Globalisation, a Fleet Management illusion

Driven by the economy of scale, fleet management globalisation is an objective of both suppliers and clients. For suppliers, a bigger reach means more clients and more sourcing power; for the client, it means simplification and higher volumes, which most often implies better pricing and an improved discount structure.

Despite its good intentions, globalisation fails more often than not and has left suppliers and fleet managers alike frustrated and forced to move back to regionalisation, at best. Hence the question “Is it worth the efforts?”, that we will be approaching from a fleet manager’s perspective.

Car Policy

There are elements in a Car Policy that cannot be truly globalised, but for which a near-globalisation is possible if a smart and pyramidal policy setup is implemented. A typical pyramid has a global reach (tier 1), a regional reach (tier 2) and a local reach (tier 3). Let’s focus on some key elements of a car policy: health and safety, driver behaviour and eligibility.

Generically, the health and safety policy is built up in 3 elements: car safety equipment, driver training and behavioural control. Here we find various elements that can be part of a Global Car Policy, such as the minimum safety equipment requirements of a company car. As the market offering varies significantly from country to country, levelling down is the right approach: seatbelts, dual airbags, rear view mirrors might be the only common denominator across the world. Also, think outside the box: in many countries, your policy might cover motorcycles, vans, small trucks, pick-ups and so on.

Driver behaviour lends itself easily to globalisation. Taking good care of the vehicle, following traffic regulations, not allowing drinking and driving,… should be generic, tier 1 rules. Other rules, linked to e.g. private usage of the vehicle, are per definition tier 3 or local.

Defining who is eligible for a car, motorcycle,… is more of a theoretical exercise on a global level. Generic rules, such as “Sales staff receives a car” or “Everyone doing more than 20,000km for work receives a car” can act as a guideline, but will have to be specified on regional or local levels. An important generic rule however can define the allocation or removal of eligibility “The Company will decide whether an employee is entitled to a car” is a useful start into tier 2 and tier 3 policies.

Sourcing

The real trouble when globalising is to find suppliers with sufficient coverage and a centralised organisation to support it. A first observation is that European and American brands tend to be much better at the latter than Asian brands. A second observation is that Asian brands are better at the former. It comes down to choosing Toyota, and dealing with many local counterparts, or choosing Volkswagen, but not being able to select a fit-for-purpose vehicle in each country.

A similar trend happens in the leasing sector. Most of the fleet countries can be covered by the major leasing companies or captives, but again, these suppliers miss out on some American, African and Asian countries. The Japanese Orix and Sumitomo have a decent coverage in APAC, but don’t offer a centralised approach.

Fleet management outsourcing companies have understood this weakness in the supply chain and try to compensate for this by offering consolidation services, but here as well, these initiatives are mainly European and don’t truly cover the globe.

Internal organisation

The intermediate conclusion is that globalisation is only possible to a small extent. Therefore, it really comes down to the client’s organisation and its ability to deal with various levels of localisation.

A first need is a global fleet manager, who has a position in the organisation that is strong enough to talk to and influence global, regional and local stakeholders. This person is supported by a regional team, that is supported by a local team. Strategy is global, finetuning is regional and execution is local. Parts of this structure can be outsourced.

A second need are the right tools to consolidate information, top-down and bottom-up. ERPs, such as SAP can be extremely useful for the cost aspects of fleet management, but are ideally complemented by a true fleet management tool that allows to consolidate asset specifics, link user and asset and make operational decisions. Finally, country-specific information needs to be available to all stakeholders on tier 1 and tier 2 level, which calls for collaborative data tools.

Once organisation and tools are in place, globalisation is no longer about covering the entire world, but covering as much as possible in a consolidated manner. Sundry countries, which will be mostly African and Asian, can be dealt with on a regional or even local level.