45
Maintenance & Repair
$.34
Fuel$.19
Indirect Costs $.02
What are the fixed costs?What are the variable costs?
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Common (and IRS) Cost Categories
• Variable or Operating Costs – Fuel– Maintenance– Tires
• Capital or Fixed Costs– Depreciation – Insurance– License– Registration
• Indirect Costs – Management costs, parking fees, tolls, finance
charges, sales or other taxes, information system cost, etc.
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DepreciationOperating = Fuel + Maintenance
Total Cost of Ownership TCO
Time/Usage
Cost
Life Cycle Costs of a Vehicle
*
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Personal Property Management• The spectrum of life-cycle
management tasks associated with the ownership of personal property:– Plan – Acquire– Receipt– Store– Distribute– Proper utilization and care of property– Property accounting control– Disposition of property
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Vehicle Assignment Vehicle Acquisition
VehicleOperation
Vehicle Utilization
Mechanic Supervision
RegistrationRenewal
Enforcing Policy
Vehicle Maintenance &
Repair
Vehicle Replacement
Outsourcing
Alternative Fuels
Accident Management
Parts Procurement & Supply
FuelProcurement & Supply
Dispatching Mission &Authority
Facility Management
Motor PoolManagement
Vehicle Disposal
Operator/DriverTraining
Fleet Management
EFFECTIVE FLEET
MANAGEMENT
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Fleet Management• To manage and control, you need
Accounting and reporting tools and methods, including:
– Fleet Management Information System (FMIS)
– Performance standards (metrics)– Processes for field reporting – Data for fleet management decision-
making
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FMIS - Essential Functionality
• Acquisition Details and Costs• Upfitting/Modifications• Asset Details• Financial Records• Licensing• Fuel & Alternative Fuels• Utilization – miles, hours, trips• Tracking? (GPS)• Motor Pool Reservations/Dispatching/Billing• Disposal
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FMIS – Maintenance Functionality
• Maintenance– Preventive Maintenance (Scheduled)– Unscheduled Repairs– Field Breakdowns, Tow-Ins– Commercial Repairs– Shop Management & Worker Productivity
• Work Orders• Labor Hours • Parts Management, Barcoding• Warranty Tracking and Alerts
• Accidents
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Essential Financial Data Elements
• Direct costs:– Capitalized value, depreciation, amortization, and disposal proceeds– All vehicle modifications and accessory equipment, (add to the
capitalized value)– All fuel by type, cost, and source– All repair/unscheduled maintenance costs– All preventive maintenance costs – Commercial lease costs– GSA Fleet lease costs
• Indirect costs:– Facilities, including building purchase/lease, utilities, and maintenance– Equipment costs, including office and shop equipment, and tools– Computer systems including hardware, software, and support– Miscellaneous cost of in-house operations, including shop supplies– Staffing costs of headquarters, field, and shop personnel– Staffing overhead costs, including training and staff support offices– Administrative costs
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If asked these fleet questions, could you answer?
• How many vehicles do you have? Types?
• Do you have too many vehicles?• What's your maintenance cost? Fuel
cost? Current value? Average age of the fleet?
• Is it cheaper to lease or to purchase (own)?
• Do all your vehicles receive PM? On time?
• What is your fleet average MPG? 5 years ago?
• How many accidents do you have? Cost?
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Types of Performance Metrics
Cost Quality of Service Timeliness of Service Customer Satisfaction Conformance with Best Practices Compliance with Legal
Requirements Contractor or worker performance Safety Accidents
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Examples of Performance Metrics
U.S. Postal Service
National Aeronautics and Space Administration
Department of Transportation
Environmental Protection Agency
United States Marine Corps
Department of the Interior
Department of Navy
Department of Health and Human Services
Tennessee Valley Authority
Department of Justice
Office of Personnel Management
Department of Labor
General Services Administration
0 2 4 6 8 10 12 14 16 18
Average Age of Owned Fleet
Years
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Examples of Performance Metrics
US Agency for International Development
Department of Energy
National Aeronautics and Space Administration
Department of Navy
Department of Homeland Security
Department of Army
Environmental Protection Agency
Department of Justice
General Services Administration
Department of Veterans Affairs
Department of Labor
Tennessee Valley Authority
Department of Treasury
$0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00
Total Cost per Mile
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Examples of Performance Metrics
National Aeronautics and Space Administration
Department of State
U.S. Postal Service
Department of Navy
Department of Energy
General Services Administration
Department of Commerce
Corps of Engineers, Civil Works
Department of Health and Human Services
Department of Treasury
Office of Personnel Management
Department of Justice
Tennessee Valley Authority
0 2,000 4,000 6,000 8,000 10,00012,00014,00016,000
Average Miles per Vehicle per Year
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Some basic metrics• Basic Fleet
• Inventory (also true for property management)• Utilization (also true for property management)• CPM / CPH (Cost per Mile or Hour)
• Maintenance Shop• PM Compliance• Mechanic Productivity• Scheduled versus Unscheduled Maintenance• Parts • Fleet Availability
• Fuel• Cost• MPG• Alternative Fuel Use
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What is a Vehicle Allocation Methodology?
