Controlling fleet management costs

Why is it when the cost of crude increases, I have yet to have a vendor call us and explain that costs are going down this month because the cost of oil is decreasing! Not going to happen!

Tires continue to rise at 3-5 percent per year; most petroleum-based products continue to increase 10-12 percent per year and parts simply do not decrease as steel prices soar. So, how can I control my expenses?

Train, train and then train some more – stop or minimize all supplier services.  In other words keep all your work in house and stop writing checks to the private sector. Yes, I realize this may mean more training and more work for your employees, but it also demonstrates efficiency and effectiveness in the “wrenches” that you have on the floor. Simply put, this is job preservation and if you’re dealing with a Union and CBA, this should be music to their ears. You are working to preserve the membership,while preserving jobs and becoming more efficient in your operation.

Here, let me give you an example – in 2008 our operation spent about $2.6 million per year on private sector companies doing work that we may or may not be able to do. The solution, we trained employees to do the work being “farmed out” without raising headcount. By 2013 our “supplier services” had dropped to $1.2 million demonstrating a steady decrease for most every year beginning in 2008. 

We did all this with no additional head count. – In fact, our wrenches on the floor dropped year over year keeping our payroll flat for the same period. At the same time Union contracts mandated increases of 2-4 percent each and every year for cost of living increases.

The answer my friend is not “blowing in the wind” – the answer is increasing your training budgets, motivating technicians to train and acquire ASE/EVT certifications and then achieving ASE Blue Seal for your operation. You’ll find that you can actually quantify every training dollar expended with a return on your investment. At the City of Columbus we know that for every dollar we invest in our employees we recover almost $22.00 in reduced supplier services. The  bottom line is that our employees are better trained than most and better equipped to keep work in house and continue to reduce expenses.

How is that working for you? Or is it? Use the comment box following.

Kelly Reagan is the Fleet Administrator for Columbus, Ohio.

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