World Trade - March 2009 - (Page 35) unfortunately, has no such decision-making framework. improvement and make the needed changes. Instead, Bentz says, managers must ask themselves, In terms of fleet re-engineering, Bentz recommends “What am I trying to do?” incremental optimization, focusing on projects with the Then, he continues, they must ask themselves, “What greatest and fastest returns. The goal, he explains, is to am I good at?” Optimizing a fleet and the practices that develop a coordinated, well-defined program that delivmanage it comes down to doing something better and faster. ers significant returns within the parameters of available So, what are you doing and how can it be done better? Are time, resources and budgets. That approach allows conyou using what you have effectively? Can it do more? tinual progress and builds momentum within the organiBentz doesn’t like to discuss industry best practices in zation to support subsequent improvements. generalities. “At Accenture, we conducted an extensive, Bentz recounts one utility client’s fleet reorganization, year-long supply chain study entitled, ‘Supply Chain which began with re-engineering fleet standards and specMastery,’ that looked at a broad spectrum of organizations ifications in tandem with a review of its sourcing options. and how they manage their supply chains.” The goal: to The outcome was a single-sourcing contract that cut the identify leading edge practices. “There are no general cost of acquiring vehicles by 20 percent, reduced vehicle answers,” he concedes. “There is no one entity that is classes from 450 to 32 in the main fleet, standardized vehibest-in-class all the time.” cle life cycles, and improved maintenance and repair prac“Look at retail operations,” Bentz advises. “Goods tices. A good early step for any fleet is to ensure that the move inbound on common carriers and outbound in pri- fleet has the right number and types of vehicles to perform vate fleets.” Reasons for that their jobs at the lowest total difference may include the cost of ownership. That cost, Using your fleet to generate greater need for control, to he reminds, includes dispobetter manage schedules or sition and replacement. That revenue by delivering other to maintain an image. Ensurprocess should be ongoing, ing white glove deliveries, for company’s goods works better because vehicles are phased instance, may be important out of the fleet and because enough for some firms to jusneeds change. in theory than practice. tify the expenses of owning Any fleet optimization fleet vehicles that sometimes program also must be inteare idle. For others, such sergrated into the overall supply vice is irrelevant. chain and managed across For some companies, the functions. One of the chalgoal is to use their fleets to lenges, Bentz points out, is generate additional revenue, that transportation is Balkandelivering goods to other ized. Decisions are made by companies within their own many different departments supply chain, or even to nonor divisions. The result is affiliated companies. That’s that the transportation direcnot always a worthwhile use tor may have little or no input of empty trailers, though. “It into the types of vehicles in works better in theory than in practice,” Bentz cautions. “It the fleet, yet is responsible for them. While wresting concan increase backhaul, but it often means that companies trol away from those managers may not be feasible, transfind themselves waiting extra hours for those clients to load portation managers may increase their ability to influence cargo or having to send another truck back for the pickup. decisions by developing business relationships with those Likewise, they find that dropping a trailer for later pickup managers. The long terms benefits of such a common requires the transportation manager to now manage a drop sense, balance sheet approach to transportation manageprogram. “That requires a lot of focus and management. ment is decreased operating expenses and improved serIt’s not easy,” Bentz stresses. “You have to be really careful vice, as well as freeing scarce capital and containing costs. doing it.” Indirect benefits will vary, but may include reduced insurHe recounts the story of one case where the client ance premiums or maintenance expenses, the need for less endured a 700-mile deadhead to get a backhaul, because real estate, reduced regulatory exposure and the goodwill they were being measured on attaining a certain percent- that may be associated with any green initiatives. age of backhaul. “That’s crazy!” Bentz exclaims. “People The bottom line, Bentz says, is simple. “Be smart. “If do what they’re measured on, so making sure the perfor- you use common sense, you’ll be in good shape.” WT mance metrics are right is critical to operational success.” Contributing Editor Gail Dutton will be producing an on-going series Fleet re-engineering of articles on “Supply Chain and the Enterprise.” The mainstay of taking a common sense, total cost of ownership approach to fleet management is re-engineering. Once managers have determined what’s in their fleets and what they do particularly well, the next step is to identify areas that need improvement, determine what constitutes For reprints of this article, please contact Cindy Williams at williamsc@bnpmedia.com or 610-436-4220 ext. 8516. WWW.WORLDTRADEMAG.COM 35 http://WWW.WORLDTRADEMAG.COM
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