Simply put:A structured process of defining the
proper number of vehicles and the proper types of vehicles to meet the organization’s mission and
budget requirements.
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Why Do Fleets Get Too Large?
• Retention of old vehicles (fleet creep)
• Easier to add vehicles than “manage”
• Lack of structured approach • Failure to adjust for mission
change• Poor data• Failure to use (good) data to
manage• Lack of technology tools
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Fleet Rightsizing Approach
• Uses existing fleet as starting point• Requires fleet utilization study• Assumes current usage signifies valid
need for respective missions• Right-sizes fleet based on utilization
and mission criticality• “Locks In” size and composition of the
fleet for each organizational unit at a point in time – the optimal inventory
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Utilization• Great data driven metric• Right-sizing metric• Establishes a standard justification
for assignment• ObjectiveQuantify as:• Miles driven• Hours operated or in use• Number of trips• Gallons of fuel used
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Mission Criticality
– Life or valuable property depend on the availability of the vehicle(s)
– The organization’s mission strongly depends on availability
– Routine operations and/or productivity are affected by availability
– Alternatives are available
Lo
w
Hig
h
An essential component of fleet rightsizing studies
0 10 20 30 40 50 60 70 80 90 1000
10
20
30
40
50
60
70
80
90
100
Medium SUVAll Depts
Utilization %
Mis
sio
n C
riti
cality
%
PASSFAIL ?
Use Data to Rightsize
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Fleet Management Challenges
• Training• Competing for Funding• Capturing the Right Data and
Accurate Data• Using Data to Manage – Performance
Metrics• Using TCO to Optimize Replacement
Cycles• Fleet Rightsizing• Balancing Customer “Needs” vs.
“Wants”
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Summary• An old fleet is a costly and “dirty”
fleet• Fleet management has unique
information requirements that are often not satisfied by property, financial, and enterprise systems
• Use of performance metrics can help track how the fleet is performing
• One of the most practical ways to cut fleet cost is to reduce the number of vehicles
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DepreciationOperating = Fuel + Maintenance
Total Cost of Ownership TCO
Time/Usage
Cost
Life Cycle Costs of a Vehicle
*
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The Future Fleet• Your fleet inventory will change over time • Capturing fleet data is an ongoing requirement• Vehicle technology is rapidly evolving
2013 Tesla Electric Car Wins “Car of the Year”
Mars Rover
Smart Cars
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Questions??
MERCURY ASSOCIATES, INC.“Specializing in the science of fleet
management”
Gary HatfieldVice President
941-685-6907 (cell)[email protected]
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• Auction• Biofuels• Capital Cost • Cost per Mile• Depreciation• Fixed Cost• Fleet Creep• Home-to-Work• Hybrid• Indirect Costs• Life Cycle Costs• LogWorld• Motor Pool
• Over-fleeting• Personal Use• Replacement Cycle• Variable Cost• Vehicle Availability• Vehicle Downtime• Vehicle Utilization• Work Order
An Introduction to Fleet Terms
Others?
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• AFV – Alternative Fuel Vehicle• B20 – Biodiesel (20%)• CNG – Compressed Natural Gas• CPM – Cost Per Mile• E85 – Ethanol 85% (15% gasoline)• FFV – Flex Fuel Vehicle (E85)• FMIS – Fleet Management Information System• LPG – Liquid Propane Gas• MPG – Miles Per Gallon• M&R – Maintenance & Repair
• NGV – Natural Gas Vehicle
• OEM – Original Equipment Manufacturer
• PM – Preventive Maintenance
• POV – Personally Owned Vehicle
• VIN – Vehicle Identification Number
• VMT – Vehicle Miles Traveled
Some Fleet Acronyms