Should the fleet department be allowed to make a profit? If so, how? I know in my past we did in house warranty and collected dollars back that way. But what other methods are there. Marking up parts, road service fees, shop fees such as haz waste, tire disposal, administrative fees when processing work sent to vendors. Should you be able to charge an overtime rate if the customer insists they need that vehicle or equipment back by the end of the day and there are repairs that must be made for the safe operation of that asset. Share your thoughts on this topic and let me know what you do in your fleet.
I was working with a Fortune 100 document processing function. We discovered that several departments were also sourcing their own document processes across the business. We developed a Lift, Shift, Source program. We would go in and examine the work and document it as is. Then, we would transition the work to our department, while leaving the current manpower with the original department. We would apply our economies of scale and improvement skills to lean out the work and make it very repeatable. Then, we would source it to one of our strategic partners, which reduced the cost even more. The soft and hard savings created, typically in Manpower Returned were measured and we would get extra money in the next budget cycle to do more of this. Basically, we were paid extra for finding improvement opportunities in our core competencies. How many people circumvent Fleet Management and lease or but their own vehicles? Why is this bad for the company?
Do you have a particular type of business in mind? When you say fleet, the 1st thing I think of are the fleet people within the context of a car dealer. But you might be referring to something quite different.
Chargebacks from accidents/driver abuse.
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2moA fleet department should be a Cost Center on the P&L, pure and simple. If you have full-time employees (or outside vendor work), this is part of the expense. The fleet manager and general manager should oversee any overtime required to keep the fleet on the road in order to manage and account for good productivity. This would also include parts, tires, etc. Items such as warranty reimbursements can either be captured in the fleet budget or not, but warranty reimbursements are not always constant and depend on the age of the fleet. I would apply this to miscellaneous income on the general statement and just realize it in the year it's booked. The final part: good fleet management is dependent on good vehicle rotation where mileage, wear and tear, and vehicle age are monitored and well managed. While we all want to "sweat the asset" as much as possible, there comes a point when purchasing a new fleet and depreciating the new costs will offset overtime and unnecessary costs. Most of the time, for large fleets, this should be factored in between 7-8 years; never purchase a new fleet at one time, so the rotation of vehicle expenses is well balanced on the P&L.