Successful Private/Public Fleet Management

SUCCESSFUL SUCCESSFUL PUBLIC/PRIVATE PUBLIC/PRIVATE PARTNERSHIPS PARTNERSHIPS

FOR FOR GOVERNMENT GOVERNMENT

FLEETSFLEETS

Presented by:Presented by:

• Ernie Hutman, CPFPErnie Hutman, CPFP– Operations and Maintenance Manager Operations and Maintenance Manager

Hillsborough County Fleet Management Hillsborough County Fleet Management and;and;

• John Crane, John Crane, – District Manager, Genuine Parts District Manager, Genuine Parts

Company (NAPA I.B.S)Company (NAPA I.B.S)

What is Outsourcing and What is Outsourcing and why does it work for some why does it work for some

agencies and not for othersagencies and not for others

• Outsourcing is utilizing a contracted Outsourcing is utilizing a contracted vendor to provide a service or productvendor to provide a service or product

• It does not always mean that agency It does not always mean that agency employees will lose their job when employees will lose their job when outsourcing occursoutsourcing occurs

• Outsourcing works well only when both Outsourcing works well only when both the agency and the vendor realize a the agency and the vendor realize a benefitbenefit

Outsourcing Hillsborough Outsourcing Hillsborough County StyleCounty Style

• Fully outsourced parts department Fully outsourced parts department ( NAPA IBS)( NAPA IBS)

• Other outsourced services include Other outsourced services include use of various vendors to provide use of various vendors to provide specialty services such as:specialty services such as:– Auto body repairAuto body repair– Automatic transmission repairs/rebuildsAutomatic transmission repairs/rebuilds– Tire and repair servicesTire and repair services– TowingTowing

FY/11 Outsourcing by the FY/11 Outsourcing by the NumbersNumbers

• Total Budget less Fuel: Total Budget less Fuel: $9,238,388$9,238,388

• Total Parts:Total Parts: 2,972,1552,972,155• Total Commercial Services:Total Commercial Services: 1,334,2311,334,231• Total Outsourced:Total Outsourced: 4,306,3864,306,386

• Percentage of Budget Outsourced Percentage of Budget Outsourced 46.5%46.5%

PARTS OUTSOURCINGPARTS OUTSOURCING(It’s in the Numbers)(It’s in the Numbers)

• Hillsborough County first outsourced it’s part Hillsborough County first outsourced it’s part procurement and warehousing in 2004procurement and warehousing in 2004

• NAPA was awarded the bid based on a sole NAPA was awarded the bid based on a sole source source

• NAPA was the only vendor who has a computer NAPA was the only vendor who has a computer system that could be made to be compatible system that could be made to be compatible with the County’s M-5 Asset Works with the County’s M-5 Asset Works Management SystemManagement System

• The County approved a 3 year extension of the The County approved a 3 year extension of the agreement in 2009agreement in 2009

PARTS OUTSOURCINGPARTS OUTSOURCING(It’s in the Numbers)(It’s in the Numbers)

• Prior to outsourcing the County managed Prior to outsourcing the County managed their own parts department by use of the their own parts department by use of the following:following:– Managing more than 20 term contractsManaging more than 20 term contracts– Issuing over 800 purchase orders annuallyIssuing over 800 purchase orders annually– Using over 4,500 Purchasing (Credit) Card Using over 4,500 Purchasing (Credit) Card

purchases annuallypurchases annually– Processing more than 15,000 invoices annuallyProcessing more than 15,000 invoices annually

• With NAPA there is one invoice per monthWith NAPA there is one invoice per month

PARTS OUTSOURCINGPARTS OUTSOURCING(It’s in the Numbers)(It’s in the Numbers)

• Prior to outsourcing the parts department in Prior to outsourcing the parts department in 2004 the County had approximately $400,00 in 2004 the County had approximately $400,00 in parts in the 5 shop locations throughout the parts in the 5 shop locations throughout the CountyCounty

• NAPA bought all non-obsolete parts at face NAPA bought all non-obsolete parts at face value value

• Assisted in disposing of obsolete partsAssisted in disposing of obsolete parts• Today NAPA has approximately $900,000 in Today NAPA has approximately $900,000 in

parts in stock at 4 County locationsparts in stock at 4 County locations• NAPA warehousing in the Tampa Bay area NAPA warehousing in the Tampa Bay area

carries approximately 25.5 million in stocked carries approximately 25.5 million in stocked partpart

PARTS OUTSOURCINGPARTS OUTSOURCING(It’s in the Numbers)(It’s in the Numbers)

• Prior to NAPA the average part Prior to NAPA the average part availability was just over 38%availability was just over 38%

• NAPA has a part availability rate of NAPA has a part availability rate of 87.5%87.5%

• With a network of stores and With a network of stores and suppliers downtime due to part suppliers downtime due to part availability has been cut by two availability has been cut by two thirds, including the fire fleetthirds, including the fire fleet

PARTS OUTSOURCINGPARTS OUTSOURCING(It’s in the Numbers)(It’s in the Numbers)

• Prior to renewal in 2009 Fleet Prior to renewal in 2009 Fleet Management performed an analysis to Management performed an analysis to determine what the continued benefits of determine what the continued benefits of NAPA were:NAPA were:

• Average parts pricing is 25% below other Average parts pricing is 25% below other local governmental contractslocal governmental contracts

