Beyond the Garage: The Full Scope of Fleet Operations
Production services and planning functions combine to ensure vehicles, data, and people align, making fleet one of your organization’s most impactful departments.
Fleet management is a complex and often misunderstood role within organizations. While many people think it is simply about vehicle repairs, the reality is that fleet managers oversee multiple lines of business. These responsibilities deliver value and play a direct role in the overall success of the organization.
Core lines of business in fleet management
The functions of fleet management are generally divided into two main sections: production and planning. These two areas work together to support employees in taking trips and assisting with the completion of work for other staff members.
Production
Production refers to product-oriented lines of business. The primary focus here is to provide vehicles, equipment, and, at times, tools, along with the necessary goods to keep operations running efficiently. These goods include a wide variety of parts, such as tires, attachments, vehicle decals, oil, coolant, fluids, and shop supplies.
Fuel management is a significant aspect of production, with significant cost and administrative expense. The introduction of alternative fuels—like biodiesel, compressed natural gas, propane, and electricity—can make procurement more complex, often requiring extensive performance verification steps.
Other important business lines (under production) include vehicle maintenance and repair, compliance inspections, vehicle recalls, towing, pickup and delivery, and collision repairs.
Vehicles may be acquired through various means, including purchase, leasing, or short-term rental, and may require additional outfitting to meet the specific needs of users. Proper vehicle disposal is crucial to minimize risk and liability. Some organizations operate motor pools, which can be time-consuming to manage and may have significant cost implications.
Labour in production
Production relies on both labour and materials. Labour can be sourced from in-house staff or contractors. Labour rates are categorized as either “bare” (covering only the employee’s wage), or “fully burdened,” which includes benefits and overhead costs such as workshop expenses, management, and other employee support costs. A general rule of thumb is that the fully burdened labour rate is about three times the technician’s hourly wage.
Planning
Planning encompasses service-oriented lines of business that support the fleet's ongoing operations and strategic direction. The goal is to ensure everything necessary is provided so trips and jobs can be completed successfully. Planning responsibilities include vehicle licensing, automobile insurance, regulatory compliance, performance measurement and reporting, production chargebacks, and cost recovery.
Information technology is a vital component of fleet management. Many fleets use telematics to gain deeper insights into fleet performance, often sharing this data with users. Reporting levels can range from minimal to highly-detailed, based on organizational needs.
A computer maintenance management system is essential, and may be operated in-house or through a third-party provider. This system might be shared with other users, or be dedicated solely to fleet management.
Driver training is frequently part of fleet management’s responsibilities, which may involve developing and enforcing procedures that affect employee relations.
Telling your story
Communicating the value of fleet management is important. It’s necessary to explain and demonstrate that fleet management is much more than fixing flat tires and performing oil changes.
Critical thinking about fleet management begins with understanding its full scope. Recognizing and articulating the impact of fleet management helps critics appreciate its influence on the organization and the efficiency of fleet staff.
In many cases, the ratio of fleet staff expenses compares favourably with other organizational functions, such as human resources, information technology, or finance. That’s a great story.
