Fleet - Understanding and Auditing One of Your Largest Indirect Spends

Transcription

1 Katherine Vigneau, CAFM Director of Professional Development NAFA Fleet Management Association Fleet - Understanding and Auditing One of Your Largest Indirect Spends

2 Katherine Vigneau, CAFM 27 years in the Canadian Army serving in Canada, Haiti, Afghanistan and Norway CAFM 1999, PLog 2001, MBA 2001, CITT 2005, MDS 2006 Certification Board present, VP Canada , winner of NAFA s Excellence in Education Award Founder of KMVS Fleet+ Consulting offering fleet and management consulting services in Canada and around the world Professional Development Strategist for NAFA since 2010

3 3 Agenda How Fleets and Personal Vehicles Differ The Three Best-kept Fleet Secrets Fleet Audit

4 Fleet vs Personal Vehicle Ownership

5 Personal Vehicle Ownership Buy or lease? Select make and model Get insurance Warranty? Regular fueling and maintenance

6 Fleet ownership Lease, buy, reimburse, rent, pool, share analysis Needs analysis Procurement RFP Specifications Commissioning Vehicle assignments Utilization reviews Lifecycle Cost Analysis Driver credentials Preventative Maintenance program Recalls Warranty management Downtime Fuel cards/systems Liability Information Management Telematics

7 Fleet managers are looked at as someone who is just spending money on vehicles and not contributing to the profit line. As long as everything runs smoothly and no issues arise, the FM is more in the background than the forefront of the organization.

8 Best-Kept Secrets

9 Misconceptions I drive a car so I know how to buy a fleet. Least expensive = lowest acquisition cost. Delaying replacement will save me money.

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11 LCA Equation Acquisition costs + fixed costs + operating costs personal use payments Lifecycle cost

12 Perils of Delayed Replacement

13 Audit How re you doing?

14 14 What s in a name? Best Practice Review Audit Competitiveness Assessment Benchmark Study

15 15 Definitions BP Review Analyzing the extent to which an organization employs methods or techniques that consistently show results superior to those achieved with other means, and that are used as industry benchmarks. Benchmark Study Comparing one's business processes and performance metrics to industry bests or best practices from other industries. Competitiveness Assessment Assessing the difference between a firm's performance and that of its competitors, and detecting and examining the factors that cause the difference.

16 16 Audit A systematic and independent examination of data, statements, records, operations and performances (financial or otherwise) of an enterprise for a stated purpose.

17 17 Why conduct an audit? To ensure the effective operation of an organization. To review compliance with regulations. To ensure you are prepared to meet potential challenges. To maintain/ enhance the organization s reputation. To perform a due diligence review for shareholders or potential investors. I m new to the job, and I want to make sure everything is OK. We just had an employee leave, and we want to be sure everything is OK. We had an embezzlement and want to know how much we lost. We think there is a problem, and we want you to find out for sure Or most frequently, things just don t seem right.

18 18 Why conduct an audit? What is your reason to conduct an audit (now or in the past)? I m new to the job, and I want to make sure everything is OK. We just had an employee leave, and we want to be sure everything is OK. We had an embezzlement and want to know how much we lost. We think there is a problem, and we want you to find out for sure Or most frequently, things just don t seem right.

19 19 Who should conduct the audit? Consultant FMC Internal Third Party YOU

20 20 Who should conduct the audit? Consultant Internal Third Party FMC YOU Do any of you have experience auditing your own organizations?

21 21 Who? Source Advantages Disadvantages Internal third party FMC Consultant You Knows the organization Free or low cost Low cost Familiar with fleet ops SME Objectivity SME You set timeline Knows the organization SME Not an SME Time Organizational bias Objectivity Cost Time Objectivity

22 22 Six Steps to a Successful Self Audit Define objective Request for Information Review data and information provided Conduct interviews, focus groups, surveys Analysis and comparison Report and debrief

23 23 Define Objective Specific Achievable The objective of the audit is to assess the adequacy of the management control framework, related risk management strategies and practices, the information for decision making and reporting purposes, as well as the extent of compliance to relevant policies.

24 24 RFI Thorough Consider time available Data availability Fleet policies Organizational charts Job descriptions Decision-making authorities

25 25 Review data and information Anomalies Discard bad data Request clarifications as required Look at data provided, see what is missing Ensure understanding

26 26 Interviews, focus groups, etc Interview senior management Focus groups with employees Survey

27 27 Analysis and comparison Risk Analysis SWOT

28 28 Report and debrief

29 29 Avoid Scope creep

30 Fighting the audit 30

31 31 Scope Creep

32 No value added 32

33 33 Must Haves Client Involvement Functional Expertise (lots of it!) Time

34 34 Resources NAFA Publications Fleet Digest Fleet Solutions Government Fleet Automotive Fleet FMCs Consulting firms Mercury Associates

35 35 Safety Audit Checklist Automotive Fleet, January 2012 Accident rates and severity. Change in injury and/or fatality rate. Change in MVRs since rolling out the program. Driver compliance with the safety policy, as well as state and federal regulations. How consistently action is taken for drivers who don t comply with the policy. Completion rates for driver training. Percentage of fleet policy acknowledgments on file for all active drivers. Number of roadside response incidents. Compliance with preventive maintenance goals to help ensure vehicles are kept in good working condition.

36 36 Maintenance Audit Checklist Joel Levitt 10 random repair orders are reviewed for completeness and accuracy Driver reports are reviewed and corrective work is done in a timely manner. Check 10 random reports. Written RO in evidence for all except genuine emergency repairs. Check this right now for all bays. Flat rates (standards of some kind) for all recurring jobs written on RO. Check all RO open on shop floor now. Check to see if 1 day's work planned for each mechanic at least 1/2 day in advance. Is the Maintenance Schedule visible to all mechanics Check fluid levels and batteries on 10 random vehicles. Pull 10 PM sheets and verify that they are complete and correct. Track any Corrective items and verify a RO was closed on each corrective item in a reasonable time. Building is clean including floors, walls, eating areas, lavatories, and lighting fixtures (adequate light).

37 37 Best Practices Checklist The Eleven Essentials The organization considers alternatives to fleet ownership and conducts regular reviews to ensure the fleet is right-sized. Vehicles are selected and procured using a formal process that considers lifecycle costs, safety and the environment and involves procurement, the user and fleet as the subject matter experts. The organization uses NAFA s lifecycle spreadsheets and defines and observes optimal vehicle lifecycles. The organization use s NAFA s RACE system along with the Total Cost of Ownership methodology to measure all costs of fleet operations. The organization has a robust policy framework covering appropriate topics. The organization has a comprehensive safety policy which includes classifying crashes into preventable and non-preventable categories and tracking Crash Frequency Rates (CFR). Vehicle Equivalency Units are used to calculate productivity and compare maintenance performance. A FMIS tracks Key Performance Indicators that contribute to organizational goals. The organization is proactive in the selection of remarketing methods and tracks results. Key personnel are certified by industry associations that they are qualified for the jobs they perform. The organization sets goals for fuel and emissions reductions in accordance with NAFA s sustainability standard.

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39 Thank you Questions? me at