• NAPA reduced OEM pricing by 13.5% by NAPA reduced OEM pricing by 13.5% by sourcing directly with manufacturerssourcing directly with manufacturers

• Overall parts pricing increased just 3.7 % Overall parts pricing increased just 3.7 % during the five years of the contractduring the five years of the contract

• County has realized an annual average County has realized an annual average savings of $400,000savings of $400,000

PARTS OUTSOURCINGPARTS OUTSOURCING

• Other benefits include:Other benefits include:– No Parts ObsolescenceNo Parts Obsolescence– No Annual InventoryNo Annual Inventory– No Lost or Stolen PartsNo Lost or Stolen Parts– No Employee IssuesNo Employee Issues– Better Parts AvailabilityBetter Parts Availability– NAPA has provided @ $10k in NAPA has provided @ $10k in

technician training at no charge during technician training at no charge during the life of the contractthe life of the contract

YEAR END INVENTORYYEAR END INVENTORY((PRIOR TO OUTSOURCING)PRIOR TO OUTSOURCING)

YEAR END INVENTORYYEAR END INVENTORY(After Outsourcing)(After Outsourcing)

Why Outsourcing Makes Why Outsourcing Makes SenseSense

• Outsourcing in areas where your don’t Outsourcing in areas where your don’t have the expertise will usually save you have the expertise will usually save you money, resources, and timemoney, resources, and time

• You don’t want a librarian to build a You don’t want a librarian to build a library, and,library, and,

• You wouldn’t ask your dentist to do You wouldn’t ask your dentist to do open heart surgeryopen heart surgery

• In today’s economic and political In today’s economic and political environment a combination of in-house environment a combination of in-house and outsourcing is almost a mustand outsourcing is almost a must

Do What You Do WellDo What You Do Well(( Leave The Rest to Those Who Do it Better) Leave The Rest to Those Who Do it Better)

Saving Money and Saving Money and ResourcesResources

• Reduction in capital costs for inventoryReduction in capital costs for inventory• Reduction in parts cost because of Reduction in parts cost because of

buying power of NAPAbuying power of NAPA– Better than State Term contracts in many Better than State Term contracts in many

casescases– Leveraging OEM parts through Leveraging OEM parts through

manufacturersmanufacturers

• Reducing the paperwork and Reducing the paperwork and associated clerical functionsassociated clerical functions

Promote and Embrace the Promote and Embrace the Public-Private PartnershipPublic-Private Partnership((Reduce the Chances of Full Privatization)Reduce the Chances of Full Privatization)

• Hillsborough County already outsources Hillsborough County already outsources close to 50% of it fleet maintenanceclose to 50% of it fleet maintenance

• Promote the fact that you research all Promote the fact that you research all areas of Fleet Management and areas of Fleet Management and outsource those that can be done better outsource those that can be done better by an outside agency while doing your by an outside agency while doing your core business functions with in-house core business functions with in-house staffstaff

Promote and Embrace the Promote and Embrace the Public-Private PartnershipPublic-Private Partnership((Reduce the Chances of Full Privatization)Reduce the Chances of Full Privatization)

• Consistently point out the other Consistently point out the other services that you provide such as:services that you provide such as:– Management of the FleetManagement of the Fleet– Replacement and DisposalReplacement and Disposal– Specification WritingSpecification Writing– Management of Fleet RecordsManagement of Fleet Records– Excellent Preventive Maintenance and Excellent Preventive Maintenance and

RepairsRepairs

Political and Economic Political and Economic ClimateClimate

• We can no longer stick our heads in the We can no longer stick our heads in the sand and hope that the next wave does sand and hope that the next wave does not crash on usnot crash on us

• Fleet Managers must be more creative Fleet Managers must be more creative and on the cutting edge in order to and on the cutting edge in order to survivesurvive

• By utilizing the best of both worlds you By utilizing the best of both worlds you will survive and even flourish in the will survive and even flourish in the tough business climate we all face todaytough business climate we all face today

Do A Self ExaminationDo A Self Examination

Ask Yourself the Following Ask Yourself the Following Questions:Questions:

• Are you doing everything you can to stay Are you doing everything you can to stay competitive?competitive?

• Are you keeping up with training opportunities Are you keeping up with training opportunities for both you and your technician staff?for both you and your technician staff?

• Are you promoting Fleet Management in a Are you promoting Fleet Management in a positive image?positive image?

• Are you consistently providing information to Are you consistently providing information to your superiors on what you are doing to become your superiors on what you are doing to become more efficient and cost effective?more efficient and cost effective?

• Are you looking elswhere to see if there is a Are you looking elswhere to see if there is a better way?better way?

• Are you always doing your best?Are you always doing your best?

Because:Because:

• Do not confuse motion and progress. Do not confuse motion and progress. A rocking horse keeps moving but A rocking horse keeps moving but does not make any progress does not make any progress

– Alfred A. MontapertAlfred A. Montapert

• Folks who never do any more than Folks who never do any more than they get paid for, never get paid for they get paid for, never get paid for any more than they do any more than they do

– Elbert HubbardElbert Hubbard

Thanks for your attention Thanks for your attention and participationand participation

Questions?Questions?Contact InformationContact Information

Ernie HutmanErnie Hutman

Phone: 813-744-5580Phone: 813-744-5580

E-mail: E-mail: [email protected]@hillsboroughcounty.org

&&

John CraneJohn Crane

Phone: 813-478-1125Phone: 813-478-1125

E-mail: E-mail: [email protected]@genpt.com