21 Oct Putting Margin Back Into Business
AfMA Executive Director Mace Hartley on the coming journey in Fleet Management
Fleet Management is increasingly gaining recognition as a crucial aspect of business optimisation and transformation, as well as of increasing customer satisfaction – and to help companies sustain their market position.
Mr Mace Hartley, Executive Director of the Australasian Fleet Management Association (AfMA), a not-for-profit organisation with 600 members in ANZ, explains the vital role of fleet management.
Says Mr Hartley, “Fleet Management is a true vocation, much the same as with accountancy, the medical profession, or when practising law.”
He also explains how fleet management has altered in the era of disruptive innovation.
Fleet Management is now smart management
“Truth is, nothing changes overnight in this industry. For instance, telematics is a buzzword now – but it’s been around for fifteen years, now gaining critical mass.”
“Telematics in Fleet Management provides many different things for a Fleet Management Operator (FMO). It’s a multi-purpose tool that has great potential to meet a range of needs and thus to become a vital aspect of the industry,” says Hartley.
Some of the now recognised benefits of telematics are: the ability to plan routes to save time and money, and the ability to monitor driver behaviour and thus intervene with driver training.
Continues Hartley: “Broadly speaking, two other notable trends are emerging: firstly, FMOs are trying to do more for their clients, now that they have more tools. Secondly, we see overall growth in awareness of Fleet Management as a managed service that impacts business performance and customer experience.”
“This has encouraged some companies who may have managed their fleet internally, to now outsource to an FMO; while other companies who have been with an FMO are bringing the managed service back in-house as a crucial aspect of operations.”
Control and Transparency: the new best practices
Hartley also warms up on the importance of organising vast amounts of information.
“Fleet managers generally don’t have enough time in a day to think about what’s happening in the world, as they are managing events taking place across an entire fleet.”
“So having transparency of data, and being in control of the information, especially of your costs, really helps with good decision-making, day-to-day management – and takes you to the next level of being able to think strategically about what can be done differently for a better outcome. To this end, a good fleet management system can help you to analyse and maybe shave 10% off your operating expenses.”
Common roadblocks: Conflicts of interest, FMO-client communication gaps
What of the issues that are endemic to the Fleet Management industry? Hartley zones in, “One difficulty for FMOs, lies in having enough resources to make a positive difference in the company they’re managing. This might lead to not putting the client’s interest first in all ways, in addition to the FMO preference for more transactions rather than less if each transaction is a profit opportunity.”
“FMOs can help businesses to make decisions, but ultimately the business still has to decide what it wants as a sustainable policy, or what its environmental footprint needs to be. This can conflict with FM company interests, as they might prefer for economy of scale to have more cars, not less, so they then don’t help the business to reduce their inventory.”
However, according to Hartley, there is new light coming through.
“There are FMOs who are keen to work with businesses to gradually bring about change and to make a positive difference. There needs to be a strong relationship between the organisation and the FMO, so that expectations are clear and can be met, and so that information passes through, such as FMOs advising if cars aren’t coming back for servicing.”
Says Hartley, “Some non-reputable FMOs don’t care if the cars don’t get serviced, because they’re saving money – but the customer then ends up paying for repairs if the car’s warranty is voided, which harms that relationship.”
Fuelling the Future
“Five years ago, electric vehicles were all the rage, but sales penetration was low because they were expensive and the cars had ‘range anxiety’, only going 50 to 80 miles on a full charge. Then the same tech advancement that allowed the electrics to draw less power and increase range, got used in combustion engines too, so that normal cars got efficiency gains of now under 5L per 100KM. And electric cars are still too expensive.”
“Since the Paris climate agreement that was signed in April this year, a number of countries have committed to reducing emissions to a certain level, and they are going to have to do that by making changes to government policy, changing incentives to make hybrids and electrics more important. So change will be policy rather than market-driven, especially as at this point, the tipping point for cost recovery [from alternative fuel vehicles] is still too long.”
“Another thing holding electric vehicles back is how long it takes to charge, having a network of charging stations, and bringing extra power into the grid to cope with the network. In my personal view, hydrogen fuel cells are the ultimate way to go, with Europe and Japan transitioning to having more hydrogen charging stations.”
“Thermal efficiency will be important in which fuel wins the race, but at the moment, we are also inhibited in the move in any one direction, by the lowering of petrol prices and newer cars having better fuel economy anyway.”
The Fleet Management Forecast for Malaysia
“In terms of the Malaysian Fleet Management industry, FMOs’ future role will be to be a good partner to business, to help businesses gain control and make better, more informed decisions.”
“They will be able to help businesses reduce CO2 footprint from the vehicle fleet, by increasing their expertise as advisors in this area and by employing the experts in this area. You will also see people embracing technology more, for example through telematics, so that fleet management whether outsourced or in-house, can help to improve operations and margin.”
SPANCO’s commitment to relevance and leadership
SPANCO’s 20 years of commitment to development of fleet management, and its provision of end-to-end fleet management services – have been reinforced since 2005 by more than a decade of membership in the AfMA.
“SPANCO is positioned very well in the fleet management industry. From the tours I’ve had to date, I can see that the systems are as good as any I’ve seen.”
“I notice that this comes from the attitude of the people in the business. I’ve spoken for hours to SPANCO management, and they are very good at their craft, and have a good attitude about solving customers’ problems and managing their business.”
“SPANCO has the advantage of representing a single brand, which gives you the related advantage of information system standardisation. A number of FMOs in Australia have been unsuccessful in this, and in Australia dealers are being slow to engage with a gateway system, but SPANCO is ahead.”
“Your system integrates the workshops and the insurance companies, automates the back end and shares knowledge. This reduces data entry, reduces error, improves transaction time, and helps with warranty claims thus reducing maintenance cost.”
“I also see that SPANCO is committed to being relevant, and to seeking out opportunities to grow – to this end I’ve highlighted some opportunities for SPANCO to do things that other FMOs aren’t even doing. So I think SPANCO is in a good position overall to grow and to take technology another step forward, to be the leader in Fleet Management in this country.”